How Pacific Jeans rides out scary time

Dozens of garment manufacturers and exporters are going through a dull spell as work orders from North America and Europe have dwindled due to surging inflation and declining purchasing power.

However, amidst this crisis, some entrepreneurs refuse to be deterred. Syed M Tanvir, managing director of Pacific Jeans, is one such individual who has weathered the storm by adopting a new strategy.

"This is a very scary time. Yet, our exports have not declined thanks to our marketing strategy," Tanvir shared with The Business Standard.

Pacific Jeans, one of the country's prominent denim producers and exporters, distinguishes itself by not solely focusing on a single type of buyer.

It works simultaneously with brands, retailers, department stores, online sellers, and wholesalers, meaning Pacific didn't limit itself to catering exclusively to one type of customer. Instead, they collaborate and do business with various types of buyers.

Tanvir said by conducting business with multiple types of buyers, Pacific Jeans has benefited from a broader market reach and customer base. He said working with brands allows them to manufacture products under different brand labels, catering to specific brand requirements and styles. Collaborating with retailers and department stores ensures that their products are available in physical stores, providing direct access to consumers.

Also, Pacific Jeans taps into the online market by partnering with online sellers. This enables them to reach a wider audience and capitalise on the growing trend of online shopping. Lastly, engaging with wholesalers allows Pacific Jeans to distribute their products in bulk to other businesses that may further distribute or resell their denim products.

Tanvir said diversification of the customer base has helped them maintain a steady flow of orders and mitigate the risk associated with relying on a single buyer or customer category.

"You have to operate in omni channels for surviving the tough times. This is how we are offsetting the risks," Tanvir said.

For example, he said when Covid-19 struck in early 2020, retailers across the world suffered the most as almost all the countries went into lockdowns and shops were closed. But online platforms had a great time during the pandemic, which they had not experienced before.

Also, Pacific Jeans has been adopting automation for the last several years and is being energy efficient to remain competitive.

This multifaceted approach has proven fruitful, as the company expects to maintain its 2022's $500 million export achievement in 2023, despite the critical challenges posed by rising geopolitical tensions, high inflation and the volatility surrounding the election year, he said.

While many factory owners are attempting to rent out their garment and spinning factories and laying off workers in a bid to exit the industry due to declining export orders, Pacific Jeans did not lay off a single worker, rather it has expanded.

"We've already set up a formal wear factory that will go into production by October this year. Some 10,000 new employment will be created in this new factory," Tanvir said.

Yet, he thinks the next six months are anticipated to be even more challenging and volatile ahead of the national elections. Also, the USA's visa curb threat may make some buyers shaky, he noted.

Tanvir advises exporters to be cost-effective and efficient and embrace automation to enhance their chances of survival.

Also, the Pacific Jeans Group is making plans to install rooftop solar power plants in all of its manufacturing units by 2025. This strategic initiative aims to achieve a minimum of 20% of the group's energy needs from renewable sources.

Pacific Jeans is a well-known garment manufacturing company based in Bangladesh. Established in 1984, it has become one of the leading denim producers and exporters in the country.

The company is headquartered in Chattogram and operates 12 manufacturing units equipped with modern machinery and technology. Pacific Jeans has so far created employment for around 35,000 people.

As Bangladesh stands as the world's second-largest exporter of readymade garments after China, the country heavily relies on the sector, which accounted for 84% of its foreign currency earnings from exports in the just concluded fiscal year on 30 June.

According to data from the Export Processing Bureau, Bangladesh exported merchandise worth $55.55 billion in FY23, reflecting a modest growth of 6.67% compared to that of a year ago.