..more mills need to be set up, especially to cater needs of the higher end fabric buyers.

- Mr Abdullah Al Mahmud (Mahin) , Founder , Mahin Group
Mr Abdullah Al Mahmud (Mahin)

Mahin Group has started its modest journey back in 1994 with the inception of Mahin Apparels Ltd. in Mirpur, Dhaka. Before the passing of a decade, it showed remarkable growth under an efficient and dynamic management by expanding into a 100% export oriented fabric and garments manufacturing conglomerate.

The group also comprises of a reputable insurance company, and is currently investing in the hotel and tourism sector in the country. The main achievement of the company is its state-of-the-art textile production facility, Hamid Fabrics Ltd (formed in 1996), which boasts of being the benchmark of quality in Bangladesh.

An investment of over $50m has been made in the textile division of Mahin Group so far, and investment projected $45m in modern spinning and yarn-dyeing facilities, in 2012, is expected to give it a competitive edge in the market and will further enhance the strength of the Hamid brand.

Mr Abdullah Al Mahmud (Mahin) is the founder of Mahin Group, and has over 17 years of experience in the textile and RMG industry. A graduate from the USA, he is often referred to as a dynamic, young entrepreneur of the country. Under his leadership, Mahin Group continues its relentless pursuit of excellence in every business area it is involved in, maintaining the greatest focus on customer satisfaction, in terms of price and quality, in the industry.

In Face2Face, conversing with Ms Madhu Soni, Sr Editor & Correspondent, Mr Abdullah Mahin puts across on the determinants behind investors increased interest in Bangladeshi textile and clothing sector recently.
Welcome to Face2Face talk Mr Mahin. Shall we begin the insights with your comments on your group's niche in Bangladesh's significant economy earner- textile and clothing industry?
Thank you.
Hamid Fabrics Ltd. has an uncompromising attitude when it comes to quality. It boasts of a setup that includes top of the range machinery from renowned European brands, such as Bruckner and Kusters. European dyes and chemicals are used throughout the production process.

HFL is run by an experienced management team, which comprises of local and foreign expertise. Only a handful of mills in Bangladesh operate at this level, thereby making us one of the major players in continuous solid dyeing nationwide.
So, as an eminent player in the industry, what is your opinion about textile and clothing sector's current performance?
Bangladesh will continue to be a major player in the global textile and apparel industry. Last year total exports in the RMG sector accumulated to around $12.5 billion. This year we expect at least a 25% growth. The current trend in the industry indicates that major upper end brands are now turning to Bangladesh to fulfill their sourcing needs. Factories are now able to manufacture a wide spectrum of items, ranging from basics to highly fashionable.
Also, as reported by BOI, the sector has attracted around 50% of investments from investor community in the country. According to you, what are the driving factors behind this?
Bangladesh has massive potential for growth. In my opinion, some of the major driving factors would be labor costs, steady GDP, government initiatives to establish new Export Processing Zones to facilitate exports of such products, and various infrastructural developments. The RMG industry is still growing and attracting new investments. There is room for more quality factories and mills to develop and flourish. Not only does this sector massively contribute to national exports, it also empowers females (90% of garment workers are women), thus bringing them out of the poverty trap.

And, how would you voice your concerns on the Gas crisis and labor issues in the sector?

The apparent gas crisis is, perhaps, due to lack of gas exploration in the last decade. If the government had taken such initiatives in the past decade or so, we probably would not have even heard about it now, as statistics also indicate that Bangladesh has sufficient gas reserves. Our operations, however, have remained uninterrupted so far.

Labor issues are scattered, in the sense that while some mills are affected, others are not. One should not generalize that the country is overwhelmed with labor issues. A growing economy will always have inherent labor issues, with increases in demand and costs of living. Most issues that have arisen or arise have been and are worked out and resolved. Once again, we have personally not experienced such issues in our facilities to date.

That is Good, indeed!
We have also heard that Relaxed rules of origin (RoO) for the least developed countries (LDCs), including Bangladesh, effective from January 1, is adding to the woes of Fabric makers. Is that so?

RoO has actually created more opportunities for Bangladesh, as more buyers are now coming here to explore the market. With the relaxed GSP regulations, the sector is experiencing an increase in demand. Currently, there may not be sufficient garment factories to fulfill such increased demand, so more investment is definitely needed.

Since 100% of the raw cotton is imported to produce export quality yarn, fabric prices are very much dependent on the price of raw cotton. More than 60% of fabrics still have to be imported from abroad, as local fabric mills cannot fulfill the existing demand. My personal opinion is that more mills need to be set up, especially to cater to the needs of the higher end fabric buyers. With the relaxed RoO companies also need to think out of the box, and engage in non-price competition, such as shorter lead times, higher quality and product diversification.

I am sure our readers would definitely take note of that.

Mr Mahin, your group has longly been the fabric-apparel partner for big brands like Marks & Spencer, LC Waikiki, Zara, BHS, and others. Have sourcing pattern and preferences of these retailers changed with time? What attributes need to be must in merchandising to this category?

Yes they have. It has become more localized. Buyers prefer to have everything done locally to take advantage of shorter lead times. Textile mills and garment factories are now more able to cope with last minute changes in buyer requirements. The sector is slowly, but surely, being more proactive in the design and development process, by investing in local labs and design houses, and offering consultation and sampling services. Joint ventures have also been a popular trend in Bangladesh recently.

Your Group is to float IPO for expansion plan. Can you help us understand the idea behind? How exactly is the plan to be routed?

The major reason for floating an IPO would be to further expand our Group's textile division. Due to huge demand from buyers for yarn dyed fabrics, as well as insufficient supply of the latter, we will be setting up a state-of-the-art yarn dye facility. Plans to invest in spinning, apparels and retail are also in the pipeline.

CSR identity for a corporate house bodes well making business sustainable. What say?

Strongly agree with this. Nation building and taking care of our biggest asset (human resource) is a duty of the businesses houses. We currently have different wellness programs within the organization. Healthcare and education are subsidized. Since the company is still at its growth stage, we are in the process of identifying certain core areas where there is a need that has not yet been met like education, healthcare and environmental preservation. The group plans to soon establish a charitable arm, and this foundation will be engaged in identifying areas in which we can contribute in a more organized and effective manner, thus creating public awareness of our efforts.

Thanks a lot for your valued time and views, Mr Mahin! We look forward for soonest opportunity for such more insights.

You are most welcome!