A SHORT BFIEF OF FACTORY

Knitting:
In Knitting section they use AUTIO STRIPER KNITTING MACHINE-X SERIES from paling pl-xscs 6 single jersey electronic control auto circular knitting machine. It added to knitted section to prove their capability in the high end section. This machine has higher RPM, pique structure, Lycia planting, even two different colors both side striper or three yarns planting by special yarn arrangement.

Dyeing:
RIB & Interlock Dual Function Circular Knitting Machine-X Series it also the new member of their knitting section. These machine are the rib or rib/interlock systems that have the market experience They completed the installation of BRUKNER high performance stuttering, drying and heat setting machine and FERRARO equalizer compacting machine, which produce and finish very sophisticated and high quality knitted fabric. HEAT SETTING MACHINE In dyeing section they use high quality heat setting machine. Open width compactor is the best in kind FERRARO complex RC 2500, fabric shrinking and stabilizing machine for open knitted fabric. OPEN WIDTH COMPACTOR Their latest installation is one of the best in kind. Ferraro complex RC- 2500, fabric shrinking and stabilizing of the wefts and warps. This machine normally comfortable to work with 100% cotton knitted fabric. SUEDING MACHINES FROM LAFER Now their expertise in the fabric finishing side is also going to fulfill in the highest level of the buyer. Some of the key features of this machine are 1)Superior shedding effect: no streaking no hairiness 2) All types of fabric structures elastic and non elastic can be processed. 3) Longer emery lifetimes

Washing:

They use washing plant from Tolkar, Turkey it installed heavy-duty textile washing and drying facilities in production level. According they have installed heavy-duty textile washing and drying facilities in production Effluent treatment plant: Northern Corporation use Effluent treatment plan which comes from INO EXCHANGE INDIA LTD. It is most top priorities for them to continuously look out for solutions to risk of the greater environmental issues. There are two ways that we are achieving at the moment: # Water conservation: reduce the amount of water needed for each unit of production. # Decrease the organic and inorganic loads in domestic and industrial waste water by the use of the most appropriated treatment, including nutrient removal. Some of the important feature of our ETP is:# Process water/liquid treatment, water treatment, water recycle and product recovery using various-chemical process for settling. # Lon exchange resins, membranes, polymers and polyelectrolyte for water and specialty non-water applications. # specialized systems for removal of excessive fluoride, arsenic, iron and nitrates from water. level

Garment:

COMPUTER AIDED DESIGNING FROM OPTITEX

On screen pattern designing, grading and digitize, has enabled us put our step into the world of accuracy. This system includes PDS-pattern designing system, Optitex grade, Optitex Digitize, MARK- Marker making. NEST++2- Advanced Automatic Nesting and other necessary software and hardware.

AUTOMATION IN THE SEWING SECTION FORMAL JUKI

Now Northern Corporation have more sewing and other assembling machines to facilitate another 10 sewing lines in their group. Most importantly these machines are automated and replacing the old manual machines which includes, lockstitch single needle, button hole stitch side cutter and more of different kind. These machine are distinguishing as they servo controlled and computerized controlled
PRINTERS & PRINTERS LTD. (PPL)
A garment panel printing house with a capacity of 20,000 pcs of garment with its 4 semi automatic printing machines started in operation in order to support the inhouse printing requirement of NCL group. This company as well nominated by all the buyers that are doing businesses with NCL group as and where they are applicable

EURO PRINTERS LTD. (EPL)

This is a joint venture company with the Belgium entrepreneur. This is the biggest automated garment printing company in Bangladesh at present. 50,000 pcs of printing panel per day is being produced from the 5 nos. hi teeth Auto Carousel Printing machines of different specification and 3 nos. automated high quality curing and drying machines. Another increase in the production of 15,000 paces capacity is underway with 2 semi automatic printing tables. All the major top buyers of Europe nominate this printing house.

In this section, fabric is checked. Cutting the fabric from the both ends fabric is checked whether it has fabric shedding or not and check the variation of the color. If any color shedding is detected then it marked by soap or sticker. In this respect 28% defect is acceptable. In the basis of defect, they distribute the fabrics in four typesIf the defect is3inch or less---------------------------------1 point Over 3inch but not over 6inch------------2 point Over 6inch but not over 9inch ------------3 point Over 9inch-----------------------------------4 point

FACTORY INFORMAION
1. COMPANY NAME: MONDOL GROUP LTD. 2. COMPANY TYPE: Knit Composite. 3. FACTORY ADDRESS: Nayapara ,Kashimpur , Gazipur, Bangladesh Web site: mondol.net Phone:880-2-9289110 5. ESTABLISHED: 2001 6. OWNERSHIP: LIMITED COMPANY 7. BANKER: EASTERN BANK LIMITED 10, DILKUSHA C/A, DHAKA-1000, BANGLADESH. 8. MEMBERSHIP: a) BANGLADESH GARMENTS MANUFECTURER & EXPORT ASSOCIATION. b) EXPORT PROMOTION BUREAU OF BANGLADESH c) BANGLADESH TEXTILE MILLS ASSOCIATION 9. INTERNATIONAL CERTIFICATE: ISO 9001: 2001 10. ANNUAL SALES: U.S. $ 4.00BILLION (APPX.) 11. PRODUCTION CAPACITY: 36 MILLION GARMENTS PER YEAR (APPX.) 12. MARKETS: 90% EUROPE, 10% OTHERS 13. CATEGORIES: MENS, LADIES AND CHILDREN 14. PRODUCT: KNIT T-SHIRT, POLO SHIRT, TANG TOP, SPORTS WEAR ETC. 15. PRODUCTION LEAD-TIME: SAMPLE 07-14 DAYS ORDER 60-120 DAYS REORDER 45-75 DAYS. 16. NUMBER OF WORKER: 7000 PERSONS 17. MACHINES AND EQUIPMENTS: AS ENCLOSED

MACHINERY OF KNITTING AND DYEING-FINISHING DIVISION NO. 01. MACHINE TYPE NO. OF MACHINE 08 SETS 11 SETS 04 SETS 02 SETS 02 SETS

CIRCULAR KNITTING MACHINE WITH EXTRA CYLINDER a) KEUM YONG (KOREA)

b) FUKUHARA (JAPAN) c) PAI LUNG

02.

FLAT KNITTING MACHINE

a) HANSHIN (KOREA) c) JY LEH (TAIWAN)

03.

04. 05. 06. 07. 08. 09. 10. 11. 12. 13. 14. 15. 16.

SOFT FLOW DYEING MACHINE FOR COTTON b) FONGS (HONG KONG) SOFT FLOW DYEING MACHINE FOR COTTON c) FONGS (HONG KONG) HIGH TEMPERATURE DYEING MACHINE FOR POLYESTER, T/C, CVC, & ALSO COTTON DEWATERING & DETWISTING & SQUIZZING MACHINE WITH AIR BALOONING ALBRECHT (GERMANY) RELAX SHRINK DRYER MONTI (ITALY) COMPA CTING CALANDER MACHINE MONTI (ITALY) OPEN WIDTH HEAT SETTING AND DRYING STANTERBRUCKNER TROCKENTECHNIK GMBH GERMANY OPEN WINDTH COMPECTING CALENDER MACHINE FERRERO LTD (ITALY) STEAM BOILER COCHRAN ROLLS ROYCE (U.K.) GENERATOR F.G. WILSON (U.K.) ATLAS COPCO COMPRESSOR FABRIC INSPECTION MACHINE DATACOLOR SF 600X SPECTRO PHOTO METER & SOFTEARE INCLUDING COLOR TOOLS QUALITY CONTROL SOFTWARE EFFLUENT TREAMENT PLANT FROM ION Exchange India Ltd. SUE DING MACHINE FROM LAFER WASHING & DRYING PLANT FROM TOLKAR

DYEING MACHINE a ) MISUNG (KOREA)

05 SETS 01 SET 04 SETS 01 SET 01 SET 01 SET 01 SET 01 SET 02 SETS 01 SET 04 SETS 02 SETS 01 SET 01 SET 01 SET 01 SET

UNITS OF MONDOL GROUP

1. MONDOL FABRIC LTD.

Nayapara ,Kashimpur , Gazipur, Bangladesh Space- 144289SQFT. Establishment -2004 2.MONDOL TEXTILE LTD. Knitting & knit Wear> Nayapara ,Kashimpur , Gazipur, Bangladesh Space- 27000 SQFT. Establishment -1996 3. MONTEX FABRIC LTD.-KNIT Composite Nayapara ,Kashimpur , Gazipur, Bangladesh Space- 66676 SQFT. Establishment -2004 4. MONDOL YARN DYEING LTD. Nayapara ,Kashimpur , Gazipur, Bangladesh Space- 20000 SQFT. Establishment -2004 5. MONDOL KNITWEARS LTD. Surabari, Kashimpur, Gazipur, Bangladesh. Space-201600 SQFT. Establishment -2006 6. montrims acceries ltd. Surabari, Kashimpur, Gazipur, Bangladesh Space-266400 SQFT. Establishment -2006

COURSE:

SUBMITTED TO:
(Assistant Professor)

SUBMITTED BY: NAME A S M Towheed Faysal Ibne Waded Mohammed Shawket Rusdi Mohammed Rizwan Razu ID 072-001-0-45 072-015-0-45 072-016-0-45 072-039-0-45

A BFEIF OF RMG IN BANGLADESH

The 100 percent export-oriented readymade garments (RMG) industry of Bangladesh has witnessed remarkable growth since its inception in the late 1970s. Paradoxically, this flagship industry of Bangladeshi private entrepreneurial talent took roots through the first export consignment of shirts from Bangladesh made by the state-trading agency, the Trading Corporation of Bangladesh (TCB), in the mid-1970s under countertrade arrangements and the destination was some East European countries. Subsequently, however, private entrepreneurs entered the industry and phenomenal growth took place in RMG exports from Bangladesh. Export of RMG increased from US $40 thousand in 1978 79 to US $6.4 billion in 2004-05. The industry has also provided employment to nearly 2 million workers, most of them women drawn from the rural areas. Explosive growth of RMG exports is of course not unique to Bangladesh. The annual compound growth rate of RMG export industries in Indonesia (31.2%), Mauritius (23.8%), and Dominican Republic (21.1%) compares favorably with that of Bangladesh (81.3%) over the 1980-87 period. However, while initial conditions were favourable for export growth in the countries noted above, this was far from true in the case of Bangladesh. This makes research into the factors responsible for the observed striking growth of RMG exports from Bangladesh a compelling case study in economic development. Academics and researches have generally attributed the remarkable growth of RMG exports from Bangladesh to favourable external conditions, notably the Multi-Fibre

Arrangement (MFA) bilateral quota system imposed by developed apparel countries, and low wages in Bangladesh. The role played by supportive government policy has also been noted in these studies. However, the role played by the RMG entrepreneurs in the dynamic growth of this industry has been largely overlooked. Thus, Khan and Hossain (1989) refuse to accept that the Bangladesh entrepreneurs had made any contribution to the rapid growth of RMG exports from Bangladesh. This apparent disbelief in the dynamics and creativity of Bangladeshi RMG entrepreneurs seems to have sprung from the more general notion, widely held by many scholars during the 1970s and 1980s, that Bangladesh lacks entrepreneurial resources. A major objective of this paper is to analyse the emergence and sustained growth to date of the export-oriented RMG industry of Bangladesh, paying particular attention to the governance aspects of such growth. As indicated above, the rise of the RMG industry in Bangladesh occurred during a time when the economys health was in poor shape and it was plagued by various problems, both structural and policy-induced in nature, which constrained, among other things, growth of manufacturing industries in the country. How did the RMG industry overcome these problems and flourish while growth of most other industries was stymied by these unfavourable factors, many of which had their roots in poor governance? The paper attempts to answer this question by analysing the problems of governance which industries in general suffered from and then explaining how the RMG industry managed to overcome many of these problems which ensured its healthy growth. 2 In this regard, special attention will be paid to an examination of the role played by the

RMG entrepreneurs, in particular how the social background of the entrepreneurs in this industry, many of whom were former civil servants, military officials and politicians, enabled them to overcome the adverse effects of misgovernance. While inappropriate government policy can spell disaster for an industry, by the same logic, sound economic policy of the government can stimulate industrial growth. Hence, a second objective of this paper is to analyse the role of supportive government policies in promoting the growth of the RMG industry in Bangladesh. In addition to policies which are supportive, deliberately weak or minimum government regulation of an industry in the form of non-implementation or weak implementation of existing government laws and regulations may spur growth of that particular industry, even through it would clearly reduce social welfare and hence can be construed as misgovernance. Has this happened in the case of the garment industry? This paper will also examine this issue. There is an unanimity of opinion among scholars that the changing structure of the global apparel industry has been uniquely fashioned by the MFA Quota system used by developed importing countries which restricted export supplies of garments to these markets from established supplying countries and thereby paved the way for the emergence of new garments exporting countries. This migration of the export-oriented garment industry from established suppliers to new suppliers was, as one would expect, directed by the existence of low wages in the new exporting countries. An important feature of the quota-restrained apparel market, which economic theory teaches us to expect, has been the emergence of quota premium or quota rent where the quota is

binding. This quota rent clearly is an addition to normal profit that would occur in an unrestrained market. This paper investigates the importance of the MFA Quota system as a contributory factor to the rise of the RMG industry in Bangladesh. More importantly, an attempt is made to assess the extent to which quota rents enabled the RMG enterprises to absorb the higher cost of doing business resulting from miss governance, a luxury which was not available to other industries. Since May 2006, the RMG industry of Bangladesh has been beset with very serious Labor unrest problems which has resulted in large-scale damaging of garment factories by The workers and has at times appeared to threaten the very existence of this industry The major bone of contention between the RMG factory owners and the workers has been the allegedly low level of wages paid in this industry, particularly wages paid to unskilled workers, together with other issues like late payment of wages, lack of security of workers resulting from absence of a formal contract between the worker and the employer, nonpayment of maternity and other benefits to female workers, etc. These issues, which form part of what is commonly known as compliance with social standards, have also posed problems for Bangladeshs RMG industry on the external front for the past few years during which time foreign buyers of Bangladeshs garments have insisted on strict social compliance on the part of RMG enterprises in Bangladesh as a precondition for their importation from this country. The fourth and final objective of this paper is to determine whether weak or lack of social compliance of Bangladeshs RMG industry at present, to the extent that it is true, can be traced back to the governments lenient and perhaps indulgent attitude towards

the countrys overwhelmingly important foreign exchange earning industry during its formative years, in the form of lack of monitoring and regulation and strict enforcement of the countrys laws pertaining to social standards. If found to be true, this can be construed As miss Governance because the government, perhaps unwittingly, would in this case have Encouraged the RMG industry to move along a path of long-run unsustainable growth, the lack of sustainability originating from a disgruntled workforce and dissatisfied importers, not to speak of exploitation of labour, particularly women workers who dominate this industry.

THE RISE OF THE READYMADE GARMENT INDUSTRY IN BANGLADESH

Generally, an industry initially develops in response to domestic demand, and then subsequently turns to export once it becomes mature. The evolution of the garment industry in Bangladesh, as in most CBI and Sub-Saharan countries, has not followed this pattern. Instead of growth being spurred by domestic demand, the rise of the RMG industry in Bangladesh can be ascribed to growing demand in developed countries for cheap apparel. Having said this, one should not forget that there was a small domestic garments industry in the then East Pakistan (now Bangladesh) during the sixties which catered to the demand for apparel in the then West Pakistan. The Mercury shirts, a company located in Karachi, sourced a few consignments of shirts during 1965-68 made

by some tailoring outfits operating in Dhaka, and then exported these to some European countries. There were a few tailoring groups in Dhaka who made a small quantity of export-quantity shirts and childrens wear on specific orders. They received orders from and supplied to Karachi-based firms. However, there was little investment in this industry during those days because of the very limited size of the domestic market. It was the global trend of relocation of production of garments from high-wage to low-wage countries, together with the bilateral MFA Quota system, that acted as the main driving 8 force for the emergence and subsequent growth of the RMG industry in Bangladesh. Supportive government policies also played an important contributory role in this regard. As noted earlier, it was the state trading agency, the TCB, that made the first export of RMG from Bangladesh in the mid-seventies. The first consignment of private sector export of garments from Bangladesh took place in 1977-78 when M/S. Reaz Garments Ltd. exported mens shirts worth 13 million French Franc to a Paris-based firm. At that time, there were only 9 export-oriented RMG units in Bangladesh. Along with Dash Garments, some other apparel-producing enterprises were set up in 1979, bringing the total number of firms in the industry to 22. By 1980, the number of firms in the industry increased to 47, but total RMG export from Bangladesh was less than US $ 1 million (Table 1). Despite the small export volume in the initial years, by the early eighties, the export-oriented RMG industry was well on its way to a historic place in the annals of industrial development in Bangladesh. During the early eighties, the government issued licences to many entrepreneurs for

the duty-free importation of machinery to produce garments for export purposes. Consequently, the number of firms in the garments industry increased rapidly and reached 632 in 1984-85. Export increased from US $ 1.3 million in 1980-81 to US $ 116.2 million in 1984-85, a phenomenal growth indeed, as shown in Table 1. Bangladesh exported its garments to the North American and European markets in the early eighties; at that time, its exports were not subject to MFA Quotas in these markets, hence the spectacular growth. However, the very rapid growth of imports of apparel from Bangladesh prompted the US, Canada and the European countries to impose MFA Quotas on Bangladeshs garments exports in 1985. This had temporarily showed down growth of the RMG industry in Bangladesh; there was a restrained increase in the number of firms from 744 in 1985-86 to 804 in 1989-90. Export growth had also slowed down somewhat during 198590 period. However, the industry bounced back from 1990 onwards. 9 Table : Growth in the Garment Industry of Bangladesh Year Export (in US $ million) Percentage change 1979 80 0.25 84.00 1980 81 1.32 430.00 1981 82 3.50 62.14 1982 83 6.37 82.14 1983 84 31.57 395.60 1984 85 116.20 268.07 1985 86 131.48 13.15 1986 87 298.67 127.16 1987 88 433.92 45.28 1988 89 471.09 8.57 1989 90 624.16 32.49

1990 91 866.82 38.88 1991 92 1182.57 36.43 1992 93 1445.02 22.19 1993 94 1555.79 7.67 1994 95 2228.35 43.47 1995 96 2547.13 14.11 1996 97 3001.25 17.83 1997 98 3781.94 26.01 1998 99 4019.98 6.29 1999 - 2000 4349.41 8.19 2000 01 4859.83 11.74 2001 02 4583.75 -5.68 2002 03 4912.12 7.21 2003 04 5686.09 15.83 2004 05 6417.72 12.91 Source : Export Promotion Bureau The number of garments factories shot up to some 3000 in 2002 and by 2005 it reached 3560. By 2004-05, exports had reached US $ 6.4 billion. The average growth rate of Exports during 1990/91-1997/98 were almost 21 percent per year. However, the growth rate of exports declined in the 1998/99-2004/05 period mainly due to exogenous factors like Flood in 1988, the global recession in 2000, and the 11 September incidents in the US the Following year. The share of garments export in total export earnings of Bangladesh climbed from 3.89 percent in 1983-84 to 75.67 percent in 1998-99 and has stayed around this level since then. It is important to note that the RMG entrepreneurs were not experienced in the technical, supervisory or managerial aspects of garment manufacturing. They were investors who were initially approached by an overseas exporter or a commission agent who offered to sell the raw materials and arrange the sale of the finished product to an 10

overseas buyer. Thus, the profit was shared between the foreign buying agent and the Bangladeshi manufacturer in the early days of the industry. Subsequently, many of the large RMG units established direct links with foreign buyers and the role of the buying agent became redundant in this case. Due to their low level of skills and risk aversion, the Bangladeshi manufacturers initially concentrated production on a limited number of easy tomake items with a minimum value-added. The woven RMG industry of Bangladesh has been heavily dependent on the use of imported inputs, particularly fabric, because of the above-noted trend of foreign buying houses and direct importers to specify the sourcing of fabric and also due to the inability (during the early days of the RMG industry) of the local primary textile sector (PTS) to supply fabrics of the required quality specifications. As a result, local value-addition in the woven RMG sector ranged between 25-30 percent in the eighties but subsequently rose to reach about 40-45 percent in more recent times. Thus, net foreign exchange earnings of the RMG industry during the eighties and early nineties was much lower than the gross foreign exchange earnings reported in Table1. An important development in the RMG industry of Bangladesh was the growth of knitted garments export in the early 1990s. The garment industry was almost completely dominated by woven garments during the 1980s. Export of knit wear to the tune of US $ 131.20 million was the first major consignment of knit RMG export from Bangladesh. After this, knitwear export from Bangladesh grew rapidly; during the ten year period 1993/94 2003/04, the annual growth rate of knitwear exports was about 23 percent, which was higher than the annual growth rate of 10.6 percent achieved by woven garments export

during this period. The share of knit garments exports in total apparel export from Bangladesh rose from 17 percent in 1993-94 to over 43 percent by 200405, while the share of woven garments gradually declined. While woven garments exports of Bangladesh are concentrated in the North American market, knitwear exports are mainly sold in the EU market. Local value addition in the knit sector is about 70 percent. According to the BGMEA, there were 4300 member firms in 2004-05 of which 2275 were woven garment units, 700 were knitting factories, and 525 were producing sweaters; however, 1300 of these units were closed. In addition, there were 560 units which were exclusive members of the Bangladesh Knitwear Exporters and Manufacturers Association (BKMEA). Thus, the total number of active firms producing garments in Bangladesh in 2005 was 3560, of which 47 percent was woven units, 42 percent knit units, and 11 percent producing sweaters. Total employment generated by these enterprises is estimated to be 1.9 million production workers, or 2 million if all employees are included. Most of these workers (an estimated 80 percent) are women drawn from the rural areas. The distribution of employment among different size-class of firms is important from the perspective of the present study. EPB data, as cited in World Bank (2005), show a relatively high degree of export concentration at the firm level. Of 2387 exporting RMG units in 2004, the top 500 firms exported 74 percent of total garments export, while 81 percent of total RMG exports was made by the top 650 firms. These firms belong in the large category (production capacity of 5,000 to 10,000 dozens per month). The remaining 19 percent of garments export was made by 1737 firms which can be considered as small

(production capacity of less than 5,000 dozens per month). The large firms source their own fabric and sell directly to foreign buyers, while the medium-sized firms work on a cut andmake (CM) basis for importers or buying agents. The small firms either sell to buying agents or work as sub-contractor for the larger firms. This means that out of the total number of 3560 firms in the RMG industry, about 1200 firms were either not exporting at all or were working as subcontractors. The same EPB firm-level data show that 1.2 million workers were employed in the 2387 firms that were exporting garments. This means that about 0.8 million workers are employed in the 1200 firms that are engaged in sub-contracting activity (i.e. they are not direct exporters) and hence are not required to fulfill the social compliance conditions of Foreign buyers.