DHAKA: To see a different face of Bangladesh manufacturing, a country that has earned notoriety with its ready-made garment plants, one drives 25 miles north of Dhaka city to Gazipur district.
Amid a predominantly industrial enclave of garmentmakers is a 24-acre site where 5,500 workers, mostly women, are busy stitching not clothes but a range of stylish leather shoes.
This is the factory of Dhaka Stock Exchange-listed Apex Footwear, Bangladesh’s leading footwear exporter. It started manufacturing leather shoes more than two decades ago. Today it is among the largest shoemakers on the subcontinent, shipping 4.5 million pairs annually to 130 retail customers in 40 countries, including Macy's M -0.02% and J.C. Penney in the U.S., ABC Mart in Japan and Deichmann in Germany.
Additionally, it produces 3 million pairs for the domestic market that are sold through a chain of 550 outlets across the country, reports Forbes online.
Visiting Apex Footwear’s factory in Gazipur one hot and humid June morning I quickly grasp that this is no sweatshop. The complex includes, among much else, an effluent treatment plant, a purification plant for drinking water, a medical clinic and a day nursery. Workers, I’m told, get an average monthly wage of $100, which is higher than the $75 mean in the garments sector. In addition, they are covered for medical and life insurance, and get bonuses twice a year plus a share of profits.
Thirty-year-old Rawshona Khatun, who works on the shop floor, says these benefits and an 8-hour workday drew her from a previous job at a garments unit nearby where a 12-hour daily shift was the norm.
“Since shoemaking is a very labor-intensive business and we operate in the heartland of the ready-made garments industry, we have to remain a step ahead. We see our compliance standards and worker benefits as our competitive advantage,” says Manzur Elahi, founder-chairman of the $200 million (sales) Apex Group, whose other listed entities are leather-producer Apex Tannery, Mutual Trust Bank and Pioneer Insurance.
Seated in his Dhaka office in the tony Gulshan area, Elahi points proudly to the gold certification received by Apex Footwear from Worldwide Responsible Accredited Production, a U.S.-headquartered social compliance monitoring organization.
A former tobacco executive, Elahi, 71, along with his son Nasim Manzur, 45, who runs operations as managing director, is spearheading Bangladesh’s charge into the global footwear trade. While China still has the biggest footprint, with a 60% share of global shoe production, its rising labor costs have made big retailers look elsewhere, to countries like Vietnam and Indonesia.
The time is ripe, say the father-son pair, for Bangladesh–where the cost of labor in shoemaking, at less than one-fourth that of China, is the lowest in Asia–to gain a significant berth as a profitable manufacturing hub.
The country’s annual leather exports, including footwear, have been climbing lately, doubling since 2010 to just over $1.1 billion, though its global share remains less than 1%. The Apex Group accounts for 15% of those.
“Apex has led the way in the shoe sector and been a source of inspiration to others. It remains well ahead of the curve on several counts,” says Farooq Sobhan, a former diplomat who is president of the Bangladesh Enterprise Institute, an independent research outfit.
Elahi, who hails from a family of legal luminaries, stumbled into the shoe trade. One of seven siblings, he grew up in Calcutta, India where his Muslim father was the chief justice of the high court and was awarded a knighthood. In 1962 Elahi immigrated to Dhaka (then part of East Pakistan) to enroll in Dhaka University. After graduating two years later, he joined the local arm of British American Tobacco in Karachi.
But Elahi, who says he admired Jamsetji Tata, the legendary founder of India’s Tata empire, was nursing a dream to start his own business. A chance meeting with a French trader, who was sourcing Bengal Black Kid semifinished leather from Dhaka that was much sought after by France’s shoemakers, sealed his fate.
Source: forbes.com
BDST: 1408 HRS, AUG 28, 2014
