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DBL Group Export Plan & Services
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DBL GROUP
Export plan
Course ID: INB-301
Section: 07
Group Name: Battleship
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Submitted To,
Mr. K. M. Nasiruddin
Lecturer, School of Business
Independent University, Bangladesh
Submitted By,
Group Name: Battleship
Name ID
Akibuzzaman Shawn 1431112
Nabil Ahmed 1510925
Trishna Barua 1530181
Md. Mahbubur Rahman 1620744
Md Naimur Rahman 1511063
Jahid Hasan Saikat 1630320
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Letter of Transmittal
November 26, 2017
Mr. K. M. Nasiruddin
Lecturer, School of Business
Independent University, Bangladesh
Subject: Submission of a report on Export Plan of DBL Group.
Dear Sir,
With due respect, it is our pleasure and honor to be your students and have this
opportunity to present the Export Plan on DBL Group. While preparing the export
plan, we have given our all to best focus thoroughly on the topic regarding this
business. We provided all relevant information regarding this business and we believe
and hope that our plan will provide a clear conception about export plan.
While preparing the business plan, we all have given our best to accumulate needed
information and we will be more than happy to answer any question and clarify it
fully to your understanding. Thank you for all your help and support which helped us
significantly in preparing this export plan.
Yours Sincerely,
Akibuzzaman Shawn
On behalf of the group.
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Acknowledgement
While preparing our project we had to take the help and guideline of our respected
faculty, who deserve our greatest gratitude. This project gives us much pleasure. We
got to know how a company exports their products. We would like to thanks Mr. K.
M. Nasiruddin (Lecturer, Independent University, Bangladesh) for giving us a solid
guideline for the project throughout numerous consultations. Many people, especially
our team members themselves, have made valuable comments and suggestions on this
proposal which gave us an inspiration to improve our assignment by a large margin.
We thank all the people for their help directly and indirectly to complete our
assignment.
Thank you.
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Table of Contents
Introduction.................................................................................................................................1
Export plan policy ..................................................................................................................... 2
Background Analysis ................................................................................................................. 4
History.....................................................................................................................................4
Vision:......................................................................................................................................5
Mission:...................................................................................................................................5
Product and Services..................................................................................................................... 5
Knitting:...................................................................................................................................6
Apparels:..................................................................................................................................6
Operation.................................................................................................................................7
DBL personal and export organization........................................................................................ 8
Resources .................................................................................................................................. 10
Industry Structure....................................................................................................................... 11
Most positive factors about DBL Group.................................................................................... 13
Competition............................................................................................................................... 14
Sustaining Competitive Costs................................................................................................... 16
Demand................................................................................................................................. 17
Marketing Component................................................................................................................ 18
Product Selection and Pricing...................................................................................................... 21
Distribution Methods.................................................................................................................. 23
Internal Organization and Procedures.......................................................................................... 25
Export Budget............................................................................................................................ 28
Implementation Schedule........................................................................................................... 30
Appendixes ................................................................................................................................ 31
References:................................................................................................................................ 34
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Introduction
Bangladesh imports raw materials such as cotton and then spins them locally before making
the finished products. Till now Bangladesh needs to import some key raw materials like
woven fabric, some accessories and other related things. Bureaucratic red tape causes many
delays in government and customs related activities. Imports and exports operations are
taking longer time now-a-days than before. Less management and worker efficiency at small
and medium-sized factories make things very difficult for them to take orders to cater to
retailers within such a short time, said exporters.
According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA),
the country’s garment sector was hit with 15 percent price cut in the last two years. Reduction
of price of the US buyers is making things further difficult for Bangladeshi manufacturer. As
European buyers give better price many manufacturers prefer EU buyer over US buyers.
They are also facing troubles at the airport and the Chittagong port, It takes four or five days
to get the samples out of the airport whereas we need the samples within a day. In recent
years, the US-Bangladesh relations deteriorated largely after Washington suspended trade
privileges for the country in 2013 for serious shortcomings in safety and labor standards.
While the rest of Asia disappointed in terms of export revenue in 2015, there was one
surprising anomaly to the pattern Bangladesh.
Bangladeshi export earnings by setting a new record for the South Asian country. This
phenomenal success can be attributed to Bangladesh’s growing apparel industry. Our
country’s GDP is expected to grow to 6.7 percent this year, which will make Bangladesh one
of the fastest growing economies in the world. As global demand for cheap clothing rises
rapidly, Bangladesh’s position as the second biggest exporter in the world continues to hold
strong that is mainly due to its large population and low labor costs.
There is good reason for Dhaka to remain hopeful for the year ahead as well as exports
account for 20 percent of Bangladesh’s GDP. Clothing in particular contributes around 80
percent of all exports. According to the World Bank, the country’s GDP is expected to grow
to 6.7 percent this year, which will make Bangladesh one of the fastest growing economies in
the world. So for all this reason, DBL should export their clothes in different countries. Even
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with these challenges ahead, as global trade picks up in the coming years, demand for
Bangladeshi garments is also expected to increase, thereby prompting much-needed
economic growth for Bangladesh.
Export plan policy
The conditions apply in this Policy related to foreign currency exchange issued from time to
time by the Bangladesh Bank. It has to be followed in case of export of goods from
Bangladesh. Besides, relevant documents required under the above mentioned conditions and
rules and regulations have to be submitted.
Export Prohibited Products: products prohibited under this Export Policy cannot be
exported. The list of products whose exports are prohibited.
Conditional Export: Products are exportable under certain conditions can be
exported only after fulfilling those conditions.
Exportable Products: all other products except the products under prohibition as
listed under conditional export as listed shall be freely exportable.
Nothing in this policy shall be applicable to the following:
Store, equipment or spare parts of foreign going ships, vehicles or aircrafts, and provisions
declared as part of their kitchen, or the baggage accompanied by the sailors or the crews and
passengers of those ships, vehicles or aircrafts.
Export of samples need to fulfillment of the following conditions:
All products that are not included in the prohibition list
A maximum of US$ 60,000 if there is no export L/C (letter of credit) or
10% of the total value of each L/C or a maximum of US$ 10,000, whichever is less
Examining on a case-to-case basis, Bangladesh Bank, if necessary, can increase these limits
For 100% export-oriented garment industries, a maximum of US$ 10,000 worth of
samples of readymade garments per year;
The diamond processing farms having bond licenses issued from the Customs Bond
Commissioner rate of processing firms registered as producers with VAT
Commissioner ate, under National Board of Revenue can send abroad cut and
polished diamond with a view to participating in international trade fair or showcasing
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for export market development. In this case the samples must be brought back to the
country after the show. If the samples are sold, all sales proceeds must be repatriated
through legal banking channel and the amount of the proceeds than the value of the
samples.
Promotional materials (brochure, poster, leaflet, banner etc.) of any price or weight
Gift parcel worth of US$ 1,000 or equivalent in Bangladeshi Taka
Bona fide baggage of travelers traveling outside Bangladesh and
Relief materials exported by the Government.
Authority to relax export control: - The Government showing appropriate reasons can
authorize the export of any product which is prohibited. The Government can issue
authorization, under special consideration, for export, export-cum-import or re-export of any
product.
Entre-port and Re-export:-
Entre-port trade means such trade that involves the export of an imported product to a third
country at a price at least 5% higher than the import price, and without any change
whatsoever in the quality, quantity, shape or any other aspect in this respect. Products under
entre-port trade shall not be brought out of the port area. However, in case of export through
another port, the products can be transported from one port to another under special
permission from Ministry of Commerce.
Re-export means the export of an imported product within a specific period of time with a
value addition of at least 10% to the imported price by changing the quality or shape or both
of the products by means of local reprocessing. Import price in this case shall refer to the
price of the product imported at the port of Bangladesh for re-export. In case of delivery from
port and re-exportation of readymade garments that are returned due to defects:
(1) For the readymade garments that have been exported under the bonded warehouse
system and have been returned due to defects or for any other reason, the Chief
Controller of Import and Export shall issue the clearance permit for the delivery of
such products from the port and the subsequent re-export on the basis of no-objection
from the relevant lien banks and the Customs Authorities.
(2) For the readymade garments that have been exported without the bonded warehouse
license or using locally produced inputs in their manufacture and have been returned,
the relevant enterprises can take delivery of such products from the port after
obtaining clearance from the Office of the Chief Controller of Import and Export
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submitting an undertaking that such products shall be re-exported within one year.
However, in case of failure to re-export as per the undertaking, such products can be
sold in the local market after paying VAT payable at the local stage as per the
existing VAT Act and after repaying, only in the case of domestic inputs/fabrics, the
amount of VAT equivalent to the amount of drawback received as per Mushak-
11chalan.
Return of rejected fabrics:
(1) For the defective fabrics which the supplier/exporter wants to take back and for
which no foreign currency has been remitted from Bangladesh, the Chief
Controller of Import and Export shall issue the clearance permit for the re-export
on the basis of no- objection from the relevant lien banks and the Customs
Authorities.
(2) For the defective fabrics which the supplier/exporter wants to take back and for
which foreign currency has already been remitted from Bangladesh, the Chief
Controller of Import and Export shall issue the clearance for the re-export of
defective fabrics on the basis of no-objection from the relevant lien banks and the
Customs Authorities. This clearance shall only be given after the determination of the
volume of defective fabrics through preparation of Inventory as per mutual consent of
the Buyer and Seller, and after inward of remittance of foreign currency through TT
or At Sight L/C or after replacement of an equal volume of products.
Background Analysis
DBL Group is a diversified business entity which has vertically integrated textile and apparel
manufacturing facilities, with concerns in Dredging, VLSI Design, Sewing Thread, Dyed
Fiber & Yarn, ICT & Telecommunications and Ceramic Tiles.
History
DBL Group started business in 1991 and till date it has resulted in a conglomerate of 22
concerns. The Group is currently in process of investing into Pharmaceuticals and Light
Engineering sectors. DBL Group has a dedicated and skilled workforce of more than 28,000
employees and had an annual turnover of USD 365 Million for the year 2015-16. DBL Group
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supplies quality apparels to globally renowned retailers and is focused on upholding the
reputation of the readymade garments and textiles industry of Bangladesh.
Vision:
We envision sustaining and growing as a diversified global conglomerate.
Mission:
We strive to attain our vision by practicing corporate governance, empowering and inspiring
our associates, being transparent in our work process, continuously developing expertise,
meeting & exceeding customer needs, demands & expectations, maintaining quality &
consistency of our products & services, engaging with community, caring for environment
and maintaining networks with our global partners.
Product and Services
Spinning:
Our spinning mill, Matin Spinning Mills Ltd., is one of the most modern spinning mills in
Bangladesh having 50,000 spindles. The mill is well equipped with the best machinery
available. Our facility also has a testing laboratory which is equipped with machines and
instruments from Switzerland.
Capacity: 25 tons/day
Count range: 10 to 60 Ne
Machines: Rieter (Switzerland); Toyota and Murata (Japan)
Raw materials:
• Cotton from USA, Africa (Mali, Zimbabwe, etc.)
• Viscose and Modal from Lenzing (Austria)
• Polyester staple fiber from Indorama (Thailand)
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Knitting:
We are among the best knitting industries of Bangladesh and only manufacture the best
quality garments for our clients. Over the years our quality products and reputation have
created a strong business relation with the world's famous clothing brands like H&M, Wal-
Mart, George, Esprit, Puma and many more. We use the latest technology, energy efficient
machinery and environment friendly production process to deliver the best quality to our
clients.
• Capacity: 45 tons/day
• Machines: 133; Mayer & Cie, Terrot (Germany) Fukuhara (Japan)
• Basic Types: Single Jersey, Auto Stripe, Fleece, Rib, Interlock
Apparels:
We are among the largest knit garment manufacturers and exporters of Bangladesh. Our
major markets include Europe, USA and Canada and we are the Platinum Supplier of H&M
for Knit Garments. H&M, Wal-Mart-George, Puma, Esprit and G-Star are among our major
buyers.
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Capacity: 9 million pcs/month
Women 40%, Men 20%, Kids 40%
Machines: 5,000
Types: Single Needle, over lock, Interlock, Kansai, Feed off the Arm, B/H, B/S,
Zigzag, etc.
They also provide Cartoon ,Master Carton, Hanger Carton, Box carton , Top Bottom , U
Divider , Divider Carton and Inner Carton.
Operation
1. Prospective clients sourcing
This should be a recurring activity. To capture data with a real time tool such as Account
Researcher, this is an important step. For maintaining a distribution channel there should be a
proper collaboration of buyer and supplier. By gather data about prospective clients and
collect data from the field level about customer.
2. Sales visit with the distribution team
We have a strong distribution network throughout the country and have an effective team to
power up the distribution system of DBL.
3. Updating sales database
Apart from the visit, there is a database maintained to pin point the sales condition of DBL
distribution. To update the database from time to time according to the sales report.
4. Preparing project profile
For their sales project or marketing project, they maintain policy. According to that policy a
project profile for sales division consisting all the project detail and roadmap.
Management Operation
The impacts due to transportation are managed in a number of ways including the following:
Daily, weekly and monthly maintenance
Engine servicing after running every 3,000 km or 3 months: including washing,
engine flashing,
Changing Mobil and air filters, etc.
Spark plug checking and replacing
Engine valve (inlet and exhaust) clearance checking and adjusting
Greasing moveable parts to avoid friction
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Fuel filter cleaning and replacing
Battery water level checking and recharging
Gear box and axle gear oil level checking and replacing
Avoid air draft using windshield/air reflector.
Motivating drivers to minimize fuel consumption, avoiding over speed, etc.
Development partners
DBL personal and export organization
DBL personal and export organization is Bangladesh Knitwear Manufacturers & Exporters
Association, BKMEA stands out in the global panorama with distinct identity and stature.
BKMEA adheres to innovation and creativity so that the sector based policy-making process
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becomes realistically and strategically perfect and gives off the result that expedites its
developmental phase. BKMEA has started its journey in 1996 by the all out efforts of few
knitwear manufacturers. BKMEA was formed as a trade association to facilitate and promote
knitwear business.
To cater the demand generated from the changing apparel global value chain, BKMEA has
been matured into the level and height of a world class organization. Now a day, BKMEA
has given highest priority in the specialization of resources. Today it is an organization of
about 2000 knitwear manufacturers and exporters that represent the largest export earning
sector of the country.
BKMEA has grown enormous network in home and abroad. For contain so much quality it
DBL can become a part of it. The other members are the core strength and primary network
of BKMEA. Besides, BKMEA works closely with national and International bodies like,
International Apparel Federation (IAF), Global Alliance for Fair Textile Trade (GAFTT) and
American Manufacturing Trade Action Coalition (AMTAC).
To boost up trade and to enhance cooperation between countries, BKMEA has signed
agreement with concerned associations like China Yunnan Light & Textile Industry
Association on June 10, 2005, Botswana Manufacturers & Exporters Association on October
8, 2009 etc. To promote the sector, BKMEA is implementing development projects with
German Technical Cooperation (GTZ) and other international organizations in this regard.
The association has signed with GTZ on March 16, 2005 and Metro Group, Germany on 26
April, 2010. BKMEA also closely working with Asian Development Bank(ADB), World
Bank, JICA, UNIDO, BRAC, Ministry of Finance and other national and international
organization for the development of Knitwear sector of Bangladesh.
The development works include: enhance productivity and improve social compliance status
of its member factories, promote workers welfare through centralized day care centre, health
care centre, prepare sector related research and publication, intensive training program to
raise the productivity of workers also the mid-level management, and organize trade .
BKMEA is run by a 27-member Board of Directors led by the President. DBL is one of the
member of them.
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Resources
Bangladesh is the 2nd largest readymade garment exporting country to the international
market. A good number of international buyers are frequently doing business with so many
manufactures in Bangladesh. Eventually to support the DBL Company remains as major
consumers of energy resources of the country.
They have a sterling acceptance to the international markets, but they have a lot of
competitors around us always seeking for the opportunity to slip us. Still our acceptance is
higher than other countries due to our high quality products rather than cost per unit- though
high quality needs more cost than basic one.
But this cost factor is unstable to them because, fuel price is getting higher and higher, raw
materials and human resources costs are increasing, gas is going out of storage within the
next decades and eventually the energy cost is moving like a unicorn and who can stop it.
Have we ever thought about that in such situation could DBL able keep their standard and
cost to the international market with the handsome markup by optimizing our resources in
their factories? In a nutshell, it is called Resource Efficiency (RE).
This resource efficiency includes energies & utilities, raw materials & human resources being
used at DBL. As country of limited resources, they must take care of their resources for
ultimate sustainability.
The main key factors have great influence on RMG sector of Bangladesh, which make a great
effect in resources of DBL.
Vast labor force,
Skilled human resources,
Technological upgrades,
Government supports for textile and clothing,
Special economic/export processing zones,
Creation of textile and clothing villages,
Incentive for use of local inputs,
Duty reduction for the import of inputs/machines,
Income tax reduction,
And international supports like GSP, GSP+, duty free access etc.
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Industry Structure
Quota system was a great blessing for establishing our garments industry. We were strongly
benefited by using that. As a result we can see a matured garments industry today. But while
quota system was approaching to an end in 2004, there’s so many got upset about the RMG
sector of Bangladesh. Though in the latter it can’t be affected here as the experts were
seemed. We conquered the post quota challenges and made that a successful story. In RMG
sector of Bangladesh, there are more than 5000 garment factories at the current time,
employing more than 12 lack labors, where 85% of the labor force is women. But, according
to BGMEA the number of garment factories in Bangladesh around 4000. Now, RMG
industry is the country’s largest export earner with the value of over $24.49bn of exports in
the last financial year. It’s great news for us that, Bangladesh is clearly ahead from other
South Asian suppliers in terms of capacity of the readymade garments industry.
Though, there are various types of garments are manufactured in Bangladesh, but all the
readymade garments are classified into two broad categories, where one is woven products
and another one is knitted products. Woven products include Shirts, Pants and Trousers. On
the other hand, knitted product includes T-Shirts, Polo Shirts, Undergarments, Socks,
Stockings and Sweaters. A woven garment still dominates the export earnings of the country.
From BGMEA website it’s seen that, Day by day knitted items production is increasing in
considerable rate and now about 40% export earnings has achieved from knitted products.
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Growth of RMG Sector in Bangladesh Economy
CostReduction Strategy:
Cost reduction strategy begins with assigning the highest priority for establishing backward
linkages. The establishment of backward linkages reduces the dependence on foreign sources
which will reduce the total and average production cost of garments. This Strategy will make
our products more competitive in the world’s readymade garments market.
Labor Productivity Improvement:
Bangladeshi workers are not efficient as of Hong Kong, South Korea and Sri Lankan
workers. Wages are low in Bangladesh, but it does not necessarily mean that relatively low
wages workers automatically lead to higher productivity. So, to keep place in the world’s
largest competitive market, labor productivity must be improved.
New Product Development strategy:
It’s a matter of great sorrow for us that, we are regularly produced the same products. Our
product categories are very less in quantities. Our product items that are exported into foreign
market are Shirts-60%, Jackets-11%, Knit items-10%, Trousers-7% and Others-11.50%. To
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survive in the world’s most competitive RMG market, we have to develop new product items
with a lot of variations.
Product Diversification Strategy:
Product Diversification Strategy is an important factor to keep place in the world’s
readymade garments market. Different types of products should be produced by applying
fashion. Thailand, China, India, Pakistan, Hong Kong, Singapore, Malaysia, Indonesia and
others are the main competitors of Bangladesh. They are already ahead of Bangladesh in
product diversification strategy areas.
Market Diversification Strategy:
Bangladesh has exported their products in the world’s limited market. Mostly are in USA,
Canada and Europe. About 46% of its total garment exports go to USA, 14% to the Canada
and rest of those into the European market. The competitors of Bangladesh are regularly
expands their markets and keep changing their products by using fashion.
Most positive factors about DBL Group
Factors Percentages of Diff. Type Strengths
Low cost of production 81.54% Strength
Good quality 60% Strength
High turnover ratio 44.62% Strength
Simple technology (labor) 43.08% Strength
Short payback period 23.08% Strength
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Competition
International price comparisons
One of the most important aspects of competing in this intensely competitive world is to
minimize production costs and maximize quality. Bangladesh garments industry lacks the
both. But Bangladesh claims that manufacturing cost of spinning mills in Bangladesh is
cheaper than many of the Asian countries, including India, Pakistan, Japan, Korea, Thailand
and Indonesia.
Bangladesh
India Pakistan Japan Korea Thailand
Public
sector
Privet
Sector
Total cost
for per kg
yam
2.56 1.48 1.78 1.60 2.38 1.73
Index 173 100 120 108 161 171
The export oriented readymade garments RMG sector in Bangladesh started its modest
journey as a small non-traditional sector of export in late 1970s. Within three decades, textile
has transformed itself as the country’s highest revenue generating sector, contributing 81% of
country’s total export.
Bangladesh is currently the largest exporter behind China and India having the potential for
growing in the coming years. With GSP facility in EU and duty free access to Canada and
Japan, Bangladesh is benefiting from competitive cost advantages which have translated into
higher export revenue.
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EU is Bangladesh’s largest RMG export destination constituting 58% of total export followed
by US market with export of 23%. Bangladesh has recently diversified into emerging export
markets including Australia, Brazil, China, Japan and South Africa accounting for 14% of
total export.
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Sustaining Competitive Costs
Bangladesh RMG sector has flourished over the years catalyzing on inexpensive labor. The
country still sustains the competitive advantage despite conceding 77% minimum wage hike
in early 2017.
The importance of the textile industry in the economy of Bangladesh is extremely high for a
long time. Normally spinning, dyeing, printing, finishing, weaving industries are called
textile industry. Textile industries are also called backward linkage of RMG industry.
There are thousands of textile industries in Bangladesh. Some are members of BTMA
(Bangladesh Textile Mills Association). And large number of textile industry is not registered
BTMA. In this article I have tried to make a list of top ten textile industries in Bangladesh.
Really it is very tough task to take compete this industry from more than thousands. In this
list we have given priority capacity of production, number of total employees, working
environments and overall contribution in economy of Bangladesh. I don’t give exactly name
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of factory or mill. We have just mentioned group name. Because each group concerns of
many factories. In this list I don’t keep Ha-meem group because it is leading manufacturer of
readymade garments. They have also textile industry but not huge.
1. Beximco Textile
2. Square Textile
3. Sinha Group
4. Thermax Group
5. Noman Grou
6. Fakir Group
7. Knit Concern Group
8. Viyellatex Group
9. Sunman Group
10. Prime Group Of Industries
Demand
People need only a few basic things to be happy and secure: food, warmth, and shelter.
Textiles are found in all of these categories. Without clothing and protective gear, farmers
could not use fertilizers, herbicides, or pesticides to increase crop yields. They also use
equipment filters and protective coverings for planting, harvesting and protecting their crops.
Without all of these technical textiles, food production would be less reliable. People need
clothes and blankets to stay warm.
Without natural and synthetic fibers, shingles and other types of building materials could not
be made, influencing the type of shelters built. So essentially, textiles are in almost
everything and without them we would be without basic necessities. The significance of the
textile industry is multifaceted. To understand how textiles have affected our day to day lives,
it's important to realize the variety of textiles available.
Medical Implants - Many hip joints, artificial valves and vessels, and other implants
are made with textiles. These devices have improved the lives of many people.
Fire Repellant - Firemen the use textiles every day, from gear made with fire
repellant materials to hoses that can be rolled up and put away.
Dental - A toothbrush and dental floss are also textiles. What if we didn't have these
options for cleaning our teeth.
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Military Use - Camouflage clothing, gear, and bags are just a few textiles made for
military use. Without these items, soldiers would be unable to blend into their
environment or effectively carry their gear into the field.
Textile industries are a major contributor to incomes for Bangladesh.
Bangladesh depend on garments textile exports for more than 50% of total
manufacturing exports
The employment effects are also significant. Employment in textile production for
developed.
Marketing Component
Identifying
DBL is one of the fastest growing industries in Bangladesh text tile industry for more than
5% of total exports. Bangladesh is best place in the region for textiles and garments because
of cheap labor and trade status with the EU. Sock industry is under the criteria of RMG and
textile sector. So, it would be great opportunity for export their product.
Though most of the people (about 70%) people live in rural area urbanization is not stop in
recent years. Country people are getting education and office going people are growing.
Demand of sock is increasing day by day both urban and rural area. The population in Dhaka
city is more than 7.0 million and the population is growing by an estimated 4.2% per year and
literacy rate is 62.3%.
The Asia Foundation's Economic Reform and Development Program have been engaging
Asian countries on the issue of competitiveness in the post-quota world. The Foundation has
worked on several programs, and published studies to help smaller Asian countries in their
efforts to maintain the textile industry and stay on the buyers' map. These activities have
stressed the fact that many of the key questions that Asian countries face revolve around the
notions of productivity and competitiveness.
Evolution
For long time garments and textile export from Bangladesh has been led by knitwear and the
woven sector was in a developing stage showing promising growth. Today DBL wants to
export by showing the same trend. There was a stereotype about the woven sector that
without the USA GSP there will be no substantial growth. But this consistency in the export
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in the last couple of years brings new hopes in the woven garments sector. Woven garments
are not limited only in basic shirts and trousers or jackets. There are other unexplored
markets that we may hunt for. As woven is in the spotlight, this issue reveals you with an
untapped market of woven that we can capitalize to bolster our export basket in the near
future.
China
The increasing garment export to China explains that it becomes the biggest destination for
Bangladesh. China is the global leader for apparel business and is obvious to turn into a
major export destination for the Bangladesh. The reason for so is the massive population with
a growing section of middle-income households.
Bangladesh’s garment export to China increased 14.77 percent year-on-year to $391.59
million in fiscal 2016-17. This is considered as a sign of new opportunities by the exporters.
Global trade experienced a significant slump but Bangladesh’s textile export got a boost for
increased shipments to China.
Total population (2015) 1,400,000,000
Gross national income per capita (PPP international $, 2013) 11
Life expectancy at birth m/f (years, 2015) 75/78
Probability of dying under five (per 1 000 live births, 0) not available
Probability of dying between 15 and 60 years m/f (per 1 000 population, 2013) 103/76
Total expenditure on health per capita (Intl $, 2014) 731
Total expenditure on health as % of GDP 5.5
Africa
Africa’s textile importers are suffering from the impact of new World Trade Organization
(WTO) rules that has opened up their sector to the forces of the free market. The quota
system in industrial nations was abolished and provided African countries an opportunity to
export their goods to global markets and buy form world wide..
The result is that more than 250,000 jobs have been lost in Africa, affecting more than a
million family members. Most jobs have been lost in Lesotho, South Africa, Swaziland,
Nigeria, Ghana, Mauritius, Zambia, Madagascar, Tanzania, Malawi, Namibia and Kenya.
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Total population (2015) 99,391,000
Gross national income per capita (PPP international $, 2013) 1
Life expectancy at birth m/f (years, 2015) 63/67
Probability of dying under five (per 1 000 live births, 0) not available
Probability of dying between 15 and 60 years m/f (per 1 000 population, 2013) 239/198
Total expenditure on health per capita (Intl $, 2014) 73
Total expenditure on health as % of GDP (2014) 4.9
Target customer – State Basedcustomers
For example at 1st we are going to target the capital city of the country.
Country Target
China Beijing
South
Africa
Cape Town
Africa South Africa
26. 21 | P a g e
Product Selection and Pricing
These Quotations have to be followed during pricing the product:
DBL present export capacitydetail:
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SL Sub-sector No. of units Installed
Capacity
Production
Capacity in a
year
1 Spinning 385 8.7 million
spindle
0.23 million
rotor
2050 million
kg
2 Weaving/Fabric
manufacturing
721 17250 shuttle
less
13500 shuttle
2150 million
meter
1. Weaving
2. Denim
3. Home Textile
4. Knitting
584
20
17
100
3 Dyeing-Printing-Finishing 233 2200 million
meter
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Distribution Methods
There are many reasons are usually intermediary based on cost perspective in relation to
strategic management. The more distant and unfamiliar the markets are, the more likely that
export intermediaries will be selected by manufacturers. Manufacturers’ export channel
choice is primarily driven by a transaction cost consideration.
They have three alternatives: direct exporting, indirect exporting or integrated exporting. For
that reason, manufacturers choosing intermediary that can lower their export transaction cost
which includes search and negotiation cost, and the cost of monitoring and enforcing export
contract. The distribution of complex products is more Combination of services offered
Transaction Creating Services Physical fulfillment of services.
.
29. 24 | P a g e
Costin Distribution
Distribution cost refers to the cost of moving goods from the point of production to the point
of consumption except the manufacturing cost. It involves cost incurred by channel partners.
Distribution cost is one of the largest cost components for most businesses. There are mainly
five ways to reduce distribution cost for organizations:
Eliminate unproductive labor
Improve equipment performance
Reduce material usage and waste
Improve space utilization
Redesign distribution channels or change channels partners.
Terms and Conditions
The quantity and description of any Goods shall be as set out in the Company's
quotation or acknowledgement of order.
All samples, drawings, descriptive matter, specifications and advertising issued by the
Company and any descriptions or illustrations contained in the Company's website,
30. 25 | P a g e
catalogues or brochures are issued or published for the sole purpose of giving an
approximate idea of the Goods described in them.
If any Goods are to be produced, designed, built or configured and/or any process is
to be applied to any Goods by or on behalf of the Company and/or in accordance with
any specification submitted by the Customer, then the Customer shall hold the
Company harmless and shall fully indemnify the Company against any and all loss,
damage, costs and expenses awarded against or incurred by the Company in
connection with, or paid or agreed to be paid by, the Company.
Without prejudice to Condition the Company shall use its reasonable efforts to supply
the Goods in accordance with any specification submitted by the Customer and
approved by the Company, but may affect minor modifications to any such
specification without the Customer’s approval.
Subject to the provisions of Condition the Customer shall be solely responsible for
ensuring the suitability of the Goods for any specific purpose and also for ascertaining
the compatibility or inter-operability of the Goods with any other goods.
Internal Organization and
Procedures
Define quotation
Export trade always begins with defining a quotation and negotiating a price. The export
management company organizes several meetings per month for its cooperated
manufacturing companies include DBL group. The main target of this kind of meeting is to
get orders through competitive biddings. Quotation is the main point that affects the order
competition, so a reasonable quotation is quite important for DBL Company. Negotiating
stuff includes products quality level, packaging requirements, products, amount, arrival time,
transportation, materials of products and some detailed requirement in manufacture.
Confirm orders
Upon getting receipt of a purchase order from a foreign buyer, DBL immediately sends him a
preformed invoice for confirmation. An order is confirmed when the preformed invoice is
signed and returned to the DBL Textile Company by the buyer.
Ensure payment
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The payment can be insured by two methods. One is the foreign customer directly transfers
the payment to the export management company’s account, the other method is to offer letter
of credit through a local authorized agent bank. a letter of credit is an obligation of a bank,
usually irrevocable, issued on behalf of their customer and promising to pay a sum of money
to the beneficiary upon the happening of a certain event or events. ”In short, a letter of credit
is a kind of certification to guarantee the customer will pay after receiving the order.
Sales Goals: Profit and Loss Forecasts
A profit and loss forecast is a projection of how much money they will bring in by selling
products or services and how much profit they will make from these sales. In good times, to
use it to ensure that there will be enough money coming in to exceed the costs of providing
the goods and services so they can make a solid profit. P&L can play an essential role in
showing a plan they need to return to breakeven, so that they'll be able to survive until better
times come.
If they use accounting software, such as Intuit's QuickBooks, Sage's Peachtree Accounting, or
Accounting Express by Microsoft, it will generate a P&L forecast for DBL once they enter
monthly sales and expense estimates. They can also create their own forecast, using a basic
spreadsheet. Here are just samples which they are estimating.
January
Sales Revenue 10,000
Cost Of Goods 4,500
Gross Profit 5,500
Fixed Costs
Rent 1,000
Labor 4,000
Utilities 100
Telephone 30
Insurance 100
Advertising 40
Accounting 130
Miscellaneous 100
Total Fixed Costs $5,500
Net Profit (Loss) 0
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GENERAL ASSUMPTIONS
YEAR 1 YEAR 2 YEAR 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0
Action Steps
Primary Market
China
Africa
Secondary market
Australia
Indirect Marketing Efforts
1. Conduct detailed market research to determine if there is a need for product.
2. Package DBL product or service so one can see that there is notably different from
that of others. If they think there are no competitors, they didn't research enough
3. Size product according to the needs of the foreign market. In other words, listen to
customers. If all their customers tell that offering is too large, then size it to their
liking. If they give too many choices, it can also be confusing.
4. Determine the size of the market they are entering. Any major advertising agency or
market research company in the foreign country can make market predictions.
5. Participate in industry-wide trade shows.
33. 28 | P a g e
6. Consider forming a partnership, strategic alliance or joint-venture with a
reputable firm in the country where they wish to do business. A native partner
knows his/her country better.
7. Develop attractive four-color printed or e-brochures -- preferably bilingual -- which
give all the detail on your product or service.
8. When customers inquire, know the basics about them product respond swiftly with
accurate answers.
9. Practice patience and always assume that, if something isn't working, they are not
trying hard enough. Keep trying, but use a different approach to achieve the targeted
result.
10. Regularly visit customers who are involved in business transactions. Personalize
relationships and be prepared to yield and compromise when needed.
Export Budget
DBL export Financial Statements
Cash Sales $0 $4,758,000 $14,859,600
Cash from
Receivables
$0 $14,274,000 $44,578,800
SUBTOTAL
CASH FROM
OPERATIONS
$0 $19,032,000 $59,438,400
New
Investment
Received
$4,110,000 $0 $0
SUBTOTAL
CASH
RECEIVED
$4,110,000 $19,032,000 $59,438,400
Purchase
Long-term
Assets
$1,380,000 $323,544 $653,822
Dividends $0 $0 $0
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SUBTOTAL
CASH SPENT
$3,729,150 $13,729,402 $31,496,510
Net Cash Flow $380,850 $5,302,598 $27,941,890
Cash Balance $427,850 $5,730,448 $33,672,338
BREAK-EVEN ANALYSIS
Monthly Revenue Break-even $222,417
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $222,417
Expenditures Year 1 Year 2 Year 3
Cash Spending $200,000 $1,960,000 $4,105,000
Bill Payments $2,149,150 $11,445,858 $26,737,688
SUBTOTAL
SPENT ON
OPERATIONS
$2,349,150 $13,405,858 $30,842,688
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Implementation Schedule
Follow-up
DBL strategy is to expand production capabilities in order to fulfill the requests of importers
with whom they currently deal for larger orders which they are unable to currently fulfill. In
addition DBL seeks to establish additional contracts with importers on the CHINA, AFRICA
AND AUSTRALIA and increase the volume of green coffee sold on the Brazilian market.
We intend to first maximize quantity of coffee sold within existing channels and second,
establish additional accounts through targeted marketing efforts.
These activities have to be followed as implementation task:
Secure office space and be open for business in three months.
Sign three clients within first three months of operations.
Sign 10 clients within the first year.
Secure office space – real estate agent
Obtain licenses and permits
Set up office phones and computers – office manager
Begin recruiting clients – sales manager
Create marketing collateral – marketing manager
Solicit referrals from clients – relationship manager
Periodic Operationaland ManagementReview
management deal with all the stake holders from the production to the end users, all these
support activities like, Logistics, retailers and distributors, government agencies, services
firms, suppliers or production units, research and development firms etc. All the stake holders
depend on each other and the company has to manage all the stake holders otherwise whole
chain will be in trouble. Operational management deals with relationships with the suppliers
and distributors think about the competitive advantage of many companies around the world.
Operational approaches used to efficiently integrate suppliers, manufacturers, warehouses,
and stores so that merchandise is produced and distributed at the right quantities, to the right
locations, and at the right time in order to minimize system wide costs while satisfying
service-level requirements. Supply is not only just to maintain the chain but also that if they
things are happening in the right way and trying to cut costs and making the process more
efficient.
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Operationalstrategyreviews the following things.
Competitive strategy
Product development strategy
Marketing and sale strategy
Supply chain strategy
Strategic fit
Customer focus strategy
Strategic sourcing
Appendixes
Employment for export
Year No. of garment factories Employment in
million workers
2006-07 4490 2.4
2007-08 4743 2.8
2008-09 4925 3.5
2009-10 5063 3.6
2010-11 5150 3.6
Market statistics
Intimidator chain of command
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Operational Details
Types and classification of Textile products
Export in short