Higher productivity creates opportunities for investments

15 June 2015

Dutch Ministers Ploumen and Schultz visited DBL today, an exemplary Bengal textile factory that participates in the Bangladesh Water Partnership for Cleaner Textile (PaCT). DBL demonstrates the business case of how initial investment in environmental improvements pays off by saving on resource costs. The margin that is created can in turn be invested in the implementation of further sustainability investments - social or environmental.

True colors of the apparel sector

Global population growth and economic development contribute to increasing demand for apparel. The sector, however, has two faces. On the one hand, it provides jobs for millions of people and plays an important role in economic development, particularly in developing countries. Yet, at the same time, it is under pressure because of the many sustainability challenges. The collapse of Rana Plaza is engraved in people’s minds across the globe, but also water pollution and ground water depletion are negatively impacting millions’ of people’s lives. Communities in developing countries are bearing the burden of exploding textile production. In the short to medium term, resource scarcity, as well as labour shortages in some regions, will limit the growth of the sector. Productivity and efficiency increases will create opportunities to produce more with less.

Textile factory DBL saves five times its investment costs

Garment manufacturer DBL, who is one of the frontrunners in Bangladesh and produces for companies like G-Star and H&M, is one of the early participants in the cleaner production programme and in the PaCT, which was implemented by IFC and Solidaridad. DBL's Managing Director Jabbar said, “With initial investments of $100,000, we were able to reduce wastage of water, energy, steam, dye and chemicals worth $500,000 within a year. So, it is a matter of mindset. It is not a big deal."

Resource availability bottleneck for growth

Supported by the PaCT programme, the first group of 19 factories that implemented cleaner production achieved water savings of 25% on average. Similar future improvements are essential given the ambitious sector growth scenario of the Bangladesh sector: doubling the industry by 2021. If drastic efficiency improvements are not achieved, the rapidly depleting ground water levels and surface water pollution, but also the availability of energy in the country, may become the bottleneck for growth.

Besides factory engagement, collaboration with buyers and brands is essential to ensure sustainable change. Sustainability needs to become part of doing business at all levels. For this reason, Solidaridad and MADE-BY developed guidance for PaCT partner brands to consider the environmental impact of design and sourcing decisions. Minister Ploumen also opened a seminar in which more sustainable processing options were outlined and discussed with PaCT partner factories and brands, inckuding input from technology providers such as Archroma, DuPont, Jeanologia and Huntsman.

During the visit this week in Bangladesh, Minister Ploumen said, “These positive examples show that it is possible to play by the rules in Bangladesh and still make a profit. It is time that all factory owners and politicians understand this.”

Ethiopia attracts responsible investments

So what’s next for DBL? DBL is setting up a factory in Ethiopia and is currently in dialogue with Solidaridad’s staff in Addis Ababa. We both want to avoid the sector in Ethiopia evolving in an uncontrolled manner. Solidaridad is building up a cotton and textiles programme in Ethiopia to support the sustainable development of the industry, from cotton to finished product. Weerdesteijn: “The experiences from DBL are valuable to put sustainability on the map in the growing sector in Ethiopia. In Bangladesh we have experienced that in fact it is very inefficient to try to fix what is wrong. Better to do it right the first time! At the same time, DBL as a foreign investor can benefit greatly from the experiences of existing players in the industry, particularly when it comes to the local cultural context, which is essential for understanding how to develop a strong social policy. This is international trade combined with development in its truest form.”

The Bangladesh Water Partnership for Cleaner Textile

PaCT is an integral programmme that supports textile wet processing factories in adopting cleaner production measures. It engages with brands, the government, communities, financial institutions, and other stakeholders to bring about systemic, positive environmental change for the Bangladesh textile wet processing sector, its workers, and surrounding communities, and to contribute to the sector’s long-term competitiveness.

PaCT is a partnership between the government of the Kingdom of the Netherlands, 8 international brands and retailers including, H&M, C&A and G-Star and sector association BGMEA. PaCT is implemented by IFC and Solidaridad. Today PaCT works with over 100 factories to identify and implement sustainability improvements.