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Bangladesh: Digital printing of garment tags

General information
Project location: Dhaka, Bangladesh
Consortium: Kimball Systems BV, Label Technologies Ltd
Project Budget: Euro 850,000
External financing: 60% grant funding by PSOM
Project period: January 2007 - December 2008

The garment industry in Bangladesh is a major contributor to the country’s total export earnings (€ 5 billion in 2005), employing roughly 2 million workers. These garments are mainly retailed in the EU and US, requiring a significant quantity of printed accessories in the form of brand labels, price tickets, adhesive labels, etc. The printing and tagging industry in Bangladesh serving the garment industry, currently only targets the middle and lower quality segments of the manufacturing. The higher quality and premium segment of the market, however, is mostly still untouched.

Kimball Systems BV and its partner Label Technologies Ltd. are currently serving the middle and lower market segments in Bangladesh. Kimball Systems does stock printing in the Netherlands of price tickets and labels for major clients like e.g. C&A, which outsources textile manufacturing to countries like Bangladesh. The traditional flexo pre-printed materials consequently are send to Label Technologies in Bangladesh, where at the instant it is required (i.e. when the client informs Kimball Systems on the textile products about to leave the factory in Bangladesh) price information is added to the labels. Adding this price information is done using B/W laser printing, not allowing large quantities of flexible and coloured labels to be printed. The situation where printed materials have to be shipped to Bangladesh can be very detrimental for the delivery performance of the garment industry due to frequent delay in imports taking place. More and more it is becoming most critical for the garment industry in Bangladesh to reduce the lead time between production and export to different western countries. On time delivery performance is the key to success. The long delivery times of the labels, combined with the absence of advanced printing technology in Bangladesh, hampers the development of the higher quality garment industry.

By setting-up a facility in Dhaka, Bangladesh, for digitally printing of tags (i.e. graphic labels, price tickets, etc.), Kimball Systems and Label Technologies will be able to serve said higher premium market. In doing so, lead times between the client and the textile vendor will be drastically reduced, while the partners will be able to produce high quality bar coded price tickets and labels, brand labels with artwork and printed accessories, colour-for-size, typically in demand by the higher quality garments industry in Bangladesh.

The proposed project will result in:

the establishment of a Joint Venture between Kimball Systems and Label Technologies for the production, finishing and marketing of high quality garment tags and printed accessories

the introduction of digital printing technology in Bangladesh through construction of a modern printing facility in Dhaka for printing and finishing (i.e. die cutting, blanking) tickets and labels, employing 30 staff

training of 30 staff in administrative management, O&M, quality control, and sales and marketing

acquiring of ISO 9001-2000 (quality management in production and sales) and ISO 14000 (environmental management principles, systems and supporting techniques) certificates adherence to the international recognised social accountability standard SA8000 (e.g. avoidance of child exploitation) and acquiring of the certificate a bankable business plan for securing finance for follow-on investments.

Follow-up investments will include investments in adding new printing technologies to allow more flexibility and to achieve larger production volumes. Additional direct employment during this period is estimated to be 20 staff.

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