Unit Cost Economics will play vital role to reach $50bn goal in RMG in Bangladesh

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GARMENTECH Bangladesh-2017 showcased the latest apparel technology in its 16th edition. Renowned technology leaders from all over the world attended the 4-day event held from 18 to 21 January 2017 at the International Convention City Bashundhara – ICCB in Dhaka, Bangladesh.

On continued to the second-day exhibition, Textile Today, an apparel magazine, organized a seminar where speakers addressed the opportunities and challenges on the day ahead of the garment manufacturers in the nation’s quest for global leadership in RMG exports.

“The leader is #1, if we continue to be the second largest exporter, we will never be a leader in the RMG export trade,” said technocrat Anas Shakil.

At present, Bangladesh is the second largest RMG manufacturer and exporter worldwide. This year the nation exported garment worth $28 billion, however the aim for Bangladesh Garment Industry is to reach $50 billion worth export by 2021, the year the country marks its 50 years of independence.

A key speaker in the event, Anas Shakil Country Head (Bangladesh), ThreadSol conducted a talk on unit cost economics as the key for garment export growth in Bangladesh. Through his talk, he emphasized that to ensure the target for $50 billion by 2021 is met, Bangladesh will need to be more competitive in terms of cost. Cost per garment determines the profitability of the garment business. And this cost per garment will have to be lowered or maintained.

According to past trend, the sole reason for Bangladesh’s dominance over other Southeast Asian markets has been low labour costs. However, with the recent developments on the strengthening of labour unions and demands for higher wages, this advantage is on the verge of the slide.

“This is where the unit economics comes into play.” says Anas Shakil, “Factories need to determine what is the major contributing factor to a single piece of garment and work on reducing that cost. 60% – 70% of the operational cost for a manufacturer today is the cost of fabric, if that cost is targeted and reduced even by a small percentage, a large part of the job is done.”

Technology like ThreadSol, in this case will play an extremely important role in overcoming the excessive manual intervention and fabric wastage the industry witnesses today. ThreadSol solutions, intelloCut and intelloBuy ensure that the garment manufacturer buys the right amount of fabric and the fabric wastage is brought down to under 1%.

The need of the hour is to deskill the jobs that are today being performed by skilled manpower which will result in Bangladesh maintaining its position in the RMG Export game and also making it stronger.

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This article has been posted by a News Hour Correspondent. For queries, please contact through [email protected]
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