RMG industrialists opt for new factories over innovation
Economic Reporter :
Around 70 per cent of readymade garment factory owners are not interested in investing in manufacturing new products. Their interest lies rather in constructing new factory buildings. Around 44 per cent of these industrialists have plans for new factory buildings in the pipeline.
Such findings were revealed in a recent survey report of the International Labour Organisation (ILO) regarding the improvement of work environment in Bangladesh's readymade garment (RMG) industry. The South Asian Network on Economic Modelling (SANEM) carried out the survey on behalf of ILO. The researchers collected data spanning from January to May 2017. ILO published the report in January this year.
A total of 2184 workers, 111 supervisors and 111 managers of 111 garment factories in Dhaka, Gazipur, Narayanganj and Chattogram took part in the survey. The survey dealt with various issues including investment in innovation for new products, the ratio of male-female workers in the garment industry, their educational qualification, health, leave and safety.
According to the survey, in the two years preceding 2017, only 29.73 per cent of the garment factories invested in innovating new products. In the one year preceding 2017, only 23.42 of the factories made such investments. And in the two years after 2017, only 22.52 per cent of the factories invested in innovative products. As to future plans for investment, the managers said that they would be investing in increased export, seeking new destinations, marketing, manufacturing high-end products and also in infrastructure.
When it came to infrastructure, 44 per cent of the factories had plans to invest in new buildings. And 36 per cent had no such plans. Meanwhile other planned areas of investment included 3.60 per cent for design centres, 8.10 per cent for training centres, 3.60 per cent for self-owned power stations, 3.60 per cent for renewable energy and 4 per cent for warehouses.
The survey revealed that 34 per cent of the factories gave no thought to the use of new technology. The reason behind this was the high cost of such technology, according to 55 per cent of the factory authorities. And rather than new technology, 34 per cent of the factories gave priority to quality of the products, new products, waste management and work environment.
Senior vice president of the apex body of garment manufacturers BGMEA, Faisal Samad, said "There have been a lot of changes in the readymade garment industry over the past two or three years. Buyers are pushing down the price of garments. There is no alternative but to go for new products. From BGMEA we are encouraging the entrepreneurs to diversify their products. We are informing the entrepreneurs about the latest demands in garments."
Faisal Samad went on to say setting up new factories and innovating new products were both important. If an entrepreneur feels that he can produce new items in his factory that is possible. Then again, he may feel that he needs to new factory to manufacture new products.