Bangladesh’s apparel industry has made significant progress in workplace safety, environmental standards, and sustainability, yet manufacturers continue to face pressure from international buyers to deliver at lower prices. As compliance requirements and investment costs rise, the gap between buyers’ expectations and their willingness to pay remains a pressing concern. In this interview with Fashion Business Journal (FBJ), Md. Fazlul Hoque, Managing Director of Plummy Fashions Ltd., former President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), discusses the need for fairer pricing, stronger negotiation strategies and greater alignment between sustainability expectations and commercial practices.
FBJ: You have spent decades in the apparel industry, served as BKMEA president, and now lead FBCCI as Administrator. How would you assess Bangladesh’s current business environment?
Md. Fazlul Hoque: The business environment has become more challenging, with instability and multiple longstanding problems emerging simultaneously across different sectors.
The economy is going through a difficult period, and overcoming these challenges requires collective effort.
As the interim head of FBCCI, my primary responsibility is to facilitate the election process. However, we are also working to address business concerns through engagement with the government, seminars, symposiums and meetings with foreign delegations. The government remains the principal policymaker, and our role is to support its efforts to restore economic stability and create a more favourable environment for business and investment.
FBJ: Factories continue to face electricity shortages and gas supply problems. What measures are needed to address the situation?
Md. Fazlul Hoque: Energy supply is primarily a government responsibility, and reliable electricity and gas must remain a priority. The Middle East conflict and wider regional instability have contributed to energy-market pressures, including disruptions affecting oil supplies.
Between late July and mid-September, Bangladesh experienced a particularly difficult period, with severe gas constraints and frequent electricity outages. Although electricity supply has improved somewhat, it remains unreliable, and gas pressure is still low in many areas. New connections also remain suspended, limiting opportunities for fresh investment.
The government has outlined plans to accelerate solar-power investment and encourage adoption at different levels, from households to large-scale projects. Wider use of solar energy could help ease some of these pressures. If the government, businesses and individuals work together to expand renewable-energy adoption, we may be able to address part of the problem more effectively.
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FBJ: Could net metering help businesses and households manage the energy challenge?
Md. Fazlul Hoque: Net metering allows consumers to generate electricity through their own solar panels and supply surplus power to the national grid. The system measures electricity generated, consumed and drawn from the grid. Depending on the applicable arrangement, surplus electricity can earn credits or payments.
Under the arrangement I am referring to, the rate for surplus electricity is Tk 10.50 per unit. I believe wider adoption of such systems, according to each consumer’s capacity, could contribute to addressing the energy challenge.
FBJ: Reports suggest that around 400 factories have shut down. How serious is the situation, and can further closures be prevented?
Md. Fazlul Hoque: I am not entirely convinced by the figure of 400 factory closures because I have not seen authenticated data confirming it. I am not suggesting that no factories have closed, but we must distinguish between temporary production stoppages and permanent business closures.
A factory might suspend operations for two days because of an energy shortage. That is very different from a business permanently shutting down because it can no longer operate. Without reliable data, it is difficult to determine what the reported figure actually represents.
I do not believe that 400 factories have permanently closed over the past two months, although I cannot establish the exact number.
Businesses also close under normal economic conditions. Some struggle, others perform well, and new businesses enter the market. Different outcomes can result from management capabilities, operational efficiency, market selection and business models. Not every closure can be prevented through government policy. What matters is addressing systemic obstacles while enabling viable businesses to operate and grow.
FBJ: Bangladesh relies heavily on Europe and the United States for apparel exports. What is driving the recent weakness in international demand?
Md. Fazlul Hoque: The global economy has slowed, and rising oil prices have contributed to the pressure. Higher fuel costs affect household expenditure in Western markets, while approaching winter brings additional heating expenses for many households.
As essential living costs rise, consumers have less disposable income for discretionary purchases. Someone who previously bought two shirts may now buy only one, prioritising necessary purchases over additional clothing.
This weakening demand affects developed markets generally; it is not unique to Bangladesh. Other major apparel-exporting countries are also experiencing pressure, although the extent varies. Understanding why exports from one country decline more sharply than those from another requires a detailed assessment of individual markets and circumstances. There is no single explanation that applies equally to every country.
FBJ: How are banking-sector difficulties affecting business activity and investment?
Md. Fazlul Hoque: An inefficient or poorly organised banking system inevitably affects commercial activity. Since August, several banks have faced serious difficulties, creating challenges for businesses and the wider economy. Banking scandals and irregularities have also complicated the situation, making financial institutions more cautious about lending.
However, banks cannot simply be blamed for tightening their lending practices. When borrowers fail to repay loans, banks naturally become more careful about assessing risks and collateral.
Measures have been introduced to support the banking sector, including refinancing arrangements and financial guarantees. For example, Tk 7,000 crore was reportedly provided to National Bank with a Bangladesh Bank guarantee to help address its difficulties and facilitate the return of depositors’ money. Bangladesh Bank has also introduced other initiatives to restore stability.
Nevertheless, implementation remains challenging. The effectiveness of these measures and their impact on business confidence need to be monitored closely.
FBJ: Factories are investing heavily in sustainability and compliance, yet international buyers continue to push for lower prices. How should the industry respond?
Md. Fazlul Hoque: We do not appreciate an approach in which international buyers impose increasingly demanding rules, regulations and standards while remaining reluctant to pay better prices. There is a contradiction when buyers expect factories to meet higher sustainability and compliance requirements without adequately recognising the associated investments.
At the same time, we must understand market realities. Any buyer naturally wants to purchase products at the lowest possible price. Consumers behave similarly when buying groceries, clothing or other goods. The challenge, therefore, is not simply to expect buyers to change their behaviour; we must also strengthen our own negotiating position.
Our negotiation capabilities need to become more strategic, organised and professional. A stronger approach at the negotiating table could help factories secure better prices and improve their commercial position.
Over the past 10 to 12 years, Bangladesh’s apparel industry has made considerable progress in compliance, particularly in workplace safety, security and environmental standards. Factories have invested significantly to meet evolving expectations, including environmental, social and governance (ESG) requirements.
When manufacturers make these investments and fulfil increasingly demanding obligations, international buyers should recognise that progress through more appropriate pricing. From an ethical perspective, there should be greater alignment between the standards buyers demand and the prices they are willing to pay.
FBJ: Multiple compliance audits create additional costs and administrative burdens for factories. How can the process become more efficient?
Md. Fazlul Hoque: This issue deserves serious attention. Sometimes, I question whether our growing focus on compliance is distracting us from production itself.
Compliance has become increasingly complicated because different countries, brands and buyers maintain different rules and requirements. We have long argued for a unified code of conduct that establishes common standards for everyone.
International organisations have introduced various standards and codes, but factories still frequently face multiple audits and overlapping requirements. The existence of different systems has not necessarily made compliance easier for manufacturers.
Factories cannot resolve this problem alone. International buyers and relevant organisations must also take responsibility for developing a more harmonised framework. A common approach would reduce duplication, make compliance more manageable and allow factories to focus more effectively on production while continuing to meet essential standards.
The international side needs to give this issue greater attention. If sustainability and responsible business practices are genuine priorities, stakeholders should work together to make the systems supporting them more consistent and practical.
FBJ: Given the current business climate, what advice would you offer textile and apparel engineering students and other young graduates considering careers in the industry?
Md. Fazlul Hoque: The industry is not growing at the pace it once did, and this is undoubtedly a challenging period. However, difficult periods are a part of life, whether in personal matters, professional careers or business. Young graduates should not become discouraged by the current situation.
My advice is to go beyond what they learn from textbooks and invest more time in practical, industry-related knowledge. Rather than spending excessive time on social media platforms such as TikTok and Facebook, they should use the internet as a learning resource. YouTube and other online platforms offer valuable opportunities to understand industrial processes and how the industry operates in practice.
It is true that jobs may not be immediately available to everyone. However, candidates who develop stronger skills and distinguish themselves from five or seven other applicants competing for the same position can improve their employment prospects.
The additional knowledge and capabilities acquired through self-learning will remain valuable throughout their careers. Our industry continues to need well-trained, capable and professional people. Young graduates should therefore invest in themselves, continuously improve their skills and understand how the industry works beyond the classroom.