After proving its mettle in Korea, Bangladesh, China and USA, the Korean-based Bando Global Co. Ltd. is all set to make itself count among the best exporters in Vietnam. There cannot be a better time for any garment exporting company to make its presence felt in Vietnam than at a time that coincides with the emergence of Vietnam as an unparalleled garment hub in south-east Asia. Bando Global Co. Ltd. is one such Group that has struck while the iron is hot. In an exclusive talk, Team Apparel Resources speaks to Brian Lee, General Manager, Bando Vina, Vietnam – the Group’s new office that opened in Vietnam by this name – ‘Bando Vina’ only in 2010.
“We had our office in District 12, since 2010. But in March 2017, we shifted to our new office in District 1, which is basically for FOB orders, and also to manage production in Vietnam,” continues Lee. Earlier working in Korea, but joining Bando Vina in only 2014, Lee informs that the new office has a strength of 40 people, which includes the team of accounts, sampling, merchandising, export and import. The company also has two factories. The first factory majorly manufactures ladieswear while the second factory produces men’s shirts. With 20 production lines across both the factories, Bando Vina hopes to increase the lines to 37 by the end of this year.
Bando Vina specializes in manufacturing ladies woven blouses and dresses in addition to making shirts. In fact the company manufactures 80% of ladies dresses, whereas the percentage contribution of shirts is only 20. Considering that Vietnam is prominent for outerwear, it does come as a surprise that the firm actually ventured into ladieswear rather than opting for the tried and tested outerwear. Lee explains the query by saying vehemently that “LG group used to run fashion business about 20 to 30 years ago. Then Korea had some financial problems due to IMF crisis. At that time LG group sold their fashion business to my boss. We then started our business in Bangladesh with men’s woven shirts. From 2007 onwards, we started investing in Vietnam even though it was too late to start manufacturing men’s shirts in Vietnam. That’s when we decided to do ladies fashion garments as we can make more profit. Finally, we started making ladies fashion items in 2007.”
Despite having a raw material sourcing office in China, Bando Vina is sure of not considering China as a manufacturing base as the cost of manufacturing (CM) is too high – something that is unviable for garment manufacturing.
What is, however, interesting is that the firm is distinct in its approach that its focus would continue to remain on ladieswear in the years to come. Men’s shirts certainly seem to not carry the same glamour as that of women’s. “We do manufacture shirts in our second factory while for some shirts, we also do sub-contracting. But the fact of the matter is that for menswear, the cost of making is fixed. Also, the design of men’s shirts has not changed much in last 50 years whereas fashion items change according to every season and every buyer,” said Lee. There is no denying the fact, however, that the company has also been making good profits in manufacturing ladies garments, which is good enough to make it incline towards making this product. It is worth mentioning here that the ladies market is relatively bigger in United States of America – providing another impetus to Bando Vina to make womenswear.
United States of America has always been the core market – almost 80% – for Bando Vina as some of its major clientele include the US giants Walmart, Calvin Klein and Tommy Hilfiger. The company also caters to UK clients like Marks & Spencer and Oasis in addition to some Korean domestic market.
India is another country which has been equally good in ladieswear, and Lee did not mince words in accepting that India is a competitor – and a strong competitor for that matter. India has been a force to reckon with in cotton items; however it’s not the same as far as synthetic items are concerned.
Corroborating on the same, Lee adds, “There is no doubt that India is quite strong for cotton and we face stiff competition from Shahi Exports and Epic Exports, but when it comes to polyester and synthetic fabrics, then Indian factories too buy from China. The transit time from China to India is quite longer than that from China to Vietnam. So we are quite competitive in synthetic items.”
Maintaining – and successfully maintaining – the synergy across its five offices in 5 different countries is what could make Bando Vina a role model for quite a few firms. The company believes in localisation though it has Koreans as HODs. “We do not have any person for sales in Korea, though we prefer having Koreans as HODs for better management. Also for the sake of integrity, finance is always handled by Koreans. Everything else, including sales, is done in local countries like Bangladesh and Vietnam. We have designers from USA. At times, it is indeed difficult to create synergy between Shanghai and New York office mainly because of time difference. However, we have been in the business for last 10 years and we know how to co-ordinate with each other. Through phones, mails and online sharing of folders, irrespective of whatever time it is, we do ensure that all information are communicated correctly on time,” substantiated Lee further.
Whenever an order is generated, the country offices themselves handle the order. The production of men’s woven shirts is always handled by Bangladesh office. While the office coordinates with the Shanghai unit for fabric sourcing and fabric production, it approaches directly to the US office if and when they need any support from US designers. Similarly, in the case of ladies garments, the Vietnam office closely works with the Shanghai and New York office. However, sometimes if a country is overbooked with orders, the planning team does sit down and chalk out the strategy to see if the capacities in other countries could be utilised to ease out the production backlog. Elucidating on how such a situation is handled, Lee mentions, “We work for our biggest customer, Walmart, in both Vietnam and Bangladesh. So if Bangladesh is overbooked, they can sometimes consider to move the orders to Vietnam, though it’s not easy for them to handle ladies dresses as their production lines specialize in men’s woven shirts; however the orders are never moved from Vietnam to Bangladesh as the former does not specialize in men’s shirts.” Unlike some other big companies, Bando Vina does not restrain itself from accepting small orders. He adds, “Basically our minimum order is 3,000 pieces but we also consider 500 pieces especially when we have to consider long-term partnership.”
The company is also optimistic about the free trade agreements (FTAs) between Vietnam and EU that may come into effect by next year. “We used to do some European orders like H&M but they preferred to shift the garment beyond the duty-free countries like Bangladesh and Cambodia. Without these duty benefits, we cannot offer good price. If FTAs do come into effect, then we may have to contact all our previous suppliers and they would be interested in Vietnamese production. So we are closely following FTA,” said an optimistic Lee.
However, organisations do have to face challenges. Despite the fact that the labour cost has not been a big concern for an enterprise like Bando Vina as its factories are situated very close to the borders of Cambodia, there is no denying that there are challenges that have been overlooked for a while now. Lee defends his remark by saying that “We have been getting good support from the local Government; however I must also add here that doing garment business in Vietnam is not as easy now as it was 10 years back. It seems the Government no longer prefers garment factories. They are more interested in promoting electronic factories like that of Samsung. There are good local Vietnamese companies too, but they may not have the know-how to make profits and sustain for a longer time.”
Influx of electronic factories in Vietnam is indeed ringing alarm bells for the nation. These electronic factories are offering huge salaries as a result of which it becomes difficult to get new workers for garment factories. Though there are no electronic factories near Bando Vina, one cannot conceal the fact that it has today become a major issue for several garment factories in the HCM City.
Another challenge that the company has been facing is that the education level of the workers who stay around the factory premises is much lower than the workers who stay in the HCM City. If the workers are uneducated, it becomes an arduous task for the company to train the workers, which finally results in low productivity and efficiency.
Good efficiency and good productivity is what matters to every firm, and Bando Vina is no exception – and to make that happen you need automation. Last year, the company invested in buying automatic cutting machines, automatic spreading machines, CAD and so on from leading technology providers like Lectra and Gerber, which has reaped them good rewards. Lee avers, “In terms of efficiency our target is 100%, but at present we have achieved over 90%, and we are satisfied.” Lee believes apart from automation, efficient analysis of how to set up production lines, before commencing the production of any style, is also but equally important.
Lastly, nothing is better than motivating the workers. The company has also been doing a lot for the welfare of its factory workers. In addition to providing incentives – based on the productivity – the company has also been supporting schools near the factory premises so that the children of the workers are able to get benefits.
Bando Vina has today made a mark for itself in Vietnam. Though Cambodia and Myanmar could become potential threats to Vietnam in the years to come, the company is hopeful of Vietnam being there and doing well, going to the next decade. “Still 60% of garment is made in China which means this part will be gradually moving to Indonesia and Vietnam. I am still positive about Vietnam production base for next 10 years. As they say, ‘Where there is a will, there is a way’,” concluded Lee, with loads of optimism.
