Bangladesh’s RMG manufacturing sector has been undergoing a tough time right now, not exceptional though, as global economic uncertainties still prevail, resulting in a notable decrease in order quantities. Despite the slowdown, companies continue in their expansion projects, sensing long-term business opportunities.
“With global buyers shifting away from China, Bangladesh has successfully captured the jacket category. As jacket production increases in the country, the demand for zippers, especially nylon and plastic zippers, is expected to rise, prompting Neo to concentrate efforts on this segment,” commented Md. Shabbir Ahmed, Director, Neo Zipper Co., Ltd with a very clear understanding of the market.
A Korea-Bangladesh joint venture, Neo Zipper, recently expanded its zipper manufacturing capacity as the company bets on increasing investment in jackets and outerwear manufacturing in Bangladesh.
Neo’s jacket zipper factory had shown resilience against all odds to commence operations in 2022 and has seen an increase in production capacity by approximately 30 per cent, from 300,000 to 390,000 pieces per day.
The company has also been making plans to expand its markets beyond Bangladesh for zippers and is currently working on eliminating complexities in zipper production, such as colour matching and precision that pose challenges when dealing with international markets. “We have been exploring options for marketing in India, focusing on specific zipper types like plastic or nylon, which are less complex than certain variations already available in the Indian market,” averred Shabbir.
Neo venturing into button manufacturing to stay relevant and competitive
Although buttons weren’t initially the focus area of Neo, the demand for the same in the country has pushed the company to venture into the button segment. Shabbir believes that relying solely on zippers may pose challenges in future, since the company has a huge sales and marketing workforce catering to the same market who Neo can use to market buttons as well. The other reason is that the lifecycle of a zipper is reducing because product lifecycle is reducing, thereby the zipper market has seen a decline in prices due to smaller players offering competitive rates with a compromise in quality.
Shabbir is a firm believer that lowering prices is not the best course of action for long-term business sustainability. “This is why foraying into buttons is a strategic decision for us. The market currently favours snap buttons over polyester ones, with a limited number of companies
dealing in the latter. To get the orders of buttons, we are banking on our strength of strong relationship with existing buyers,” commented Shabbir.
While the button manufacturing technology may vary slightly, the core processes, such as plating, dyeing and stamping remain quite similar as zipper production is considered more complex. This is where Neo Zipper has an expertise. “In addition to zippers and buttons, we are also involved in the production of metal trims, including buckles and other accessories. Leveraging our die casting capabilities for pullers, we will further increase production of various trims,” asserted Shabbir.
Dealing with buyers’ mindset still a challenge!
Md. Mahbubul Amin, Managing Director and CEO, Neo Zipper questions the effectiveness of buyer nominations as this seems to be a common practice amongst all brands but raises concerns on the importance of nominations and the logic behind such practices. “Buyers advocate for certain standards in the country but simultaneously seek the lowest possible prices which makes it difficult to work as a nominated company even if our 60 per cent business comes from nomination,” shared Amin, adding that the brands leverage their position, threatening to shift orders to other countries if their price reduction demands are not met.
| “We have been exploring options for marketing in India, focusing on specific zipper types like plastic or nylon, which are less complex than certain variations already available in the Indian market.” Md. Shabbir Ahmed Director, Neo Zipper Co., Ltd. |
Strong focus on lead times
Despite all challenges, Neo wins over the market with its short lead times. Neo Zipper believes it stands out with its capability to ship zippers promptly. While the standard shipping time for zippers is 15-20 days at Neo, it has been able to fulfil the delivery within just seven days too. “Our efficient working model enables us to fulfil any quantity of zipper orders within the required timeframe without having inventory issue at any given point of time,” Shabbir concluded, emphasising the company’s commitment to increasing speed-to-market to meet the evolving demands of the global industry.
