DHAKA, Bangladesh — In the aftermath of the collapse of Rana Plaza last year, global pressure to inspect factory buildings has changed the basis of the fashion business in Bangladesh.
This story first appeared in the December 16, 2014 issue of WWD. Subscribe Today.
Of the 2,000 factories inspected so far, an estimated 2 percent, or 29, have been shut down. Global brands and retailers, the International Labour Organization and the governments of the European Union and the United States gave factory owners in Bangladesh some stern guidelines to follow and over the last year, much has changed. Inspection teams from the Accord for Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety have been working with local factories to pinpoint safety problems and correction procedures. Failing to fix them means the brands would stop doing business with those factories.
But at the close of the three-day Dhaka Apparel Summit last week, there was a focus on motivation and incentives — a celebration of garment factories that were doing it right.
“It is easy to dismiss all the factories in Bangladesh as faulty,” said Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association. “But we also have some of the best factories in the world and we want to inspire nonperformers to do better.”
The event last week was about the best practices in the industry, and as Asif Ashraf, managing director of Fakhruddin Textile Mills, walked away from the stage with his third win, he told WWD, “We’ve always tried to do our best — but it feels good to be recognized.”
It was a glitzy evening as industry leaders were called up to the stage to reveal the winners of the Social and Environmental Excellence Award 2014 organized by the German Society for International Cooperation Ltd., or GIZ, and the Bangladesh Brand Forum. A video presentation showing off the finer points of the winning factories added perspective and inspiration for the factory owners who were in the audience.
“Our main objective was motivation through recognition,” said Magnus Schmid, program coordinator for the Promotion of Social and Environmental Standards in the Industry with GIZ. “Motivation, that is not only for the winners to continue with their best practices, but also for others to follow in their footsteps.”
Among the 25 awards were 10 platinum, one champion, 10 gold, three honorable mentions and one for best trainer.
Abanti Colour Tex won the platinum award for grievance handling under the social compliance category, while Kwun Tong Apparels won the gold award. Jinnat Fashions won the platinum award for women’s empowerment and Ananta Garments the gold. Beximco Fashions won the platinum under inclusive skills development category, while Fakhruddin Textile Mills won the gold.
There also were subcategories, and winners in each.
In the last segment, for fire building and fire safety excellence, an award sponsored by the Alliance, Epic Garments Manufacturing won the platinum award. Vintage Denim Studio won the gold.
“These factories exemplify what is possible through innovation, commitment and collaboration,” said Ellen Tauscher, independent chair of the Alliance.
Sorting through the 120 nominations was a panel made up of industry experts on health, compliance and labor relations.
Beaming with pride, M.A. Jabbar, managing director of DBL group, said his factory, which had turnover of $300 million in 2013-14, continued to look for ways to improve, even having put in the extra money for fire doors, sprinkler systems and other corrections mandated by the inspections done by the teams of global brands and retailers from the Accord and the Alliance.
“We are investing in making ourselves better. It is just that, like many factory owners, we had to be convinced that it was necessary. If we are convinced, we are willing to adapt to things very quickly. It is obvious that we have that capacity from the way we have come out of the disaster last year,” he said.
Touring factories in Dhaka, it was clear that the problems with smaller shared factories were going to need longer-term measures. Many multistory buildings that have multiple factories on different floors still need to work out the process of improvements, and discussions continue.
Some smaller factories, widely known as subcontractors, have disappeared from their listed addresses. Within the high-traffic and congested roads in Dhaka, commuting is a struggle, but many factory owners are looking at ways to go farther afield. In Gazipur, Savar, Ashulia and other surrounding areas, there are factories that continue to look for ways to keep up with global standards.
For instance, at the Epyllion Group factory in Gazipur, which has 14,000 employees and produces 2.7 million pieces a month, Mohammad Junaid Abu Salay Musa, director of the group, said ensuring higher standards always has been a way to more successful growth.
As former U.S. ambassador to Bangladesh — James F. Moriarty, who is on the board of the Alliance as well as managing director of Bower Group Asia — and a team of accompanying television reporters who were documenting progress asked questions, Musa spoke about the extent of technology his factory has introduced for growth and about improving best practices.
“The big companies don’t have a problem about audits. Every buyer we have worked with does these kind of checks, but now there are additional requirements which we are incorporating into our factories,” he said.
The group has numerous factories, many of them state-of-the-art, with mini golf carts that are used for transport between buildings. A treatment plant for the water used for dyeing, and extensive areas for checking the strength and color of fabric and garments, are maintained in a separate area. A mock lake and a mini golf course are part of the premises.
Yet, detailed inspections have brought up issues that need to be addressed.
At Epyllion Style Ltd., for example, the inspection reports listed on the Web site of the Accord noted that there were “numerous cracks in non-structural masonry walls (Concrete Section-Building 1); large gaps between bearing plates in steelwork (Shed 1 and Shed 2 – Building 1),” and so on.
Moriarty and the team also visited the Utah Group nearby, which has an entrance that resembles a five-star hotel, with showrooms for its finished products on the first floor, and specially monitored equipment that clearly indicates managing director Abdul Razzak Sattar’s attention to detail.
Sattar, who has overseen the growth of a group that has 12,500 workers, spoke about the fact that “every factory in Bangladesh got affected by Rana Plaza.” He said his factory, which used to be in Dhaka city, was moved to Ghazipur 15 years ago to have the ability to expand and manage compliance issues better. Producing for companies such as H&M and Tesco, he said he finds it important to stay ahead of the curve on calls for compliance.
“There has been a lot of uncertainty,” he explained. “We were not afraid of closure as some factories were, but the total orders were reduced. Buyers were uncertain about the future of the factories and wanted to spread their risks. The competition is intense. It is a buyers’ market here.”
Talking about how further changes are imminent, he observed that there is a lot that is beyond the control of individual factory owners.
“What we really need is priority gas connections, electricity, transport. Then it is possible to be far more than a $50 billion industry. [The goal set by the government for the nation’s apparel sector.] Rather, $100 billion is easily conceivable in the event we have facilities for more infrastructure.”
At an event held by the Bangladesh Knitwear Manufacturers and Exporters Association where a business directory containing more than 25,000 addresses of global apparel buyers in 160 countries was launched, A.K.M. Salim Osman, the association’s president, brought up the same point.
“Knitwear factories are now running to their 60 percent capacity for shortage of utility services. We need an uninterrupted supply of power, gas and water for the industry to grow,” he said.
Knitwear earned $12 billion from export in 2013-14, out of the total of $24.5 billion exported by the garment industry during that time.
Assessing these and similar complaints by factory owners, brands and retailers, Commerce Minister Tofail Ahmed responded positively. He said the Bangladesh government would extend “all-out cooperation to the businesses so that Bangladesh could become a middle-income country by 2021 and so that we could reach our target of earning $50 billion through [apparel] export.”