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Editorial Industry Insight

Do buyers realize the manufacturer’s pains?

Bangladesh readymade garments industry, one of the best sources for quality apparel products in the world, is in a crisis of fair price. For many days, apparel manufacturers are demanding fair prices for their products and recently following their footsteps Commerce Minister Tipu Munshi and Bangladesh High Commissioner to the United Kingdom Saida Muna Tasneem demanded fair prices for garment items from the US and EU retailers and brands as the local apparel exporters spent billions of dollars to strengthen workplace safety which led to an increase in the cost of production.

getting fair price for RMG
Figure: A worker ironing suit in a factory of Bangladesh.

The $33 billion industry has already invested a huge amount and is continuing to ensure workplace & workers safety and improving the quality of products.

We have seen a significant investment has been made here under the two representatives of international buyers- Accord and Alliance. As of a November update on Accord’s site, the Accord noted that 90% of remediation for safety issues have been completed where the ninety-seven percent of Accord factories have removed lockable and collapsible gates, and 90% have adequate lighting in fire exists.

On the other hand, remediation across Alliance-affiliated factories has been completed and around 450 completed all material items in their initial Corrective Action Plans (CAP), according to the 5th annual and final report of Alliance.

At the same time, a huge investment was made by the textile and RMG millers in green building projects.

Of the top 11 LEED-certified factories in the world, 8 are from Bangladesh. These eight are “Platinum” rated, which is the highest category that can be reached under this globally recognized certification. 20 factories are in the LEED Platinum category and 40 are in LEED Gold. Indeed, there are 73 Bangladeshi LEED Green garment factories certified by the USGBC. There are some 320 factories in the pipeline waiting for LEED certification.

Recently Bangladesh government has increased workers minimum wage to 51% to ensure a better life for the workers. However, finally, all of these push the production cost to become higher.  According to the sector leaders, production cost has been increased by almost 20% in the last few years.

To survive in the global market Bangladesh is continuing to offer products at reasonable prices and we have data that shows buyers are paying less prices to Bangladeshi manufacturers comparatively to its rival country’s manufacturers.

For the last few years, Bangladesh’s apparel producers have paid their attention to make value-added products which is a prime demand of today’s buyers.

However, continuous pressure for reducing product price from buyers is slowing down manufacturers’ courage. In addition, highlighting negative things- in spite of having a huge improvement in the sector – by buyers or brand representatives also disappointed the manufacturers.

In conclusion, business should always be cooperative and both sides should try and put themselves in a win-win situation so that a long-lasting relationship can be built.

As the buyers truly want a workplace & workers safety and quality products those are ensuring by the manufacturers, surely, buyers must not show their misery to pay a few more cents for each product to their manufacturing partners.

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