Increasing numbers of international clothing and leather goods companies are responding to global competition by producing goods in Bangladesh. They include Picard Lederwaren, a German family business producing leather goods. However, the employment and environmental conditions under which Bangladeshi factories operate are often unacceptable. In 2012, Picard Lederwaren wanted to open a new production plant in Bangladesh but faced two challenges. First, the company wanted to source its raw materials only from tanneries that met social and environmental standards, and second, it wanted to modernise working processes but lacked the skilled staff required to do so.
As part of a develoPPP.de project, DEG and Picard supported a tannery in bringing its production in line with social and environmental standards. The project partners also collaborated with the College of Leather Technology to develop a new training course. The develoPPP.de-programme is implemented by DEG on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) to support companies wishing to engage in developing and emerging countries in the long term.
Since 2014, Picard has been producing leather goods in the new factory and now employs 1,600 people – 600 more than before modernisation. The company meets all the country’s health and safety and environmental standards, which are a legal requirement in Bangladesh but are seldom complied with. Picard is proving to other companies that higher wages and production in line with social and environmental standards need not mean lower profits provided a company optimises its processes at the same time.
At the College of Leather Technology, 41 students have already completed their training, with 25 more completing the course each year. This ensures that Picard has the skilled workers it needs for its own operations while also boosting labour market prospects for students.
‘The collaboration with DEG has enabled us to improve training in our Bangladeshi factory and secure it in the long term. By insisting on compliance with social and environmental standards, we are assuming responsibility.’
Thomas Picard, Managing Director, Picard Lederwaren