It Just Keeps Getting Better for Asmara Bangladesh Clocking US $ 128 Million Turnover with major US & EU brands.
Being in Bangladesh since 2005 has given Asmara ample experience and resources to manoeuvre through the dynamic and topsy-turvy path of apparel export sector based out of the new south-Asian tiger, Bangladesh. Content with the growth rate of 11% in the last financial year, Asmara moved into a new office in Uttara, Dhaka to a total space of 40,000 square feet. “Despite the prices being stable since 2016-17, we have registered 11% growth in value by increasing the quantities by 14%. Volumes are still the end-game for apparel exports in the country, despite value additions being in demand constantly as buyers still expect 20-30% cheaper products when they look at sourcing from Bangladesh,” starts out Manish Ojha, Country Manager, Asmara Bangladesh, who has been at the helm of Asmara growth since the early days of the company in Bangladesh. Working with brands such as A&F, Zara, Reitmans, Cecil, Group Dynamite, POP etc, Asmara clocked US$ 128 Million Turnover in the last financial year – 40% from American buyers and the remaining 60% equally divided between buyers from Canada and Europe. Tom Tailor, the JV business of Asmara, has also crossed US $ 86 Million in FY 2017.
Asmara has always had an edge over its competitors due to its strong linkages and presence in other apparel manufacturing nations such as Vietnam, India, Sri Lanka and Turkey (Also China, Indonesia & Pakistan). “The international nature of our operations gives us the opportunity to present all our customers with a variety of sourcing options and it suits the situation because most of the brands are looking at diversifying their sourcing beyond countries such as China and Bangladesh,” elucidates Manish. Having recognized the potential of Cambodia and Myanmar, Asmara has been looking at establishing a direct presence in both the nations while still testing waters. “We have already registered our office own office in Myanmar & Cambodia is running for almost a year already, given the fact that Chinese companies have made great in-roads in the apparel and textile business of the country. Suit manufacturing capabilities are coming up very well in Myanmar,” shared Manish. Asmara has a presence in India, Sri Lanka, China, Bangladesh, Indonesia, Vietnam, Turkey, Hong Kong and Pakistan along with offices in Dubai, New York, Australia, Cambodia, Morocco and Myanmar.
Speed to market and Product Development have, are and will always be the two most crucial critical success factors for apparel sourcing and manufacturing organizations. Asmara being no different is constantly working to improve its capabilities on both the fronts. “Cecil has been working with us on the concept of ‘Design to Store in 100 days’ wherein 12 collections are done in a year, all being salesman-sample driven. Once the order is placed by Cecil we have just 60 days to pack and ship the goods as all the shipments are airlifted. They are not concerned about sourcing the fabrics and accessories or deciding where to source them from,” explains Manish. “Sourcing fabrics locally from Bangladesh is a piece-of-cake. But when it comes to importing special or specific quality from Pakistan or China, we have to see whether the mill can give us the fabric in 15-20 days excluding shipping. For viscose blouses, we pre-book solid fabric with mills in China on our risk and start printing as soon as the order is confirmed. This saves us a lot of time,” highlights Manish. To make possible the velocity of such sourcing operations, teams from both Cecil and Asmara have to be on the spot with the deadlines every month when a new PO arrives.
Manish lauds the apparel manufacturers of the country who have developed their capabilities as per the ever-changing demands of the global buyers but wishes that the same buyers stop seeing Bangladesh as a cheaper alternative to China or India. “If we look at a basic 5-pocket denim or a chino trouser, the CM will not be more than 15-20% of the total FOB in any case. Now expecting suppliers to make it less than 20% compared to China or India is not possible as costs have risen in Bangladesh also – Can trims be cheaper in Bangladesh? Can washing be cheaper in Bangladesh? Can chemical be cheaper? No,” points out Manish. To match the volumes demanded by buyers, apparel manufacturers have invested heavily in automated machines and technologies – still CM percentage of a garment’s cost can only be reduced to a certain extent and that too over a period of time. “If we look at the skill-set of operators in Bangladesh and compare that of operations in China, they are still developing Bangladesh. Hence it would be unwise to expect them to be more efficient than Chinese counterparts. The best they can do is try to match their present efficiency levels,” he adds further. Moreover, the recent drive of compliance and worker safety have already strained the factory owners financially.
Asmara also has pattern making, fitting and testing departments to help its vendors deliver right-first-time product. The in-house CAD department, which houses a CAD software, digitiser and plotter from Lectra and is responsible for creating patterns and modifying them for its buyers, and then printing and delivering the patterns received by them to all its vendors. “A tight control at this stage helps us avoid rejection and alteration after the garment has been made,” explains Manish. To further communicate its understanding of quality to its vendors, Asmara has developed a quality manual for the same purpose. The company has also developed a Quality Ownership Program wherein they train the production and quality teams of the factory, stand buyer standards and set the process right in the production line, this avoids duplication and empowers factory teams to provide the right product at the first place. When productivity and output gains are registered, the practices are communicated to the rest of the factory. “We have our IE team from Sri Lanka who decode the entire product to make it more cost efficient and production friendly. Next, we communicate our observations to the factory and if we can delivery 2-3 garments more per hour, we have done our job,” explains Manish.
The vendors also send samples and garments to Asmara’s testing lab for testing physical parameters such as colour fastness, tear/tensile, crocking etc, for internal analysis and corrections, if required. Once the sample is approved, Asmara conducts an internal PP meeting with the QA department, the factory specific QC department and the Merchandising department, and the files with the approved samples and the style information related to the style are transferred to the QC department, who then takes up the matter in the factory at the PP meeting, discussing all intricacies to produce quality products, highlighting all critical areas. “We are authorised by a majority of brands to conduct a final audit and release the shipment from US, EU & Canada,” says Manish, although third-party audits are also done.
Talking about the ambitious target of USD 50 Billion by 2021, Manish believes that the same might be delayed by a year or two as Bangladesh might soon lose its tag of Least Developed Country. “This would increase tariff in EU on Bangladeshi products and we expect that 5% of the European business might go down,” adds Manish. In the coming years, Asmara Bangladesh is gearing up with its vendor partners to compete with Vietnam, Cambodia and India by new product categories.Features Highlights