Reflections on RMG

 Published in: The Daily Star on May 12, 2010
Reflections on RMG

The readymade garments industry in Bangladesh and the quakes in Los Angeles have a lot in common.
Los Angeles has suffered 70 quakes this year so far. The RMG sector in Bangladesh has, on the other hand, faced the same or more number of disruptions. In Los Angeles, residents are advised to “duck, crawl and hold”. In Bangladesh that is exactly what we, entrepreneurs, are also going to be doing in no time. People in LA have one exception to this similarity though — they prepare for a big earthquake to hit them every morning but in Bangladesh, we live through our daily quakes and think the worst is already over. Additionally, in our list of self-deception, we conveniently add our positives and move on to live yet another day of living the life of an RMG entrepreneur. We tell ourselves – we have the best compliant factories, we pay salaries and overtime by the 7th of the month and we have a strong ‘welfare team’ taking care of the grievances of our workers. And yes, we go to our factories when we need to. We can’t go wrong.
That is unfortunately a big tale of delusion we live in and the bubble has burst. Once, Ashulia was the most vulnerable area. Today, all zones have succumbed to the temptations of revolt. One after the other, the towers leading to the sky soaring growth figures have all crumbled to the ground. Humpty Dumpty is in pieces and the king’s horses and men are gearing to face an irreconcilable ‘Mission Impossible’.
In reality, Humpty Dumpty is dead and done with. I don’t know if we ought to call ourselves Humpty-Dumpties or God’s Warriors out on their last stride. To me, breaking news on my telephone, crushing news covered in media, endless talk shows reflecting rhetoric on suppression, deprivation and denial of rights — all sound the same. There has hardly been a season of appreciation ever. There has hardly been a season of peace for RMG.
Ever since mid-2006, the RMG sector in Bangladesh has seen its worst with its workers turning tiny own spaces into massive war zones. The policymakers and owners were once seen pacifying the workers in the EPZ where the best of the factories were vandalised.
The winds of criticism blew leading manufacturers and obviously the breeze was blowing from all directions, starting from the activists down to the common man. RMG was doomed to face a quick annihilation. The general conversation stated the obvious — how can the workers survive with so less? These questions have still stayed the same, as none of our cost indexes have shown any improvement.
Way back in 2006, we had to fight inflation, price hike and an ever-increasing downward trend in our revenue margins. In 2010, we face the challenge of performing more efficiently with increasing fabric prices from China, producing more to make up for the margin loss, offering a more competitive and suicidal ‘cutting and making’ (CM) along with even more challenging delivery deadlines.
Buyers today make us think we are the divine alternate of China and therefore, are capable of wish-washing the 30 days China-Chittagong sail time away. Buyers today also assume all of us can perform semi-miracles and link every tonne of piece goods to production in an instant, reducing the production lead time by almost half. We are supposedly the new Aladdins with our new bottles with yet with our old genies, who are ready to pop out of our wish bottles reminding us — three wishes, to be exact. That’s all. Three. Uno, dos, tres. No substitutions, exchanges or refunds.
In a short span of time, hundreds of factories have faced the music of revolt. Many workers have listed their demands and have had them met by their owners. The owner does not really have a choice. Either you comply or you declare a “lock-out” as a token of your protest against the workers striking illegally. But this is a month of deadlines and swift deliveries. This is a month when entrepreneurs want to prove to their buyers that nothing in Bangladesh can fail.
As I write this piece, I am looking back at the day I spent today at our factory in Kanchpur, Narayanganj. After a strike on April 28, we closed our factories only to open them a day after the historic May Day was observed. In the meantime, most factory workers in the area forced their owners to come in, declaring to accept all their demands of extra bonuses, leave encashment and doubling of attendance bonus. The lists were long and most of their demands were met. The factories in that area agreeing to do so had always enjoyed better margins and had always manufactured value added products. Therefore, for a few of them, giving in to the pressure was not a huge hiccup.
But in factories like ours, where we do try to interact with the workers directly, where we do try to keep our little spaces hassle free, I felt no happiness while I was standing in the factory with a megaphone in my hand, trying to explain why striking was illegal and why I was unable to take their side today. In their long list of demands, they had listed the minimum wage to be Tk 5,000, total leave encashment, maternity leave of six months, attendance bonus worth Tk 400 (which is currently Tk 200) and much more. I estimated the increase and calculated that we would have to charge our customers USD.10/pc more to meet their demands. Will our customers agree to pay though? Can we afford to portray our scene to be once again, rowdy and unmanageable, as it was a few years back? Can we manage to negotiate a higher CM from our customers who, at this point of time, want to minimise costs at their end by stuffing us with more orders and yet decreasing the margin by the minute? With most of our factories booked with orders, can we afford to have more lockout days in the future? If not, what is the new route? Shall we be able to turn to our government for incentives, policy support and understanding?
Populism is a great practice for those who profit from their gift of the gab. Entrepreneurs like us, unfortunately, have no talent to steer either the workers’ mood or action. We are only good with our suitcase full of samples, a calculator and a few mails offering prices across negotiating tables. That is how most of us still travel and secure business that feeds our thousands. There are bad apples in every basket, but there are many fresh ones, which do this country’s economy a lot of good. If there are any quarters trying to drive our sector to the ground, they should be adequately warned by the highest authority to refrain from acting against the interests of the state. We, who work for our workers and our families, deserve to be heard and fully understood by those who question our motives and us.
I ended that day by accepting 20 percent of the workers’ demands. I compensated the rest 80 percent with my promise to have lunch with them on one Sunday every month, reviewing their cases and evaluating the performance of our mid-level management who often go wrong with their attitude and explanations and end up abusing their powers. As a result, most of what we say or intend to deliver go unheard. To put it simply, we cannot be lost in translation. We need to have proximity to our workers, we need to be accessible and most of all, we need to be felt amongst all of them, even if it means risking their wrath. To friends in the industry, let us not give the opportunity to those who wait to strike us at this hour.

The writer is the managing director of
Mohammadi Group.