TruStory
Classical Handmade Products (CHP), an SME from Bangladesh, makes sustainable, handmade home accessories such as rugs and baskets from natural fibers and recycled clothing.
Larger brands started taking notice of CHP’s products. In 2021, IKEA for example, contacted CHP because of their rugs, baskets, coasters and placemats, and wanted to introduce them to the European market. Nowadays these are part of the IKEA collection. Other European and American brands have followed. CHP never imagined this to be possible, but it became a reality!
MD. Tauhid Bin Abdus Salam completed his graduation degree from the BGMEA University of Fashion and Technology (BUFT) in 2004 where he studied fashion designing. Upon graduation, he joined a Dutch buying house (Ready-Made Garments, RMG) as a marketing manager, and at the same time he played the role of a lecturer at Ahsanullah University of Science & Technology and BUFT. The capital he accrued during his 4 year career (about 20,000 Euros), served as the initial investment to start his business ‘Classical Handmade Products’. Tauhid came to learn about the production of rugs produced in the northern part of Bangladesh, as a result of his education. He planned to manufacture Grameen Check” for the RMG sector, but realized that it would be difficult to produce such precise thread based designs on such a mass scale. He began pondering on how to utilize thicker threads and around that time he started producing rugs by establishing 90 machines across 3 units.
Reason to start the company
Tauhid started the business out of his interests towards rugs produced in the northern part of Bangladesh. In the early days of his venture, he met a lady who came to him searching for a job. The woman worked as a stone breaker, and received 0.4 Euros per day as remuneration. He came to know about her penurious living standards from an NGO worker. From that point on, the entrepreneur decided to create a model that would directly empower women in poverty through employment. With this end in view, CHP established 21 decentralized production units spread across these ultra-poor areas in the subsequent years.
Local jobs and quality of life
CHP stands out for its meaningful social initiatives, significantly enhancing the quality of life for employees and the broader community. The company’s focus on health and well-being is evident through free health checkups and services for its workers, along with providing free eye checkups and spectacles. These measures have improved health and workforce productivity. Additionally, CHP has installed 40 solar street lights, ensuring safer passages for over 2,000 community members, particularly benefiting women traveling home after dark. The company has donated 1,500 trees to local communities and schools, promoting a greener environment.
Furthermore, women’s empowerment is central to CHP’s mission. CHP has implemented supportive measures such as providing free sanitary napkins, ergonomic exercise routines, and childcare facilities.
These initiatives help women balance their professional and personal lives, reducing stress and enhancing their overall well-being. Employment opportunities at CHP have transformed lives, as illustrated by Rahima, a worker who says, “With the money I earn here, I help my husband, send my kids to school, and save for my future. I support my family’s needs and education expenses. This job at CHP has transformed our lives and given me hope for achieving great things.”
CHP’s revenue grew by 61.53% between 2019 and 2021.
CHP promotes the use of eco-friendly yarns like banana, pineapple, and jute fibers in the textile industry. These natural fibers offer a sustainable alternative, reducing environmental impact and creating a circular economy. There is a high demand for these products both domestically and internationally, leading to a decrease in carbon footprint and a diversification of exports.
CHP’s revenue grew by 354% between 2021 and 2023 as per the audited financial statements. CHP aims to improve its position in the export market by directly branding its products overseas. The company has already begun the process of preparing the required documents in Europe. Additionally, it plans to manufacture and export the raw materials for these products from India and Sri Lanka.
CHP faced the challenge of transforming a rapidly expanding, informal local company into a professional entity capable of reaching new European markets, employing a large workforce, and securing working capital from local banks. CHP is now exporting to 44 different countries.
CHP is one of the companies that received investment from Truvalu in Bangladesh. The Truvalu Bangladesh team monitors the investment and provides technical support to CHP. With a small grant through the Dutch Good Growth Fund of Invest International, to hire Truvalu’s support services, Truvalu has significantly advanced CHP’s development. Alongside the Fair Factory Fund, Truvalu invested in CHP’s share capital, enabling the company to increase its capacity. A €30,000 subsidy facilitated €1.25M in equity capital investments and an additional €3M in bank loans, initially resulting in the creation of approximately 1,000 new jobs. This collaboration exemplifies the power of working together: Truvalu’s private investment capital and business development services, coupled with financing from Invest International and co-investments from the Fair Factory Fund, achieved the desired outcome.
Since investing in CHP, Truvalu has worked diligently to enhance CHP’s financial strategies and corporate governance. In 2023, Truvalu developed financial tools for CHP that aid in forecasting and evaluating performance and effectively communicating these results to investors. Truvalu continues to assist CHP in reaching its full potential.