1. There is no correlation between capacity enhancement and order flow increase. That means the way we increased the capacity similarly the order flow didn't increase so as a matter of fact competition became fierce to grab the limited orders and ultimately caused drastic fall down of price.
On the other hand factory owner/ management didn't give real projection to the brand and/ buyers that on so and so date we are increasing such capacity and to feed that we require such quantity enhancement from the specific date. I mean it was unplanned capacity enhancement.
2. As a currency Taka have become strong. Whether it's artificially done/pegged by central bank I am not indulging myself into that discussion. But for the 4-5 years not much deviation in the exchange rate. So as a exporting sector RMG facing unequal competition for some of the neighboring economy like India, Pakistan and so on. In recent days lots of orders are going to Pakistan only for this reason.
3. In course of time lot of working areas can be automized, ERP need to be introduced to have real time data, machine need to be modernized, motion expedition and so on but we are ignoring.
4. Wages hike and power,gas price increase also played a role though I personally feel increase of wages was inevitable and necessity. But we could have cover-up that by increased efficiency but we couldn't and man machine ratio( Co- related with efficiency) of our country is also high in context of efficiency also we remain in the lower side.
5. Hidden cost is really hearting adversely to the cost of business like renewal of Licensing, transport cost, miscellaneous expenses at different scenario, competitiveness of port, extended time for raw material sourcing etc.
6. We couldn't become leader in alternative market other than USA and EU which includes UK.Emerging market like China,India, Brazil, Mexico, Russia and the then federation Asia pacific ,Part of East Europe etc are unexplored till now.
We couldn't develop different product range also for different countries perspective or strategize marketing.
7. Few owners (I am not generalizing) diverged fund or over invested for some other purpose which lead the gearing/leverage high and ultimately project becoming sick.
8. Most of Giant brands sales gone down but online sales boosting. Information reveals that couple of years ago online Garments sales was 5 billion Dollar but nowadays it's more than trillion.
The online Brands vendors are shipping garments on 17-25 days lead time but we couldn't make us ready.
Armanul Azim
Chief Operating Officer
Tosrifa Industries Ltd
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