Mainland Headwear Holdings Ltd – setting up production facilities in Bangladesh

Mainland Headwear Holdings Ltd was established in 1986 and listed in Hong Kong in 2000, engaging in the design, manufacturing, trade and retail of casual headwear. In recent years, Mainland Headwear has expanded its businesses through mergers and acquisitions as well as the establishment of strategic alliances, including signing a manufacturing agreement with New Era Cap Co., Inc., acquiring H3 Sportgear LLC and San Diego Hat Company, and forming a joint venture with Promotional Partners Worldwide Group Ltd to design, manufacture, and sell Sanrio products in the Chinese mainland. Headquartered in Hong Kong, Mainland Headwear has factories in Shenzhen and Bangladesh, manufacturing licensed casual headwear which are primarily sold in the US and European markets.

Capitalising on the Belt and Road Initiative, Mainland Headwear set up a 25,000-square-metre factory in rural Bangladesh in 2013 to boost production as the rise in labour costs on the Chinese mainland was weighing on profits. In its initial three years of operation, the company’s factory expanded significantly, with the number of staff increasing from 200 in 2013 to 4,500 in 2017, and monthly production together with production efficiency are continuously being enhanced.

Mrs Pauline Ngan, Deputy Chairman and Managing Director of Mainland Headwear Holdings Ltd, said many infrastructure projects including expressways, railways, deep water ports and power plants had been built in Bangladesh since the launch of China’s Belt and Road Initiative. The travelling time between the capital city Dhaka and Chittagong port will be shortened from seven to eight hours, to four to five hours upon completion of a new expressway, which will greatly improve the efficiency of raw material transportation. With the railway from Dhaka to Kunming expected to be completed in 2020, along with the deep water port construction deal between Bangladesh authorities and China’s COSCO, the local garment manufacturing industry is tipped to grow.

With more than 30 years of industry experience, the company overcame operational challenges in Bangladesh with its localised manufacturing planning and customised human resources management scheme. The company developed a digitalised inventory monitoring system, the ERP System, for management to obtain real-time information about inventory and raw materials’ status, and for customers to track their orders. Specialised equipment such as embroidery machines, sublimation printers and laser engraving machines were also widely adopted to better manage output. The company also maintained effective two-way communication with its staff to tackle issues arising from cultural misunderstanding. In order to instill a team atmosphere and strong sense of belonging among the workers, the company organises praying assemblies for Muslim workers, and provides comprehensive remuneration packages including housing allowances and gift packs with daily necessities. The setup of the factory has also boosted the population of the village from 400 to 10,000, improving its GDP and living standards.

Mrs Ngan said the Hong Kong-based company has been playing a role in connecting Chinese investors and the Bangladesh authorities. As a member of the Chinese Investors’ Alliance, Mrs Ngan provides consultation and training services to newcomers through regular classes on setting up companies in the country and overcoming cultural barriers.

Mrs Ngan said, as the company further expands its operation in the country, the Bangladesh factory will become the focus of the company’s business development. The second phase of the factory will be in operation by the year 2018. The company also plans to recruit 2,000 additional workers and local university graduates to hopefully enhance the synergy between the Bangladesh factory and the design and high-end production facilities in Shenzhen.