“Desh Garments” – The history of Bangladesh garments industries.

When people talk about Bangladesh, they usually refer to cyclones and floods. But then when people want to talk about the positive things that have come out of this country, they talk about the Ready Made Garment Industry. And, when that happens, one has to talk about the Late M. Noorul Quader. A Civil Servant of Pakistan, a valiant freedom fighter, the first Establishment Secretary of the Mujibnagar Government, the DC of Pabna during the war of liberation, the Founder Chairman of Bangladesh Parjatan Corporation and finally, the father of the export oriented RMG industry.

I sometimes wonder, when being asked to write or speak about my father, how endless his list of achievements would be, were he to write his own resume. That it would be laden with so many diverse occupations, hobbies, experiences and achievements – it would be difficult to compete with one like him. The man, simply, is par excellence.

Mr. Quader was in fact a very passionate man. He took interest in many things and always had the general attitude to do more for others than for his own self. Hence he really was a visionary and not the typical businessman. Having fought in the War of Liberation of 1971, and after returning from his self-exile in 1976, it was his dream to give something to the country that he fought with his heart and soul to liberate.

We must remember the main industry at the time before independence was primarily jute with the scattered textile mills in West Pakistan. Soon after independence, mills were nationalised by the state, which lead to closure of most industries. Indenting and trading were the way of life with hardly any industrialisation. However, the country had a large population, poor landless families, cheap labour, low barriers to entry and exist, port access, a fairly decent infrastructure and a few mavericks.

In 1978, there were only nine export-oriented garment manufacturing units, which generated export earnings of hardly one million dollar. Some of these units were very small and produced garments for both domestic and export markets. One of such units was Reaz Garments established in 1960 as a small tailoring outfit, named after the Reaz store in Dhaka. After serving only the domestic markets for 15 years, in 1973 it changed its name to M/s Reaz Garments Ltd and initiated new dimension in the Bangladesh export industry with the shipment of 10,000 pieces of Bangladesh made garments (men’s shirts) worth to 13 million Francs to a Paris-based firm in 1978.

Mr. Quader was himself involved in the business of trading and indenting for the Union Oil Company of USA, Buhler AG Switzerland, General Motors Locomotives, Campotex, etc. However, it soon followed suit that Mr. Quader met with Chairman Kim Woo Choong of the Daewoo Corporation of South Korea. It was pure luck from Quader’s point of view that Daewoo was shut out of US shirt markets and needed to find a base in a previously shirt-free country. The two together then came up with the brilliant idea of setting up Bangladesh’s very first 100 percent export oriented Ready Made Garment factory in Kalurghat, Chittagong. On the 4th of July 1978, that landmark joint venture agreement was signed and the journey began.

On October 2, 1978, The Daily Ittafaq (The Observer had run the English equivalent) had run an advertisement which was unique and from stories that have been narrated, it has been heard that the half page advertise in the newspaper had created quite the stir in the famous ‘Modhur Canteen’ of Dhaka University that day. Young men and women (for the very first time) were amused, confused and fascinated by the opportunity that they could see unfold before them. Dreams were envisaged and pens were taken out as they soon hurriedly jotted down the details of the opportunities that lay before them.

Quader was looking for 130 people to be sent to see Daewoo’s state-of-the-art technology in Pusan, South Korea and learn the technical and marketing know-how for garments manufacturing and exporting. The joint venture agreement itself was also of a unique nature where Mr Quader was the sole financial investor in the project and Mr Kim would offer the knowledge transfer.

According to the World Bank Report, The Garment Industry in Bangladesh (Chapter 6), written by Mohammad Yunus and Tatsufumi Yamagata, Desh Garments Ltd, at the time of inception ‘emerged as the single largest and most modern garment-manufacturing unit in the sub-continent.

The 130 Desh-selected trainees returned home after a six-month training period to form the nucleus of the RMG sector’s technology and its core human resource base. Consequently, Desh’s modern factory constructed with Daewoo’s specifications and technical assistance with the capability of six lines, 600 workers, and a 5 million pieces per year capacity, worth an USD 1.3 million investment went into operation. Desh began its journey with the first shipment of just 1.2 lakh pieces of boy’s shirt to a German company called MNR.

This started the new era of manufacturing industries in Bangladesh, with young energetic workers, a very good support from the government, financial institutions and foreign support.

This was the very first time that women (18 out of the 130) were sent abroad to receive any industrial training of its sort.

Of course, at the time, Quader had to himself go through a detailed interrogation himself from the parents of these brave girls. When later someone had asked Quader on a personal level, why he was interested to train women, he explained his reasons for it.

Noorul Quader had a sense of undying love for his mother.  He believed in getting his mother’s blessings in whatever he did. When he was the SDO of Chandpur, he took his mother along with him.

Being the youngest of six siblings, Quader had three older sisters whom he followed around the house all day as a child. They were all educated, intelligent, independent and even at that time, groomed to be women of the world per se. His younger even taught him how to cook, sew and even play a sitar. Along with his mother, Quader termed the women in his household to be ‘full of wisdom’. Hence he had a deep respect for women. He never differentiated between a man and a woman. He believed that they were just as intelligent and skilful. Looking at the millions of women in the villages sewing away and making the ‘kathas’, making clothes for their children, husbands and fathers, being strong enough to deliver their menfolk’s meals on time and out in the fields, he felt that the women of Bengal were no less than our men. He felt as though it was his duty to empower them. Hence, Quader, amongst some controversy and some curiosity, choose to empower the women of Bangladesh. And that really was the first time in history that a silent revolution took place that were to empower and employ the women of Sonar Bangla. Today, they make up for 90 percent of the work force in the RMG industry of Bangladesh.

However, this landmark journey did not start without its usual share of troubles.  Desh was faced with several hiccups and incumbencies within the operational and financing side of running the business.

During 1981-82, Desh was given an import entitlement of Tk 18.00 crore for one year but the CCI&E could only give a license to import raw materials worth Tk 24.00 lacs, i.e. only 1.5 percent of the requirement. The entire factory lay idle with all the manpower including the 130 Korean trained people.

To resolve the situation Noorul Quader met the then Governor, Bangladesh Bank, Nurul Islam, also a senior Civil Servant of Pakistan, and suggested to devise a scheme to open a 90-120 days deferred payment Letter of Credit by the local banks to import fabrics and other inputs keeping the export L/Cs received from the buyer of the garments in lien with the bank. This he called a Triangle of Trust between the garments factory, the supplier of fabrics and accessories, and the bank. The Governor gave patient hearing, appreciated the proposal and asked Quader to submit a written proposal. That was done and soon the Back-to-Bank Letter of Credit banking system came into effect and the problem of having ready cash to import the raw materials was solved.

The other obstacle to overcome was Bangladesh’s heavily protectionist trading system. It would be hard to be competitive on world markets if they had to pay several times of the world prices for their raw materials because of the government’s tariffs and quotas. Daewoo knew well the ins and outs of special bonded warehouse systems because there was already such a scheme in Korea. Daewoo explained to Quader how they could forgo the multiple tax system and make their raw mater

ials more price competitive.

At Quader’s explanation and persuasion the Bangladesh government then set up the special bonded warehousing system to give duty-free imports to its exporters, hence making our manufacturing costs competitive and making the overall price of the garment much more attractive in the global markets.

The government allowed the bonded facility to garment industries under custody of the factory owner by-passing the previous system of controlling the same by customs officers and also allowed Utilization Permits based on paper calculations in place of the original system of carrying out physical measurements.

Thus, in short, the four factors mentioned below were introduced, negotiated and were a major contribution by Noorul Quader as far as the methods to do business in Bangladesh were concerned. They were – (1) The first ever training of 130 people on the technical and marketing know-how of the export oriented RMG industry, (2) Back-to-Back Letter of Credit banking system, (3) Custom Bonded Warehousing facility at the factory level and, finally, (4) Allowing of Utilization Permits on paper calculations.

To quote to the previously mentioned World Bank Report – ‘Usually governments in less developed countries are weak and always lack proper timing and co-ordination with regard to creating supportive policy regime for conducive growth of emerging industry. From that perspective the role of successive governments to promote the RMG industry in Bangladesh is quite remarkable.’

Noorul Quader cancelled the collaborative agreement on June 30, 1981, after a little more than a year of production and watched production soar from 43,000 shirts in 1980 to 2.3 million in 1987.

The Desh workers watched Daewoo and Noorul Quader create useful knowledge about making shirts, selling shirts abroad, using special bonded warehouse systems, and using Back-to-Back import Letters of Credit in Bangladesh. Out of the 130 persons who were trained at Daewoo, 15 of them had left during the first half of 1985 to set up their own garment export factories under the same model. They further went on to transferring the know-how to others and the initial shirt mania then diversified into other products such as gloves, trousers, sportswear, jackets, so on and so forth. By 1985, there were over seven hundred Bangladeshi garment factories.

All the factors put together, along with the companies started by the ex-Desh workers, spawned the growth and success of the Ready Made Garment industry leading to where it is today – churning a massive USD 27 billion industry.  Though the country had various challenges as an impoverished country emerging from a major war, the government gave strong support to entrepreneurs.  It was Noorul Quader’s vision of Bangladesh being a major garments hub globally that lead to the creation of his own company Desh garments, whose success then laid the foundation for the growth and success of Bangladesh as a major global garments manufacturer with approximately 5,000 domestic garments companies operating today and employing more than 4 million workers.

The collaboration was a great success – Desh managers and workers learned fast. Although Daewoo did not do badly from the collaboration, the benefits of its initial investment in knowledge had leaked well beyond what Daewoo intended.

The Bangladeshi garment explosion soon was noticed on the world stage and earned the country a place on the industrial map of the world. Noorul Quader’s dream was realised, his job was done in giving the country he fought hard to liberate over nine months, a new identity of being a fast growing Ready Made Garment producing country. Although still vulnerable to world trade policies, poor infrastructure, political instability, the industry is still going strong today.

Before Noorul Quader’s breakthrough, the return to an investment in a Bangladeshi garment shop or factory was low. Once Quader got the industry rolling with his Daewoo-supported knowledge creation, the return to an investment in a garment factory was high.

Still Noorul Quader did not get fully rewarded for the benefits he brought to Bangladesh by inadvertently creating the Bangladeshi garment industry. The return to his initial investment was mostly a return for society, not a private return to himself.

The other day a relative who had just completed her MBA told me that at the beginning of her course, she was asked to write an essay on ‘What defines success?’ She had told me, that to her, it had to do with material achievements, assets, and wealth. She then told me, that at the end of the course, when she was asked to write an essay on the same subject again, she perceived success to be a completely different notion. She said, ‘Success was something that could be defined as how someone is remembered, what he is remembered for and how diversely he may have contributed to the society and the lives that he may have touched’. If that is a standard by which I should evaluate the success of my father, I could very proudly say that there are very few people in this world who had enjoyed the success and glory that my father had experienced, both while he was alive and now, in death.

People from all walks of life tell me stories of him, of his good looks, his kindness, his style, his panache, his temper and the child-like innocence with which my father truly embraced life. Mr Noorul Quader, was not just a man, neither was he a businessman. He was a true visionary, a gentleman and a true legend – one that we do get to meet seldom in our lifetime.

May his soul rest in eternal peace in the Heavens above and may we only live to see his dreams flourish in our future in an even bigger magnitude than he, himself may have envisaged.

The writer is the daughter of Noorul Quader Khan and Director of Desh Garments Limited.

Source by: the dailystar

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