Mergers and acquisitions can help garment factories of Bangladesh. Most Bangladeshi garment factories are small in size and they depend on subcontracting. Therefore, mergers can help them attain scale, where they can make the necessary investment in compliance. This in turn can help them get orders.
Compliance has a cost but there are rewards too, because of the compliance, cost of production comes down, factories get better price, knowledge, experience and training that ultimately increase Production.
One country Bangladesh can look to for inspiration is Vietnam. Vietnam may not produce better quality products but the country is disciplined and there are no strikes and other irregularities in the readymade garment sector. Further factories in Vietnam are bigger and are compliant from day one. Vietnam does not allow any factory to operate unless it’s compliant. So Bangladesh has to develop its industry to remain competitive.
Trade unionism has crept into Bangladesh garment factories, which isn’t a bad sign, but ignorant young workers aged 18 to 30 are involved in trade unionism. There needs to be a move toward legal and constructive trade unions which understand their role and function.
For now Bangladesh remains in the list of first three countries
for garment sourcing and this is expected to be the situation at least till 2020.