The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan has demanded 1.5 crore vaccines for the Readymade Garments (RMG) workers as they have been working during the pandemic to protect the country’s economy.
The President remarked while speaking in the TexTIMe 7th episode on ‘Working Together to Regain Export’ organized by Textile Today on 27 June 2021. Mohammad Ali Khokon, President, Bangladesh Textile Mills Association (BTMA) was also present where Tareq Amin, Founder & CEO, Textile Today moderated the webinar.
The Covid-19 pandemic hit hard Bangladesh textile and apparel industry, however, the industry is continuously fighting back and increasing export. It is high time when textile and garments manufacturers must work together to regain the export volume. This week the two presidents discussed how manufacturers can work together to regain export.
Orders worth USD 3.5 billion were canceled within 60-70 days of lockdown last year. Some orders were restored this year but the loss was tremendous. Recently, the Covid situation in Bangladesh is getting worse. Thus, the government issued a lockdown from the first of July.
On the other hand, Western countries are recovering from Covid-19 due to proper vaccination and treatment. So, orders from countries like the EU and the UK are rising again. History may repeat itself during the lockdown. Orders can be canceled at any time. Lockdown can increase people’s movement too.
Faruque Hassan said, “People go to their hometowns on holidays during the lockdown, increasing contamination of Covid.” So both Presidents persuaded the government to open the factory during the lockdown.
Mohammad Ali Khokon said, “Most of the workers live near the factory and within the short distance employees get transportation from the factory.” There is less movement of people in the industry.
Faruque Hassan suggested keeping workers in the discipline. Eventually, it will lessen the rate of infection.
Replying to a question asked by the moderator Tareq Amin regarding purchasing private vaccination, Covid testing, and treatment of the workers Faruque Hassan said, “BGMEA has set up three PCR labs for testing RMG workers at two and one in Chittagong.”
Also, it is not possible to import private vaccines from other countries. Both the Bangladesh government and the WHO have not formulated any policy for this yet.
Mohammad Ali Khokon suggested for workers to stay inside the factory resident so that they make less movement. BTMA is also working on compliance, employee protection, and the use of facemasks.
Faruque Hassan said, “There are 4 lakh workers in the garment industry but by counting down family members estimates that the amount of vaccines needed is 1.5 cores.”
Bangladesh set an ambitious vision to reach $50 billion exports by 2021, the 50th anniversary of the Republic of Bangladesh. “We have worked and are still working on the vision, but it is impossible to reach the goal for two reasons,” Faruque Hassan said.
“One is for the 2015 global market contraction and finally for Covid 19.”
According to the World Trade Organization, global clothing demand fell 8 percent to $445 billion in 2015. Due to Covid brands went bankrupt and broke the global supply chain. Still, the industry is recovering.
Faruque Hassan said in a subsequent report on June 30, 2021 export results could exceed USD 31 billion.
Mohammad Ali Khokon said, “There were almost no exports in July, August and November last year. However, we have omitted these three months then exports have shown significant potential. Factories are struggling to run during this period. Manufacturing simply runs the industry for paying up the wages and to sustain.”
Faruque Hassan said that the manufacturers are taking fewer orders than its break-equation just to survive. Without large-scale incentives from the government, many manufactures could go bankrupt in the end.
Mohammad Ali Khokon said it was a government initiative that saved the industry last year.
Replying to the question ‘What would be the benefit to the industry if manufacturing continued to take such orders?’ Faruque Hassan emphasized developing pricing strategies for proper negotiation. Buyers should think about manufacturers too.
Replying to the query on the possibility to formulate a center pricing policy Faruque Hassan said they were working on it but the economy was built in a way that was a difficult task.
Mohammad Ali Khokon said, “We have changed the idea that Bangladesh can only cut and make base industries. Today BTMA can support the garments industry with 70% backward linkage (yarn, fabric, denim, accessories, etc.). Also, both garments and textiles have enough efficiency and technology to put them on the negotiation table.”
“Last year, against USD 34 billion export backward linkage contributed USD 23 billion. It declined this year but backward linkage doing everything it could to support the garments industry. Knit products are the reason for export performance, but if woven products can show more performance, we can get the export back. However, the resurgence of exports remains in diversification,” said Khokon.
“We are already working on product diversification like man-made fiber, multifiber, and microfiber,” said Mohammad Ali Khokon.
Responding to a question regarding the problems the spinning industry is facing in the wake of the cotton price revolt Mohammad Ali Khokon said, “Cotton prices have risen almost 100%. During the last year’s epidemic, it was the time of cotton planting. However, the time for planting epidemic trees was short. The minimum cost of cotton which was 65 cent now it 1 dollar. BCI and organic cotton prices rose 200%. The global cotton supply chain is disrupted right now.”
As raw key materials price rose, subsequently clothing price should have seen a rise, however, the reality is far different. “This is due to the lack of price negotiations at the end. Foreign buyers are still holding on to previous prices. So, the garments industry can’t afford to buy the fabric at high prices.”
The steps required by the garment industry to regain exports
According to Faruque Hassan, market expansion, product diversification, developing virtual marketplace, and proper research can get the export back.
Highlighting the strength of the Bangladesh apparel industry, he said, “Bangladesh’s garment industry is still more capable than its competitors. Bangladesh is second in ethical business after Taiwan. Bangladesh garments industry has low compliance issues and a large number of green factories.”
However, he said, “The workers of the Bangladesh garment industry have less efficiency than the competitors. So, the focus should be on technology rather than low-cost labor.”
BGMEA is developing research and training centers to work in virtual markets to create a new market and to build skilled employees.
How BGMEA and BTMA can work together to regain apparel exports
Mohammad Ali Khokon said, “The growth of the textile and garments industries is proportional because they are both dependent on each other. BTMA, BGMEA, and BKMEA can work on issues on compliance, policy-making, and persuading the government to go easy on VAT, tax, tariff, etc.”
The BGMEA President said the two organizations can work together on market and product research. Diversification is a crying need right now. Proper research planning is required from both sides. Also, the textile industry should prepare itself more to compete internationally.
Replying to a question raised from the young entrepreneurs regarding investment in this sector Faruque Hasan advised the new entrepreneurs to do a proper feasibility study before investing. On the other hand, the BTMA President advised them to acquire proper knowledge and skills before coming to this sector.