Cheap labour model unsustainable in long run

[Shahzaz ud din]

Cheap labour model unsustainable in long run
By Shahram Haq
Published: November 16, 2019
TWEET EMAIL

Discussing the scenario where a country only focused on becoming a cheap market, the Hugo Boss MD said this methodology had a life span of only 15 to 20 years. PHOTO: FILE

LAHORE: Textile-based entrepreneurs in Pakistan should re-model themselves as absolute solution providers in front of global textile manufacturers because the hymn of a cheap labour souk for international firms will probably not help the country sustain in the long run, said Hugo Boss Managing Director Joachim Hensch.

In an interview with The Express Tribune, Hensch said uncovering a new and cheaper market was an endless race and unfortunately, technological integration in Pakistan’s industry was quite low, which made it easy for the buyers to move on.

Hensch was in Pakistan to attend the International Apparel Federation’s fashion convention in Lahore. Hugo Boss is a German luxury fashion house headquartered in Metzingen.
Cheap labour can attract foreign firms to Pakistan

“Twenty years ago, everyone portrayed China as a rising star in terms of manufacturing and all of a sudden it became an expensive country with labour issues, leading the buyers to discover new markets with cheaper labour like Bangladesh, Indonesia and Vietnam,” he said. “We cannot continue following this model, therefore, Pakistan has to find a way to attract global buyers.”

During the fashion convention, local entrepreneurs and government officials tried to encourage the global apparel players, including Hugo Boss, to take benefit of the cheap labour available in Pakistan.

“Although it is always an honor for a country to get a renowned company enter its economy and start production, I think it is not sustainable because it does not change the mindset of people,” he said. “It will never help a county if some global fashion brand enters it and starts production.”

He regretted that there was a lack of knowledge of design patterns in Pakistan. Current business leaders have to embrace technology and understand that “one needs many middle managers possessing excellent skills to keep the factories running,” he emphasised.

Hensch pointed out that the government of Pakistan could facilitate the domestic textile industry by establishing connections abroad and introducing exchange programmes between universities to develop leaders of the next generation.

“This is something the government can do for sure. It can also extend financial support,” he added.

Discussing the scenario where a country only focused on becoming a cheap market, he said this methodology had a life span of only 15 to 20 years and hence it was an unsustainable model.

Highlighting that Pakistan was situated close to China and was not far from Europe, he urged the locals to take a step further and research on what kind of textile and apparel industry the world would see in the next 5 to 10 years and prepare for it today.

“If Pakistan still wants to follow the same old model, then this industry may upgrade a little bit and survive for a while till some other country presents itself as a cheaper market and buyers move there,” he said. “This is presently happening in Bangladesh and Vietnam.”

Pakistan needed to focus on training and skills upgrading initiatives for the workers so that they could be able to come on a par with the rest of the world, Hensch added.

Published in The Express Tribune, November 16th, 2019.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

 

[jupiter2007]

Same story with Pakistan, old mentality expecting countries to invest billions in Pakistan while may have the labor force but no infrastructure. Our textile industry is using old 80s machinery with low production.

 

[Verve]

Same story with Pakistan, old mentality expecting countries to invest billions in Pakistan while may have the labor force but no infrastructure. Our textile industry is using old 80s machinery with low production.

It's the Seth mentality that's the biggest hurdle, as pointed below:

and understand that “one needs many middle managers possessing excellent skills to keep the factories running,” he emphasised.

 

[FuturePAF]

Cheap labor model is a way to get investors in the door. It’s local industrialists/entrepreneurs or the government that needs to innovate and develop value added industries on top of the early investments. A part of the profits needs to be constantly re-invested into R&D so that our industries mature beyond the basics. For example, In textiles we need to support our fashion designers getting access to foreign markets or partnering with major retailers to have their own line of clothes, not just producing clothes. With enough years of name recognition, our fashion designers can spin-off their efforts into their own company. We will have absorbed expertise through the collaboration to be able to run our own company with supply chain connections in all the markets our fashion designer originally collaborated with.

 

[LuCiFeR_DeCoY]

“Twenty years ago, everyone portrayed China as a rising star in terms of manufacturing and all of a sudden it became an expensive country with labour issues, leading the buyers to discover new markets with cheaper labour like Bangladesh, Indonesia and Vietnam,” he said. “We cannot continue following this model, therefore, Pakistan has to find a way to attract global buyers.”

During the fashion convention, local entrepreneurs and government officials tried to encourage the global apparel players, including Hugo Boss, to take benefit of the cheap labour available in Pakistan.

“Although it is always an honor for a country to get a renowned company enter its economy and start production, I think it is not sustainable because it does not change the mindset of people,” he said. “It will never help a county if some global fashion brand enters it and starts production.”

He regretted that there was a lack of knowledge of design patterns in Pakistan. Current business leaders have to embrace technology and understand that “one needs many middle managers possessing excellent skills to keep the factories running,” he emphasised.

Hensch pointed out that the government of Pakistan could facilitate the domestic textile industry by establishing connections abroad and introducing exchange programmes between universities to develop leaders of the next generation.

“This is something the government can do for sure. It can also extend financial support,” he added.

Discussing the scenario where a country only focused on becoming a cheap market, he said this methodology had a life span of only 15 to 20 years and hence it was an unsustainable model.

Highlighting that Pakistan was situated close to China and was not far from Europe, he urged the locals to take a step further and research on what kind of textile and apparel industry the world would see in the next 5 to 10 years and prepare for it today.

“If Pakistan still wants to follow the same old model, then this industry may upgrade a little bit and survive for a while till some other country presents itself as a cheaper market and buyers move there,” he said. “This is presently happening in Bangladesh and Vietnam.”

Pakistan needed to focus on training and skills upgrading initiatives for the workers so that they could be able to come on a par with the rest of the world, Hensch added.

Published in The Express Tribune, November 16th, 2019.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Completely agree with the article, in long run cheap labour can't be sustainable.

Working in garments doesn't consider as a full time job for bread winner in Bangladesh. Almost all the workers are females, they are from low income families and doesn't have any skill. Some of them used to be maid. So its win win for both sides.

And last time I checked Bangladeshi garments industry is still on the raise.

 

[jupiter2007]

Completely agree with the article, in long run cheap labour can't be sustainable.

Working in garments doesn't consider as a full time job for bread winner in Bangladesh. Almost all the workers are females, they are from low income families and doesn't have any skill. Some of them used to be maid. So its win win for both sides.

And last time I checked Bangladeshi garments industry is still on the raise.

Many Pakistani investors have invested in Bangladesh. If our government can fix few issues including easy of Business, fix 5 years tax rate for the textile companies, and protection from bhatta khor, Insha’Allah we will see our textile business will double in just 2 years.

1) Easy of Business
2) 5 Years Fix tax rate
3) Protection from Bhatta Khor.

 

[touela]

Cheap labour model unsustainable in long run
By Shahram Haq
Published: November 16, 2019
TWEET EMAIL

Discussing the scenario where a country only focused on becoming a cheap market, the Hugo Boss MD said this methodology had a life span of only 15 to 20 years. PHOTO: FILE

LAHORE: Textile-based entrepreneurs in Pakistan should re-model themselves as absolute solution providers in front of global textile manufacturers because the hymn of a cheap labour souk for international firms will probably not help the country sustain in the long run, said Hugo Boss Managing Director Joachim Hensch.

In an interview with The Express Tribune, Hensch said uncovering a new and cheaper market was an endless race and unfortunately, technological integration in Pakistan’s industry was quite low, which made it easy for the buyers to move on.

Hensch was in Pakistan to attend the International Apparel Federation’s fashion convention in Lahore. Hugo Boss is a German luxury fashion house headquartered in Metzingen.
Cheap labour can attract foreign firms to Pakistan

“Twenty years ago, everyone portrayed China as a rising star in terms of manufacturing and all of a sudden it became an expensive country with labour issues, leading the buyers to discover new markets with cheaper labour like Bangladesh, Indonesia and Vietnam,” he said. “We cannot continue following this model, therefore, Pakistan has to find a way to attract global buyers.”

During the fashion convention, local entrepreneurs and government officials tried to encourage the global apparel players, including Hugo Boss, to take benefit of the cheap labour available in Pakistan.

“Although it is always an honor for a country to get a renowned company enter its economy and start production, I think it is not sustainable because it does not change the mindset of people,” he said. “It will never help a county if some global fashion brand enters it and starts production.”

He regretted that there was a lack of knowledge of design patterns in Pakistan. Current business leaders have to embrace technology and understand that “one needs many middle managers possessing excellent skills to keep the factories running,” he emphasised.

Hensch pointed out that the government of Pakistan could facilitate the domestic textile industry by establishing connections abroad and introducing exchange programmes between universities to develop leaders of the next generation.

“This is something the government can do for sure. It can also extend financial support,” he added.

Discussing the scenario where a country only focused on becoming a cheap market, he said this methodology had a life span of only 15 to 20 years and hence it was an unsustainable model.

Highlighting that Pakistan was situated close to China and was not far from Europe, he urged the locals to take a step further and research on what kind of textile and apparel industry the world would see in the next 5 to 10 years and prepare for it today.

“If Pakistan still wants to follow the same old model, then this industry may upgrade a little bit and survive for a while till some other country presents itself as a cheaper market and buyers move there,” he said. “This is presently happening in Bangladesh and Vietnam.”

Pakistan needed to focus on training and skills upgrading initiatives for the workers so that they could be able to come on a par with the rest of the world, Hensch added.

Published in The Express Tribune, November 16th, 2019.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Have the government taken steps to qualify/upgrade workers in the garment industry to make them more competitive in the eyes of world leading companies?