Green factories help Bangladesh get an edge over rivals - Just Style
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Green factories help Bangladesh get an edge over rivals

By admin-demo 11 Mar 2019

The Rana Plaza tragedy pushed Bangladesh’s US$30bn clothing industry into making health and safety improvements to reassure brands they would not be tarnished by similar disasters – and now the industry is going a step further by seeking to establish a reputation for environmental excellence.

One case in point is Remi Holdings, a textile maker working from the Adamjee Export Processing Zone in Narayanganj, near Dhaka.

Remi, an arm of the Bangladesh-based Bitopi Group, which has holdings in garments and advertising, operates a platinum-rated green factory scoring 97 out of 110 points of the US Green Building Council (USGBC) certification scheme. The group’s Tarasima Apparels, based at Manikganj in Dhaka, also has a USGBC platinum rating.

To secure this, Remi has spent US$20m on improvements such as waste water controls (half the emissions compared to standard plants), ensuring 35% of lighting is energy-efficient, 75% of the premises has natural light and 9% of energy comes from onsite solar power.

The two-year-old factory turns over US$32m annually, making more than half a million bottoms for top retailers such as Hennes & Mauritz (H&M), Primark, Target, Benetton and Promod. 

Bitopi managing director Miran Ali says the cost of establishing such green factories is 25% higher than for a conventional unit, but there are clear benefits. In particular, orders that might not have come otherwise have been placed by buyers who want to market clothing as sustainable as possible.

Environmentally-managed clothing factories have an edge in the outsourcing market, something Ali insists “differentiates us from Vietnam, Cambodia and Indonesia,” Bangladesh’s major regional rivals. Manufacturers building green credentials will benefit “in the long-term,” he adds.

And they need to compete, given most new garment factories in Bangladesh have at least adopted USGC’s LEED (Leadership in Energy and Environmental Design) certification. “Entrepreneurs have realised this is the only way forward,” says Ali. 

In the short term, he wishes the investment would pay off a little more handsomely, noting that many buyers overlook such investments and still offer the same low prices as they do to standard units. “Some buyers are taking cognisance of [the investments], but they are the minority,” he says.

Ali also hopes that global buyers will in future recognise the national industry as one that is developing an “environmentally-sustainable” apparel sector with an international reputation for good practice.

And Bitopi is indeed part of a larger story: some 67 garment factories in Bangladesh have achieved LEED certification that evaluates location, sustainable sites, water efficiency, energy, indoor environment and innovation.

As of June 2018, there were eight LEED platinum certified plants in Bangladesh, according to a study commissioned by UK’s Department for International Development (DfID). Some 280 Bangladesh factories are in the process of getting LEED-certified, according to the report.

Another platinum-certified manufacturer is Plummy Fashions Ltd, a knitter also based in Narayanganj. Fazlul Hoque, the company’s managing director, started the construction of this US$14m factory in 2013, the year of the Rana Plaza collapse, which scarred the image of Bangladesh’s clothing sector. “I wanted to counter that image,” Hoque told just-style.

The Plummy Fashions plant consumes 40% less water and energy than standard plants and emits 35% less carbon, according to a company note. Hoque says buyers have responded positively, although are still negotiating hard on price.

Plummy, which employs 2,000 workers, makes T-shirts, polo-shirts, sweatshirts and trousers for buyers including Zara, Next and Guess. Its sales are on track to reach US$30m this year.

Mohammad Hatem, a former vice president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), agrees industry leaders have been motivated by Rana Plaza to invest in green factories. And while prices are still struggling upwards, “long-term benefits will be there,” Hatem told just-style.

Indeed, resource savings in green factories help the bottom line. “Costs must be recovered through resource savings,” argues Dr Shahpar Selim, who has consulted for the Adam Smith Institute. “And the benefits must be thought of as continued participation in an increasingly environmentally conscious global industry.”

See also: Will green growth bolster Bangladesh garment exports?