Grameen Knitwear

Today we had a trip to the Grameen Knitwear factory on the outskirts of Dhaka. It was a very interesting trip to see to conditions that people were working in and everything that goes into making that shirt that you pick up from your favourite clothing store.

The factory was quite big and it was also located in the Export Processing Zone (EPZ) which is basically a higher security area where many foreign companies have located and good there are produced to be exported. The Grameen Knitwear factory was one of the few wholly Bangali owned factories located in the EPZ. The only other name I recognised was an Avery factory, but we only drove though a small portion.

Inside the Factory

Generally the working conditions in the EPZ are better than in other factories outside. The environment is better for the workers, not as hot, fewer fumes, higher safety standards etc. The pay is also better, the Grameen Knitwear factory paid their unskilled workers 3,800 taka per month ($55), compared to 3,000 outside. However this wage rate does not include some extras including a food / lunch allowance, and a bus service to pick up and drop off workers at their homes. They have found that one major advantage of these bonuses was that they had very low turnover compared to other garment factories.

The Factory was split into main 3 sections: Knitting, Dyeing, Garment – which was further split into cutting, sewing, and finishing / packing. Finishing included numerous quality checks and ironing, before it was packaged and put in boxes to be shipped out.

Knitting Section- all automated

The factory was opened in 1999 and employed 900 people then and was 1 storey tall. Now they employ 2,700 skilled and unskilled workers, in a 4 storey building. Grameen had also just purchased some nearby land which was going to be used for a couple of social businesses and a second garment factory. On a side note – one of the social businesses being built will be an Adidas factory where they are producing specially designed and affordable shoes for children in impoverished families.

A couple knitting machines

They exported most of their clothing to Germany, most of the rest to other parts of Europe and a small portion to North America. They imported yarn from India and specialised in athletic wear which is higher quality than the surrounding garment factories outside the EPZ produce.

Fabric waiting to be dried after the dyeing stage

It was very interesting to see all the work and the whole process that goes into making each t-shirt that you try on at the mall. The manager said that the cost for different shirts varied, but on average they sold each for $2.50 to the distributor, and he then had heard that they sold those for 4 to 5 times the price. Then add in another mark-up by the retailer and that is what you and I are paying.

Cutting Stage - they stack 30 sheets at least before cutting

 Plus in a factory of 2,700 Bangali workers, at the end of the process they wrap the shirt in plastic and throw in a cardboard picture of a white German girl with blond hair and blues eyes. I have never properly appreciated the number of people that go into making each t-shirt, and the only thing I think about when deciding which to buy is the picture of how it looks.

The Sewing Section

The manager mentioned that energy was a major problem for the plant. When the electricity went off, he had to pay 4 to 5 times as much to get electricity from a gas powered generator. In one of our other meetings they had talked about designing factories so that they will need less air-conditioning and fans and be all around more energy efficient. It is unfortunate that solar power is not feasible yet, since Bangladesh has such a huge power shortage (supply is only half of demand) and they get a lot of sun here.

I feel like I keep getting drawn off onto tangents, but this was an interesting thing I read in my book talking about adapting technology for the bottom of the pyramid markets. Here in places like Bangladesh, especially in rural places, you cannot just plug in your curling iron or blow dryer, because there are blackouts, and when the power is on there are numerous power surges. So anything that runs off electricity has to be able to handle a range of voltages. The technology has to be more advanced and developed to work here than in the developed world! That is just one example of the many adaptations needed that I would not have thought of before.

So, that was my trip to a garment factory. The factory has expanded quite rapidly, from 900 employees in 1999 to 2,700 in 2010, but they need to keep expanding. Firstly it is profitable, and it is also providing valuable, high quality jobs and economic growth to the area. For example if you build more factories then there are more workers who need houses to rent, and more income for nearby rural families who are renting a room out to the workers.

Cheers,

Mike