While Indians have earned the reputation of being among the top apparel producing nations for foreign brands, it is rare to see an Indian establish a brand in a foreign land and work his way backwards into the manufacturing industry. Started as Roochi Traders in 1982 by Vishwa Sachdeva, and currently led by his son Mickey Sachdeva, Cotton Heritage is a growing fashion brand in imprinted sportswear in the US. While the company’s operations and warehouses are based in US, it does most of its sourcing out of the Indian subcontinent, with offices in Pakistan, India, China and Bangladesh through its sourcing wing Roochi Traders. In a one-o-one with Apparel Online, Sanjay Taneja, Country Manager, Roochi Traders and Masoud Rana, GM (Operations), share their experience of Bangladesh as a sourcing hub…
With sharp understanding of what each garment manufacturing destination has to offer, Roochi Traders selects the sourcing regions as per the product requirements. From Pakistan, the company is sourcing fleece based products; now with the GSP advantage to EU, manufacturers are moving quickly to ramp up capacities and upscale technology and this makes Pakistan a favoured sourcing destination, while in India, in spite of cotton growing nation with many people below poverty line, only few suppliers have evolved their business models to handle staple product manufacturing. The biggest and most vibrant destination is Bangladesh and Cotton Heritage has been sourcing substantial quantities for over two decades. “We are highly quality- and cost-conscious organization and firmly believe in maximum utilization of every available resource to stay competitive in highly competitive commodity segment. For us, Bangladesh is an important sourcing destination and 55% of the total global sourcing is being done from here. Our core product is T-shirts and other knit products, and we ship multiple containers every week from Bangladesh. We are currently sourcing over 65% of our requirement of crew neck tees from Bangladesh, the reasons are – better work efficiencies, modern technology, higher sourcing flexibility,” says Sanjay who graduated from NIFT, Delhi (India) as first batch in GMT and carries work experience from both manufacturing and buying side from various companies.
With a considerable experience in sourcing out of South Asia, Sanjay believes that Bangladesh is arguably the most favourable hub for garment manufacturing. “Unlike India where apparel is not a priority industry, in Bangladesh there is a cohesive environment to manage large scale factories and an unfaltering desire for growth, supported by Government. The best example of this is how the industry regained balance post the Rana Plaza incident. Today the exporters are going for sustainable business models like green factories, managing carbon footprints, and undertaking many other initiatives. Not only that Bangladesh offers better prices, investment in update technology, machinery and equipment is also excellent here,” adds Masoud.
As an expat and observer, Sanjay has been travelling to Bangladesh since 1998 for sourcing products and feels that irrespective of all the odds, this country has progressed in all spheres. Besides, appreciating the overall growth in terms of inducting latest technology and infrastructure, he is appreciative of the strong middle management which is emerging in Bangladesh along with fresh graduates who are coming out from textile and fashion institutes. “Their communication and technical skills have improved; every retailer brings in a lot of technical knowhow and expats themselves have been instrumental in developing skills within the country. Seeing the growth in skills of its own human resource, now the Government is putting some caps, like an expat can’t work for more than 5 years, or on hiring one expat a company has to recruit 5 Bangladeshi employees,” spells out Sanjay.
Though the country is leading as a preferred sourcing base, it does have its own set of problems, such as power shortage, gas shortage, the recent increase in labour wages, and the rise in cost of production, yet Sanjay is optimistic. “As the country grows, it is only natural that there would be a gradual increase in wages. Yet the wages are still the cheapest in the region. Also, even when the wages have gone up by 72 per cent, the actual FOB would only go up by 3 to 7 per cent; depending on the volumes that one is doing, and this much variation can be accommodated,” argues Masoud.
For Cotton Heritage, it is an essential business need to continually look for new low cost manufacturing destinations other than Bangladesh. Sanjay claims that Central America is also a huge manufacturing base for products like basic Crew-Neck T-shirts, with large factories employing as many as 20-30 thousand personnel under one roof, so within the company’s sourcing offices we compete with each other which makes sourcing competitive by the day. Adding to this dilemma is the continuous fluctuation in yarn prices, presently resulting in a hike. “Cotton has become white gold today. If you are into a staple product category, the pressure of prices is very high. We vigilantly watch the price movement regularly and book our resources when we find the prices to be on the downslide. That is the only way to check the fluctuation in prices,” shares Sanjay.
Even though Bangladesh has gradually developed expertise in more complex product categories, Masoud insists on sticking to sourcing a basic product, something for which the country is traditionally known for. “As an organization we have been breathing this product for a very long time and we believe that there is a huge market within our segment. That is why we feel that in spite of holding on to T-shirts, we can still have our appetite of growth,” reasons Sanjay.
Cotton Heritage is sourcing its products from vendors, who are handpicked after thorough evaluation as per company’s standards. We only select WRAP/BSES certified factories. For us colour continuity, vertical integration, business ethics, and clean finances, are few of the requisites before nominating a vendor,” concludes Sanjay, according to whom Roochi Traders’ negotiations on price points are highly demanding, so the vendors have to be ready for that as well. Cotton Heritage caters to all of USA and also does private label products for various importers. We value our business with our vendors and our clients, and provide optimum service with good prices.
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