Sherpa Hossainy's Blog

Trade unions push for RMG pay

Posted in Bangladesh, Business, Dhaka, Export and Import, RMG and textile by Sherpa Hossainy on August 28, 2011

Published in The Independent on 17 August 2011

Read the article on Independent website

Digital print edition

Different workers’ platform and trade unions demanded disbursement of garment workers’ salaries and bonuses before August 25 in a tripartite meeting on Tuesday.

The meeting was held between the government, owners and representatives of workers of the readymade garment (RMG) sector to plan peaceful disbursement of salaries and bonuses among workers before the Eid-ul-Fitr.

The sector trade body, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), initiated the talks.

The trade union leaders expressed satisfaction over the current relationship between the owners and the labourers and lauded the government efforts to keep stable situation in the factories.

They said there should be meetings between the owners in every factory to let the labourers know when they will get paid, how long they will work, and when they will have their vacation.

The trade union leaders said there are some factories that are not BGMEA or BKMEA members, and reluctant to follow BGMEA decisions.

“They could create some sporadic incidents that could create widespread problems,” a leader said.

Shajahan Khan, minister for shipping, said that previously there had been labour unrest because of untimely wage payment.

Selim Osman, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that instead of confining the salary disbursement within August 25, the issue should be settled by mutual understanding among the owners and the labourers.

“There is power crisis, the roads are bad and shipments are delayed, so owners are also not in a favourable position; so giving two salaries and one bonus within a month is tough,” he said.

Abdus Salam Murshedy, president of Exporters Association Bangladesh, said the banks should be kept open on Friday and Saturdays, so that the shipments, LCs and the transactions can take place and the labourers can be paid in time.

Israfil Alam, chairman of the parliamentary standing committee on labour ministry, said, “There are 50,000 factories, some random incidents may occur but don’t try to spread it like a plague and destroy the industry,” he said.

Md Shafiul Islam Mohiuddin, president of BGMEA, said, “We highly value relation between the labourers and factory owners and we reach a consensus in line with their demands and owners’ capability.”

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Clouding Your Mind: Marketing and Cloud Computing

Posted in Business, Computer, Guest posts, Internet, IT by Sherpa Hossainy on August 13, 2011

This is a blog post on cloud computing by James Kim,  who wrote this article as a guest writer for my blog:

From tech magazines to business blogs, it seems like all we hear nowadays is “cloud” this and “cloud” that. Newscasters, journalists, bloggers, and marketing pros have stretched the term to the point where it’s, well, nebulous. Everything from online fax services to data storage has evolved out of cloud computing technology. But, how is this technological advancement changing marketing? And how will it influence your world?

What is “the Cloud?”

In a cloud computing system, the network of computers performs what would normally be performed by individual, local computers in an on-premise installation. In its simplest terms, the Cloud is the internet. Cloud computing can be defined as web services for the users on the internet, or the cloud. Many people discuss cloud computing in terms of front end and back end. The front end is what we can see: the interface, the side of the computer client. The Web 1.0 internet revolution allowed everyone to access the front end of the cloud by using a standard client application. The back end houses the different layers of the software stack that composite the cloud. Now, in the Web 2.0 boom, we see increased communication between applications on the back end.

The Cloud in Marketing and Sales

There are tons of ways that companies are using this increased back end communication, or “application interoperability,” to tap into social networks and improve Customer Relationship Management (CRM):

-Real time, in process analytics have made it possible for companies to analyze and predict customer behavior.  It is now easy and inexpensive for business to examine customer behavior at every stage of the product: from design to consumer response. Through cloud applications, we can better pinpoint customer dissatisfaction and take corrective action.

-A company can also utilize the increased application interoperability by taking advantage of SaaS (software-as-a-service) application marketing. Under the SaaS model, a company can add a new social media channel or feed to an application and make it available to customers on-demand.

-It is now becoming easier and easier for a company to achieve mass customization. Each customer is assigned a unique ID so that web services can be tailored to that individual.

While discussion of the Cloud may seem foreign, inconsistent, and obnoxiously over-generalized, it is crutial to understand this technology to stay ahead of the curve. This technological shift will soon inform nearly all aspects of a business, from CRM to in-house organization. Once you’re familiar with the basics, you can increase efficiency and better understand your customer.

[James Kim is a writer for Choosewhat.com, which provides product reviews and test data for business services and products. Choosewhat.com’s goal is to help small companies make informed buying decisions on business solutions that help their business.]

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Primary textile sector faces tough time

Posted in Bangladesh, Business, Dhaka, Export and Import, RMG and textile by Sherpa Hossainy on August 11, 2011

Published in The Independent on 10 July 2011

Read the article in Independent website

Digital print edition

Dwindling yarn and cotton prices in the international market, incessant power and gas crisis and European Union’s new regulation have put Bangladesh’s primary textile sector (PTS) under grave threat, industry insiders said on Tuesday.

The global cotton prices steadily declined from May this year following an unprecedented rise from October 2010, and hit a momentous high of $2.52 per pound in April; while the prices were $0.95-$1.10 per pound in August-September in 2010.

Currently international cotton prices are hovering around $1-1.3 per pound and international yarn prices also declined from $6.5 per kg in April to $3-3.5 now.

“Now we are incurring around $3 loss per kg of yarn and the spinning mills now have a staggering high-priced yarn stock of 250,000 tonnes worth Tk 9,000 crore ($1.23 billion),” said Jahangir Alamin, president of Bangladesh Textile Mills Association (BTMA) at a press conference in the city.

“Now the ready made garment (RMG) exporters can purchase low-priced woven and knit fabrics from China and India, because those countries have their own cotton production,” he added.

According to the National Board of Revenue (NBR) statistics, the imports of woven and knit fabrics in January-June period went up respectively by 51.18 and 293.06 per cent and yarn imports 18.21 per cent.

The BTMA president said 50 per cent of the total capacity of manufacturing mills is currently unused because of lower export orders and local demands.

He also said the textile mills’ production capacity has decreased by 35-40 per cent for the relentless gas and power crisis.

The BTMA chief said the new GSP criteria might seem to have benefited the ready made garment (RMG) makers, but the long-term growth potential of RMG solely depends on textile sector.

The new rules of origin (RoO), adopted from January 1 by the European Union (EU), fixed single-stage processing instead of two-stage as a condition to enjoy the Generalised System of Preferences (GSP) facility for the least developed countries.

The two-stage processing meant the garment makers had to purchase fabrics from the native country. But under the new rule they can import fabrics from other countries and still attain GSP facility, which gives their products duty-free access in the EU.

“Eighty per cent of all yarns and fabrics produced by this backward linkage industry are exported to the EU countries in the form of RMG. If the textiles sector does not survive, there is no chance of the RMG sector to survive either,” Alamin said.

“Our main competitor China and India are providing strong policy support and cash incentives for their textiles sector, which creates a 15-20 per cent price disadvantage at the onset,” he said.

Moreover, China and India’s market manipulation and anti-dumping policy is also hurting the textiles sector, he added.

Alamin said the government has failed miserably to provide any support and the existing incentives are insufficient to offset the rising price disadvantages.

The BTMA president raised a five-point demand to the government to save the textile sector.

The demands included: increasing the existing cash incentives from 5 percent to 15 per cent and continue it till 2015, taking safeguard measures to discourage imports of raw materials for RMG and encourage use of local fabric and yarn; declaring incurred loss into working capital term loan and put that into a interest-free block account providing two-year moratorium, removing all taxes and duties on polyester and viscous staple fibre to encourage diversification and reduce dependency on cotton and fixing bank interest rate down to a single-digit.

Alamin said in the past three years there had been no new investments in the textiles sector, which boasts existing investments worth over Tk 30,000 crore and where almost 10 million people are involved.

“If these problems persist, let alone new investments the existing ones would be wiped out and creation of new employment would become impossible,” he said.

In the first ten months of the previous fiscal year, the export earnings were $15.07 billion, where primary textile sector’s contribution was $9.06 billion. The contribution of the primary textile sector is more than 80 percent of the total export earnings of the country.

Bangladesh exports may feel US debt crisis pinch

Posted in Bangladesh, Business, Dhaka, Economy, Export and Import, RMG and textile by Sherpa Hossainy on August 5, 2011

Published in The Independent on 05 August 2011

Read the article on Independent website

Digital print version

Leading economists warned of an inauspicious ripple-effect of US debt crisis on Bangladesh despite America averted a disastrous financial default in a last-ditch effort.

President Barack Obama on Wednesday signed a legislation to raise the US debt ceiling after Congress voted in favour of a bipartisan compromise deal. The bill raises the US debt limit by up to $2.4tn (£1.5tn) from $14.3tn, and makes savings of at least $2.1tn in 10 years.

The economists think Bangladesh and other developing nations will still be affected by the US austerity bill, which will mete out US government expenses and public expenditure and see the interest rates on mortgages, car loans, student loans and credit cards soar.

Professor Mustafizur Rahman, executive director of Centre for Policy Dialogue, said: “The dollar will weaken from the impact, so Bangladesh’s export competitiveness will be undermined as our currency (Taka) will be appreciated against the dollar.”

“US public expenditure will be toned down as an effect, so the recovery from recession will be sluggish and there will be negative impact on input demands,” he said.

Rahman said US external commitments in ventures like climate change fund and Millennium Challenge Account (MCA) will wane, and the underdeveloped countries dependent on those funds could take a hit.

“As these funds will be low-priority for the US, the aid from those funds will plunge,” he said.

Rahman said that there may not be any immediate impact on the country’s Balance of Payment (BOP); however, if US demand falls there could also be some problems with regard to BOP.

The economist also warned of a possible negative impact if credit rating agencies like Moody or S&P downgrade US sovereign debt rating from the coveted AAA+ rating.

“The cost of borrowing would increase for US if the credit rating drops and that could again make global investors lose their faith in the dollar,” he said.

Abu Ahmed, professor of Economics at Dhaka University, said the increase in US debt ceiling will increase US inflation, which is already very high.

“The confidence in US dollar as a reserve currency will aggravate as an impact, and our forex reserve is all about US dollars,” Ahmed said.

The blow on dollar as a standard forex reserve currency is already being felt as many countries are shifting to gold and other currencies to use as reserves.

“The impact will be felt throughout the world. For India and China who has over trillion dollars of reserves, there is a much severe problem. Now the world is slowly moving to use gold as reserves,” Ahmed said.

Bangladesh Bank recently bought some gold for reserve, but a second thought should be given on other currencies to use as reserve, Rahman said.

He said the debt deal did not raise the taxes so there would be a possible investments surplus for US entrepreneurs and that might be a boon.

Bangladesh’s exporters also remained skeptic about any positive outcome from the eleventh-hour debt deal as they feel a hike in lending rate in the USA and demand contraction, as a result of declining purchasing capacity of US consumers, will hurt exports.

“The orders from the US are decreasing already. There is no intimation or confirmation on orders,” Abdus Salam Murshedy, president of Exporters Association of Bangladesh, said.

The US market is the largest importer from Bangladesh; if purchasing power of the US consumers goes down, the exports will take a hit, Murshedy added.

Bangladesh exports apparel items worth over $5 billion, nearly 25 per cent of the country’s total exports, to the USA.

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