“Need to expand ICA members from Bangladesh to influence and shape cotton trade regulations”
The textile and apparel industry in Bangladesh is currently facing significant challenges such as the high cost of raw materials, power expenses, and the need for product diversification etc. Addressing these issues is crucial at this point. Recently, Azhar Ali, COO (Spinning) at the SALMA Group, was interviewed by Textile Today. He joined Salma Group as a consultant in 2019. Throughout his career from 1995, he visited many countries including Brazil, India, China, and South Korea, and gathered extensive experience.
He talked about his professional journey in the textile industry, the difficulties he faced, and his experiences working in various textile companies. He also discussed the challenges of the industry, including the high costs of raw materials, power, and finance. To improve competitiveness in the market, he suggested that product diversification is essential in reducing costs.
The Salma Group is primarily involved in the import and trade of raw cotton and the production of yarn that is intended for export. They achieve this through a variety of spinning mills owned by the group, which includes Tamijuddin Textile Mills Ltd (TTML), Dabiruddin Spinning Mills Ltd (DSML), Suraiya Spinning Mills Ltd (SSML), BSB Spinning Mills Ltd, and Humaira Composite Textile Mills Ltd (HCTML).
The group is known as a leading producer of high-quality yarn within the country and their yarn is utilized by prominent knit and garment factories that focus on 100% export. They are producing all kinds of blends such as Viscose-mélange, PC-CVC, 100% modal, 100% Tencel, cotton blends and more.
Textile Today: Could you share your professional journey?
Azhar Ali: I completed my undergraduate degree in Textile Engineering from Textile Engineering College (now BUTEX) in 1995. I started my career at Beximco Textile and later on did a job at Padma Textile, Prime Textile but I felt that I was not given the opportunities I deserved to learn and develop myself.
At the beginning of 1997, I joined Square Textile, where I made my identity in the textile sector. After leaving Square Textile, I built Badsha Textile with my all experience. Implementing a new project was part of my career plan. I made a team and successfully completed the project of 50,000 spindles. We started commercial production within 8 and a half months. The productivity was unparalleled, with 32 tons of production per day and approximately 49,600 spindles produced by one blowroom.
However, I felt that I have lack of knowledge in commercial, banking, insurance, and other areas, so I left Badsha Textile to join Delta Spinning as a senior GM.
Here I successfully redesigned the factory within 6 months, reversing the factory's production from 30% ring and 70% rotor to 70% ring and 30% rotor. I redesigned everything from humidification to every other aspect of the factory. After working there for two years, I left Delta Spinning to join Zerina Composite Textile Industry Ltd. as a working partner and CEO. At Zerina Textile, I had to oversee all work, from the MD to the CEO, and activated closed machines, develop the system, build a new team, and pay off long-term loans.
After 2016, I started a consulting firm to share my experience and ideas and provide technical support for starting new companies. However, I realized that I had more to do in the sector and started diversifying the products. We started with all the fancy yarns at Zarina Textile, and the market gave us good feedback.
I believe that a 100% cotton factory is not feasible for Bangladesh because the raw material cost is the first cost center, ranging from 65%-75% of total costs, followed by power costs. The cost used to be around 5-6% at some point, but now it has gone up to 7-8%. Because most machines are automatic, wages can vary from 4-5%. The financial portion of the bank should be 7-8%, but currently, it's almost 12-13%, and this cost is increasing day by day due to various mechanisms.
To reduce these costs, it's essential to work on raw materials, which are the most expensive. To achieve this, we must move towards product diversification, which means abandoning cotton and using other fibers.
Textile Today: What is your opinion on implementing modular production lines in response to the changing ordering patterns of global buyers and consumers?
Azhar Ali: I believe that implementing modular production lines should be considered from the initial planning stage. However, it may not always be feasible to do so in an existing industry due to the dependence of carding machines on the products being produced. If we want to implement a modular production line, we would need to increase the number of carding machines, make changes to processing machines, and bring in additional blending machines.
Textile Today: Due to the changing ordering pattern of global buyers and consumers, manufacturers need to change their program to do small orders. What steps should be taken to ensure quality?
Azhar Ali: To ensure quality, we need to increase the number of carding machines since different materials require different carding specifications and speeds. We should also increase the blending line and ensure that the team understands the fluctuating demand of customers and their desire for new products.
Starting a new factory is another option, and we have designed a new factory with fiber dyeing capabilities that will be operational by the end of the year. This new factory will have 40,000 spindles running from 7 blow room lines, producing different products and colors.
Textile Today: What are the current trends in fiber and how can the industry shift towards man-made fibers given their tight profit margins? What preparations should be taken in the spinning sector?
Azhar Ali: It's challenging to incorporate new machines into existing factories due to space constraints. However, blending units can be located elsewhere instead of the blow room, and carding machines can be arranged in smaller spaces. Draw frame heads should be increased, and the factory should be prepared for the transition toward man-made fibers.
As for fiber trends, countries with high temperatures demand 100% cotton or cotton blend products, while cold countries prefer products without cotton. However, this discussion has only focused on the knitting segment. The woven segment is an untapped market that we can explore more. We have already begun developing different products and processing for customers in this segment.
The sweater market is another opportunity for product diversification. Cotton mélange is in high demand in the sweater market, but it is mostly imported. Therefore, we can tap into the sweater and woven segments from the hosiery segment. Denim, on the other hand, is almost saturated in our country, so the focus should be on the top body part garments in the woven segment.
Textile Today: In recent years, cotton prices have been fluctuating. What advice would you give to factory owners regarding strategies to follow when purchasing cotton to avoid these fluctuations?
Azhar Ali: This is a difficult question to answer because the global market follows the New York Cotton Exchange (NYCE) commodity. Cotton can be purchased through fixed-price or on-call options. In our country, cotton is mainly procured through a fixed price, with limited forward booking. However, as we rank second highest in cotton consumption, traders have started to adopt the on-call method.
Dealing with an on-call system requires a detailed understanding of global trading, and those who deal with this system have received education from renowned universities worldwide. To cope with them, we need to have a detailed idea about global trading. Shippers always develop everything in their favor, so increasing the number of members from our country in the International Cotton Association (ICA) will enable us to participate in changing the rules and regulations. The current total number of ICA members is 291 where 22 factories in Bangladesh are ICA members.
Textile Today: Can you tell us about the new products that you are currently developing and planning for the future?
Azhar Ali: At Salma Group, we are continuously planning and developing new products. We are currently working on a new cotton- mélange factory with a capacity of 40,000 spindles per day and can produce 22 tons per day. Additionally, we are establishing a fiber-dying factory that has a capacity of 16 tons per day, and it can dye different types of fibers, including cotton, polyester, viscose, and linen.
We are also aware of the decreasing reserve of underground water, which is essential for soft water usage. Thus, we are also planning to produce dope-dye polyester and dope-dye viscose in the future.
Furthermore, we are focusing on colored mélange -linen products and developing new products in this category. We are also planning a new project of 100% linen with a capacity of 4 tons per day, and we expect it to start by 2025.
Textile Today: Can you tell us about the new products that you are currently developing and planning for the future?
Azhar Ali: At Salma Group, we are continuously planning and developing new products. We are currently working on a new cotton- mélange factory with a capacity of 40,000 spindles per day and can produce 22 tons per day. Additionally, we are establishing a fiber-dying factory that has a capacity of 16 tons per day, and it can dye different types of fibers, including cotton, polyester, viscose, and linen.
We are also aware of the decreasing reserve of underground water, which is essential for soft water usage. Thus, we are also planning to produce dope-dye polyester and dope-dye viscose in the future.
Furthermore, we are focusing on colored mélange -linen products and developing new products in this category. We are also planning a new project of 100% linen with a capacity of 4 tons per day, and we expect it to start by 2025.
Textile Today: Do you have any special message for professionals in the textile industry?
Azhar Ali: With my 29 years of experience in this field, I want to emphasize that there will always be fluctuations in the market, and sometimes it can be really tough. However, this is also the time to identify the areas where we can sustain and invest in those segments.
Apart from importing cotton, we should focus on other products as well. If we can design our factories accordingly, we can excel in the near future. As we are leading the industry currently, we can continue to do so in the future by adopting timely and appropriate product diversification.
==END==