TruStory

Classical Handmade Products Bangladesh

The company

The SME Classical Handmade Products (CHP) from Bangladesh makes sustainable, handmade home accessories such as rugs and baskets from natural fibers and recycled clothing.

Bigger brands started taking notice of CHP’s products. In 2021 IKEA for example contacted CHP because of their rugs, baskets, coasters and place mats, 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 could not imagine this to be possible. But it became possible!

The entrepreneur

MD. Tauhid Bin Abdus Salam completed his undergraduation from the BGMEA University of Fashion and Technology (BUFT) in 2004 where he studied fashion designing. Upon graduation, he joined a Dutch buying house (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 short career of 4 years, acted as the capital (about 20.000 Euros) to start his business ‘Classical Handmade Products’. Tauhid came to learn about the production of rugs (shotrunji) 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.

“We are very proud to work together with the Classical Handmade Products team and director Tauhid Salam.“- Jaap-Jan Verboom, Director Truvalu BV

Social Impact

Local jobs and quality of life

CHP stands out for its impactful 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 notably improved the overall health and productivity of the workforce. Additionally, CHP has installed 40 solar street lights, ensuring safer passages for over 2,000 community members, particularly benefiting women workers 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 also 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.”

Some impact figures

In 2023, CHP employed 2589 workers: 2123 female and 466 male workers. It sourced from 4788 local producers, herewith impacting their economic Incomes. The total value (in EUR) of raw materials purchased from these smallholder farmers in that same year was 1,502,748.The company has set itself the following targets (2024): At least 265 workers are trained every quarter. A minimum of 80% of the workers hired are women. At least 6 people with disabilities are hired every year. More than 70 workers availed some form of healthcare service in a month. More than 90% of the workers who availed healthcare services are satisfied with the level of service. Monthly monetary value of raw materials purchases is USD 450,000 on average. 10% increase in income of workers after joining CHP. 15% increase in income of the smallholder farmers after starting to work with CHP.The investment contributes to the creation of local jobs, the professionalization of the SME and the concrete sale of sustainable, recycled products. It contributes to SDG 5 (Gender Equality), SDG 8 (Decent work and income), SDG 9 (Industry, innovation and infrastructure), SDG 12 (Responsible consumption and production) and SDG 13 (Climate action).

Financial returns

CHP’s revenue had a growth of 61.53% between 2019 and 2021.

Classical Handmade Products provides local jobs and a better quality of life for its employees – mostly underprivileged women “- Sharawwat Islam, managing director Truvalu Bangladesh

“With the money I get working here, I help my husband with his work and send my kids to school. I also try to save money after allocating some of it for my personal use. I wouldn’t be able to do any of it without this job in CHP BD.” “My father is a farmer. I bear my educational expenses and also help my siblings with the money I get from working here in CHP. I try to provide for the rest of my family as well. Through diligent studying, I aspire to achieve great things.” Women working at CHP

The uniqueness of the company

CHP promotes the use of eco-friendly yarns like banana, pineapple, and jute 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.

Future plans

CHP’s revenue had a growth of 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.

Co-entrepreneurship

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 subsidy of €30k 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.