A sea of opportunity in handicraft business
An entrepreneur talks about the problems and opportunities in handicraft export business with The Business Standard
Years back, when Rashed Khan was working as a merchandiser in the apparel industry, a client requested him to source some environment-friendly handicraft items. As Rashed helped that client out, he discovered that most of the craft producers had compliance issues regarding labour rights, work conditions and environmental protection.
Many vendors at that time were reluctant to meet the compliance requirements set by the buyers. They would not understand why a buyer should bother about how a product was developed. Consequently, it became difficult to supply the products.
The idea crossed Rashed's mind right then: "As I understand compliance issues, and what the buyers want, why don't I start this business myself?"
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This was the beginning of Craft N innovation, a small but 100 percent export-oriented company that exports handmade craft items to Europe.
"We use only local raw material, we train unemployed people, especially women, and develop products of buyers' choice," Rashed told The Business Standard.
The company currently exports to France, Sweden, Norway, and Turkey. Buyers from Japan, Netherlands and Germany are also interested, but the contracts stalled due to Covid-19 pandemic.
The crafts - mainly carpet, rug and baskets - are made of jute, bamboo and seagrass.
"We are doing a fusion of Bangladesh's tradition and the buyers' culture," Rashed said.
Started in 2018, the company purchases jute from the farias (agents), processes it for the carpet and rugs. It has set up factories in Dhaka's Mirpur, Rangpur's Badarganj and Thakurgaon. The trainers of the company also train skilled workers from a pool of marginalised rural women. They make craft components at home while taking care of their household chores.
This handicraft sector is very promising. People in the West are becoming more and more conscious about the environment, and they are falling for biodegradable, hand-made items, especially from the markets that strengthen marginal communities.
Still, there are scopes for improvement in the emerging sector. According to Rashed, our workers are still not quite competitive with those from Vietnam, Indonesia, China, and India when it comes to productivity, skills and ability to do fancy work.
To promote this sector's growth, the government has provided a 10 percent incentive on handicrafts export. Bangladesh Handicrafts Manufacturers and Exporters Association, BANGLACRAFT, has appealed to the government for a raise, and the incentive is likely to rise to 20 percent, Rashed informed.
Regarding how long the government should incentivise this sector, Rashed said it was difficult to predict at this point. He emphasised that we need to increase productivity to a level when incentivising would not be necessary. And he has a clear vision of how to attain that.
"If you look at apparel industry, we once used to rely solely on cheap labour. Then highly educated people, textile engineers, industrial engineers came in, and productivity rose. In handicraft industry, there is still a large void regarding this. When this gap will be filled, productivity will increase and the need for any such incentive will be gone," Rashed hoped.
And right there lies the sea of opportunities.
Rashed added, things began to change lately. Young and innovative entrepreneurs are now coming into this industry, and a positive impact is already visible. More buyers are showing interest, and orders are on the rise.
Now global giants like Walmart are planning to source handicraft products from Bangladesh and many big apparel makers are turning to this industry.
Industry insiders opined that hassle-free delivery of licenses and other paperwork from the government's side would further help the sector flourish.
Bangladesh has certain strength in this sector. The jute grown here is of superior quality. Many Indian producers import raw jute from Bangladesh, and develop high valued products with that. Of course, Indian rugs and carpet industry is very developed, with some communities having hundreds of years of experience, which is a challenge for Bangladeshi producers like Rashed Khan who are focusing more on similar products.
The Business Standard asked Rashed Khan how he viewed closure of government-owned jute mills. He thinks this closure can be turned into an opportunity if the government takes measures to allow small handicraft exporters use the land and infrastructure inside those closed mills.
Eco-friendly and recycled products are of high demand in Europe. Innovation and skill development in this sector are absolute necessities in order to thrive. Branding of Bangladesh as a handicraft producing and exporting country is also vital. Rashed mentioned that he had to struggle to convince some of his clients that Bangladesh does not need to import jute from India, that it grows its own jute in abundance.
Then again, farmlands are decreasing, and jute cultivation is also on the decline. Combined with rising demand, Rashed thinks a shortage of jute supply is looming worldwide. He also observed that Bangladesh needs to stop exporting raw jute.
Apart from jute, bamboo, seagrass and cane products, traditional kantha made of used saree is also selling good. This item is called Bengal Kantha, but the business belongs to Indian producers.
"Eco-friendly, recycled and reused products are in high demand. Another plus point is that we don't pollute," Rashed said.
When he was asked about the environmentally hazardous bleach that the industry uses to remove colour from jute and then discharges, Rashed said that bleach is only used occasionally. Also, there is a European regulation called REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals). before exporting a product, it needs to get tested for any harmful substance in REACH's nominated labs in Bangladesh.
"We don't use any chemical that is restricted by REACH," the handicraft exporter said.
Also, there is another certification system called the amfori Business Social Compliance Initiative (BSCI), which monitors and assesses workplace standards across the global supply chain. Handicraft exporters are required to comply to BSCI standards too.
The current number of handicraft exporters are very small compared to the burgeoning demand of environment-friendly craft items in developed world. So, there is a huge scope for new actors in the market.
