It is not so long, since we have started the business year 2012. Time flies very fast and now we have already been passed half of the year. The year may not begin with ease like any other year for the Garmentexians. Because the Aggrieved mail from Director sir wobbles every corners of Garmentex. Entire departmental chief tried to attend the meeting held as on 28th January, 2012 with their problems along with the solution and all of us were strongly committed to face the challenges of 2012. After six months we think, it is the right time to present a half yearly financial or a business report that may show the financial position and provide an impression how long we drive forward regarding our commitment.
At the half yearly report, we tried to show a pictorial financial position of the Garmentex Group (Woven Tops). Generally there are some limitations in the analysis of half yearly report because in the half way all the findings may not come properly. Keep besides this limitation, we here submit all our financial reports along which we tried to depict a pictorial scenario, where we are & how our business runs at present and also our problems and opportunities are also taken places from the financial point of view. So that our honorable top management may get some idea in the half way for their valuable decision makings.
The first six month of 2012, total turnover of Garmentex (Woven Tops) is 18.51 million USD on an average of USD 3.09 million of per month compared to USD 3.28 million per month in 2011. On the other hand, during the year 2012 woven tops increased its production line to 36 from 30. Paralally Factory Overhead Expenditure increased 29% then of year 2011. The Overhead may further increase after calculating the Assets transfer . In this circumstance, it is an alarming position for woven tops to sustain its profitability unless we expedite our turnover compare to our cost. Now Market Diversify is a significant issue for Bangladesh apparel industry. We may implement by searching new market like Japan, Russia, Latin America, Africa etc. In addition competitive Pricing is also the key factor to sustain the present market and also penetrate in new market.
Besides expediting turnover cost control is a most important technique to sustain the profitability. Because now a days, at this very competitive apparels industry it becomes very difficult to raise the export volume at overnight. In the way of cost control, we should implement some major tools such as policy development, budgetary control, procurement policy implementation, strategy analysis & development, optimum production capacity identification, sales & procurement projection development, wastage minimization, to accelerate production efficiency, overtime minimization etc.
Finally as like all Garmentexians we believe we may face this challenge to sustain the 25 years growth & profitability by expediting our turnover, production efficiency and control cost with high level proficiency.
- Budgetary Control will be the major cost control technique for Garmentex. Though it takes place in the some part in the company, it should be work in every cost center, factory & department wise. If an approved budget placed by the every cost center, then the excess expenditures can easily find out by the budget variance.
- Business Projection is another essential element for smooth financial position. Sales & Procurement Projection are crucial to forecast & implement every business & financial plan. If low variance short-term projection & long term target implement, Garmentex may operate more financially sound business.
- Competitive Pricing is now the heart of apparel industry marketing but it is very difficult to set in heterogeneous product. High pricing may causes the loose of market & low pricing certainly decline profitability. There are so many issues relating to pricing, which are not possible to illustrate in few words. But it should be analyzed & reviewed more & more time regarding market condition, CVP analysis, BEP analysis, factory optimum level fulfillment etc.
- Procurement Policy Implementation is presently commenced in the Garmentex. Implementation of Procurement Policy is required both local purchase & foreign import. Successful implementation certainly helpful for the control of cost & reduce the exploitation of procurement. It also help to minimize capital blocking which is directly related to enhance financial cost.
- Diversify Debt Instrument is indispensable for reduce cost of capital. It is hard for present garments industry position to operate business by bearing long-term loan at the rate of 16-18%. Presently the Govt. & our associate banks offer some low cost short-term loan (interest rate 3.5% - 7%) like EDF, OAD, UPASS etc. especially for the apparel industry. We should create fund by efficiently use those instrument and then we should go long term investment by the created fund.
- Stock Management System has a crucial role for any manufacturing company. Woven tops able to figure a Stock Management System, which is working on wastage minimization, costing data generation, inventory turnover period minimization etc. More nursing & technological support may provide fruitful result for the company.
There may be more recommendation like market diversification, information technology development, production technology development,for optimum capacity level identification, more realistic for every context of production, worker turnover ratio minimization etc. which should be deliver more emphasis by the concerned department.
Finally all the apprehension keeping beside, some positives sides are taken place during the period. Innovation of Fabrics Relaxation Machine, Inventory database buildup, transform the interest expense to income position, keep the air freight cost in a control level, formulate a substantial purchase policy etc.(so far we know, there may be more) are the part of accomplishment during the year 2012. So, by fulfilling all other commitment & target at the beginning of the year and successful implementation of reviewed policy, Garmentex will be able to expedite turnover, control cost & ascend the efficiency level of production as Garmentex enterprise its 26 years of success story.