Internship report

On
Pearl Prince Apparels
Limited

Prepared for:
Kazi Shamsur Rahman
Assistant Professor

Proctor, AMT

BIFT.

Prepared by:
A S M TOWHEED
(072-001-045)

AMT 072

26.Jun.2011

Kazi Shamsur Rahman

Instructor for internship Program

BIFT,

Uttara, Dhaka

Dear Sir,

This is the report I made based on my Internship program held on 22.Jun.2011 in

Pearl Prince Apparels Limited in Tongi Gazipur.

This assignment has five (5) main parts, Objective of the Internship Program, Factory
Profile, A Brief history of RGM in Bangladesh, Different Departments and their
Functions, and Suggestion to Improve the situation.

I am honored to be one of your luckiest AMT students. We all hope long live among
us and good wish for your coming days.

Yours Sincerely,

A S M Towheed

BIFT.
 Acknowledgement

A am cordially acknowledging the support of following people have assisted us in

preparing this report.

Mizanur Rahman
1 Complinace Manager
Marks And Spencer
Tahare Ferdouse
2
Dewhirst Bangladesh Ltd
Saheen Alam
3 Manager Compliance and HR
Pearl Price Appeals Limited
Abdur Rahman Tutul
4 Sr. Merchandiser
Pearl Price Appeals Limited
 Contents

Topic Page No.

Executive Summery VI

Objective of the Internship Program 1

A Brief of the Organization 4

A Brief History of RMG Sector in Bangladesh 18

Different Departments of the Organization and their Function 49

Merchandising 51

Store 58

cutting 63
 Sewing 73

Washing
75

Finishing
77

Human Resource & Compliance

79

Suggestion
81
 Executive Summary

The aim of the Internship program are as follows:

 To know how a factory works

 To know how different departments co-ordinates with each other
 To know how new orders come to the factory
 To know how the Product Development is done
 To know how the Costing and Pricing is done, how the price is fixes
 To know how suppliers are arranged
 To know how price negotiated with supplier
 To know how the team work is done perfectly
 To know how production execution is done with in deadlines

The report discuss about Objective of the Internship Program, Factory Profile, A Brief
history of RGM in Bangladesh, Different Departments and their Functions, and
Suggestion to Improve the situation.
Date : 23.Jun.2011

Pearl Prince Apparels Limited

Plot – 14, block – A, Squibb Road, Cherag Ali, Tongi Industrial Area, Gazipur.

TO WHOM IT MAY CONCERN

This is to certify that Mr. A S M TOWHEED so of Md. Abdul Manman and Aisha
Khanam was a internee of Pearl Prince Apparels Limited for 22.Jun.2011 to
23.Jun.2011.

During his attending the Internship program he was found him very honest, hard
working, intelligent and his responsive is quite impressive.

We wish him success in all his endeavors.

Manager Human Resource and Compliance

Saheen Alam

saheen.alam@yahoo.com

Pearl Prince Apparels Limited

Objective of the Internship Program
Objective of the Internship Program:

The objective of the Internship program is to learn how a factory works, watching
different departments closely. How different departments co-ordinates with each
other, how the team work happens.

The main focus is on the Merchandising division. How new orders come to the
factory, how the Product Development is done, How the Costing and Pricing is done,
how the price is fixes, how to arrange suppliers, how to price negotiate with supplier
and at last and the most important thing is to know how the production execution is
done with in deadlines.
A Brief of the Organization
A Brief of the Organization:

Name of the Organization Pearl Prince Apparels Limited

Plot – 14, block – A, Squibb Road, Cherag Ali,

Address :
Tongi Industrial Area, Gazipur – 1711, Bangladesh.

Near the Dhaka – Mymenshing highway, 10

Location : Minutes drive from Shahjalal International Airports
towards North.

Established in May 2007 with a synopsis to

establish a best woven bottom garment factory,
where buyer will feel real comfort to use the facility
for their products. The company is having well
experienced and highly professional staffs and
workforce, who are the main asset of Pearl Prince.
Focus of the Factory :
They are in a process of attending ISO 9001:2000,
WRAP & SA8000 Certification. They respect
ethical and social value of workforce and
determined to provide better possible work
environment, welfare and safety. They want to be
trust worthy to our buyers for Quality, Commitment
and Social Ethics.

Exim Bank Limited

Bank Details :
Motijheel Branch, Dhaka.

Legal status : Private Company

Chairman : Mr. Taslim Akhter

Merchandising : Mr. Varun Gambhir

Corporate Setup
Quality : Md. Mahabubr Rahman

Compliance : Saheen Alam

Factory Location:
 Overview of the Factory:

Brand Logo

Total factory Area : 114500 Sq . ft

Monthly Capacity : 200000 – 250000 Pcs ( Woven Bottom)

Market : USA, Europe, Canada.

Marks and Spencer Jc Peny, VF Asia, Kohl’s and

Customers :
Macy’s

Dress pant, 5 Pocket Demin, Cargo Short, Trouser

Production Category :
and Skirts.

Group Annual Turnover: US$ 80 million

Group Annual Capacity: 30 million pcs

M&S Turnover: US$ 20 million

M&S Supplier since 2007

Mission of Pearl Prince Apparels Limited:

Pearl Prince Apparels Limited Are dynamic

apparel designing and manufacturing company
offering multiple sourcing options, committed to
delivering world-class products with the right
price, right quality and on-time delivery to their
global customers.
Values of Pearl Prince Apparels Limited:

Integrity

Responsibility

Teamwork

Efficiency

Competitiveness

Customer service
Main Products:

Straight Leg Jeans Woven Jogger Pocket Jeans

Single Pleat Trousers with

Pleated Skirt Jazz Pants
Belt

Cotton 3/4 Length 'Dragons' Motif Utility

Distressed Look Jeans
Jeans Trousers
 Roll Up Trouser Pocket Stitch Detail Jeans Cotton Rich Straight Leg

Pure Cotton Roll-Up Cargo Style Zip Off

Beach Life Chino Shorts
Combats Trousers

Palm Tree Print Shorts Cassette Print Swim Short Cotton Chinos
Company Organogram:

Cutting

Production
Coordinator Sewing
General
Manager
(Production)
Maintennance
Finishing

Security

General
Manager Admin Store
& Compliance

Managing HR
Director

Washing

Production
Manager (
Washing) Dry Process

Quality
Manager Sand Blasting

Werehouse
Man power Details:

Designation Quantity
Operator 750
Helper 350
Quality Inspector 140
Quality Controller 25
Quality Asst. Manager 2
Production Manager and Asst. 6
Production Manger
Supervisor 60
Line chief 15
Cutting in charge 1
Cutter and cutting Assistant 67
Iron man 90
Folding man 24
Packing man 28
Mechanic 13
Electrician 11
Security Guard 17
Checker 5
Sweeper 10
Cleaner 30
Pattern Master 1
Product Development 14
Admin 34
Mechhendiser 8
Store officer 2
Boiler Operator 2
Generetor Operator 2
ETP 2
Total 1726
Strength of the organization:

Good communication

Product development

Consistent quality & price

Can do complicated styles, all kinds of washes,

embellishment

Multi – product (Outfits)

Weaknesses of the organization:

Expensive on OPP (Opening Price Point)

Poor service quality

Low use of mordern equipment

Low numbers of fire Extinguisher

No incentive program for the workers

Business Share % With Different Retailers:

2%
8%

10% M&S
VF Aisa
45% Kohl's
10%
JcPenny
Macy's
Other

25%
Environment of the Factory:
Pearl Prince Apparels limited is committed to maintain a Code of Conduct is work
places. Pearl Prince Apparels Limited has sought to ensure that, all garments are
manufactured in very good working conditions with meaningful job and providing all
customers with high quality of products.
Our goal is to create and encourage the creation of model facilities. That not only
provide good job at fair rates of pay, but also improve the workers health and safety
environment, working hours etc. Pearl Prince Apparels limited must respect and
comply with national and international laws and regulations.
Pearl Prince Apparels Limited policy is to discourage and not to support the use of
child labor. Our as defined by local law and ILO convention. Pearl Prince Apparels
limited does not employ any worker below the age of 18 years old.
Pearl Prince Apparels Limited does not support the use of forced labor, bonded or
involuntary labor. Also Pearl Prince Apparels Limited does not keep any deposits for
employment.

Harassment& Abuse:
Pearl Prince Apparels Limited treats employees with respect and dignity. No
employee is subjected to any physical sexual, psychological 01 verbal harassment
and abuse. If any such incident takes places it is dealt through existing disciplinary
practices.

Discrimination:
Pearl Prince Apparels Limited protects and promotes the basic human rights of the
work force. Pearl Prince Apparels limited does not encourage or support
discrimination in hiring, compefl5ati0fl access to training, promotions termination or
recruitment, based on race, caste gender sexual orientation nationality, origin,
religion disability, pregnancy or marital status.
Freedom of Association: Pearl Prince Apparels limited’s employees can form any
committee and join a trade union of their own choice. Employee is not subjected to
intimidation or harassment for this.
Pearl Prince Apparels Limited ensures that, wages are paid for a standard working
month, which meets the legal standards. Pearl Prince Apparels Limited follows the
legally approved grading wage structure for the employee. Minimum wages is Taka
3000/= maintained. Pearl Prince Apparels Limited is committed to pay all payments
regularly in time. Also there is a provision of Ration shop, from where employees can
buy their day to day living items in subsidized rate.

Pearl Prince Apparels Limited complies with the local law and industry standards on
working hours. Workers do not require to work in excess of 48 hours per week. In
case of more than 48 hours work Over Time, it is done with the concern of workers
and is paid at premium rate as per local law. Pearl Prince Apparels Limited ensures
that, over time remains within legal limit. Minimum 01 (One) hour break is given
during daily work period. 01 day weekend in every week is mandatory for all
employees.

Pearl Prince Apparels Limited provides a safe and healthy working environment to
prevent occident and injury to health. We contribute all facilities to the health care
needs of the workers. Modern water purification system Is in workplace to ensure
pure drinking water including the provision of normal and cold water. Sufficient first
aid boxes are available. Permanent Nurse and Doctor regularly check-up the health
of workers at the premises. Pearl Prince Apparels Limited does the best to have
0dequate ventilation, lighting. toilets, personal protective equipments. fire fighting and
safety equipment5. Fire training provided and fire drills carried out in the premises
and record maintained as per law.

Pearl Prince Apparels Limited committed to the environment to meet all applicable
environmental local laws in the company and striving hard for a better environment at
the factory.
Their factory has set up with complete social & ethical compliance issues such as:

Compliances Issues:

 Full proof fire safety issues.

 Boards containing the facilities have been posted on the walls at visible
places.

 Prayer room for mole & female workers.

 In house Clinic consists of 6 sick beds with modern facility run by MBBS
doctor. dl Day care centre.

 Canteen room.

 Toilets - I : 25

 Mineral water drinking facility.

 Well equipped with sufficient fire fighting instruments.

 Adequate first old boxes in each section.

 Monthly fire drill demonstrating.

 Free medical facility.

 Life insurance for the workers.

A Brief History of RMG Sector in Bangladesh
A Brief History of RMG Sector in Bangladesh:
RMG contributes 76% of total exports in Bangladesh. Major products of apparels
include knit and woven shirts, blouses, trousers, skirts, shorts, jackets, sweaters,
sports wears and many more casual and fashion items. The sector currently employs
approximately 1.5 million workers, mostly females from underprivileged social
classes. Clothing, being the largest industrial sector, has been experiencing
phenomenal growth for last 10 years. This is largely due to the simple level of
technology needed by the industry. Moreover, relatively inexpensive and easily
available machineries, requirement of smaller premises, abundant supply of cheaper
work force, low tariffs on imported machineries and, most significantly, benefits of
reserved markets by MFA quota have

spurred the growth of the garment industry. At present the country exports nearly 5
billion US$ per year to around 90 countries in the world which include USA, Canada,
Germany, UK, France, Italy, Netherlands, Spain and Belgium. In fact, Bangladesh is

the 6th largest supplier of apparels in the US market. In order to export readymade
garments, it is now almost mandatory for the exporters to disclose the quality
parameters towards acceptance of the product as per the intended end use as
decided by the World’s leading brands. Knowledge in regulations pertaining to the
area of flammability, care label and fiber products identification act are very important
for export oriented garment trade, which is not only to satisfy the requirement of U.S.
Federal Trade regulation but also to safeguard the interest of consumers.
Performance evaluation of the garments is essential prior to shipment with a view to
meet the specific requirement standards of the buyers. Working environment,
wherein the garments are to be produced, is equally important to protect human
rights and the code of conduct derives the basic objectives of social compliance
issues. Thus, Bangladesh has a stiff challenge ahead to meet the demand of world
market. For Bangladesh, the Ready Made Garment export industry has been the
proverbial goose that lays the golden eggs for over fifteen years now. According to
BGMEA, after the Liberation War of Bangladesh, in 1983 the Ready-Made-Garment
(RMG) industry emerged to be a most promising sector in the socioeconomic context
of Bangladesh. From that point of time till now, this industry has grown and
developed so rapidly that currently Bangladesh is exporting RMG products worth 5
billion USD every year to countries like EU, USA, Canada and other countries of the
world. Now, Bangladesh enjoys the position of being the 6th largest apparel supplier
to the USA and EU countries. 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. The total indirect employment created by the RMG industry in Bangladesh is
estimated to be some 200,000 workers.

In addition to its economic contribution, the expansion of the RMG industry has
caused noticeable social changes by bringing more than 1.12 million women into
labor force. Most importantly, the growth of RMG sector produced a group of
entrepreneurs who have created a strong private sector. Of these entrepreneurs, a
sizeable number is female. It has also been found that RMG can generate huge
employment, (85 % female) with comparatively much less investment. The overall
impact of the readymade garment exports is certainly one of the most significant
social and economic developments in contemporary Bangladesh.

Background
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.

The hundred percent export-oriented RMG industry experienced phenomenal growth

during the last 15 or so years. In 1978, there were only 9 export-oriented garment
manufacturing units, which generated export earnings of hardly one million dollar.
Reaz Garments, the pioneer, was established in 1960 as a small tailoring outfit,
named Reaz Store in DHAKA. It served only domestic markets for about 15 years. In
1973 it changed its name to M/s Reaz Garments Ltd. and expanded its operations
into export market by selling 10,000 pieces of men's shirts worth French Franc 13
million to a Paris-based firm in 1978. It was the first direct exporter of garments from
Bangladesh. Desh Garments Ltd, the first non-equity joint-venture in the garment
industry was established in 1979. It had about 120 operators including 3 women
trained in South Korea, and with these trained workers it started its production in
early 1980. Another South Korean Firm, Youngones Corporation formed the first
equity joint-venture garment factory with a Bangladeshi firm, Trexim Ltd. in 1980.
Bangladeshi partners contributed 51% of the equity of the new firm, named
Youngones Bangladesh. It exported its first consignment of padded and non-padded
jackets to Sweden in December 1980.Within a short period, Bangladeshi
entrepreneurs got familiar with the world apparel markets and marketing.

Till the end of 1982, there were only 47 garment manufacturing units. The
breakthrough occurred in 1984-85, when the number of garment factories increased
to 587. The number of RMG factories shot up to around 2,900 in 1999. By late
1980s, RMG exports replaced jute and jute goods and became the number one in
terms of exports. In 1983-84, RMG exports earned only $0.9 billion, which was
3.89% of the total export earnings of Bangladesh. In 1998-99, the export earnings of
the RMG sector were $5.51 billion, which was 75.67% of the total export earnings of
the country.

Both external and internal factors contributed to the phenomenal growth of RMG
sector. One external factor was the application of the GATT-approved Multifibre
Arrangement (MFA) which accelerated international relocation of garment production.
Under MFA, large importers of RMG like USA and Canada imposed quota
restrictions, which limited export of apparels from countries like Hong Kong, South
Korea, Singapore, Taiwan, Thailand, Malaysia, Indonesia, Sri Lanka and India to
USA and Canada. On the other hand, application of MFA worked as a blessing for
Bangladesh. As a least developed country, Bangladesh received preferential
treatment from the USA and European Union (EU). Initially Bangladesh was granted
quota-free status. To maintain competitive edge in the world markets, the traditionally
large suppliers/producers of apparels followed a strategy of relocating RMG factories
in countries, which were free from quota restrictions and at the same time had
enough trainable cheap labor. They found Bangladesh as a promising country. So
RMG industry grew in Bangladesh.

By 1985, Bangladesh emerged as a strong apparel supplier and became a powerful

competitor for traditional suppliers in the US, Canadian and European markets. Since
1986, Bangladesh has been increasingly subjected to quota restrictions by USA and
Canada. RMG industry suffered setback in a number of countries in the 1980s.

Bangladesh exports garments to some 30 countries, its exports are highly

concentrated in two major markets, the USA and EU. The USA as the largest
importer country imported 43.24% of total garments exported from Bangladesh in
1998-99. Bangladesh was the sixth largest supplier of apparels in the US markets in
the same year. However, if European Union is considered as a single market, the US
market becomes the second largest. Bangladesh exported 52.38% of its apparel
exports to the EU in 1998-99. The EU is the single most important destination of
knitwear export from Bangladesh.

The EU as a bloc has been importing from Bangladesh an increasing quantity of

apparels. In the last five years Bangladesh's exports to the EU have grown by 174%.
The main reason for this phenomenal growth is the almost duty free (due to GSP
privileges) and quota-free access to this market. Other export markets are small.
Japan and ASEAN countries are potentially large markets. Bangladesh has not yet
been able to export sizeable quantity of apparels to Japan, although it imports about
90% of the machinery from Japan to run the apparel industry. Similarly, Bangladesh
has not been able to have market access to ASEAN, or Indian markets although it
imports a huge quantity of fabrics and yarn from these countries. The main reasons
for this are the tariff and non-tariff barriers Bangladesh faces in these markets.
Recently, Bangladesh has started exporting to India, South Korea and other new
markets. As a member of South Asian Association of Regional Cooperation
(SAARC), Bangladesh has undertaken an elaborate programme to increase apparel
exports to India and other member countries of SAARC. Bangladesh recognises the
fact that its economic security depends on the future of its RMG industry. Therefore,
it has undertaken an elaborate programme to meet the challenges it is likely to face
in the post-MFA world market.

Starting of The Bangladesh Garment Industry:

The sector now dominates the modern economy in export earnings, secondary
impact and employment generated. The events in 1998 serve to highlight the
vulnerability of this industry to both internal and external shocks on the demand and
supply side. Given the dominance of the sector in the overall modern economy of
Bangladesh, this vulnerability should be a matter of some concern to the
policymakers in Bangladesh. Although in gross terms the sector’s contributions to the
country’s export earnings is around 74 percent, in net terms the share would be
much less partially because the backward linkages in textile have been slow to
develop. The dependence on a single sector, no matter how resilient or sturdy that
sector is, is a matter of policy concern. We believe the policymakers in Bangladesh
should work to reduce this dependence by moving quickly to develop the other export
industries using the lessons learned from the success of apparel exports. Support
for the apparel sector should not be reduced. In fact, another way to reduce the
vulnerability is to diversify the product and the market mix. It is heartening to observe
that the knit products are rapidly gaining share in overall garment exports as these
products are sold in quota-free markets and reflect the strength of Bangladeshi
producers in the fully competitive global apparel markets.

Contribution of the RMG Industry

RMG business started in the late 70s as a negligible non-traditional sector with a
narrow export base and by the year 1983 it emerged as a promising export earning
sector; presently it contributes around 75 percent of the total export earnings. Over
the past one and half decade, RMG export earnings have increased by more than 8
times with an exceptional growth rate of 16.5 percent per annum. In FY06, earnings
reached about 8 billion USD, which was only less than a billion USD in FY91.
Excepting FY02, the industry registered significant positive growth throughout this
period

In terms of GDP, RMG’s contribution is highly remarkable; it reaches 13 percent of

GDP which was only about 3 percent in FY91. This is a clear indication of the
industry’s contribution to the overall economy. It also plays a pivotal role to promote
the development of other key sectors of the economy like banking, insurance,
shipping, hotel, tourism, road transportation, railway container services, etc.
A 1999 study found the industry supporting approximately USD 2.0 billion worth
of economic activities (Bhattacharya and Rahman), when the value of exports stood
at a little over USD 4.0 billion.

One of the key advantages of the RMG industry is its cheap labor force, which
provides a competitive edge over its competitors. The sector has created jobs for
about two million people of which 70 percent are women who mostly come from rural
areas. The sector opened up employment opportunities for many more individuals
through direct and indirect economic activities, which eventually helps the country’s
social development, woman empowerment and poverty alleviation.

Exporting Condition of Garments Industry

The Ready-Made Garments (RMG) industry occupies a unique position in the
Bangladesh economy. It is the largest exporting industry in Bangladesh, which
experienced phenomenal growth during the last 20 years. By taking advantage of an
insulated market under the provision of Multi Fibre Agreement (MFA) of GATT, it
attained a high profile in terms of foreign exchange earnings, exports,
industrialization and contribution to GDP within a short span of time. The industry
plays a key role in employment generation and in the provision of income to the poor.
Nearly two million workers are directly and more than ten million inhabitants are
indirectly associated with the industry. Over the past twenty years, the number of
manufacturing units has grown from 180 to over 3600. The sector has also played a
significant role in the socio-economic development of the country.

The Agreement on Textile and Clothing (ATC) introduced in 1994, aimed

at bringing textiles and clothing within the domain of WTO rules by abolishing all
quotas by the end of 2004. It provides an adjustment period of 10 years, so that
countries affected by the MFA could take the necessary steps to adjust to the new
trading environment. Liberalization of trade following the Uruguay Round agreement
presents opportunities as well as challenges for a developing country like
Bangladesh in RMG sector. In the Post-Uruguay Round period, traditional
instruments of trade policy such as tariffs, quotas, and subsidies will become less
feasible and less relevant. In a liberalized trade regime, competition among textiles
and clothing exporting countries is likely to become intense. The objective of this
paper is to identify the prospects of RMG industry after the MFA phase out by
analyzing the current scenario along with different policy measures and the available
options in order to be more competitive in the new regime.

The export made by Garments Industries of Bangladesh is improving year after year
except some of the year. Strike, layout, shutdown of company, political problem,
economic problem, inflation etc. are the prime cause of decreasing export in this
important sector. But above it, Readymade Garments Industries is the leading sector
in export sector.
 Year Export (in US $ million) Percentage change

1991 – 92 624.16 32.49

1992 – 93 866.82 38.88

1993 – 94 1182.57 36.43

1994 – 95 1445.02 22.19

1995 – 96 1555.79 7.67

1996 – 97 2228.35 43.47

1997 – 98 2547.13 14.11

1998 – 99 3001.25 17.83

1999 – 00 3781.94 26.01

2000 – 01 4019.98 6.29

2001 - 02 4349.41 8.19

2002 – 03 4859.83 11.74

2003 – 04 4583.75 5.68

2004 – 05 4912.12 7.21

2005 – 06 5686.09 15.83

Figure: Year Export by the garments industries (in US $ million)

Average Quota Prices of Selected Garments Items Exported by Bangladesh, 2006

 T
able: Quota Prices of Selected Garments Items Exported

Problems Regarding With RMG

The garment industry of Bangladesh has been the key export division and a main
source of foreign exchange for the last 25 years. National labor laws do not apply in
the EPZs, leaving BEPZA in full control over work conditions, wages and benefits.
Garment factories in Bangladesh provide employment to 40 percent of industrial
workers. But without the proper laws the worker are demanding their various wants
and as a result conflict is began with the industry.

Low working salary is another vital fact which makes the labor conflict. Worker made
strike, layout to capture their demand. Some time bonus and the overtime salary are
the important cause of crisis. Insufficient government policy about this sector is a
great problem in Garments Company.

There are some other problems which are associated with this sector. Those are-
lack of marketing tactics, absence of easily on-hand middle management, a small
number of manufacturing methods, lack of training organizations for industrial
workers, supervisors and managers, autocratic approach of nearly all the investors,
fewer process units for textiles and garments, sluggish backward or forward blending
procedure, incompetent ports, entry/exit complicated and loading/unloading takes
much time, time-consuming custom clearance etc.
 Picture: Labor- Management conflict in Garments Industry

According to our survey in five leading Company we found some problem which are
given in a chart with their percentage-

Primary Problems

Problems high medium low total

3 2 0 5

01.Raw-materials 60% 40% - 100%

1 3 1 5

02. Marketing problems 20% 60% 20% 100%

5 0 0 5

03. Machinery problem 100% - - 100%

04. Inefficient workforce 3 2 0 5

60% 40% - 100%

1 1 3 5

05. Licensing problem 20% 20% 60% 100%

4 1 0 5

06. Quota problem 80% 20% - 100%

 3 2 0 5

07. Poor government policy 60% 40% - 100%

5 0 0 5

08. Labor unrest/strike 100% - - 100%

Secondary problems

Problems high medium low total

1 3 1 5

01.Middle man affect 20% 60% 20% 100%

0 2 3 5

02. Sluggish business linkage - 40% 60% 100%

2 2 1 5

03. Unloading(RM) takes time 40% 40% 20% 100%

2 3 0 5

04. Time consuming schedule 40% 60% - 100%

1 2 2 5

05. Communication gap 20% 40% 40% 100%

5 0 0 5

06. Dependency on foreign market 100% - - 100%

0 2 3 5

07. Trade block - 40% 60% 100%

2 3 0 5

08. Credit problem 40% 60% - 100%

Safety Problems
Safety need for the worker is mandatory to maintain in all the organization. But
without the facility of this necessary product a lot of accident is occur incurred every
year in most of the company. Some important cause of the accident are given below-

 Routes are blocked by storage materials

 Machine layout is often staggered
 Lack of signage for escape route
 No provision for emergency lightin
 Doors, opening along escape routes, are not fire resistant.
 Doors are not self-closing and often do not open along the direction of
escape.
 Adequate doors as well as adequate staircases are not provided to aid quick
exit
 Fire exit or emergency staircase lacks proper maintenance
 Lack of proper exit route to reach the place of safety
 Parked vehicles, goods and rubbish on the outside of the building obstruct
exits to the open air
 Fire in a Bangladesh factory is likely to spread quickly because the principle
of compartmentalization is practiced
 Lack of awareness among the workers and the owners

But now the situation is much improved and we found, all the surveyed garments are
fulfilling the requirement of emergency exit. It is provided in all the cases, signage is
present and fire fighting equipments are up to date, a departure from the past. Even
fire drill is held once in a month.

Bangladesh Faces the Challenge of Globalization

Bangladesh faces the challenge of achieving accelerated economic growth and

alleviating the massive poverty that afflicts nearly two-fifths of its 135 million people.
To meet this challenge, market-oriented liberalizing policy reforms were initiated in
the mid-1980s and were pursued much more vigorously in the 1990s. These reforms
were particularly aimed at moving towards an open economic regime and integrating
with the global economy.

During the 1990s, notable progress was made in economic performance. Along with
maintaining economic stabilization with a significantly reduced and declining
dependence on foreign aid, the economy appeared to begin a transition from
stabilization to growth. The average annual growth in per capita income had steadily
accelerated from about 1.6 per cent per annum in the first half of the 1980s to 3.6
percent by the latter half of the 1990s. This improved performance owed itself both to
a slowdown in population growth and a sustained increase in the rate of GDP growth,
which averaged 5.2 percent annually during the second half of the 1990s. During this
time, progress in the human development indicators was even more impressive.
Bangladesh was in fact among the top performing countries in the 1990s, when
measured by its improvement in the Human Development Index (HDI) as estimated
by the United Nations Development Project (UNDP). In terms of the increase in the
value of HDI between 1990 and 2001, Bangladesh is surpassed only by China and
Cape Verde.

While most low-income countries depend largely on the export of primary

commodities, Bangladesh has made the transition from being primarily a jute-
exporting country to a garment-exporting one. This transition has been dictated by
the country's resource endowment, characterized by extreme land scarcity and a
very high population density, making economic growth dependent on the export of
labor-intensive manufactures.

In the wake of the 2001 global recession, Bangladesh's reliance on foreign countries
as a market for exports and as a source of remittances has become obvious. If
Bangladesh is to become less vulnerable to the economic fortunes of others, it will
need to strengthen its domestic economy, creating jobs and markets at home. A
strong domestic sector and an improved overall investment environment will provide
a more stable source of income - like what the garment industry has provided so far -
and will rekindle and sustain Bangladesh's economic growth.

Impact of global economic recession

The ongoing global economic crisis has been the cause of major concern of export
dependent economies. It has been observed major industrial countries is
experiencing sharp fall in export demand .Even high exporting countries like China
and India recorded sharp decline in export in last few months. Other high performing
countries like Indonesia, Malaysia.Phillipine and Thailand are also suffering badly
due to the ongoing crisis. On the contrary export from our country so far has
remained quite strong. Knitting and woven garment exports have increased by 41%
and 36% respectively. In July-December period over the corresponding period last
year. This is attributable primarily to low-end textiles product, which has been least
affected by the crisis. And they will continue to import this low end product during the
crisis period. From Bangladesh.

The expert of FOREIGN TRADE INSTITUTE differs in opinion and they rightly points
out that garment sector is in deep trouble and the demands for these products will
drastically will fall down when income will start improving. The BGMEA must look into
it thoroughly and start thinking from now on without wasting time regarding how to
tackle the situation and keep our products export on track which accounts for 76& of
our foreign exchange.

Workers right
Since 1990 Bangladesh has experienced a spectacular growth in the area of Clothing
and Textile industry.

On the basis of applicable Labor law, we could divide the RMG sector in two
categories. One is EPZ area (Export Processing Zone) what is under the authority of
BEPZA (Bangladesh Export Processing Zone Authority,) where workers rights
defend by EPZ law. And the other side we could call outside of EPZ area or Industrial
area where workers rights defend by Bangladesh Labor law-2006.

Now in Bangladesh, there are 2.2 million workers are toiling in RMG industry where
most of them are female workers in order to alive the country’s economy.

The labor rights condition at RMG sector in Bangladesh under the major headings.
The headings are,

1. Employment status, wages & legally mandated benefits

2. Voluntary overtime
3. Harassments and abuse
4. Freedom of association.

Employment status, wages & legally mandated benefits:

If we just take a look in few past, we learn that in 1994 the minimum wage of a
garments worker was 13.88 $. At 2006 the 2nd wages board fixed a new minimum
wage 24.81 $.

The garments factory recruits workers by given a notice at the factory gate. At the
time of appointing it is rare that a worker gets his appointment letter or employment
contract. Only workers personal information and mailing address keep under record
by the management. The workers get only ID card or Attendance card.

The working day beginning at 7 or 8 am and ending at 8 or 10 pm at evening with

one or half hour launch break. Regular working hour is 8 which is ordered by labor
law, implemented by too few factories to count and the workers have to work up to 10
to 12 hours, some where it is 9 to 14 hours with 1 hour launch time, sometimes due
to emergency shipment the management forced the workers to do night shift work for
the whole night. Many factories have found that they always forced the workers by
lock the factory main gate to do the excessive overtime. Regular two hors overtime is
compulsory, no way to refuse the overtime if any one refuses to do he or she would
get dismiss or termination or deducts wages or have to face verbal harassments,
sometimes it turn into physical punishment. In addition to, the overtime is never
announced in advance.

Voluntary Overtime:

It has been described that the working day starts at 7 or 8 am in the morning and
ends at 8 to 10 pm at the evening including 30 minutes to 1 hour launch break.
Regular 2 hours overtime is compulsory. No way to refuses to do the overtime, if any
one refuses he or she must be dismissed. In case of medical and when it reaches in
critical then he would get unpaid leave, Somewhere management deducts his
overtime hour or wages.
It is also been found that due to electricity failure workers have to pass lazy hours but
when the electricity are available the workers have to do work more then 12 to 16
hours when the electricity are available but consider as a regular working day which
is very much common during the Summer.

Harassments and abuse:

The midlevel management of the RMG sector belief that verbal harassments and
abuse is the part of the production and it is proportional into production. When any
one made any mistake in his work what is called “alter” he must be treated with bad
languages. Female workers treated with inappropriate and sexually exploited
languages. It is very much common in every garments means sewing floor.

Freedom of Association:

No factory have found that the management willing accept the workers associational
rights & Collective bargaining rights. The workers have fear to lose the job for
practicing any sort of union activities. Mass termination, decrease work force in order
to reduce union members, Dismissal, harassment & tortured by muscle man and law
forces agencies these are way to vanish any union activities followed by
management. Good factory has accept union activities and provide workers
associational rights but this is rare to find out. Though outside of EPZ area, workers
could practice limited union activities but inside the EPZ area there is another
different practice called WA or workers Association. According to EPZ- law it is
mandatory but most of the EPZ factories have management sponsored WA what
couldn’t gain workers rights.

Prospects of the RMG Industry

Despite many difficulties faced by the RMG industry over the past years, it continued
to show its robust performance and competitive strength. The resilience and bold
trend in this MFA phase-out period partly reflects the imposition of ‘safeguard quotas’
by US and similar restrictions by EU administration on China up to 2008, which has
been the largest supplier of textiles and apparel to USA. Other factors like price
competitiveness, enhanced GSP facility, market and product diversification, cheap
labor, increased backward integration, high level of investment, and government
support are among the key factors that helped the country to continue the momentum
in export earnings in the apparel sector. Some of these elements are reviewed
below.

Market Diversification
Bangladeshi RMG products are mainly destined to the US and EU. Back in 1996-97,
Bangladesh was the 7th and 5th largest apparel exporter to the USA and European
Union respectively. The industry was successful in exploring the opportunities in
markets away from EU and US. In FY07, a successful turnaround was observed in
exports to third countries, which having a negative growth in FY06 rose three-fold in
FY07, which helped to record 23.1 percent overall export growth in the RMG sector.
It is anticipated that the trend of market diversification will continue and this will help
to maintain the growth momentum of export earnings. At the same time a recent
WTO review points out that Bangladesh has not been able to exploit fully the duty
free access to EU that it enjoys. While this is pointed out to be due to stringent rules
of origin (ROO) criteria, the relative stagnation in exports to EU requires further
analysis.

Product Diversification
The growth pattern of RMG exports can be categorized into two distinct phases.
During the initial phase it was the woven category, which contributed the most.
Second phase is the emergence of knitwear products that powered the recent double
digit (year-on-year) growth starting in FY04. In the globalized economy and ever-
changing fashion world, product diversification is the key to continuous business
success. Starting with a few items, the entrepreneurs of the RMG sector have also
been able to diversify the product base ranging from ordinary shirts, T-shirts,
trousers, shorts, pajamas, ladies and children’s wear to sophisticated high value
items like quality suits, branded jeans, jackets, sweaters, embroidered wear etc. It is
clear that value addition accrues mostly in the designer items, and the sooner local
entrepreneurs can catch on to this trend the brighter be the RMG future.

Backward Integration
RMG industry in Bangladesh has already proved itself to be a resilient industry and
can be a catalyst for further industrialization in the country. However, this vital
industry still depends heavily on imported fabrics. After the liberalization of the quota
regime some of the major textile suppliers Thailand, India, China, Hong Kong,
Indonesia and Taiwan increased their own RMG exports.
 Figure: Trend to back-to-back linkage

If Bangladesh wants to enjoy increased market access created by the global open
market economy it has no alternative but to produce textile items competitively at
home through the establishment of backward linkage with the RMG industry. To
some extent the industry has foreseen the need and has embarked on its own
capacity building.

Policy Regime of Government

Government of Bangladesh has played an active role in designing policy support to
the RMG sector that includes back-to-back L/C, bonded warehouse, cash incentives,
export credit guarantee scheme, tax holiday and related facilities. At present
government operates a cash compensation scheme through which domestic
suppliers to export-oriented RMG units receive a cash payment equivalent to 5
percent of the net FOB value of exported garments. At the same time, income tax
rate for textile manufacturers were reduced to 15 percent from its earlier level for the
period up to June 30, 2008. The reduced tax rates and other facilities are likely to
have a positive impact on the RMG sector.

Infrastructural Impediments
The existence of sound infrastructural facilities is a prerequisite for economic
development. In Bangladesh, continuing growth of the RMG sector is dependent on
the development of a strong backward linkage in order to reduce the lead
time. However, other factors constraining competitiveness of Bangladesh’s RMG
exports included the absence of adequate physical infrastructure and utilities.
Labor Productivity
The productive efficiency of labor is more important determinant for gaining
comparative advantage than the physical abundance of labor. In Bangladesh, the
garment workers are mostly women with little education and training. The
employment of an uneven number of unskilled labors by the garment factories results
in low productivity and comparatively more expensive apparels. Bangladesh labor
productivity is known to be lower when it compared with of Sri Lanka, South Korea
and Hong Kong. Bangladesh must look for ways to improve the productivity of its
labor force if it wants to compete regionally if not globally. Because of cheap labor if
our country makes the labor productivity in the apex position, then we think the future
of this sector is highly optimistic.

Research and Training

The country has no dedicated research institute related to the apparel sector. RMG
is highly fashion oriented and constant market research is necessary to become
successful in the business. BGMEA has already established an institute which offers
bachelor’s degree in fashion designing and BKMEA is planning on setting up a
research and training institute. These and related initiatives need encouragement
possibly intermediated by donor-assisted technology and knowledge transfer. A
facilitating public sector role can be very relevant here.

Supportive Government Policy

In contrast to the public sector-led import-substituting industrialization strategy
pursued during the first few years after independence, the industrialization
philosophy of the government changed rather dramatically from the late 1970s when
the emphasis was on export-oriented growth to be spearheaded by the private
sector. Towards this end, various policy reforms were implemented in the 1980s and
1990s. Some of these reformed policies contributed considerably to the growth of the
RMG industry in Bangladesh.

During the 1980s, a number of incentives were introduced to encourage export

activities. Some of them were new like the Bonded Warehouse Facility (BWF), while
others like the Export Performance License (XPL) Scheme

37 were already in operation and were improved upon. Also, rebates were given on
import duties and indirect taxes, there were tax reductions on export income, and
export financing was arranged. Under the XPL scheme, exporters of non-traditional
products received import licenses for specific products over and above their normal
percentage allotment based on the f.o.b. value of their exports. Under the Duty
Drawback System, exporters of manufactured goods were entitled to get refund of
duties and taxes paid on imported inputs used in export production, and also all
excise duties paid on exported finished goods. For certain fast-moving items such as
RMG, a notional system of duty payments was adopted in 1982-83. Under this
system, exporters were exempted from paying duties and taxes on imports used in
export production at the time of importation, but were required to keep records of raw
and 21packaging materials imported. The duties and taxes payable on the imports
were kept in a suspense account. Liabilities to pay the amounts in suspense were
removed on proof of exports.

The discussion in this section clearly points to the positive contribution made by
policy reforms to the growth of the RMG industry in Bangladesh. In particular, two
policies– the SBW facility and the back-to-back L/C system- led to significant
reduction in cost of producing garments and enhanced competitiveness of
Bangladesh’s garments exports. It also allowed garment manufacturers to earn more
profit which, when necessary, could be used to overcome difficulties arising from
weak governance. Furthermore, poor governance, reflected in the leakage of duty-
free imported fabrics in the domestic market, paradoxically enough also helped the
garment manufacturers to earn extra ‘profit’ and thereby enabled them to absorb the
‘high cost of doing businesses – a fall out of bad governance.

Recommendation
Bangladesh economy at present is more globally integrated than at any time in the
past. The MFA phase-out will lead to more efficient global realignments of the
Garments and Clothing industry. The phase out was expected to have negative
impact on the economy of Bangladesh. Recent data reveals that Bangladesh
absorbed the shock successfully and indeed RMG exports grew significantly both in
FY06 and (especially) in FY07. Due to a number of steps taken by the industry,
Bangladesh still remains competitive in RMG exports even in this post phase-out
period.

Our Garments Industries can improve their position in the world map by reducing the
overall problems. Such as management labor conflict, proper management policy,
efficiency of the manager, maintainable time schedule for the product, proper
strategic plan etc.

Government also have some responsibility to improve the situation by providing-

proper policy to protect the garments industries, solve the license problem, quickly
loading facility in the port, providing proper environment for the work, keep the
industry free from all kind of political problem and the biasness. Credit must be
provided when the industry fall in need.

To be an upper position holder in the world Garments Sector there is no way except
follow the above recommendations. We hope by maintaining proper management
and policy strategies our country will take the apex position in future.

Suggestions Regarding Fire Safety

We need to remember that when there is a fire, the first thing one should do is to run
away from it. And this is what everyone does in such a situation. But the situation
become dangerous and tragic when the escape doorways and gates are found
locked. Precautionary should need to be adopted are given below:

 Building should be constructed with fire resisting materials

  Adequate exits and proper escape routes should be designed
 Protection against fire and smoke should be ensured
 Electrical wiring must be properly designed, installed and maintained
 Escape routes should be lighted at all times, kept clear, be indicated by signs
 Regular fire drills should be held
 Doors should be protected and should open along the direction of escap
 Doors should not open on the steps and sufficient space should be provided.
 Smoke/Fire alarm systems must be installed
 adequate number of extinguishers should be provided
 Prior relationship with local Fire services should be established

The Ready-Made Garments (RMG) industry occupies a unique position in the

Bangladesh economy. It is the largest exporting industry in Bangladesh, which
experienced phenomenal growth during the last 25 years. By taking advantage of an
insulated market under the provision of Multi Fibre Agreement (MFA) of GATT, it
attained a high profile in terms of foreign exchange earnings, exports,
industrialization and contribution to GDP within a short span of time. The industry
plays a key role in employment generation and in the provision of income to the poor.
To remain competitive in the post-MFA phase, Bangladesh needs to remove all the
structural impediments in the transportation facilities, telecommunication network,
and power supply, management of seaport, utility services and in the law and order
situation. The government and the RMG sector would have to jointly work together to
maintain competitiveness in the global RMG market. Given the remarkable
entrepreneurial initiatives and the dedication of its workforce, Bangladesh can look
forward to advancing its share of the global RMG market.

Minimum Wage:
The RMG industry of Bangladesh has optimized its vision to build a powerful
industrial sector in the country over the last thirty years employing millions of workers
and providing a strong platform to women empowerment that follows a progressive
living standard. Since workers are the life-blood of this industry, retaining the workers
and their productivity were the major demanding factors to review the minimum
wages. Moreover, in a globalized world firms have to be socially responsible and
there is no alternate but to ensure a decent living for the workers. It is true that Tk.
1662.50 minimum wage fixed in 2006 was barely enough for a worker and a family to
live with in today’s context. But this is also true that the actual wages paid by the
factories were much higher than the minimum wages of 2006. The reasons behind
this are - an acute shortage of skilled workers and declining influx of fresh
incumbents in the garment sector. Therefore rationalizing the minimum wages was
also a desire of the owners. A survey report released by the World Bank in 2010
titled “The Global Apparel Value Chain, Trade and the Crisis (Policy Research
Working Paper 5281)” finds that the per hour average wage in garment industry was
USD2.44 in Turkey, USD2.17 in Mexico, USD1.44-1.88 in China, USD0.51 in India,
USD0.38 in Vietnam, USD0.33 in Cambodia and USD0.31 in Bangladesh.

Now with effect of the new minimum wages 2010, per hour average wages of the
workers is estimated to be USD 0.39 (BGMEA estimate). The buyers group has also
raised their concerns over this matter and sent a letter to the Honorable Prime
Minister of Bangladesh. Based on these considerations, the present democratic
government took the initiative to review the minimum wages just after 3 years of the
last review, though it is mentioned in the Bangladesh Labor Law 2006 that the
minimum wages for the workers of a sector has to be reviewed in every five years.
Particularly it was a desire of the Honorable Prime Minister to review the wages for
the RMG workers. As a matter of fact, the Minimum Wage Board has completed the
wage review process at a shortest time ever and submitted the proposed wages.

Timeline – Minimum Wages in the RMG sector in Bangladesh

 The minimum wages for the garment industry was first declared Tk. 627 for
the lowest grade in 1985.
 The wage was reviewed after 9 years to Tk.930 in 1994, 48.33% increase
 After 12 years in 2006 it was revised to Tk.1662.5, 78.76% increase
 The third review of the minimum wages have been made after 3 years in
2010 to Tk. 3000, 80.45% increase.

The Minimum Wage Review 2010: At a Glance

The Board: The Ministry of Labor and Employment instructed the Minimum Wage
Board on 14 January 2010 to review the minimum wages. The Minimum Wage Board
was a 6 member board headed by Mr. Iktedar Ahmed who is a district judge. There
were two representatives from the labor side and two from the owner side. An
independent representative was there Mr. Iqbal Ahmed, who is a Professor of the
Institute o Business Administration (IBA). Two observers (one from each party) joined
the Wage Board at a later stage as per the approval of the government.

 The Wage Board sat in 14 meetings starting from 15 April 2010 to 27 July
2010 to prepare the draft wage recommendation.
 The Wage Board submitted the draft proposed wage to the Labor Ministry on
29 July 2010.
 The Wage Board had further 2 meetings to review the comments/suggestions
on the draft wage proposal and finalize the wage recommendation.
 The Wage Board submitted the final recommendation on 10 October 2010 to
the government.
 The final official Gazette notification was released on 31 October 2010.
 The implementation of the new wage started from 1 November 2010.

Steps Taken by BGMEA and BKMEA: Since the formation of the Wage Board,

BGMEA and BKMEA played a vibrant role in the entire process:

 Two in house committees were formed in BGMEA with the representatives of
BKMEA – working and executive committees.
 Besides an expert committee was also dedicated in the process.
 6 General Meetings were organized at Dhaka and Chittagong.
  BGMEA also organized several meetings with the labor federations including
United Federation of Garment Workers, Samiilita Garment Sramik Federation,
National Garment Workers Federation, Jatiya Garment Sramik League,
Bangladesh Jatiyatabadi Garment Sramik Dol, Garment Sromik o Shilpa
Rokhya Jatiya Mancha, SKOP, and others.
 The Wage Board members visited garment factories as a part of the process.

Finalization of the Minimum Wage Gazette 2010

After the release of the proposed wage gazette, 2 weeks time was given to submit
any comment, suggestion or grievance on it. The minimum wage board received 343
letters in total with comments, reactions and suggestions on the draft wage gazette,
where 321 letters came from the factory owners and the rest 22 letters from the
workers side demanding a further increase of wages in Grade 3, 4, 5 and 6. The
Wage Board consulted with the Honorable Labor Minister on this issue and had two
more meetings, whereby the wages of the Grades 3, 4, 5 and 6 were further
enhanced.

The Minimum Wages for the Garment Sector - 2010

Break Down of the Minimum Wages 2010

Wage Comparison: Proposed s. Final, and 2006 Vs. 2010

 Wage Groth Comparison, in %
1994-2006 and 2006-2010
140

120

100

80 2006

2010
60

40

20

0
Trainee Grade I Grade II Grade III Grade IV Grade V Grade VI Grade VII

Estimated Average Wage of the Workers in a 100 worker RMG Factory

*Take Away = Minimum Gross Wage + Overtime Allowance (52 hours per month)+
Attendance Bonus (Tk. 300)+ Festival Bonus (2 Basic Wage per year) + Insurance
Premium (Tk. 100 per month)

The Bangladesh Labor Law 2006 also stipulates to consider the 9 determining
factors for reviewing minimum wages:

 Cost of Living
 Standard of Living
 Inflation
 Price of the Produced Goods
 Cost of Production
 Productivity
 Nature of Job and Risk Associated
 Socio-Economic Situation of the Country
 Capacity of the Industry to Pay

The Board went through a tough negotiation where several factors were brought on
the discussion table, such as:

 Price increase of the essential commodities

 Overall inflation in the economy
 Living Cost as per the Cost of Basic Needs and the Direct Calorie Intake
methods

Export Performance
 During July-December of FY 2010-11 RMG export grew by 42.18% compared
to the same period of FY 2009-10.
 The growth in December 2010 was 73.11%, which is an all time high exports
performance of USD 1.53 billion in a single month.
  During July-December of FY 2010-11 the value of RMG export was USD 7.95
billion.
 This export performance is 22% more than the strategic export target of the
government, which is equivalent to USD 1.43 billion or Tk. 10,032 core.
 Export from RMG sector contributes 77.55% to national export earnings.

BANGLADESH'S RMG EXPORTS TO WORLD

Calendar Year: 2009 & 2010

Value in Million US Dollar

Woven (MN US$ )

Month 2009 2010 Growth%

January 584.24 570.26 -2.39

February 532.57 560.46 5.24

March 542.13 615.74 13.58

April 437.79 505.9 15.56

May 493.41 555.98 12.68

June 522.62 622.43 19.1

July 521.78 671.28 28.65

August 490.09 645.39 31.69

September 364.76 473.57 29.83

October 307.76 559.27 81.72

November 439.78 534.87 21.62

December 458.49 752.68 64.16

5695.42 7067.83 24.1

 Woven (MN US$ )

800

600

400

200

Knit (MN US$ )

Month 2009 2010 Growth%

January 562.94 535.06 -4.95

February 466.87 481.85 3.21

March 480.61 552.81 15.02

April 479.96 545.38 13.63

May 578.59 632.32 9.29

June 619.66 727.93 17.47

July 651.85 798.66 22.52

August 552.46 790.06 43.01

September 449.63 592.56 31.79

October 440.46 706.75 60.46

November 487.27 644.94 32.36

December 426.27 778.95 82.74

 Total 6196.57 7787.27 25.67

Knit (MN US$ )

800

600

400

200

Total (Woven+Knit)

Month 2009 2010 Growth%

January 1147.18 1105.32 -3.65

February 999.44 1042.31 4.29

March 1022.74 1168.55 14.26

April 917.75 1051.28 14.55

May 1072 1188.3 10.85

June 1142.28 1350.36 18.22

July 1173.63 1469.94 25.25

August 1042.55 1435.45 37.69

September 814.39 1066.13 30.91

October 748.22 1266.02 69.2

November 927.05 1179.81 27.26

December 884.76 1531.63 73.11

Total 11891.99 14855.1 24.92

Total (Woven+Knit)

1600
1400
1200
1000
800
600
400
200
0

Opportunities
 The review of minimum wages has increased the confidence of the buyers.
 Minimum wage in China went up by 20% in January 2011 and this will be
increased by 100% in next 5 years. So firms are going for a ‘China +’
strategy.
 Clothing imports and retail store in major markets have increased significantly
in recent months.
 The price level has started to pick up in recent months. During the first half of
2010 US’s clothing import price from Bangladesh has dropped by 4.84%, but
during the July-November 2010 period this has increased by 3.05% (Source:
OTEXA).
 European Union simplified the GSP Rules of Origin from ‘2-stage’ to ‘1-stage’
for the LDCs. Implementation started on 1 January 2011.
 Japan will revise the rules of origin for knitwear items from ‘3-stage’ to ‘2-
stage’. The new rule is expected to come into effect from 1 May 2011.
 China granted duty free access for 205 garment items from 1 July 2010 on
30% value addition condition.
  Malaysia has recently granted duty free access for 197 items including 47
garment items and South Korea allowed duty free access for 251 products
including 75 garment items from July 2010.
 The 8 million pieces duty-free access in India has been fully utilized by
August 2010. Duty free access for a number of items in India is expected
soon.
 Government adopted a 3-year stimulus program to encourage RMG exports
to markets other than EU, USA and Canada.

Challenges
The US and EU economies are projected to have a slower growth in 2011.
Unemployment is still high, i.e. 9.4% in US (December 2010). The growth of EU
economy is projected 1.3% in 2011 where Greece and Ireland are already in trouble
and the unemployment in Spain is 20.30% (October-December 2010).

Export surge vis-à-vis supply side capacity constraints:

I. The Chittagong Port handles countries 92% export-import trade alone, which
is increasing by 12%-14% annually. In 2010, the Ctg. Port handled 13,43,448
TEUs container which is 15.67% more than that in 2009 (source: Chittagong
Port Authority). On top of it, the Government is keen to develop the power
sector of the country and they are allowing solicited and unsolicited tenders to
faster the process. Therefore, a huge volume of power plant machineries and
Furnace oil will be imported through Chittagong Port. Besides, the Chittagong
port transit is also coming as a big challenge as far as the port capacity is
concerned. Based on these considerations the question is “Are we ready to
handle such import-export volume through Chittagong Port?”
II. There was no major improvement in roads and highways communication over
the last decade. In 2001 the area of Bangladesh’s national roads and
highways was 20799 KM and in 2010 it is recorded 20948 KM, only 0.72%
increase (source: Ministry of Finance, GoB). Particularly this is important to
mention that the only highway between Dhaka and Chittagong is a big source
of risk for the entire export oriented sector of the country. We have practically
realized this truth when the Meghna Bridge was under maintenance and the
vehicular movement was suspended. Even if any strike or Hartal is called
covering part of the Dhaka-Chittagong highway, it creates blockade as we do
not have a second road to the port.
III. Electricity and gas supply situation has worsened in recent times. New
factories are not getting gas connection. This is worth mentioning that we
have a huge population in our country who are talented and highly adaptable.
We can use these human resources to move up to the secondary industry as
well. But without electricity, gas and adequate infrastructure this is not
possible to draw investment in the country.
IV. Garment machinery import LC opening has increased by 41.91% during July-
November 2010 period (Source: Bangladesh Bank). Such a high capacity
expansion has implication on furthering the skill shortage.
Lack of Skill Development Initiative
Though BGMEA is working with the government to develop skills for the garment
sector, but these are not enough. With the increase in investment in the industry and
lack of fresh incumbents, the gap between installed capacity and required skill is
widening. In this circumstance, the government needs to go for a vigorous skill
development program.

Balancing Between Wages and Skill

Since there is no standard method to assess the skill level of the workers, factories
often adopt wrong approaches to designate an appropriate Grade or to promote a
worker. As a result, a worker with low-grade skill is getting wages of a higher grade.

Colliding policies
The declared second stimulus package could have created some relief to the
manufacturers during this crucial time. But with the increase in source tax and
imposition of VAT on commercial rent this benefit has been faded.

Inflation
General twelve month average inflation has reached 8.12% in October 2010, which
was 5.11% in October 2009.

Misguiding Workers
Some NGOs, which are not allowed to involve in labor related issues, are engaging
themselves to provoke/misguide the workers. The Government has already taken
strong action against some of them.

Cotton market trend should be treated with caution

The current tight supply conditions and high prices of cotton in the history of 140
years is a wake-up call for Bangladesh. Having almost no production of cotton
Bangladesh is the 6th largest cotton consumer in the world (4 million bales in
2010/2011), and the second largest importer of cotton (source: www.cottoninc.com).
China and India were the highest cotton producing countries in the world (30 million
bales and 26 million bales of cotton respectively in 2010/2011) (source:
www.cottoninc.com). As the consumption of China is higher than its production, it is
the highest cotton importer in the world as well. On top of it, China is increasing its
cotton stock and even making overseas investment in cotton growing and
processing. Among the major cotton exporting country in the world, India exports its
surplus cotton which is currently restricted to 5.5 million bales for the year started
from October 2010. Apart

from that, natural disaster, increasing demand world-wide, panicked buying has also
caused the future of our RMG industry highly uncertain.
So, given the growth trend of global apparel market and the corresponding growth
potential of RMG industry in Bangladesh, this is highly alarming that our entire textile
and clothing industry may stuck-up at a stage due to cotton supply shortage.
Therefore, the time has come to take the cotton issue seriously.

The government should take steps to get into long term agreements with the cotton
growing countries, particularly with the African countries, Australia and Brazil (4th
and 5th largest cotton exporters in the world respectively).

Implication of Preference Erosion and Regional Trading Arrangements (RTAs) With

the successful conclusion of NAMA negotiation in the WTO there will be significant
reduction in the tariff rates on industrial goods in both the developed and the
developing countries. This will erode the preferential margins that we (LDCs) are
enjoyed under the various GSP schemes. So, our competitive edge will suffer from
this preference erosion. This is a major concern for Bangladesh as the country is
pursuing export-led growth strategy. Erosion of preferential margin is likely to
undermine our competitive advantage with consequent adverse implications for the
economic growth, foreign exchange reserves, livelihood for large number of people,
and poverty alleviation. Apart from that, due to the slow pace of current multilateral
trade negotiations, many countries are signing preferential trading agreements in the
forms of Regional Trading Arrangements (RTAs) and Bilateral Trading Arrangements
(BTAs). Therefore our government needs to enhance its engagement regionally and
bilaterally.

The year 2011 started with a mix of both challenges and opportunities for the RMG
industry of Bangladesh. It is very encouraging that the implementation of the new
minimum wage is highly satisfactory (87.08%) from the very first month which is the
result of tireless effort from BGMEA, BKMEA and the government. This has improved
the impression of our industry both at home and abroad. However, we have seen that
the buyers have increased the FOB price on the rise of cotton price, and we also
expect that they would come forward to share the increased wage cost as well.

Most importantly, the income of the workers should be protected from erosion caused
by inflation. The MFB understands that the ultimate success of minimum wage
implementation greatly depends on how well the workers could reap the benefit of
enhanced wages end of the day. Therefore the government should take appropriate
measures to check inflation. Besides, the fundamental rights of food and shelter for
the workers have to be ensured and the followings are recommended:

 Both BGMEA and the Government felt the need for expanding and continuing
the food rationing program for the RMG workers, but the rationing program -
which was started - is now stopped. We appreciate that the government is
continuing the OMS for low income people, at the same time food rationing
for the RMG workers including Rice, Daal and Soyabean oil should be started
immediately with a wider coverage and be continued.
 In addition to food, the government should also come forward to establish
dormitories for the workers. Bangladesh Bank has a fund under the Grihayon
Tohobil, but the policy needs some amendments to grant loans in favor of the
 individual factories who are eager to establish dormitories for their workers.
The government may also adopt policy to allot land to BGMEA and BKMEA
near the industrial zones to construct dormitories for the workers. Besides,
the government may consider the following recommendations which are vital
for the growth suitability of the industry: Skill Development: Considering the
growth trend, it is expected that the RMG industry can reach USD 25 billion
export by next three years, which will create additional 8-10 lakh job
opportunities. So, the government needs to take-up a comprehensive skill
development initiative sustain the growth. The government can allocate Tk.
200 crore budget annually for skills development for the next 3 years.
Adequate initiative should be taken to enhance the productivity of workers as
well. A standard method to be developed to determine the productivity level of
workers to keep the balance between skill and wage. Infrastructure
Requirement.
 Modernization of Chittagong Port – Technology and other Physical Capacity
 The Chittagong Port Management can be privatized
 Construction of Deep-Sea Port
 An alternate Expressway between Dhaka and Chittagong (apart from 6 lane
Dhaka-Chittagong highway)
 Set-up a double-track Railway between Dhaka and Chittagong to ensure
maximum 3-4 hours travel time.
 Ensure proper use of Mongla Port and regional connectivity
 Setting up of Special Economic Zones (Garment Village) with proper township
facilities for the workers to reside there
 Setting up of central ETP by the government

Power and Gas:

For supporting the sustained growth of industrialization in the country there is no
alternate but adding massive capacity in power and gas sector. The present
government is committed to bring visible changes, but till the time the power and gas
supply situation gets normal the government can provide following assistances:

 Subsidy on diesel and furnace oil. The RMG sector needs approximately 250
million liters of diesel annually.
 Revise the electricity tariff plan by fixing the off-peak rate as flat rate. The
peak rate is Tk. 7.12/KW and off-peak rate is Tk. 3.43/KW at present.
 Provide gas and electricity connection to the newly built factories which are
ready for operation, on priority basis.

Policy Support:
 Restoring the 0.25% source tax
 Withdrawal of 9% VAT on commercial space rent
 Rationalize Chittagong Port Charges
 Law and order situation including close monitoring of the activities of the
instigators
Different Departments of the Organization and
their Function
Different Departments of the Organization and their Function:
There are three different major division in the factory.

Major Division in
RMG Factory

Merchandising Production Human Resource

My focus is on Merchandising Division.

Merchandising
Organogram of Merchandising Division:

Managing Director

Manager Mrechandiser

Marketing Merchandising Production Merchandising

Product Developer Assistant Production

Merchandiser

Junior Production
Merchandiser

The term Merchandising is the process of dealing with any product from its sales
confirmation design analysis raw material sourcing, production and quality control
and shipment arrangement to the customer with in a specific time frame. This is the
Heart of the organization.
Basic requirement for a Merchandiser:
 Excellent communication skills in English in both written and verbal, as a
Merchant needs to communicate with multi-cultural business
person/Organization.
 Skill in computer, internet, graphics software.
 Familiar with the technical terms of design, production, quality control,
merchandising, and commercial activities.
 Adequate product and production related knowledge i.e. Fiber-Yarn-Fabric,
Knitting, Cutting-Sewing-Finishing, Dying, Printing, Finishing, Embroidery
printing etc.
 Right source of various raw materials lie Fabric, Trims-accessories,
Embellishment and etc.
 Price idea and negotiation skills.
 Strong commitment sense and get the things done well in time / certain case
in advance.
 Knowledge about international Marketing. Business rules and commercial
activities.
 Strong Decision Maker - should be Smart enough to handle different situation.
 Daily Notes Meeting minutes for detail activities to be maintained and perform
accordingly.

Role of a Merchandiser in Garment Business:

The Merchandising Executive must combine Logical and Analytical thinking with
intuitive and expressive creativity. He must be a multi faceted individual who is
Involved in all company functions that results in creation. Developments execution
and delivery of a product line. Merchandiser plays various roles in the garment
business. For a Buyer he is the supplier/ Manufacturer; To the factory he is a Buyer;
To the supplier he Is also a Buyer - as the Merchant is representing the customer
requirements/choice to the multiple phase of souring materials to shape the ultimate
product. Organizing Design development.

 Prepare the Sample development as per customers selection or requirement.

 Product costing analysis & offer price quotation to customer.
 E-mail correspondence and making phone call to the customer, supplier.
internal office and Factory for the concern Issues.
 Convincing I explain Customer in various case like- Pricing Shipment
schedule. ship dote Extension, Penalty waiving etc in a fair way.
 Maintaining Proper file. Order tracking record and Time & Action Plan.
 Proper 0derstaflding of Briefing Sheet I technical Pack (Tech Pack) and
Purchase order sheet (P0 sheet).
 Preparation of Lob dip/Hand loom/strike off/Bulk Lot approval from Customer
 Receiving the P0 sheet from customer and raising the PI (Performa Invoice)
to customer to get the LC (Letter of Credit).
 Calculating Material requirements like for Yam. Fabric and Trims-
accessorizes
 Production space booking with Production Department as per the shipment
schedule that confirmed with customer.
 Selecting and sourcing the raw materials from the right sources.
 Arranging payment terms for different suppliers.
 Getting the Raw-materials in-house before starling Production.
 Organizing necessary sampling approval on time.
 Pre-Production meeting with necessary approval comments and special
instruction.
 Ensuring the Production to be started as per planning timeline.
 Organizing Pre-Shipment Inspection (PSI) — like Pilot Run, Inline. Mid-line,
Pre-finial inspection etc. as per customer requirements.
 Ensuring scheduled Final Inspection Booking with Customer / 3rd Party
inspection QA team as per customer requirements.
 Scheduled Vessel booking to be confirmed as per vessel sailing date /
Window period /cut-off period.
 Ensuring the goods to be Ex-factory as per the timeline and need to confirm
the Booking with Customer / 3rd Party inspection QA team as per customer
requirements.
 Post shipment analysis report to Management and same to customer as
well.
 Need to keep the order records Including the approved samples & etc for 4 to
6 months after the shipment.
Areas of Merchandising Activities:

Market
Knowledge

Product
Sourcing
Development

Planning &
Manufacturing
Control

MERCHANDISER

Materials
Interface with
Managemen
Manufacturing
t

Interface Production
with Sales Authorization
Garment Business Chain:

Customer

Inspection Buying
team Agent

MERCHANDISE
Factory R
Raw
quality
material
conral
Suppliers
team

Dhipping Factory
Logistics Productio
team n Team
Production has five different Section:

Store

Cutting

Sewing

Washing

Finishing
Store
Organogram of A Store Room:

Managing Director

Manager Store / Store In

charge

Asst. Manager Store / Asst.

Store In charge

Senior store Officer

Store Officer

Store Assistant

Worker/Labor
Importance of Store Room Management:

Helps to smoothly run the industry

Helps to ensure the quality of the product

Helps to ensure timely delivery

Helps to increase the productivity of the industry

Helps to make industry profitable

Helps to make the customer satisfied

Helps to increase market share

Activities of Store Room Management:

Inventory

Planning of the store

Receipts of material / items

Inventory for incoming materials

Give entry of all incoming items in the resister book / computer

Systematically sorting / racking all items

Trims / swatch card prepare

Collect approved trims / swatch card

Samples prepare and send it to testing lab

Perform inspection / checks to ensure quality of all incoming
material

Shade grouping of fabric / yarn

Issue materials to concern department / section as per requirement

Send finished goods to the port as per the schedule

Ensure safety and security of the store

Prepare update statement on incoming materials and outgoing goods

Prepare report order wise

Attend in the co-ordination / pre-production meeting

Keep all records properly

Compliance issue
Cutting
 Organogram of cutting room:

Cutting Room Manager/In

charge

Asst. manager Cutting Room

Cutting Room Executive

CAD Room In Charge Supervisor Pattern In Charge

CAD Room In Charge Pattern Master

Assistant Pattern Maker

Marker man assistant Spreader Assistant Cutter Assistant Issue Record keeper
Production flow chart in the cutting room:
Fabric inspection

Cut Ratio

Planning Markers

Spreaders

Production

Spreading Manual

Machine

Machine

Cutting Die Press Cutter

Computer

Shade marking

Cut Inspection

Preparation of sewing
Tickets

Bundles

Numbering

Cut plan:
Cut plan is very important. For cut order planning in the apparel industry, the problem
begins with a given set of garments, in varying sizes, to be manufactured. A plan is
needed for spreading the fabric and dividing the garments into various sections of the
spread so as to minimize fabric waste and the cost of cutting, but still satis the
customer’s order. The cut is performed by spreading fabric onto a table, often
spreading several layers of fabric for cutting efficiency (See Figure at right). The
actual lay out of the pattern pieces are called a marker.

The key inputs for the cut order planning problem are the sizes to be cut in each
section, ply height in each section and the number of sections required to fill the
order. The size combinations per section are passed to the marker making function
for actual determination of the marker itself Additional output is the estimated
efficiency of the marker (in percentage of fabric utilization), the cutting cost per unit,
the total perimeter to be cut and the total area to be cut. In our previous research, we
showed that cutting costs do not have a significant impact on the total cost of cut
order planning, so our methods are now based solely on the cost of the fabric. Three
heuristic algorithms were developed for solving the cut order planning problem. The
Savings heuristic assigns size combinations to a section based on the fabric savings
achieved by combining them into one section. The Cherry Picking algorithm builds
sections by combining certain sizes based on the best utilization of fabric. The
Improvement algorithm takes an existing solution and tries to improve it by
exchanging sizes in different sections or by combining existing sections into one
section. These algorithms are embedded in a user interface which we have
developed in the Windows ™ environment on a DOS-based PC. Where graphics and
statistics are displayed for quick understanding of the results. Both the cut order
planning and marker making problems are combinatorial in nature, and require
heuristic methods for obtaining solutions efficiently.

An example is following:

 Total quality = 1200

 Maximum ply = 100

 Garment per marker = 6

 Marker length = 36 ft.

S M L XL

Red 50 100 100 50

Blue 100 200 200 100

Yellow 50 100 100 50

Number of cut =

=2
Cut 1

Size
S M L XL Total ply=100
Color
Red 1 2 2 1 Ply=50
Garment= 6×100=
600
Yellow 1 2 2 1 Ply=50

Cut 2

Size
S M L XL Total ply=100
Color

Garment= 6×100=
Blue 1 2 2 1 Ply=100
600

Marker length = 36 ft

= 36/3 yds

= 12 yds

So,

Red fabric required = 50 × 12 yds

= 600 yds

Blue fabric required = 100 × 12 yds

= 1200 yds

Yellow fabric required = 50 × 12 yds

= 600 yds

Total fabric required = (600+1200+600) yds

= 2400 yds.

Patten making:
Patterns are the building blocks of a garment. Without them, constructing garments
would be impossible. Patterns help convert a flat, two-dimensional cloth into a
shapely, three-dimensional garment. Thus, making patterns would require skill and a
sound knowledge of different shapes and sizes.

Marker generation:
Marker is a set of pattern laid on a sheet of paper in an organized manner and
marked according to the pattern shape and size to cu a fabric lay of the fabric, so the
fabric fallout (fabric wastage) could be minimized.

Types of marker:
I. Single garment marker

II. Single size two or more garment marker

III. Ratio marker

Calculating Length of marker:

We can calculate the length of a marker. The system is shown as followings:

Assuming,

 1 sq m pattern board weights = 250 gm

 Fabric width = 150 gm

 Pattern set weight = 900 gm

 Desired efficiency = 90%

 What will be the marker length?

Step 1:

1 sq m = 10000 cm2 pattern board wt. = 250 gm

So, 1 cm2 pattern board wt = 250/10000 gm/cm2

= 0.025 gm/cm2

Step 2:

Area of the marker in pattern board = 900/0.025 cm2

= 36000 cm2

Step 3:

We know,

Marker efficiency =
 

 L = 266.67

= 267 cm

So to active 90% marker efficiency, the length of marker will be 267 cm.

Calculating Marker Efficiency:

Let’s assume an order came like this

S M L XL

2: 3: 3: 2

Now,

S pattern set weights = 150 gm

M pattern set weights = 200 gm

L pattern set weights = 250 gm

XL pattern set weights = 300 gm

Total = 2500 gm

1 cm2 pattern board weights = 0.02 gm

Area accrued by pattern on marker= 2250/0.02

= 112500 cmᶺ2

Marker Efficiency =

= 90.36%

The Efficiency of the marker is 90.36%

Marker analysis:
We have to consider the followings to analyze a marker:

 Fabric face to face or back to back

 Marker width
 Length of the marker
  Pattern component
 Style model
 Fabric consumption
 Matching design
 Both way marker
 Grain line
 Checked fabric
 One way marker
 End loss
 Marker length
 Folded fabric
 Fabric on the open
 Splicing position or overlapping
 Size combination
 Selvedge and edge

Spreading:

Factors of spreading:

 Fabric direction:

Before spreading the direction of the fabric have to be right. The direction could be
top to bottom or bottom to. It specially matter where the fabric has likes velvet or the
fabric has shine like shiny fabric. If the fabric is cut into two different direction then if
may happen that the garment has two different look on light reflection.

 Alignment:

The alignment is important factor for spreading. The lay of fabric should be closed by
clamp or attached by spick to maintain the alignment point to point. The grain line of
the fabric should be considered.

 Matching checks and strips:

If checked and stripe of a fabric are not matched it could be the cause of rejection of
the garment. Before cutting it has to be made sure that the checked and strips of cut
panel are checked and matched.

Techniques of spreading:
 Face to face or back to back

Alternative piles in different directions.

  Face to back

Alternative piles in different direction.

 Face to back or back to face

All piles are in same direction.

 Face to face and back to back

Bundling:
Bundling is to bundle the cut fabric. It is done to minimize size differences, avoid
mixing up with different buyer’s order, to check toe measurement. Bundling cars is
used in bundling.

Buyer:

Order No:

Style No:

Cut# Date:

Size: Pieces:

Part:

Cutter:

Bundle card
Bundling is to bundle the cut pieces of different parts. Bundling is done to reduce the
mixing of parts, shading, mixing with another order, size, styling, and rejection of the
garment.

Bundling is done with a marker on it, and then tied with the selvedge of fabric with a
bundle card. It is very simple but important task indeed.

Numbering:
Number is given to the cut pieces of a garment are numbering. Numbering is the last
check point to prevent shading. It helps to make a garment from a ply. That means,
every part of a garment comes from an individual ply. Like the sleeve will be attached
with 25 front and back, each part of the garment will be known as 25.

Numbering could be done by sticker or machine or pen, usually on the seam

allowance. Sometimes extra fabric is kept over the seam allowance when cutting.
Numbering is done on the extra fabric by machine. So the ink of the machine is not
spread on the garment.

Cut panel checking:

It is very simple task to check the cut fabric parts with the marker, but it is very
important to reduce rejection.

Cut ship ratio:

The ratio between cut quantity and shipment quantity is the cut ship ratio.

= 90%

If the selling price per garment is 5 UDS. Then the financial loss is 10×5 = 50 USD.

Embroidery
Embroidery is the art or handicraft of decorating
fabric or other materials with needle and thread
or yarn. Embroidery may also incorporate other
materials such as metal strips, pearls, beads,
quills, and sequins

A characteristic of embroidery is that the basic

techniques or stitches of the earliest work—
chain stitch, buttonhole or blanket stitch, running
stitch, satin stitch, cross stitch—remain the
fundamental techniques of hand embroidery
today.

Printing
Printing is a process for reproducing text and image, typically with ink on paper using
a printing press. It is often carried out as a large-scale industrial process, and is an
essential part of publishing and transaction printing.
Sewing
List of Machine used in Sewing section.

Sewing floor of the factory

Washing
Finishing
Pressing is done

Metal detector

Goods Ready to Ship

Human Resource & Compliance
The Human Resource division is the combination of two section:

Human Resource

HR Compliance

HR department is responsible for any kind of recruitment in the factory. They also
arrange training for the workers.

Fire Safety and Evacuation Plan of the factory

 Canteen facility for the workers

Compliance team looks after the workers right. They make sure every worker is
treated equally.
Suggestion
They should improve their service quality.

Incentive program has to be arranged.

They should seek for new buyer.

The wall must be plastered and cleaned.

Production training for workers has to be

arranged.

Number of fire extinguisher has to be

increased.