SUBMITTED TOMohammad Hannan MiahSchool of BusinessNorth South University

SUBMITTED BYFAISAL AHMED CHOWDHURYID# 063-413-030

SUBMITTED BYFAISAL AHMED CHOWDHURYID# 063-413-030

1

Internship report on Problems and Prospective of Exporting woven Garments from Bangladesh in the context of Texport Limited

April 26, 2011

Mohammad Hannan Miah

North South University

Plot 15, Block B

Bashundhara, Dhaka 1229,

Bangladesh.

Sir,

With great pleasure that I am going to submit the Internship report on “Problems and Prospective

of exporting woven Garments from Bangladesh in the context of Texport Limited.” I expect this

report to fulfill the requirements of my internship program at Texport limited. I have put in my

best efforts to make this report a success. However, I am sure that this report could have been a

more superior one, if it had not been my first time to conduct such a relational study. However

this has obviously been a great source of learning for me to conduct similar research studies in

future.

I would like to express my sincere gratitude to you for your guidance and suggestions in preparing the report. I will be happy to provide any further explanation regarding this research report if necessary.

Sincerely yours,

Faisal Ahmed Chowdhury

063 413 030

2

AcknowledgementsAcknowledgements

II present my warm thanks to the North South University (NSU) for the opportunity of carrying

out this study as part of my BBA course. I am particularly grateful to my internship supervisor,

Mohammad Hannan Miah, Senior lecturer, School of Business of North South University, for his

guidance, understanding and inspiration.

I am especially thankful to the interview person Forhad Hossain Chowdhury, managing director

of Texport Limited to support during my report and for giving us the opportunity for gaining

practical experience in the field of garments industry especially woven garments sector. Without

such report, I would not have been able to carry out the study. I am grateful to Mr. Anwar

(Director, Texport Limited), Md.Mohin (senior merchandiser), Javed ali (General Manager,

Sales & Marketing, Texport Limited).

I also wish to acknowledge the help and cooperation that we received from various officials and

staff members of BGMEA, Texport Limited whom we talked about the purpose of this

interesting report. We also acknowledge our gratitude to my friends, NSU Library and NSU IT

Department for their cordial support during my report.

3

Executive summary

Bangladesh - the country of world famous muslin fabric has now emerged as an apparel

giant in the world textile and apparel market. The country exports its apparel products worth

nearly 5 billion US$ per year to the USA, EU, Canada and other countries of the world. At

present the country is the 6th largest apparel supplier to the USA and EU countries. The major

products are Knit and Woven Shirts and Blouses, Trousers, Skirts, Shorts, Jackets, Sweaters,

Sports-wears and many more casual and fashion apparels.

In the new competitive business era, Ready Made Garments (RMG) sector is getting more

competitive in Bangladesh. Besides this, as the number of salaried individuals are increasing day

by day, they are also becoming more aware about the utilization of their money while fulfilling

their personal needs. Again, Texport Limited has a few problems regarding labor conflict, lack of

team work, financial problems and promotional activities that should be rectified. Overall, there

are huge opportunities for Texport Limited to develop and enter in RMG industry with a massive

amount of investment as this is one of the ways for risk diversification. In recent business, every

RMG company are focusing more and more on to latest technology and emphasize on cost

reduction. If Texport Limited desires to keep in balance of its reputation compared to other well-

reputed garments organization, they need to overcome the problems & need to match the current

market condition.

Fortunately, BGMEA along with the government and other organizations recently has

taken some responsible steps to assure adequate safety in the industry. But none of the previous

problems were as appalling as the recent wage-problems of the labors because it is threatening

the very existence of this industry. Garments industry needs a lot of work-force to cope with its

demanding and hard work. That’s why in an underdeveloped country like ours where

unemployment rate is very high and labor price is very cheap, this industry never even felt the

4

deficiency in manpower. In fact it is because of the low cost labors that this sector bloomed in so

little time with exceptional efficiency. But it seems that the low cost of the garments-labors are

in reality a little too low for a human being. And that’s why unrest broke out and garments owner

cannot run their business. This is the main problem of exporting garments.

The devoted labors of our garments industry have worked day and night for the

establishment of the industry. Although the working condition is not always suitable for them,

they never walked out on their jobs. Being a conscious citizen of Bangladesh, I know that our

fragile economy can only be commanding if the backbone of the apparel business remains

strong. So when I was asked to chose a topic for the research in the internship report, I intended

to utilize the chance to find out the basis of this problem and prospect of exporting woven

garments in context of Texport limited.

This project will certainly benefit the garments workers, owners and employers as it could and

would work like a guideline for them. They can take necessary steps to improve the scenario

accordingly. As a responsible citizen of Bangladesh it is every person’s duty to be aware of this

problem. This will create awareness among the general people. They would understand the

gravity of the problem and contribute in possible ways for the betterment of the situation.

5

Table of contents

Pages

Organization part

Company overview 8-9 Organization chart 10-12 Product and services 13-15 Various functional departments 16-20 Industry overview 21-23 Order follow up 23-33 Risk analysis 33-38 Five forces analysis 39-40 SWOT Analysis 40-43 Supply chain management 44-48 Strategy and implementation 49-50

Project part

Introduction 52 Objective 53 Significance of the study 54 Findings 54 Methodology 54-56

Topic analysis

Problems of exporting woven garments 58-62 Main issue 63 Interview 64-68 Data analysis 68-74 Opinion of garments owner 74 My findings 75-76 Result 77-81 Recommendation 81 Limitation 81 Conclusion 82

6

ORGANIZATION PART

7

COMPANY OVERVIEW

TEXPORT LIMITED

52, SHAHID TAJUDDIN AHMED SARANI

(5 TH FLOOR, KA-15/6),RASULBAG, MOHAKHALI, DHAKA

Factory Address : 52, Shahid Tajuddin Ahmed Sarani, (5TH Floor), KA-15/6, Rasulbag, Mohakhali, Dhaka-1212

Contact Person : Forhad Hossain Chowdhury. ( Managing Director)  Factory Telephone :8821772, 9899765 Factory Area : 16,831 Sqft Number of Employees: 400 Capacity : 80,000pcs~100,000 pieces

Office Address :Plot No. 8, (2ND Floor), Block- CWS©, Gulshan South Avenue, Gulshan-1, Dhaka-1212, Bangladesh

Tel: 8821233, 8821771,8828372

Fax : 880-2-8823577 E-Mail : info@texport.net, forhad@texport.net

BUSINESS PARTNER REVIEW

8

More’s / Target Normann Waeschefabrik GmbH & Co. KG Tv-Mania, Germany Cora Nonco, France Alimentaire Suzy Inco, Canada. Wal-Mart, Canada Others

MISSION

Texport Ltd. is committed to provide an inevitable quality of service to its buyers, and in order to

achieve this quality of service, we are still striving to achieve heights of buyer satisfaction and go

a little beyond boundaries, offering quality woven garments, keeping in pace with the buyer

standards in terms of competitive price, superior quality and prompt delivery, which has enabled

us to step into the threshold of the 21st century.

VISION

Texport Ltd. will not rest on its success; rather it will keep growing and benefit millions of

customers worldwide by tailoring world class garments. Texport limited will also continue to

grow and expand for the betterment of its committed work force by plough back increased

profitability into the business so as to enable more growth, and to let the employees share the

company's success. Texport ltd has a long-term view to expand its business.

9

ORGANIZATION STRUCTURE

ORGANIZATION CHART

MANAGING DIRECTOR

DIRECTOR

Merchandiser GM Administration Commercial Manager

Accounts Officer

Commercial Officer

Pattern Master Sample Depptt.

10

Quality Controller Production Manager Store- In-charge

Cutting- In-charge

Line Chief Finishing - In-charge

TEXPORT LIMITED

FLOW CHART OF WORKING PROCEDURE

SOURCING ORDERNew Buyer Existing Buyer

SAMPLE DEVELOPMENT & APPROVAL

ORDER CONFIRMATION

NEW ORDER

RECEIVE MASTER L/C REPEAT ORDER

IMPORT OF RAW MATERIAL

RAW MATERIALS TESTING & PRESHIPMENT INSPECTION

11

Quality Inspector

INVENTORY & STORE

RECHECK FABRICS & OTHER MATERIALS, SHADE BLANKET & WASHING PANEL

PRE-PRODUCTION MEETING

CUTTING

SEWING

PROCESS INSPECTION &QUALITY MONITORING

FINISHING, NEDDLE DETECTION & PACKING

FINAL INSPECTION

EXPORTAFTER SALE SERVICES DOCUMENTATION

12

PRODUCT AND SERVICES

In this industry there are mainly two types of product one is knit based and another is woven

based, knit based industry produce knitted fabrics also known as jersey fabrics, from which T-

shirt, leggings chemisoles etc. are produced , woven based industry mainly produce formal

shirt, denims, etc.

Texport limited is based on woven garments, in which cotton fabrics are produced from the

cotton as the requirements of the buyer, local spinning mills are the main sources of yarn, but

sometimes they import it from India, China, and Indonesia etc if not available in the local

market. Texport limited not only produce the goods but also provide the services like

packaging, handling, inspection, and transportation etc.

ORDER MAKING PROCESS

At first Texport limited take the order from the buyers, and then they find out the cost of

that product with the profit. Then looking for the cotton sources to woven the fabrics,

after completion of the fabrics, the dyeing process starts followed by the cutting process,

after finishing other work process the goods go through the finishing line where ironing,

packing and checking is done, then the goods are shipped through the shipping line by the

carrying and forwarding agent.

13

MACHINE LIST

SL NO . DESCRIPTION UNIT

01. SINGLE NEEDLE MACHINE JUKI DDL-5530 118

02. SINGLE NEEDLE MACHINE JUKI DDL-5530N28 28

03. DOUBLE NEEDLE LOCKSTICH MACHINE JUKI LH 515 2

04. DOUBLE NEEDLE LOCKSTITCH JUKI LH-11628(1/4”) 6

05. DOUBLE CHAINSTITCH MACHINE JUKI MS-191A(1/4”) 2

06. TRIMMING KNIFE MACHINE JUKI DLM 52001 10

07. OVER LOCK 5 THREAD JUKI MO-2366NE-DD4-40K/F 16

08. OVER LOCK 5 THREAD JUKI MO-6716S--DE4-40H/F/E35 3

09. OVER LOCK 3 THREAD JUKI MO-2354NE-0D4-40K/F 6

10. BUTTON HOLE MACHINE JUKI LBH-780 9

11. BUTTON STITCH JUKI MACHINE MB-372 8

12. BUTTON STITCH JUKI MACHINE LK-1903 ASS-301/MC-596K 2

13. BUTTON STITCH MACHINE, COMPUTERISED JUKI LK-1903

6

SS-304/MC 590-3K

14. BUTTON SNAPPING MACHINE SNAP 2

15. BARTACK MACHINE 1 NEEDLE JUKI LK-1850J 2

16. BARTACK MACHINE 1 NEEDLE JUKI LK-1850JU 3

17. KANSAI SPECIAL DFB-1404PSF(SHIRT FRONTING) 1

18. KANSAI SPECIAL DFB-1404PMD(ELASTIC ATTACHING 1

14

19. KANSAI SPECIAL MODLE-B 2000C(BELT-LOOP MAKING) 1

20. FUSING MACHINE HASHIMA- HPM-600B 1

21. FUSING MACHINE HASHIMA- OP-601 NU 1

22. CUTTING MACHINE 10” EASTMAN 629C 2

23. CUTTING MACHINE 10” EASTMAN 629 1

24. CUTTING MACHINE 8” EASTMAN 629C 1

25. CUTTING MACHINE 8” EASTMAN 629 1

26. SHIRT FOLDING MACHINE 6

27. GAS STEAM BOILER WITH 14 IRON MODERN MB-60 1

28. AUTOMATIC STRAPING MACHINEMODEL H-328 2

29. THREAD SUCKING MACHINE MODERN TS-05 1

30. DIESEL GENERATOR P165E1 165KVA/132KW 1

31. NEEDLE DETECTOR MACHINE OSHIMA ON –688CD 1

32. COLLAR BLOCKING MACHINE (ELECTRIC HEATING) 1

33. THREAD WINDING MACHINE TW-338/A 1

34. ELECTRIC STEAM (GENERATOR) BOILER WITH 3 IRON NB-36C

1

35. NEW STEAM IRON NAOMOTO ASL-610

3

36. INDUSTRIAL STEAM IRON NAOMOTO HYS-55

3

15

37. MINI STEAM BOILER 1

38. COMPUTERISED EMBROIDERY M/C BEXMH YS 20T 7 COLOURS

1

39. COMPUTERISED EMBROIDERY M/C BENSH-YN-20 9COLOURS

2

------------------

-----

TOTAL- 258

VARIOUS FUNCTIONAL DEPARTMENTS

Finance & Accounts Dept:

To assure efficient and effective management of the company’s financial and physical resources

Mr. Anwar (ACCA) is the Head of the department who control all the accounts and financial

activities for Texport limited. He also looks after the banking procedure of LC’s and other

documents.

Major Responsibilities

1. To preserve the financial integrity of Texport limited through internal audit and fiscal

control

2. To provide oversight of the financial procedures of the company.

3. To effectively manage department activities.

16

4. The Finance Department is responsible for the overall financial management of the

company. It provides support services to all other departments consisting of accounting,

payroll, accounts payable, budgeting, cashiering, data processing and risk management.

Marketing Dept:

One of the key departments in Texport limited, closely monitored by the Director on day to-day

basis, The Marketing Department has been the Lynch Pin that keeps Texport limited connected

to the world of Apparel. Considering its diversified roles, the marketing departments can be

rightly qualified as solely responsible for the Growth that has been achieved by Texport limited

over the years. Clothes need to be manufactured to the accurate procedure, more importantly

these should be marketed properly due to their nature. Texport limited has concentrated a good

deal of its energies on the marketing department. It has developed a very strong and efficient

marketing division over the years as a part of its overall marketing strategy.

Due to its strategic importance, this department is under the direct supervision of Director along

with the Marketing Manager.

Major Responsibilities

Identification of new products and assesses the market potential

Conduct pre-launch studies and feasibility studies

new market exploration and strategy preparation for market penetration

Arrangement of meeting with the buyer to accumulate more orders

Formulation of overall marketing strategy for the company

17

It has been the continuous endeavor of the department to promote Texport limited products

across the markets within the boundaries of ethical marketing practices. And Texport limited has

been successful in its endeavor.

Human Resource Dept:

Employees are the key factor for any types of organization. Consequently RMG sectors are not

behind to look after their key employees. As a readymade garments industry Texport limited also

concern about their human resources. They already established a strong human resource

department to run their whole industry successfully. The human resources department is

responsible for the recruitment of professional and classified employees, benefits management,

salary administration and job classification, training and development, records management,

employee relations, and human resources information systems.

Quality Control Dept:

Total quality management is the task and responsibility of every single employee of Texport

limited. TQM at Texport limited means:

TQM is first of all a system of values of thinking and acting in quality, in which every

employee has to be integrated and which has to be lived by everybody in daily

business

18

‘Total’ means to align all structure and processes with the customers and their needs.

Quality stands as synonym for competitiveness; it is well the yardstick for all quality

standards set.

‘Management’ means a target oriented deployment and implementation of these

requirements through leaders who act and serve as role model to their employees and

motivate the people.

Compliance Dept:

All the members of the worker-owned enterprises are self-employed and shareholders of the

enterprise; therefore entitled to the profits and benefits generated through the work executed.

Even in other small private enterprises that Texport limited interacts with, the employer and

workers are supported to form self-help groups and initiate small savings. Over time, this ensures

that the individuals are able to break their cycle of indebtedness and become increasingly self-

reliant.

Job orders are paid on the basis of quantity and quality of production as individuals within the

group. Texport limited ensures that increasingly the income earned even for low skilled members

within the collective will go beyond the minimum wage prescribed, as their training investment

and learning will increase their productivity and skills levels. Though most often, the workers are

reluctant to engage in training as they see it as wasting productive time or irrelevant, this has

gradually changed since Texport limited integrates skill development (technical, entrepreneurial,

etc) with their ongoing work.

19

In terms of a work environment, all the worker-owned enterprises are supported to function from

common work sheds, equipped with basic facilities (including water, toilets, ventilation, and

light) and infrastructure. 'No child labor' is a non-negotiable adhered to all the worker-owned

enterprises and members are supported to send their children to preschool or school.

The experience so far has clearly indicated the impact of such bottom-up development

compliance. Texport limited has become a key partner, ensuring social compliance demanded by

international buyers abroad.

Merchandising Dept:

Merchandising department is one of the key departments in the garments industry. The

correspondent with the foreign buyers depends on the merchandiser.

Major Responsibilities:

Taking the orders from the buyers

Calculate the cost of the merchandise

Making the sample as far required

Negotiate about the costing with the buyers

To find out the best supplier for the accessories, packaging, other related

products.

20

Production Department:

The production department is headed by production manager and has wide range

responsibilities. This department looks after total factory operations. It has a number

of section, namely Production planning, Administration, Stores and warehouse,

power and fuel, Maintenance, Different in the production process, and Delivery

section. Each section has definite responsibility.

Administration in the factory side has a number of responsibilities. The factory is

running for 24 hours a day and 350 days a year. The administration maintains all the

auxiliary tasks necessary to enhance the production. All sorts of control required in

the factory site are done by administration section under production department

dormitory for workers, Engineers and other employees; Residence for the top level

employees, Dining for workers and executives, Transportation for factory

employee's, vehicles for raw material supply and product delivery etc. are maintained

by the Administration Department. They also look after securities of the factory

premises.

As a manufacturing company that have a lot of materials in stock. This section is

responsible for receiving materials from the suppliers, stock those properly, and passes

those to the different % sections of the production process for use. They also maintain

the level of stock. They prepare reports of stock and send it to the planning section to

inform them how much material planning has to order. As shown in the production

flow chart, there are a number of sections in the production process. All the section has

the responsibility to do their job within the limited time scale, the section also

responsible to record how much they have sent to the next section.

21

The jobs for delivery section are to store the finished goods and deliver those against

order and time schedule. They are responsible to confirm the reception of L/Cs, amount

deliver.

INDUSTRY OVERVIEW

The garment industry in Bangladesh has become the main export sector and a major source of

foreign exchange since 1980. It currently exports about $5 billion worth of products each year

according to BGMEA. The industry employs about 3 million workers of whom 90% are women.

The Readymade Garments (RMG) sector has grown in two distinct phases in Bangladesh-pre

and post 1990-91. The growth in the first phase as been mainly to duty- free and quota-free

access. The RMG share in exports increased from a modest 27% in 1986/87 to 70% by

1996/97. The contribution of the RMG sector jumped to 73% in 1997/1998 and it is increase

to 76% in 2006/07.the data is given below for the last ten years 1997 to 2007.

Foreign exchange earnings for the first ten months of current fiscal year 2007 DEC is US$6220

million. Individual sub-sector wise break-up shows that export earnings for woven RMG

between DEC 2006-DECl 2007 is US$2.752 billion registering a 06% surplus against the

export target and a 11.03% rise over the same period of 1999/2000. Knitwear worth US$1.214

billion was exported the falling short by 1.61% of the targeted earnings but 20.93% more than

the same period for the last fiscal year. The supplementary Budget for the FY 2000/01 has

allotted another Tk. 2 billion for the RMG sector to be given in the form of cash incentives. There

is more than four thousand RMG factory in Bangladesh. There are two main divisions in the

garments industry, one is knit and another one is woven, in this chapter I will discuss about the

woven garments of the industry.

22

YEARRMG EXPORT IN

MILLIONTOTAL EXPORT IN

MILLION

% OF TOTAL RMG EXPORT AGAINST

TOTAL EXPORT

2000-2001 3781.94 5161.20 73.28

2001-2002 4019.98 5312.86 75.67

2002-2003 4349.41 5752.20 75.61

2003-2004 4859.83 6467.30 75.14

2004-2005 4583.75 5986.09 76.57

2005-2006 4912.09 6548.44 75.01

2006-2007 5686.09 7602.99 74.79

2007-2008 6417.67 8654.52 74.15

2008-2009 7900.80 10526.16 75.06

2009-2010(Dec) 4730.36 6220.61 76.04

ORDER FOLLOW UP

23

24

IPOProcess

“Set of interrelated or Interacting activities

which transforms Inputs in Outputs”

Output (Y)

Remember: Your In-Put’s (X’s) have a impact on the Out-Put (Y)

Inputs (X’s)

25

SIPOC – Clothing order

Suppliers Inputs Outputs Customers

Fabric ContractsProduction Department

Trim Information Buyer

Washing & Embroidery Communication

On Time Shipment for Customer QA Department

Experience, Skill, & Knowledge

One shot sample approval

Commercial Department

Start Boundary: End Boundary:

Receipt of Purchase order / Contract

Sheet

Sample Approval & Fabric & Trims in

Factory

Inspection and Documantation

Garments are been shipped to the

customer.Production

On Time Fabric & Trims for Production

Process

26

Controls & Resources

ProcessOutput (Y)

Inputs (X’s)

Controls

Resources

SamplesIn-Put Out-Put

C

R

Production Out-Put

C

R

Fabric & TrimsIn-Put Out-Put

C

R

ShipmentIn-Put Out-Put

C

R

IIn-Put

In-Put

Variables

• Controlled (Within our Control)• Uncontrolled (Not within our Control)

** It’s important that we understand and identify above.

27

The FlowConfirmation of price & delivery with customerReceipt of PO

Sheet

Open Order-File & Prepare T&A (Critical Path)Approval of Cost-Sheet

Information to Planning

Give details to sample rooms for Fabric YY’s and to start on the fit samples (Sample room file opened).

Do requirements – Fabric & TrimsGive swatches

for lab-dips and counter samples

Ordering fabric & trims – Give

sample requirements to

suppliers

Receipts of P/I’s (Fabric & Trims)

Approvals (Fabric quality, lab-dips, trims – quality,

design, & colours)

1st Fit samples (Ex & approval /

comments follow-up)

Fabric / Trim shipments ex-

origin & follow-up on fabric & trims

sample requirement for

PP samples, photo samples,

etc..

2nd Fit samples (If required) or Pre-

production samples / Photo

sample, etc..

Factory / Line Size-set reviewPre-production

meetingPilot Run

TOP ApprovalBulk Production

Pre-production sample approval.

Preparing Tec-files for other departments with

final trim card. Embroidery / Print approval in Any.

Fabric / Trim In-house & Inventory.

Packing sample approval

Bulk Wash Approval

Final Inspection & Shipment

Export Lc & Back to back Lc’s for suppliers

Documentation & Shipment Follow-up

Required Details & Information

PO / Order Sheet Price Quantity Color & Size break-down Ex-Factory / final inspection date

Fabric / trim details – colors, quality, requirement, etc.. Size-spec Sample, sketch & color ways Sample requirement Workmanship details Packing & shipping instructions

Opening the Master File

• Should be very neat and tidy.• Should always divide in to cages (with separators) for easy reference.• Should always have a file label with the relevant details.

E.g.. for Cage separation

Reports Sample follow-up Buyer in-out Suppliers in-out Order details Fabric Trim Po’s, PI’s, & Requirements Lc’s & Documents Costing & Pre-booking correspondence

28

Fabric Suppliers

Confirmation of delivery date and issue of Performa-Invoice Lab-dip approvals Fabric quality approval Wash standard approval Fabric Shade-bands Fabric sample requirement Pre-shipment test reports Bulk fabric shipment Payments

29

SuppliersFabric

Trims

Sewing trimsPacking trims

ImportedLocal

ImportedLocal

Trim Suppliers

Confirmation of delivery date and issue of Performa-Invoice Color / Quality / Design approvals Trim sample requirement Pre-shipment test reports (If required) Bulk shipments

30

The Flow (Fabric)

Quality swatch & Colours from

buyer

Passing Quality swatch & Colours to fabric suppliers

Tentative fabric booking for

reserve production space /

confirmation of delivery date

Final booking (Colour wise) for

PI w/ sample requirement /

Price Confirmation

Lab-dips and quality swatch

from supplier for approval

Lab-dips and quality swatch

sent to buyer for approval

Deciding payment terms (Opening

BTB Lc’s)

Fabric bulk production

Despatch of sample fabric requirement

Shade-bands (from head-ends)

for approval

Fabric Shipment (Ex-origin)

Shade-bands approved. Pre-shipment inspection /

test reports.

Fabric arrives at port

Clearance

Lab-dip / quality approval or resubmission request

from buyer

Fabric In-houseInventory & Inspection

Payments

Ordering (Fabric & Trims)

Consumptions & requirements Requirement break-downs & workings Price quotations Required quality standard / test reports Purchase orders Performa-invoices Payment terms / LC terms

Important

31

The Flow (Trims)

Samples, details, & Colours from

buyer

Passing details to suppliers

Tentative booking on critical items to reserve space (If

required)

Final booking (In detail) for PI w/

sample requirement / Price confirmation

Colour / Quality / design samples

for approval from suppliers.

Approval samples sent to buyer

Deciding payment terms (Opening

BTB Lc’s)

Trim bulk production Despatch of sample

requirement

Samples from bulk for approval /

reference

Shipment (Ex-origin)

Pre-shipment test reports if required.

Arrives at portClearance

Approval from buyer orRe-submission

In-houseInventory & Inspection

All approvals – Before cut-date Fabric – In-house before cut-date Sewing trims – In-house before cut-date I.e. thread, labels, zippers, etc... Packing trims – In-house before packing starts I.e. Tags, tickets, poly-bags, hangers, cartons, etc...

Trim Cards

Details – Buyer, Po no., Style, Quantity, Manufacturing unit, Del date, etc... Fabric – Swatch & thread (Color, Composition, & Consumption) Pocketing / Contrast / Trimming – Swatch & Thread if any (Color, Composition, &

Consumption) Lining (Woven / Fusible / Non-Fusible) Buttons – Buttons and attaching thread Marketing – Labels & Tickets Trims – Zippers, stoppers, cords, etc... (Length per size, width, etc...) Extras & Comments

Tech Files

Latest tech-spec Copy of order sheet Approved trim-card

32

Trim-card distribution Department

Product DevelopmentStoresQualityCuttingSewingFinishingCommercial

Complete trim cardComplete trim cardComplete trim cardOnly fabric, lining, etc..Mainly with sewing trimsMainly with packing trimsNot required

Approved wash standard Sample comments / alterations Special important comments / messages Copy of T&A

Suppliers that provides a Service

Printing Embroidery

33

DepartmentProduct DevelopmentStoresQualityCuttingSewingFinishingCommercial

Complete trim cardComplete trim cardComplete trim cardOnly fabric, lining, etc..Mainly with sewing trimsMainly with packing trimsNot required

Tech-file distributionDepartment

Product DevelopmentStoresQualityCuttingSewingFinishingCommercial

Complete fileTrim card & requirementsComplete fileComplete fileComplete fileComplete fileNot required

CommercialShould give:Copy of Order SheetCopies of all Performa-invoicesCopies of all purchase ordersImportant details on packing & shippingCopy of Export Lc / details to trace.

Should get:Copies of all BTB Lc’s / StatusCopy of the original export LcImport information / Status (Vessel details etc..)Export information / Status

Appliqué Washing & blasting Special hand work

** Above too have a flow, most importantly these are done on the garment while the garment is on production, and hence we should get all approvals in hand before the cut-date.

Remember

• All requirements have to be double checked, since there is no room for mistakes.• Be extremely cautious when giving information to relevant departments.• Should always do your best to execute the order in the proper manner, since short-cuts

and assumptions might be costly.

Risk Analysis

What is Risk Analysis?

A Systematic evaluation of every product is essential to protect our business from financial, manufacturing, quality and safety risks.

It is a continuous process, where each of these potential risks are clearly identified as early as possible and action taken to prevent and/or control.

Why does Risk Analysis have to be done?

It will protect the business

34

Should get:Copies of all BTB Lc’s / StatusCopy of the original export LcImport information / Status (Vessel details etc..)Export information / Status

Risks are highlighted prior to bulk productionCan warn the customer of potential issues – amend the design at the development stageFactory can carry out pilot-runs early / develop folders / obtain the correct machineryCan use Risk Analysis to prioritize timeSafe guard factory from potential risks

a) New fabric suppliers

b) New fabric types

c) New processes – pigment dye

Recommended Stages of Risk Analysis

Stage 1 - Product Screening (1st Design Garment – Before you send the fit / style samples out)

Stage 2 - Pre Contract Seal Risk Analysis (Before Contract Seal – Before you send the pre-production

samples out) Stage 3 - Post Contract Seal Risk Analysis

(Pre-Production – Before you start production)

Key Responsibilities

Stage 1 - Product Screening Head of Merchandising

Stage 2 - Pre Contract Seal Risk Analysis Head of Production / Merchandising

Stage 3 - Post Contract Seal Risk Analysis Head of Production / Merchandising

Operational Responsibilities

Critical Path / T&A Control Meetings held at the planned times Availability & Accuracy of Tech Packs Ensure Potential Risks are highlighted Relevant Documentation completed & distributed Follow-up Actions Accountability

35

1st Tier: 8 Sections

Fabric / Lining / Interlining Trims / Components Additional / Finishing Processes Make Up / Design Features Packaging & Labeling Laying Up & Cutting Fit & Styling Warehouse & Distribution

Risk Analysis Activities

Fabric / Lining / Interlining

Performance Fitness for purpose

36

Suggested Framework

Each Stage of Risk Analysis is a 3 Tiered

System

1st Tier: 8 Sections2nd Tier: Key Activities3rd Tier: Questions / Prompts

Environmental Past Knowledge Cost Wash & Wear Tests / Wearer Trials Work Study / Engineering Interlining Product Safety Pilot

Risk Analysis Activities, Additional Finishing /Design Processes

Embroidery Pleating Non iron Garment dye Cost Wash test / Wearer trial Engineering Past History Wash Laundry Product Safety

Make Up Features

Engineering Fitness for purpose New Design Features Past history of design features Wash test / Wearer trial Product Safety Pilot Location Handling

Packaging / Labeling

Promotional Packaging Hangers Engineering Cost Product Safety Labeling

37

Cutting / Laying Up

Costing Laying Up Cutting Past history Special Requirement Product Safety

Fit / Styling

Fitness for purpose Wearer Trial Wash tests Past History New Features Measurements Product Safety

Warehouse / Distribution

Handling Storage Transport Cost / Freight / Duties Product Safety

3rd Tier: Questions / Prompts

Stage: Pre Contract Seal Risk Analysis Section: Make Up & Design Features Key Activity: Engineering / Work Study Questions / Prompts:

Do we have the right machinery? Do we require any new types of machinery? Are there enough machines? Are there special attachments needed?

The Risk Analysis Meeting

Raise a Risk Analysis Assessment Form for every design / Tech pack Brainstorm as a team – have relevant prompts / questions All Risk issues recorded on the form with agreed actions, responsibilities and completion

date

38

Ensure results are fed back into the system On-going issues recorded for the next stage

Suggested Involvement at Each Stage

Product Screening Product development / Design Merchandising Costing / Work Study Garment Technology Fabric Technology

Suggested Involvement at Each Stage

Pre-Contract Seal Risk Analysis Merchandising Product development / Design Costing Engineering / Work Study Garment Technology Fabric Technology Quality Management Purchasing Production

Continuous Improvement of the System

Create a Questions / Prompt Sheet Update it every season Passed / Fail Designs – reasons Passed / Fail Samples – reasons Late Deliveries & Reasons (Air freights) High Quality Costs (Repairs, Seconds) Missed planned production start dates and reasons High customer returns

FIVE FORCES ANALYSIS

39

Industry Competitors:

The competitive level between the garments firms doesn’t seem to be an important factor in

firm’s behavior and decision. For the nature of the production (OPT), these firms compete

among them for linkages with foreign investors through cheap labor force and effective

organization. In this sense, competition between existing 4500 firms domestically is high. While,

internationally, Bangladeshi companies are competed by China, India, Pakistan, Indonesia, Laos

etc. In Bangladesh many organization have technology and human resource by which they are

taking lots of advantages, while other organization could not even utilize their existing resources,

that’s is why these organization sometimes change their mind into unethical business, and loose

the buyers, while global competitors take these type of advantages and pull the foreign buyers

towards them in fact foreign buyers are not willing to give orders to Bangladesh.

Bargaining power of Buyer:

Due to the characteristics of this sector, the buyers and the suppliers power are not same, because

there are lot of local and global competitors who are waiting to take the order at a more cheaper

price because of their technology and utilizing of the resources, Their power is high since they

are the ones to decide about the price, quality and other related issues. Buyer power is more in

this industry because of the adequate suppliers.

Bargaining Power of the Supplier:

There is less bargaining power of the suppliers in this garments industry. But it seems sometimes

like some buyers do not produce all types of products. For example VISCOSE; not every

supplier produce goods with this type of garments. So in this case some suppliers have the

bargaining power that produce this types of specific goods. Internationally, other artificial fiber

40

& Latex based clothing and leather clothing represent other substitute products for the whole knit

industry.

Potential of New Entrants:

Thought there are lots of knit composite factory in this industry. But also there are prospective to

enter into this industry with the latest technology & expertise employee and also skilled labor,

with the help of these resources newcomer can compete with the local & global market. Existing

companies can’t change their overall resources instantly where as a new comer can take the

advantage to establish their factory with the help of the latest technology and skilled human

resources.

SWOT ANALYSIS

Strengths:

Latest technologies are available in Texport limited.

Texport limited has a bulk of qualified, experienced and dedicated human

resources.

Texport limited has been able to utilize its extensive marketing efforts in order to

capture a wide customer base at a very short time.

In order to convey innovativeness and creativeness, Texport limited tries its best

to come up with latest products as buyer’s requirement.

41

Long historical textile experience in the region.

Marketing Teams are very dedicated to develop the company’s overall position in

the current market circumstances.

Financial support is available from the banks & other financial institutions.

Backward Linkage

Very friendly work environment.

Highly motivated and pro-active team of employees.

Strong governmental support.

Strong Partnership with spinning mills, printing & embroidery factory.

Motivated young people with strong commitment.

Market image is very much strong.

Amongst the top twenty garments in Bangladesh.

Full-fledged back –up data center support.

Excellent advertising efforts.

Too much buyers focused.

Texport limited always loyal to the buyers.

Weaknesses:

They appoint some contractual labor which costs higher than the regular labors.

During the last 5 years many new garment factories starts their operation in this

country; which is starting to lose its market share to its rivals due to low barriers to

entry, and the other garments increasing aggressiveness.

42

During the export many necessary papers are need to be prepare which takes too much

time & also costly.

While dealing with its buyers especially with the foreign buyers, they make lot of

inquiries; they always need hundred percent perfect goods, which cannot be possible

sometimes.

Other partner factories are far from the Texport limited.

Some lack of experience and motivation at mid-level management.

Lack of skilled labor in the Texport limited.

Opportunities:

This garment industry deal with the global market so the market size is enormous the

garment industry the market size is enormous,

Opportunities to adopt the latest technology

Trained or skilled labor can be employ

43

Expand the business into more technology based

New types of raw materials can be obtain

New types of fabric design can be offered to the buyers

Threats:

Increased competition by other garments organization is a threat to Texport limited.

New rules and regulations from the government.

Strictness of the buyers in terms of quality and rules and labor laws.

Entry of the new entrants with the new technology in the market.

SUPPLY CHAIN MANAGEMENT

44

Defining the Supply Chain

Is an integrative approach to dealing with the planning and control of materials and product flow from suppliers to end-users? Supply chain management represents a network of firms interacting to deliver a product or service to the end customer, linking flows from raw material supply to final delivery.

History of Title & Buzzwords

As the elements involved in SCM increased, so do its title & buzzwords changed. The emergence of the concept of managing a process can be dated roughly as:

1975 Buying & Stock Control 1980 Merchandise Control 1985 Quick Response 1990 Efficient Consumer Response

1995 Supply Chain Management

Participants

Suppliers Manufactures Distributors

45

Processes

Demand, Planning, and Forecasting Procurement Manufacturing and Assembly Distribution Return

Planning

• Demand Forecasting• Inventory Simulation• Manufacturing planning• Transportation Scheduling

Execution

Order processing Production & Assembly Distribution Return

Part of the Supply Chain

• Performance control – How well has the supplier matched the instructions?• Supplier compliance – Has the supplier followed the instructions?• Supply chain visibility – Can the retailer see what the supplier is doing?• Collaborative management – Treating the supplier as a genuine partner & the supplier too

been passionately devoted

‘Three Ts’ that Enhance Value & Reduce Costs

• Time

46

• Trust• Transparency

Trade Offs

Price Lead time Risk Quality Reliability

A trade-off usually refers to losing one quality or aspect of something in return for gaining another quality or aspect. It implies a decision to be made with full comprehension of both the upside and downside of a particular choice.

Additional Tasks

Packaging Labeling Ticketing Bar-coding

Procedures & Systems

• Purchase orders placed• Purchase orders in manufacture against target supplier delivery dates

47

• Merchandise dispatched by the supplier• Merchandise received at the retailer’s warehouse• Stock at the warehouse• Merchandise allocated to stores• Stock at stores

Flows

Raw Material Flow Finish Goods Flow Information Flow Financial Flow

Challenges (In the Clothing Supply Chain)

Design-Sourcing-Manufacturing

48

Model

Factory (Bangladesh)

Buyer(USA)

Fabric Suppliers(China)

Trim Supplier(Local)

Bank(Bangladesh)

Bank(USA)

Warehouseor DC

Stores

Supplier’sBank

Agent

PA

Finished Goods Flow

NY NJ LA

Financial

Flow

Raw Material

Flow

Information Flow

• To Source, Design and produce clothing patterns, and prototype, the latest in-house, and then contract the production to the manufactures.

• To place the company at the forefront of up to the minute design and innovation to attract more shoppers to the company’s stores.

• To allow the supply chain to respond quickly to changing needs and circumstances.• To make proactive go/no-go decisions base on complete, and completely accurate, data.• High levels of control over stock movement, and enhance decision making in a highly

dynamic environment though process visibility.• To develop strategic thinking and planning to occur months before the product reaches

the stores.

Challenges (In the Clothing Supply Chain) Count...

Logistics

• Coordinating and controlling thousands of tons of clothing from manufacturing centers throughout Asia to the final destination, with a greater control and visibility as well as overall reduction in inbound logistics cost.

• Maximizing the container utilization by consolidating a larger percentage and thereby reducing cost.

• Also to implement value-added pre-shipment services, such as quality control and barcode scanning at origin.

49

STRATEGY & IMPLEMENTATION

With the consideration of the above whole study especially the problems and prospects, I suggest the Texport Ltd. management to think about the following points:

As there are already more diversified retail credit, PBL should rethink about its target client segment and if possible, should include defense people, lawyers and journalists that can easily fit with that products.PBL should consider especially of businesspersons.

PBL management should take care of its IT development. If there is an online system between Retail Credit Head Office (RHO) and branches, the applications along with necessary documents will be able to be transferred in short time and with less costs for assessment into the RHO. It will also reduce the disbursement time interval and PBL will be able to get more clients.

PBL has currently decentralized retail credit disbursement system which is requiring more time for even any small amount of loan. In this case, PBL should develop a central database system which will enable the RHO of PBL to disburse any amount of retail credit directly from Head Office. It will not only reduce the loan disbursement time

Interval but also helps branches of PBL to be more retail client oriented. This central database system will also enable RHO to identify any retail client of any branch at any time, which will ensure highest level of monitoring and quality control.

PBL management should take more steps to promotional activities. Television advertisement, creating billboard, recruiting more sales agents and arranging retail loan fair can add a large opportunity in achieving more market segments.

50

Garment business is compared to blood of Texport limited and it is the backbone of the economy

of Bangladesh. The Ltd realizes it and took an initiative to establish a garment factory for the

development of economy our country. The garments section of the factory is fully equipped with

automatic machinery from Japan and USA producing highest quality knit garments from basic to

high fashion designs. It is a testimony to our commitment to quality that the finished products of

the factory are always upto the mark.

Garments sectors are very challenging and profitable sector Texport limited have only completed

twenty years of garments business. At the very beginning stage of this factor, it has only five

lines but now it has fifteen lines. So it is very transparent to us that The Texport limited run its

business very efficiently and competitively. Therefore The Texport limited is considered as one

of the biggest factories in Bangladesh. At the initial stage of business, The Texport limited had to

confront the very acute situation

No doubt that Texport limited has achieved its better position but it has some shortcomings and

if it is possible to overcome the shortcomings then it will reach in a giant position.

51

PROJECT PART

52

INTRODUCTION

Since the late 1970s, the RMG industry started developing in Bangladesh primarily as an export-

oriented industry although; the domestic market for RMG has been increasing fast due to

increase in personal disposable income and change in life style. The sector rapidly attained high

importance in terms of employment, foreign exchange earnings and its contribution to GDP. In

1999, the industry employed directly more than 1.4 million workers, about 80% of whom were

female. With the growth of RMG industry, linkage industries supplying fabrics, yarns,

accessories, packaging materials, printing, embroidery etc. have also expanded. In addition,

demand for services like transportation, banking, shipping and insurance has increased. All these

have created additional employment. The total indirect employment created by the RMG

industry in Bangladesh is estimated to be some 400,000 workers.

The RMG industry is highly dependent on imported raw materials, like yarns, accessories,

because Bangladesh does not have enough capacity to produce export quality fabrics and

accessories. About 90% of woven fabrics and 60% of knit fabrics are imported to make garments

for export. The industry is based primarily on sub-contracting, under which Bangladeshi

entrepreneurs work as sub-contractors of foreign buyers. It has grown by responding to orders

placed by foreign buyers on C-M (Cut and Make) basis. During its early years, the buyers

supplied all the fabrics and accessories or recommended the sources of supply from which

Bangladeshi sub-contractors were required to import the fabrics. However, situation has

improved. At present, there are many large firms, which do their own sourcing. And nowadays

the industry has many spinning and accessories factories who supply the raw materials and

accessories.

53

OBJECTIVES OF THE STUDY

This report is prepared primarily for the fulfillment of the Internship program, which is an

essential part of the B.B.A. at North South University Bangladesh (NSU). The report is going to

be prepared Problems and Prospective of Exporting woven Garments from Bangladesh in

the context of Texport Limited.

Broad Objective:

The broad objective of the study is to find out the problems and prospects of the exporting of the

woven garments from the Bangladesh. The main study will be the techniques to overcome the

problems are facing in this competitive condition in the market.

Specific Objective:

The specific or the main objectives of this report will be:

To provide an outline of Texport Limited.

To focus on its evolution.

To focus on the different products of Texport Limited.

To focus on exporting unit of Texport Limited.

To focus on the actual current market size of RMG in Bangladesh.

To focus on different problems regarding garments in Bangladesh.

SWOT analysis of Texport Limited.

Analysis of the data collected through survey and interview.

54

Giving a recommendation based on the survey.

SIGNIFICANCE OF THE STUDY:

The growing future of any country is totally dependent upon the socio-economic situation.

Garments are a very important factor to improve the socio economic situation, because seventy

five percents export are made from the garments compare to the total export. The purposes of

this report cognates the academic purpose. This project objective is to gather practical knowledge

and experiencing the corporate working environment with the close approximation to the

business firm and the experts who are leading and making strategic decisions to enhance the

growth of a garments related company. To this regard, this report is contemplating the

knowledge and experience accumulated from course perspective.

EXPECTED FINDINGS :

I personally think that the owners of the woven sector should take a responsibility to train and

give proper guidance to the labor, so they do not involve in this kind of harmful activities in the

near future. As well as government should take the direct responsibility of this sector, at this time

seventy five percent of total export is from this sector, may be in future almost hundred percent

of total export will take place from this sector.

METHODOLOGY

For the organization part, much information will be collected from different documents

(prospectus, journals, brochures and websites.) of Texport Ltd. All the information incorporated

55

in this report will be collected both from the primary sources and as well as from the secondary

sources.

PRIMARY SOURCE OF DATA

Survey:

Surveying is the most integral part of my primary research. For the survey, I had to make

questionnaires because of some basic reasons. The apparel industry is very big and the workforce

is divided into countless labor-sections. So the opinions will naturally differ a lot about the new

wage scale. Even, they did not share the same attitude towards the recent unrest. So I figured

that, making questionnaires was inexorable. The target groups for my survey were- the

Employers and the Workers of the Texport limited. I wanted to have a clear idea of the subject

and combine the opinions of both the employers and workers to come up with my own

conclusion. It took a lot of time and effort to set the appropriate questions that would help me to

draw any conclusion.

Compared to the workers, surveying the employers was somewhat easier. It was a little

hard to get appointments with all my desired high officials as they are always very busy with

their work. But my colleague helped me a lot in this matter. They were all very cooperative in

the survey and replied with integrity.

Personal Interview:

56

For the better understanding of the issue I have taken personal interviews of Managing

director of Texport limited Mr. Forhad Hossain Chowdhury and Mr. Anwar director of Texport

limted.

SECONDARY SOURCE OF DATA

The secondary sources of data will be collected from the research papers of Texport Ltd. To

clarify different conceptual matters, Internet and different articles published in the journal &

magazines will be used.

57

TOPIC ANALYSIS

58

Problems of exporting woven garments

Problems with the workers

Since May 2006, the RMG industry of Bangladesh has been besieged with very serious labor

unrest problems which has resulted in large-scale damaging of garment factories by the workers

and has at times appeared to threaten the very existence of this industry. The major bone of

argument between the RMG factory owners and the workers has been the allegedly low level of

wages paid in this industry, particularly wages paid to unskilled workers, together with other

issues like late payment of wages, lack of security of workers resulting from absence of a formal

contract between the worker and the employer, nonpayment of maternity and other benefits to

female workers, etc. These issues, which form part of what is commonly known as ‘compliance

with social standards’, have also posed problems for Bangladesh’s RMG industry on the external

front for the past few years during which time foreign buyers of Bangladesh’s garments have

insisted on strict social compliance on the part of RMG enterprises in Bangladesh as a pre-

condition for their importation from this country.

Uncertain Future of the Industry

59

 After the end of the Multi-Fiber Agreement at the beginning of 2005 and the changeover to the

new World Trade Organization regime, it was feared that the Bangladesh's booming textile

industry would suffer as it would lose business to countries like China and India. But fortunately

for Bangladesh, so far this prediction has been proved wrong. In fact, the industry has continued

to grow at a healthy rate of 20 percent. However, this does not indicate that the Bangladesh

garment industry has become more competitive. The reality is that this increase has been largely

due to restrictions imposed on China by the Western nations than to the ingenuity in Dhaka or

Chittagong. The China cannot be held back after 2008, which means a completely different

picture might emerge after that.

Agreements with Garment Workers not honored

 A study by Bangladesh Institute of Labor Studies (BILS) has indicated that garment

manufacturers and exporters in Bangladesh have yet to implement four agreements signed

between 2006 and 2010 to defuse problems following labor unrests.  A number of labor leaders

believe that owners reached accords with workers just to defuse troubles whenever there was

unrest. Instead of implementing deals, the owners even filed a writ petition against the

government notification about minimum wages for laborers circulated in 2001.

 The factory owners also did not implement the 24-point suggestion offered by the Department

of Inspection for Factories and Establishment in November 2000. The department pointed out 24

kinds of irregularities in the garment industry that went against labor laws. Inspection by the

department also found that non-implementation of labor laws resulted in discontent and anger

among the workers.

Child Labor

60

Although child labor is illegal in Bangladesh, for years the powerful garment industry employed

between 50,000 and 75,000 children under 14, mainly girls. Bangladesh is one of the world's

leading garment exporters, but the situation captured little international attention until 2002,

when the US introduced legislation to ban the importation of goods made using child labour. Still

there are some garments factories where child labour is employed. In near future foreign

countries may impose more strict laws or totally ban the import from Bangladesh if government

do not handle this situation properly

Unskilled labor

One of the major problems is unskilled labor in garments industry, which creates problem with

the quality of the product. Buyer wants the quality as well as within the time period but one thing

is possible at a time, quality or time. Unskilled labor can be eliminating if the workers get

sufficient training to improve their lacking. Government or garments association like BGMEA or

BKMEA should take initiatives to establish training center , so the garment worker can get

training and help to give more quality product and within a time frame.

Unavailability of raw materials

There is a shortage of raw materials in Bangladesh, sometimes raw materials need to be imported

from India or China or may be other countries as well , it is not always possible for a company to

import raw materials from outside which is costly and also time consuming , though the

garments factory get tax exemption from importing. If availability of raw materials can be

ensured by the government, it will be easy for the garments factory to shipped the goods on time

61

and at a low cost, though they find some raw materials like yarn , or other things , the price

become so high that cannot be afforded by the garments factory or else they need to ask the

buyers for the higher price. But these matters create a situation which could led the buyers to

switch to another countries.

Prospective of exporting woven garments

An important development in the RMG industry of Bangladesh was the growth of knitted

garments export in the early 1990s. The garment industry was almost completely dominated by

woven garments during the 1980s. Export of knit wear to the tune of US $131.20 million was the

first major consignment of knit RMG export from Bangladesh. After this, knitwear export from

Bangladesh grew rapidly; during the ten year period 1996/97 – 2006/07, the annual growth rate

of knitwear exports was almost 30 percent, which was higher than the annual growth rate of 10.6

percent achieved by woven garments export during this period. The share of knit garments

exports in total apparel export from Bangladesh rose from 19 percent in 1996-97 to over 48

percent by 2006-07, while the share of woven garments gradually declined. While woven

garments exports of Bangladesh are concentrated in the North American market, knitwear

exports are mainly sold in the EU market. Local value addition in the knit sector is about 50

percent.

The RMG industry is a low-technology and labor-intensive industry. Hence, global relocation of

this industry has been partly dictated by the availability of cheap labor in a potential supplying

country. Being a labor-surplus economy, Bangladesh has always enjoyed low wages. The

62

comparative wage position of the Bangladeshis apparel industry in 1981, the time when global

relocation of the RMG industry was occurring at rapid rate.

Necessities of skilled labor

In this industry skilled labor are highly required to improve the quality of the product and to

operate the high technological machineries. Government should take necessary steps to train up

these labors for the future benefit of the country. Skilled labor can add more revenues in this

sector, comparatively India and China has this resource to compete in the global market but

Bangladesh always one step behind in this matter, so this the time to generate more skilled labor

to compete with them, as a result it will thrust the garments sector into rapid growth.

Technological improvements

Computerization has become a prevalent corporate response to free-trade related clothing import

competition as deregulation and the drying up of subsidies to support a Bangladeshi clothing

industry. Nowadays many firms adopting computerized machines to increase the productivity

and the quality of the product, but due to the high price of these machineries not all the firms can

afford these machines, if they get the support from the financial institutions properly, they can

bring these machines and give a quality product and at the same time they can offer the buyers

more stylish and elegant product.

63

Main issue

Labor unrest

The garments sector witnessed habitual violence in Bangladesh. In recent times (June-July

2010), sequence of incidence had taken place. Some incidents have paralyzed the whole Dhaka

city. The workers took street, ran amok. Police violently swooped on them, water canon, rubber

bullets and baton charges could not stop the workers from staging spontaneous demonstration.

Generally in Bangladesh, the major reasons of sudden outburst, against the backdrop of

accumulated anger and immeasurable troubles of the workers, are directly linked to low wage,

unpaid wages and overtime.

Last year 2010

72 incidents are seen

988 workers injured in police actions

45 workers were arrested

more than 10,000 were sued

and at least 78 workers were sacked

Reason for the unrest

The major reasons of sudden outburst

low wage

unpaid wages

64

Unpaid overtime

irregular pay

sudden closure of the factory without any prior notification

Interview of the workers

The apparel industry is the backbone of the economy of Bangladesh and the backbone of

this industry is the cheap labors. We all know cheap labor is our main asset. One the workers

unrest can paralyze our garments sector. And this is the main problem of our garments sector

as well as exporting sector. I asked question to the workers of Texport limited about the

unrest and what they think that, it will affect to our exporting.

How long have you been working in this sector?

 

Less than 2 years.

2- 6 years.

6- 10 years.

More than 10 years.

 

What was your basic salary (per month) before this unrest broke out?

65

 

Less than tk.900 per month.

Tk. 900- 1250 per month.

Tk. 1250-1500 per month.

Over tk.1500 per month

 

 

Were you satisfied with your salary per month?

 

Yes, I was reasonably satisfied.

Yes, but I had to do a lot ‘over-time’ to get the desired amount.

No, I was not satisfied at all.

No, I wasn’t but it’s the same case with all the workers; so somehow I managed.

Are the unrest, did you try to approach the officials with your salary-demands and

what was the result?

 

Yes, we did several times maintaining the proper chain of command;

but with no satisfactory result.

Yes, some of us did but any certain discipline and there was no result.

Yes, we did and there were satisfactory steps taken to alleviate the problem.

66

No, we did not approach as there was no need.

No, we did not as we were scared.

 

Did you take part in the possessions and the movement activities?

 

No, I didn’t as I was satisfied with my job.

No, I didn’t as I was fearful of losing my job.

Yes, but very few people of my office know it.

Yes, I took part in the possessions as our demands were just.

  Do you support the processions and the violence activities that the workers did to

highlight their demands?

 

No, I don’t support the activities at all.

No, I don’t support as there were others ways to solve the issue.

Yes, as there were no other ways to highlight our demands to the

world.

I support the demonstrations but I don’t support the violence

activities.

 Were any of your fellow workers took part in the processions and violence

activities?

 

67

No

Not that I know of

Yes (explain briefly)

Which of the following has contributed the most in causing this disorder?

 

The recent price hike of daily essential commodities.

Dirty politics by some dishonest politicians.

The escalating frustration of the workers with their meager salary.

Many offices give the workers their salary and bonus very late and hence the

problem occurred in the recent market conditions.

Others ( explain briefly)

What is the reaction of the workers after the new wage-scale was declared?

 

We are very happy that our demands were met.

We are reasonably satisfied but still there is room for further improvement.

We reject the new wage-scale completely and propose for improvements.

We accept as our company’s financial condition is not capable to afford further

pressure.

Has your company agreed to follow the new wage-scale for the workers?

 

Yes, it is already in action.

Yes, but the officials said that it would take some time.

68

No, the company can’t afford it.

No, our wage was already higher than the proposed scale.

 What do you think will be the effect of this in the apparel industry as a whole?

 

I don’t have any clear idea about the outcome of this event.

The industry will overcome this problem in no time.

The industry will face serious problems to regain its lost reputation.

It will harm the industry but there were no other ways for workers.

Data analysis

 

This is the most important part of my project paper; Data Analysis. My main objective here is to

find out problem and prospect of exporting woven garments. The data that are presented here are

results of the survey that I conducted.

69

We can get a clear picture about the worker’s wage-satisfaction from the graph. About

42% workers said that they were reasonably satisfied with the salary the get but they have

to do a lot of over-time to earn a respectable amount. Another 28% said that they were

completely happy with their previous salary whereas 25% workers replied that they were

very frustrated with the salary. So we can infer from the graph that more than 60% of the

workers were actually happy with the salary that they used to get before the unrest.

70

11; 28%

17; 43%

10; 25% 2; 5%

Were you satisfied with your salary (per month) ?

Yes, I was reasonbly satisfiedYes, but I had to do a lot of "over-time" to earn the desiredNo, I was not satisfied at allNo, I wasn't but like others I managed somehow

21; 53%

10; 25%

9; 23%

Before the unrest, did you try to approach the officials with your salary-demands and what

was the result?

Yes, maintaing chain of command but nothing was doneYes, some of us did but any certain discipline and there was no result.Yes, we did and there were satisfactory steps taken to alleviate the problem.No, we did not approach as there was no need.

As seen from the above graph more than 50% of the workers tried to take the issue to

upper levels maintaining the proper chain of command. Another 25% said that they did

approach with the problem but it was not an organized one. However, one-fourth of the

workers said that they were totally satisfied with the situation and did not do as they think

that there was no need. As we can see from the graph that more than three-forth of the

workers did try to state their dissatisfaction about the wage-issue before the unrest broke

out. At the same question more than half the employers said that there had been no

complaint from the workers as they earned a good amount by working over-time. Another

30% replied in the same tone that they were very happy with the salary and did not bother

about complaining

71

20; 50%

2; 5%

5; 13%

12; 30%

1; 3%

Which of the following has contributed the most in causing this disorder?

The recent price hike of daily comoditiesDirty politics by some dishonest politiciansThe escalating frustration of the workers with their megar salaryGetting the wages well after due timeConspirasy of foreign countries

From the graphs we can easily deduce that the most important reason that contributed this

disorder is the unnatural hike in prices of daily essential commodities. Almost half the

workers and employers agreed with that. A very surprising fact is that the significant

reason for this issue according to the workers (30%) was the fact that they had to wait well

over due time to get their meager salary whereas the employers (30%) said they believe

that the strife is a result of a foreign conspiracy. In comparison, only one (1) worker agrees

with the employers in the matter. Although the employers denied any relation of dirty

politics with the matter in hand but a small portion of the workers (5%) supports that

theory. Some of the employers and the workers also blamed the communication distance

between the workers and the officials for this fiasco.

72

29; 73%

11; 28%

What is your opinion about building a trade union after this unfortunate event?

Yes, we are already in process to create oneNo, there is no such programme as there's no needWe had one even before the unrestNo, the company officials are reluctant to create one

About 80% of the employers believe that there is no need for a trade union. But most

surprising is that after all these events more than 70% of the workers believe that there is

still no need of a trade union in the industry in the near future. Another 20% of the

workers were in favor of creating trade union but they said that their company officials are

reluctant to create one. Although 20% of the employers did say that they have not yet

decided about the fact yet but it is likely to be not positive.

The data that are given are very surprising and give us a sense of alarm. Although the

workers have gone to great extents to raise their wage but in reality they don’t have any

73

32; 80%

8; 20%

What do you think will be the effect of this in the apparel industry in future?

I don't have any clear idea about the outcomeThe industry will overcome this probem in no timeIt will harm the industry but workers had no other wayThe industry will face serious problems and may never regain its repuattion

clear idea about the outcome of this occurrence. Only 20% workers said that they know

that it would harm the industry but they had no other choice, except what they did, to

make their demands noticed. As far as the employers are concerned they are fairly

confident that the industry will overcome the problem and rise again with its lost dignity

and reputation. About 80% of the employers believe that a peaceful political condition will

give the industry a lot of stability and enough opportunities to regain everything they lost

and even more. Only 20% of the employers are not certain about the future of the industry.

 

74

18; 45%

19; 48%

3; 8%

Do you support the new wage-policy suggested by the BGMEA and the government?

We are very happy about the new wage-scaleWe are reasonably staisfied and hope for further im-provementsWe reject it and propose for new improved scale

The graphs show a positive reaction both from the workers and the employers. 45% of

the workers are very happy with the proposed wage scale and another 47% is also satisfied

with it but expects further improvements in the near future. Only 8% of the workers reject

the scale totally saying that that it is still very low for them. So more or less, more than

90% of the workers expressed their support for the new wage scale which is very useful for

the betterment of this unrest situation. The employers also replied in the same tone. Almost

all the employers extended their support towards the new wage scale unanimously saying

that it is in line with the present market conditions and there are very little rooms for

further improvements here.

Opinion of garments owner

That the price hike is the main reason of the disaster. That’s why this wage is not

sufficient for the worker.

Officials believe that foreign conspiracy have initiated this riots to defame our

industry.

also force the workers to do much over-time without any financial rewards

Every single day is important for this business and there is no time to waste. The

government should understand the importance of the business and help in possible

ways.

They also hope to establish a trade union for the industry in future so that these

unpleasant incidents can be avoided.

75

They also urge the common people to come forward and contribute in possible ways

to make the business reach its pinnacle.

these riots as an attempt to discredit Bangladesh and thus make it lose its good

business reputation

My findings

I have put my best efforts to make this project as genuine and authentic as possible. However, it

has some limiting factors which cannot be denied. The apparel industry in Bangladesh is very

huge and around twenty-five lack (25, 00,000) people work here. So in order to get a true and

complete picture of the scenario, opinions and reactions of at least half the people should be

counted. But that feat is impossible for me to achieve because of the time and resource

limitations. Moreover, as a student, many classified information are well over my reach. And

understandably, the officials and the workers are not entirely honest in their attitudes.

Nevertheless, even with all the limitations I hope I was able to draw a reasonable conclusion for

the issue.

76

With the help of the survey, interviews, newspapers and magazines I have proved that the

major cause of the riot is the unnatural price hike of daily life. Most of the workers and

employers agreed with that. However a surprising thing was that many employers attributed to

foreign conspiracy as the reason of the unrest. And this is the main threat of exporting.

As we can see that my hypothesis was proven partly in the project. The apparel industry

in Bangladesh is a very promising one. The recent unrest harmed the business greatly but it will

rise and shine soon. However, some steps are needed to be taken to ensure that. First of all the

government and BGMEA should investigate the event more thoroughly and take note of the facts

that fueled this unfortunate event. The injured workers should get some compensation. Next, the

government should inquire and ensure that the new wage-scale is followed in every company. As

I have found out, there are some companies that can’t afford the proposed scale. In these cases,

BGMEA should help and govern them so that they can gain more financial success. It is the duty

of the government to manage and control the price level of daily necessities so that of people of

all sections can afford to buy them. The industry should ensure the safety standards for its own

benefits. A substantial labor trade union must immediately be formed to avoid these occurrences

in future. Political peace must be ensured as a top priority. Different backward linkage

businesses must be set up so that the industry can get their raw materials at lower prices and thus

increase their profits. If the apparel business is properly nurtured it can take the fragile economy

of our country to a strong and steady economy with multi-dimensions. And every person of this

country can play an important role in making this dream possible.

77

RESULT

Bangladesh is a potential country in exporting woven garments product. From my survey I found

almost eighty percent people answered Bangladesh is improving in garments sector day by day

through their enormous operations. There are lots of problems in the garments sector. Unskilled

labor is one of the major concerns for this type of industry. People agreed with this type of major

problem. For which they think industry are losing lots of orders with in a period of time.

Government is one of the big helping hands for any industry in the country. Government plays a

vital role in the knitting industry to improve the countries overall economic condition. So people

think government supports a lot to the entrepreneur to improve their overall business situation.

Political condition in a country is another barrier for the development of the industry in

Bangladesh. Though nowadays the political condition improved & the entrepreneurs get rid of

the terrible situation. Not only the owners but also the thousands of labors are involved in the

woven sector. The family members of these labors are depend on them, so directly or indirectly

millions of people are rely on this knitting industry. If any irrelevant issue occurs it will

automatically impact on them, so government should not reluctant to arises these unethical

problems by implementing rules & regulations.

The quality is the main factor of the garments product. A good quality product can pull the

buyers into this sector. Foreign buyers are the main buyers in this woven garments sector, they

always concern about the quality of the product. There are some organizations in Bangladesh

who inspects the quality of the product on behalf of the foreign buyers. So there is no room for

the knitting industry to hinder with the quality.

Labor and owners conflict was there from the beginning in this industry. At first the problem was

started from the side of the owners. The owners use to involve the workers more hours than

expected and also they paid low wages. Mainly this conflict arises for this reason. The owners

also give fewer wages to the women comparatively to the men. At one time the problems

become much bigger that government and the foreign buyers were forced to impose tight rules

and regulations in this industry, in fact the American buyers do not give orders if a firm do not

have the certificate of Worldwide Responsible Apparel Production (WRAP), WRAP is an

78

independent, non-profit organization dedicated to the certification of lawful, humane and ethical

manufacturing throughout the world labors. Nowadays the situation rotates opposite, owners are

bound to fulfill the requirements of the labors, otherwise labors are so intense that they start

creating problems and sometimes they block the streets and ruined the factories to fulfill their

demand. Recent days this labor unrest is discontinue due to the government restrictions.

Texport limited is also one of the sufferers of labor problems in this industry though they

overcome this problem in a short period of time. The demand of the workers of Texport limited

was to increase the wages and bonus without any reason. This problem was created by one of the

union leader of labor because of some financial benefit. The union leader was also involved in

the labor uproar to discontinue the factory operations, which was a problem for Texport limited

to continue the production; as a result they also fail to ship the goods on time.

I personally think that the owners of the woven sector should take a responsibility to train and

give proper guidance to the labor, so they do not involve in this kind of harmful activities in the

near future. As well as government should take the direct responsibility of this sector, at this time

seventy five percent of total export is from this sector, may be in future almost hundred percent

of total export will take place from this sector.

Rising food and essentials prices are making the garment workers plight worse. The

low wages have a disastrous effect on workers' livelihoods. The workers especially

women are struggling to feed themselves and their kids, and their anger is boiling over.

Companies have broken their promises and pledges. Companies pay hardly any attention

to miseries of the workers. In the absence of any stewardship of movement, a network

has developed among the workers which is expanding and growing. 

Government promised that workers wages would be substantially increased, but the

statements and arguments on fixation of wage clearly demonstrate that the government is

not going to keep its promise.

79

Non-existence of union and organization left no option for the workers but to take streets

in protest of torture, low wage and non-implementation of labor laws.  

All the Memorandum of Understanding ( MOU) in a series of tripartite negotiations,

which took place over the last couple of years, were not respected by the Bangla Desh

Garment Manufacturers and Exporters Association (BGMEA) and Government;

The role of the labour department of government is fuzzy and dubious. Not a single

Workers Participation Committees are allowed to function properly in the factory.

RECOMMENDATION:

With the consideration of the above whole study especially the problems and prospects, I suggest the Texport Ltd. management to think about the following points:

As there are already more diversified retail credit, PBL should rethink about its target client segment and if possible, should include defense people, lawyers and journalists that can easily fit with that products.PBL should consider especially of businesspersons.

PBL management should take care of its IT development. If there is an online system between Retail Credit Head Office (RHO) and branches, the applications along with necessary documents will be able to be transferred in short time and with less costs for assessment into the RHO. It will also reduce the disbursement time interval and PBL will be able to get more clients.

PBL has currently decentralized retail credit disbursement system which is requiring more time for even any small amount of loan. In this case, PBL should develop a central database system which will enable the RHO of PBL to disburse any amount of retail credit directly from Head Office. It will not only reduce the loan disbursement time

80

Interval but also helps branches of PBL to be more retail client oriented. This central database system will also enable RHO to identify any retail client of any branch at any time, which will ensure highest level of monitoring and quality control.

PBL management should take more steps to promotional activities. Television advertisement, creating billboard, recruiting more sales agents and arranging retail loan fair can add a large opportunity in achieving more market segments.

LIMITATION OF THE STUDY:

Readymade Garments industry is so oversaturated and the number of market players is so intense

that it limits the opportunity to work extensively on the proposed research subject during the

internship period. The limitations confronted while conducting the paper were:

• Availability of data was limited for manipulative the entire report.

• Local garments are key players in the market. Exclusion of foreign companies for the study can

be attributed to the unavailability of data in Bangladesh.

• Lack of published materials.

• Inadequate facts & figures published articles, business journals were not available

particularly for the garments industry.

81

CONCLUSION

Texport Limited is one of the private foreign exchange earners in this sector in Bangladesh.

Texport Limited has always given the highest value of its component contributing to the

production, management, revenue where the human resources was considered as the

prime factor. Texport Limited endlessly strives to achieve the best output, by developing

and improving and proper utilizing its human capital. As a result it becomes one of the

leading knitting organizations beside others.

Though Texport Limited has the capability of doing operations in this sector but also it has ample

opportunities to upgrade itself by using all its resources, maintaining qualities and giving continues

effort.

Texport Limited management should give more attention to attracting, developing, motivating

and retaining qualified employees through job-products that satisfy their needs. Therefore, it is

hoped that Texport Limited will be able to put the effort of its employees in greater development

of the organization and enable it to hold a lion’s share of market in the garments sector.

From the above analysis and comparison, it has been proved that, Texport Limited though has

some problems, yet it has lots of opportunities to carry on its retail lending business. Diversified

product portfolio, lower rate of charges etc is the favorable features of Texport Limited for

clients. If, Texport Limited follows the above recommendations, to cope up its problem, Texport

Limited will be able to continue to chart in this traded path.

Bibliography

www.bgmea.com

www.bkmea.com

www.wrap.com

82