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Bangladesh RMG: Still a major sourcing destination for major brands

After a year of COVID-19 calamity, global apparel brands are putting their faith in Bangladesh RMG as a key sourcing destination of RMG in the coming months, according to a new study carried out by the Centre for Policy Dialogue (CPD), a think-tank based in Dhaka, and the Institute of Policy Studies (IPS) of Sri Lanka.

The discoveries of the study were presented at a recent webinar on ‘Recovery of the apparel sectors of Bangladesh and Sri Lanka: is a value-chain-based solution possible?’

Figure: CPD study depicts that major fashion brands are still counting on the country due to their resilience and capability in dealing with unprecedented scenarios. 

The CPD study said that medium-term challenges will cautiously correlate with the degree to which the COVID-19 is controlled. The 2nd wave has significantly lessened the apparel demand in major markets such as the US, the EU and the UK.

The CPD study found that key sourcing countries – China, Bangladesh, Sri Lanka and Vietnam are major players in the global supply chain of apparel – have either re-shored or over-focused to an inadequate number of sourcing countries during the COVID-19 pandemic period.

Despite the downward scenario in RMG producing countries like Bangladesh, the CPD study depicts that major fashion brands are still counting on the country due to their resilience and capability in dealing with unprecedented scenarios. And proposing that in case of a key global crisis, a redistributive tactic should be maintained to safeguard export orders at least at the pre-crisis level, mainly for countries that have financial limits and weak social support programs to support their suppliers and workers.

While various industry leaders voiced their positivity of a strong comeback.

Rehman Sobhan, Chairman of the CPD, said that the International Labour Organisation (ILO) could consider playing an entrepreneurial role in bringing together international buying countries with supplying countries to restructure the global demand management.

“A tripartite exercise should be carried out, including government, employers, and workers to produce a mutually accommodating system of unemployment insurance to address not just the immediate impact of the coronavirus crisis but a longer-term crisis.”

Mostafiz Uddin, Managing Director of Denim Expert Ltd, said during the crisis, his buyers even did not respond to emails, although they were saying that they were long-term business partners.

Mostafiz Uddin is not hopeful about getting back all of his arrears from the buyers as lead-time, contracts, and prices changed due to the fallouts of COVID-19.

“Brands and retailers should consider us as their business partners meaningfully,” the entrepreneur said.

Husni Salieh, Director for Strategic Transformation at MAS Holdings in Sri Lanka, said the value of a value chain was truly optimized when its stakeholders work collaboratively, particularly during the crisis.

He added that building resilience within a relatively diversified but existing value chain could face the current and future crisis successfully.

Pierre Börjesson, Head of Sustainability for Global Production of H&M Group, called for speeding up digital marketing so that the supply chain was not affected during any disaster.

H&M, which purchases more than $3.5 billion worth of garment items from Bangladesh every year, did not cancel any work order during the pandemic, Borjesson said, calling for social protection for workers.

Dan Rees, Director of Better Work, a flagship program of the ILO, said the only sector-specific measure might not address the existing challenges.

To build strong resilience and protect the workers, trust and cooperation among the stakeholders and a long-term plan were required, he said.

The study said, “There is a limited level of initiatives of major market players to keep the suppliers of major sourcing countries and the world of work in uncertainty to address the medium-term challenges.”

While a substantial shift in the supply of export orders by buyers during the COVID-19 period (January–June 2020) has underprivileged numerous key supplying countries, including Bangladesh and Sri Lanka.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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