March 29, 2024

Special Report: Business of Green: Conservation Pays Off for Bangladeshi Factories

One step in the process happens in the dye house, a hangar-like factory where cloth and dye are boiled in enormous metal vats for three to seven hours. Here, the natural, off-white color of cotton cloth is transformed into vibrant hues. One recent morning, a worker guided a winch extracting freshly dyed orange cloth from a vat as steaming water cascaded to the floor.

The textiles industry requires large amounts of water to dye and rinse cloth, as well as steam for printing and pressing fabric.

To produce 35 metric tons of cloth each day, DBL uses 3,400 cubic meters, or about 900,000 gallons, of water — about 1.5 times the volume of an Olympic-size swimming pool.

In 2011, DBL and 17 other Bangladeshi factories upgraded equipment as part of a program backed by the aid agencies of Britain and Norway and the International Finance Corp., the World Bank unit serving the private sector.

The 18 Bangladeshi textile makers together invested more than $1 million to upgrade their factories, while 10 apparel buyers, including the giant retailers HM and Tesco, contributed a total of $35,000 to the program. Solidaridad, a Dutch non-governmental organization, provided technical advice and funding.

DBL invested $80,000 to make simple but powerful upgrades to equipment like boilers and dyeing and rinsing machines, as well as implementing simple fixes like insulating steam pipes and fixing leaks. Before the changes, DBL used 120 liters, or 32 gallons, of water to produce a kilogram, or 2.2 pounds, of cloth; now it uses 60 liters.

In Bangladesh, many factories use as much as 170 liters of water to make one kilogram of cloth.

Those measures save not only water but also the electricity and gas used to pump, filter, heat and treat water, which translates into total savings of $500,000 each year for DBL.

“We use less resources for more production,” said Mohammed Jabbar, managing director of DBL. “The program really opened our minds.”

In one year, the factories in the program together saved 1.2 million cubic meters of water, 16 million cubic meters of gas and 10 million kilowatt hours of electricity, while reducing greenhouse gas emissions by 32,000 tons, according to the International Finance Corp., which estimated that if half of Bangladeshi textile factories adopted similar measures, they could save $75 million, along with 63 billion liters of water and 650 million cubic meters of gas.

Conserving water is critical for Bangladesh, where a booming textile and garment industry helped the economy grow 6 percent last year. Bangladesh is now the world’s second largest exporter of garments, after China, and the industry’s sales are projected to grow to as much as $42 billion by 2020 from $19 billion last fiscal year, according to a report by McKinsey, the management consulting firm.

But fast growth means dangerous depletion of water and other resources. Bangladesh is one of the world’s most densely populated countries, with 160 million people living in a space smaller than Iowa. Although much of Bangladesh lies in the delta of the Brahmaputra River, groundwater is being rapidly depleted: The water table in Dhaka, the Bangladeshi capital, drops two meters, or more than six feet, each year.

DBL has a multimillion-dollar effluent treatment plant, but plenty of Bangladeshi textile factories — not to mention tanneries and other industries — do not. Water full of dyes and chemicals is often dumped directly into rivers, contaminating water and killing fish and other wildlife that millions of people depend on.

In Bangladesh, groundwater is virtually free, so industries have little incentive to conserve it — but they want to save energy, as fuel prices remain high.

Saving water means using less energy to heat water in gigantic boilers and to clean wastewater in treatment plants, as well as using less dye imported from Europe.

Article source: http://www.nytimes.com/2013/03/22/business/energy-environment/conservation-pays-off-for-bangladeshi-factories.html?partner=rss&emc=rss

June Sales Reports Show Shoppers Opened Wallets

Despite worries that a drop in consumer confidence and high gas prices would damp results, every sector that is tracked by Thomson Reuters — from discount to luxury — on Thursday reported increases at stores open at least a year, a measure known as same-store sales.

At the 25 retailers followed by Thomson Reuters, same-store sales rose 6.5 percent. Analysts had expected an increase of 4.9 percent.

Though the comparable-store increase in April was higher, at 9.0 percent, those numbers were misleading because Easter can fall in March or April, affecting results in those months. Excluding the Easter months, June’s results were the biggest increase since February 2004, when sales rose 7.0 percent, Thomson Reuters said.

That meant that, instead of complaining about gas prices or a too-hot, too-cold or too-wet June, retailers in some sectors reported good news.

“It reflects that despite all the bad news, the consumer still basically feels like they’ve got money in their wallet,” said Al Sambar, a retail strategist at the consulting firm Kurt Salmon.

While discount stores turned in the strongest performance as a sector, with sales rising 9 percent, every sector had positive comparable sales. And the companies with the best results and that beat analyst expectations by the widest margins cater to all sorts of shoppers.

Costco, up 14 percent, goes after value-minded shoppers, but also those who have enough to spend on flat-screen TVs and vats of mayonnaise. Saks, where sales rose 11.9 percent, is all about high-price luxury. Kohl’s and Dillard’s, where sales rose 7.5 percent and 6 percent respectively, go after a midrange shopper with lots of promotions and coupons. Zumiez and Wet Seal, which rose 9.8 percent and 7.3 percent respectively, aim for teenagers with mall shops.

June is not a make-or-break month for retailers, which are generally clearing out inventory in anticipation of the back-to-school season. Retailers often mark down leftovers to make room on the floor during June, and promotions were intense at a few stores. Still, many retailers have said that they will be increasing prices later this summer, and some have been testing slightly higher price tags.

“June is somewhat of a transition month for retail,” said Michael McNamara, vice president for research and analysis for MasterCard Advisors SpendingPulse, which tracks overall sales. “Some categories are ending one season and getting ready for the next, such as apparel. Other categories are depending more on the summer travel season.”

Discretionary spending seemed to be strong. The SpendingPulse numbers suggested that luxury, jewelry and apparel spending all continued at a brisk pace, and the retailers’ results reflected that.

Kohl’s said that sales of watches and handbags were quite good, for instance, while Saks said that women’s shoes, designer apparel and jewelry were among its best performers, and J.C. Penney also said jewelry had sold well.

Because the shopper seemed to be buoyant, the differences among competitors were getting more pronounced as retailers could no longer blame the economy.

Penney had one of the biggest misses, with its comparable sales results up 2 percent versus analyst expectations of 2.3 percent. The company said that was because of a “softer than anticipated selling environment for J. C. Penney’s moderate customer and the resulting higher level of promotional activity during the quarter.” The company noted that online sales rose 2.2 percent for the month.

Competitors like Macy’s and Kohl’s, though, turned in much stronger results. Kohl’s said home, women’s and children’s products all had big increases. At Macy’s, same-store sales rose 6.7 percent, and Internet sales were up 45 percent in June compared with a year ago, the company said. (The results include both Macy’s and Bloomingdale’s.)

In terms of same-store sales increases, Costco had the biggest jump, with 14 percent. Analysts had expected a 12.7 percent increase. Limited, driven by Victoria’s Secret, continued to shine, with a 12 percent increase, versus analysts’ estimates of 3.8 percent. Saks placed third in the comparable-sales horse race, with sales rising 11.9 percent, versus analysts’ estimates of 7 percent.

Analysts said that the back-to-school picture was still hazy. While the strong results in June indicated consumers were happy to shop, many retailers have said they will raise prices around the back-to-school season because of more expensive goods. “The customer, regardless of all this stuff we’re talking about, is price sensitive,” Mr. Sambar said, and retailers did not yet know whether the shoppers would accept higher prices.

Article source: http://feeds.nytimes.com/click.phdo?i=e3fbed79233743bc61d259ad2e59fd22