The end of 2021 brings déjà vu to the clothing makers

Compliance with certain standards and regulations will be one of the key issues in our RMG sector in the coming year. Image file: star

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Compliance with certain standards and regulations will be one of the key issues in our RMG sector in the coming year. Image file: star

There is a deep sense of déjà vu as we approach the end of 2021 and look forward to what the new year will bring. At the end of each year, I’d like to reflect on the lessons learned over the past 12 months, and how the country’s RMG industry will weather next year – what hurdles may lie ahead. As 2022 approaches, it is hard to escape the feeling that we are still trapped in a downward spiral of uncertainty driven, of course, by the Covid-19 pandemic.

Many experts assumed that the epidemic would be over now or, at least, we would be able to see an end in sight. However, as I write this article, chaos reigns in some of our major markets in Europe and the United States. We are seeing closures again in some countries, which will undoubtedly have an impact on the amount and types of clothing purchased. The main indicator is that the new variant of the coronavirus, which is sweeping Europe, is much milder than its predecessor, which caused the worst bout of a pandemic around the world earlier this year. We should hope and pray that this will indeed be the case, and Omicron will prove less dangerous than Delta.

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Looking ahead to the year ahead, the dominant message is very similar to last year’s: proceed with caution. Domestic RMG manufacturers had a boom period in the second half of 2021, but there is still anxiety and tension within the industry – a sense of dread that our progress could be derailed at any moment. Therefore, we must be rational as we approach 2022, and not take any undue risk. We must closely monitor the developments of the pandemic in our key markets by following local news outlets in the European Union, the United States and beyond. In fact, now more than ever, it is important to be aware of what is happening in other parts of the world, to understand how these events can affect us as clothing makers.

Another problem that I definitely see raising its head in 2022 is inflation. As producers, we have seen the impact of inflationary pressures in terms of rising costs of raw materials, such as cotton. Cotton is the lifeblood of the RMG sector in Bangladesh, and its price has been rising consistently in the past year. In general, the price of cotton is now about twice the price before the outbreak of the epidemic in late 2019. The prices of organic cotton, which many of our customers now demand, are especially high.

The challenge with these price increases is that they are often absorbed by suppliers. Customers don’t sympathize much with suppliers when we complain about the high prices of raw materials – perhaps because they have their own challenges.

In such circumstances, it is difficult to see many solutions to inflationary pressures in our industry, other than for manufacturers and customers to have an open and transparent discussion on the matter with some give-and-take effort put in by both sides. In the longer term, if these price hikes “start” and become normal, we need to consider whether a cultural change is required in terms of what end consumers pay for clothing – something I’ve discussed regularly and worthy of a whole new article.

The third issue that I think will be big in 2022 is regulation. Our customers, more than ever, are looking for the best suppliers who adhere to certain standards and regulations related to the environment and social issues. This transformation is moving at a rapid pace, and it is happening in response to the pressure that their governments as well as international agencies are putting on fashion companies. Where are the costumes made, who makes them, and under what conditions? – These are the questions to which our buyers have to provide answers in increasing detail.

The implications for us, as suppliers, are increased regulatory costs, more paperwork and more hassle. But we must accept and embrace this new regulatory environment to thrive in the fashion industry in the future. “Due diligence” is the key phrase on every fashion director’s lips right now. We cannot bury our heads in the sand on this subject.

There are two other issues that I think we need to pay more attention to, and they will become more prominent in the coming years. The first is cooperation. I have seen, with growing optimism, the number of partnerships that Bangladesh Readymade Garment Manufacturers and Exporters Association (BGMEA) has been involved in over the past 12 months. These partnerships are in areas such as textile recycling, traceability, inward investment, and brand promotion of Bangladesh. The saying goes: “No man is an island”, and in today’s interconnected world, Bangladesh needs reliable partners to come to terms with the new dynamics that dominate our industry. I think here in terms of sustainability, innovation and technology. International cooperation will be a major driver moving forward in our industry and as individual plant owners we can play our part in this by looking to set up cross-border ventures with like-minded vendors.

The other issue is purchasing practices, which we’ve discussed a lot in the past 18 months. I see more and more cooperation on this issue, and an increased willingness to discuss a more equitable way of doing business that provides greater certainty and clarity for both buyers and their suppliers. The signs are positive. Nobody benefits from persistent allegations of unfair procurement practices – one party claims they are being treated unfairly. Shall we wish industry leaders and major buyers in 2022 finally deal with this problem, so that hostile trade relations over pricing and purchases become a thing of the past?

One can only live in hope.

Mustafa Uddin is the Managing Director of Denim Expert Limited, and founder and CEO of Bangladesh Apparel Exchange (BAE) and Bangladesh Denim Expo.

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