How to start Garments Manufacturing Business in Bangladesh
Starting the garments manufacturing business is getting challenging nowadays due to various reasons. The challenge begins with choosing a suitable location for establishing plants developing buyers and so on. This business’s success emerges when a set of experienced mid-management and skilled workforce produce quality goods with efficiency. To start a garment manufacturing business, the entrepreneur must be well aware of the investment risk and returns. The experience of the owner in the garments producing business was once considered an additional qualification, but it is now essential to have some knowledge in this field. The reason is quite simple: the price of the ordered garments is getting more competitive, and the overall requirement of business in terms of product quality and social compliance has enhanced. The prospective aspect is that if an entrepreneur can efficiently handle the company, the return is much higher compared to other businesses.
To manufacture the garments, the entrepreneur needs to put up a production unit with necessary machines and set up, hence requiring a piece of land for that purpose. Choosing a suitable area can be critical because the locality and communication system to and from the place might impact future business in getting skilled operators and an expert workforce. The land should preferably be in a convenient space where natural airflow and light source is available. In some cases, due to excessive investment in purchasing property, the entrepreneur might think of borrowing an area or building. But, it should always be kept in mind that there mustn’t be separate owners for the building and the company. Most renowned buyers do not allow shared construction, meaning the building owner must have some percentage of share in the company.
Garments Manufacturing business License
The first thing is obtaining a trade license from the local authority. Generally, securing a trade license for business is not difficult. In the case of the garments business, the local authority, namely City corporations, Pourashava or Union Parishad, provides the license mentioning the company as a 100% export-oriented garment manufacturing plant. Trade license needs renewal each year, generally in June. The other permits include factory license, which is provided by factory inspectors, fire license issued by the fire service, and civil defense authority. The company must obtain a bond license to import raw materials such as fabric, accessories, etc. Subsequently, Import Registration Certificate and Export Registration Certificate are required from the chief controller of Import and export. Several other licenses are also needed for running the operation of the business.
Machinery can be purchased from local importers. There are several renowned brands of sewing machines, and they have regional liaison offices in most countries, including Bangladesh. The machine list depends on the sewing line layout, which is related to the product category. A basic five-pocket trouser generally requires 48 to 52 sewing machines of various types, namely, plain lock stitch, double-needle lock stitch, overlock, flatlock, feed-off-the arm, waist-band attaching, bar-tack, button-hole or eyelet hole, etc. The machines are generally imported from abroad by the local liaison offices of the concerned brands, but the entrepreneurs can also open letters of credit to import machines themselves. Some individual devices are also needed for smooth operations. These include button-attaching machines, including a snap button or shank button attaching machines, fusing machines, fabric inspection machines, fabric relaxation machines, etc. To increase efficiency, the owner might procure automatic hemstitching equipment, auto pocket attaching devices, etc. but these are expensive, so the choice somehow depends on the budget and investment. There must be a utility facility that ideally contains boilers, generators, air compressors, a substation, water pumps, etc. The utility buildings might be adjacent to the main production buildings.
Developing buyers is one of the entrepreneur’s key jobs, as the purchase orders from customers or buyers are the driving force of the business. The procurement orders depend on the facility’s condition and the type of expertise the facility has. If the factory is woven-product based, the product might be tops and bottoms, both denim and non-denim. The factory can avail the more diversified the expertise, the better opportunity. To get on-boarded to a buyer’s vendor list, the factory generally goes through a rigorous process starting from product quality assessment to social compliance status. The capacity, location, workforce, product diversity, etc. are also considered by the customer while enlisting a factory in their supplier list. The purchase orders are generated based on the capacity and free space. While confirming orders, the difficulty level of the product manufacturing, price, shipment date, payment terms, and other parameters are considered. The suppliers can evaluate payment terms, shipment mode, bank transaction history, and company goodwill before confirming the orders. Generally, a merchandising team consisting of a team leader and a few teammates looks after a particular account (buyer’s portfolio) and arranges all logistics supports to ensure smooth and on-time shipment.
Having experienced human resources is essential to produce quality products, ensure efficiency, and address various technical difficulties. It is recommended to hire an expert and knowledgeable production manager or a general manager to take care of the whole production and order flow. A robust quality team is a must to get better quality products without hassle. If the product quality is found unacceptable by the quality assurance team of the customer during the final audit, the goods must be rechecked before shipment, which involves both unnecessary cost and time. From raw material receiving in-store to delivery of the goods, cutting, sewing, and finishing decent quality as per the buyer’s guidelines must be followed. The process quality is also essential as the product quality depends on the redundancy of the processes. Various teams of planning, accounts, administration, human resources, compliance, maintenance, store, security, commercial, etc. are involved as the supporting wings to ensure the smooth supply chain of the goods.
Social Compliance Audit
Auditing the factory by various third parties is an integral part of the credibility of the suppliers. Some preferred audits are recommended, such as social compliance and Business Social Compliance Initiative (BSCI) audit can be performed. For the safety of the facility in terms of structural, fire, and electrical, the factory is recommended to be audited by the buyers’ alliance, namely RMG Sustainable Council (RSC) and Nirapon (Previously known as ACCORD and ALLIANCE respectively). The entrepreneur needs to ensure all kinds of safety in the building so that no unexpected accident occurs. The general safety guideline consists of installing fire doors in all the exits, a central fire detection system, and a fire hydrant system, using proper cables throughout the electrical connections, insulating distribution boards of the power supply, etc. The dining and canteen facility, a bonded warehouse, needle-free zone, and C-TPAT area for finished goods storage are requirements to fulfill the regulations and compliance of the customers.
As a labor-intensive industry, the garments manufacturing business is a bit challenging. But the beauty of this business is to take the maximum risk to achieve the maximum profit. The entrepreneurs who feel interested in starting a business are strongly recommended to prepare for the challenges and hurdles the business involves and keep a mindset to move forward with many obstacles. Success in the garments business is still quite an achievable task even with the competitive price, high social-compliance requirements, and enhanced quality requirements.
If you are looking for the below pieces of information, this content may have answered,
- Garments Manufacturing business in Bangladesh.
- How to set up a Garments production unit
- How to set up a garment factory or plant.
- Some important factors of the Garment manufacturing business
- How to start clothing manufacturing business
- How to start apparel manufacturing business
- Syed Fardeen Hashemy
- Executive Director, Radisson Casual Wear Ltd.
- Email: [email protected]
- Cell: +880-1676824624
About the Author:
Syed Fardeen Hashemy is a young professional who works for branding the apparel/ garments sector of Bangladesh as the hub of green sourcing. He’s currently leading a team of 1,500 employees and continuously motivating them toward implementing sustainable concepts in this industry. He’s already implemented several sustainable projects to contribute to SDG, especially in terms of social and environmental aspects. Some of his pioneering projects in the garments trade are digital wage payment, ensuring health and hygiene for female employees, reducing carbon footprints, adopting biodegradable jute-made bags, etc. His affiliation with the Ella Alliance and the introduction of the Ella pad in this sector have started to be followed by fellow industry experts. Fardeen’s early career began in the manufacturing industry in Mumbai and Vadodara, India, where he adopted and applied several green models of energy reduction and productivity enhancement. Fardeen has been awarded several scholarships throughout his academic career. He’s an engineer and also possesses an MBA degree from renowned universities in the country.