Our RMG industry needs to grow to take advantage of the US-China trade war

China, once regarded as “the factory of the world,” has seen a steady decline in its apparel industry exports over recent years. Although it’s still the largest apparel producing region globally — rising labour and raw material costs and an increase in local manufacturers concentrating on the domestic market rather than exports, started a slow trickle of international customers away from the region.This has, most recently, been further compounded by the much-publicized tit-for-tat trade war between the two nations since January 2018, which has led to an increase in apparel product tariffs from the region and created unease amongst customers. The situation is popularly termed “trade 2.0.”Other sourcing hubs in the Asian region are reaping the benefits of the decline in China’s fortunes, most notably Vietnam. The country is targeting an export objective of $40 billion for the year 2019 for textiles and apparel, a 10.8% increase year on year.The largest market for Vietnamese garment production is the US and the country has seen an increase of 13.9% in apparel exports over the first nine months of 2019. This trend seems to continue as Vietnam appears set to be one of the biggest beneficiaries of the US-China trade war with US fashion companies looking to alternative sourcing areas.The Bangladesh RMG industry has also enjoyed an increase in apparel exports over the same period but lags behind Vietnam with an increase of 9.29%. One has to ask why, given the importance of the RMG industry to Bangladesh’s economy, we are not capitalizing more on the current trade friction between the USA and China.The Chinese apparel and textile industries were world-renowned for their diversity, able to produce nearly all garment product categories and cater for all market sectors from mass, price-sensitive brands, and retailers through to those operating in the luxury sector of the fashion industry.To their credit, the textile and apparel manufacturers in Vietnam have taken over this mantle, establishing an industry, with some 6000 manufacturing facilities, that cater to a diverse array of apparel products appealing to US customers.Sadly, I fear, the same cannot be said for the Bangladesh RMG industry. Historically, as all of us involved in the sector are aware, we have relied upon more basic, higher volume products to drive our business.Since its inception in the 1980s the growth of the sector has been outstanding, but, as the industry faces the transition to trade 2.0 over the coming years, surely now is the time to instigate real change within the sector.As mentioned earlier, using the example of Vietnam as a benchmark, we can see that the Bangladesh RMG industry falls some way short in the diversity of apparel product categories that it produces. To tackle this the industry needs to address the skill sets of its workforce, the extent of its research and development capabilities and its investment in the appropriate technology.Apparel categories including lingerie, swimwear, formalwear, and performance outerwear (to name a few) are not traditionally associated with Bangladesh but offer huge export business potential. It is in these, non-familiar product categories, that the RMG needs to be developing to take advantage of the US-China stand-off and to penetrate into other markets.With the correct guidance and training, there is no reason why our workers cannot develop the appropriate skills to manufacture more diverse product categories. It may be necessary for certain RMG companies to invest in and develop different production lines for the new product categories being manufactured. They will need to consider methods that allow increased flexibility, cater to smaller production runs and can be operated by operatives that can produce goods to the highest possible standards. The training of workers is not just a matter for factory owners and managers. The RMG sector contributes some 83% to our nation’s GDP, so it is an invaluable factor in the continuing development of the country. I believe that the government and other concerned bodies should be supporting the industry by making the necessary investments to establish a network of training facilities so that they are fully conversant with the processes involved and can take up roles within companies and offer an immediate impact.To support the investment in the establishment of manufacturing capabilities for new product categories we will need increased investment in the R&D sector. If the RMG industry wishes to diversify into a broader spectrum of apparel types, we need to consider the full development process and support it from concept through to finished product. New product categories require different R&D disciplines, and these will need to be developed in line with customers’ expectations and requirements. Coupled with investment in workforce training and R&D, the industry must be prepared to invest in technology and infrastructure relevant to the new product categories. Diverse product categories require a variety of different technologies, not necessarily existing in Bangladesh at present.With the correct investment in staff training, R&D and the appropriate technologies, there is ample opportunity for the Bangladesh RMG industry to learn from the success that Vietnam has made and shake off the image of a basic resource and offer a broader, more diverse range of apparel categories to both the US and wider international audience.Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the Founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).

Women workers are more vulnerable than their male counterparts to losing their jobs due to automation in five key sectors in Bangladesh, according to a study. It said women in low-wage occupations with less education are likely to be impacted more due to high risk of automation in readymade garment and textile, furniture, agro-processing, leather and footwear and tourism and hospitality sectors at the beginning of Fourth Industrial Revolution (4IR). “In the five key sectors, two in five jobs are at risk,” said the study titled “Future Skills: Finding Emerging Skills to Tackle the Challenges of Automation in Bangladesh” conducted recently by Access to Information (a2i) programme under ICT Division. The aim of the research was to assess the present situation on occupational role and skills in the key sectors at the advent of 4IR. To extend insights beyond main occupations and sectors at risk of automation, several socio-demographic indicators have been analysed to further understand how workplace automation affects different segments of the workforce. Also in these sectors, young workers aged between 18 and 24 are more susceptible to having an occupation in relation to adult workers, although age-based disparity is considerably lower than the gaps by sex, the study has revealed. Education levels produce different odds of occupying a high-risk job. Workers with primary education are more at risk of losing jobs than those having secondary school education, the study said. “Higher education and training helps develop competency needed for complicated tasks requiring advanced level of perception and manipulation as well as creative and social intelligence,” it added. Low level and low quality postsecondary and tertiary education and training as well as low educational attainment level among the workforce are matters of concern. However, a recent study released by US-based research firm McKinsey in October 2018 forecast that many garment manufacturing countries might incur a substantial loss of business and employment reduction due to automation. Over 50 per cent of imported readymade garments would be manufactured by 2025 near Europe and the USA, away from Asia, according to about 25 per cent of global sourcing executives who were surveyed. Asad-Uz-Zaman, policy specialist at a2i, told the FE that the RMG sector along with some other sectors is facing the risk of automation as employers are cutting jobs on a small scale. He also underscored the need for market-driven skills and proper training for women workers. Dhaka Chamber of Commerce and Industry (DCCI) president Osama Taseer in a statement said advanced economics are seriously concerned that automation and robots powered by artificial intelligence will axe many occupations and wipe out skills from the workplace. The RMG industry which accounts for 84 per cent of export earnings and employs directly 32.52 per cent of total employed population in the industrial sector and 6.58 per cent of total employed population in Bangladesh is undergoing structural changes encompassing automation and higher productivity, he added. Due to this automation process, the DCCI chief said, many skills will become obsolete and many jobs will disappear within a short time. He also put emphasis on re-skills and up-skills to prepare the workforce for future jobs, focusing on big data analytics, drone and robot operators, large sorting and planting machine operators, mechanical engineering, artificial intelligence network experts, technology-driven services, computer-aided process and enterprise resources planning experts.