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Bangladesh textile and apparel industry during COVID-19

Bangladesh’s export earnings are increasingly becoming dependent on the readymade garment (RMG) sector. Now this phenomenon is threatening our country’s economy due to corona-crisis. Because the country’s 84% remittance was gaining from this sector.

Bangladesh-textile-apparel-during-COVID-19
Figure: The Coronavirus epidemic poses a threat to the country’s apparel sector, as foreign buyers have started revising their business strategies amid the prevailing critical situation.

The Coronavirus epidemic poses a threat to the country’s apparel sector, as foreign buyers have started revising their business strategies amid the prevailing critical situation.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said that more than one thousand RMG factories had received order cancellation or shipment delay notices from the buyers for export orders worth almost US$3 billion. It is affecting more than 1.44 million workers.

Now Bangladesh, USA, China, Italy, Spain, France and other European countries declared nationwide lockdowns as the countries took sweeping measures to reduce the spread of the coronavirus. Following the lockdowns, major brands in Europe, including Primark and Inditex, shut their stores in the countries and asked Bangladeshi suppliers to hold shipment of ready garments for another two to four weeks.

Amid this situation, global buyers are not only canceling and suspending orders but also, they are not taking ready goods. The current state makes us clear that the textile and RMG industry is vulnerable and dependent. The corona-crisis shows us that we should go to a self-reliant industry.

Fazlee Shamim Ehsan, Director of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the prices of basic raw materials, including sewing thread and level yarns used in production, are high due to the virus outbreak.

However, Chinese suppliers, after resuming their operation partially, have started communicating with local factories. He also requested to every manufacturer of our country to shut down their work from 26 March to 4 April.

As the coronavirus founded in China in December last year and has now spread to over 199 countries. almost 150 people have tested positive for the virus while five others have died in Bangladesh till 29 March.

Based on the current situation many factories including Epyllion, Dird Group, Apex Holdings, Concord, etc. have declared for closing their work from 26 March to 4 April due to corona-crisis.

BGMEA President Rubana Huq said that everyone related to the RMG sector we have to be patient and not be afraid. Every manufacturer should contact their buyer and should try to convince them not to cancel their order fully and to take the ready goods through this employee can get their salaries.

She also sent a letter to the global buyers urging them not to cancel or hold orders till July so that workers could get their wages and allowances during two Eid festivals.

BGMEA has already given masks and also producing personal protective equipment’s (PPE) for the protection against corona-crisis.

In the meantime, Prime Minister Sheikh Hasina has announced an incentive package of Tk 5,000 crore to pay the salaries of workers of export-oriented industries in the case of Coronavirus infection.

Prime Minister said Bangladesh Bank has already taken several business-friendly initiatives. The central bank has announced that it will not liquidate any customer till June.

“The export collection period has been increased from two months to 6 months. Similarly, the deadline to meet the import costs has been increased from 4 months to 6 months. Banking on mobile has increased the limit for financial transactions.”

The Prime Minister also said the deadline for payment of electricity, water and gas bills has been extended till June without surcharges or penalties and repayment of loan installments of NGOs.

Fazlee Shamim Ehsan, Director of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), added that the supply chain, especially of man-made fiber and woven fabric, might be affected, as the majority of those are imported from China.

According to the industry people, about 46 percent of raw materials for the local RMG industry is sourced from China. It is high time to rethink our business structure. Bangladesh RMG sector should start producing raw materials and utilize properly the existing raw materials like jute, leather, etc., which will reduce foreign dependency as well as boost the economy.

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