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COVID-19 and the pulse of our apparel industry!

The ongoing life-threatening coronavirus has already caused massive loss of life and economic damage throughout the globe, and Bangladesh has no exception with over 112,306 confirmed cases and over 1,464 deaths. Needless to say that, in the time of the pandemic, the private sector has been severely impacted.

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Figure 1: COVID-19 opened up the grim picture of the global apparel fashion industry.

Coronavirus has brought unprecedented disaster to Bangladesh’s readymade garment (RMG) industry. This blow comes as the garments exporters are waiting nervously for their immediate future in the face of mounting order cancellations and unethical behavior by the brands and retailers in terms of holding payment, demanding unreasonable discounts, and the poor purchasing practices.

COVID-19 opened up the grim picture of world-famous retailers like EWM, Peacock, JC Penny, Debenhams regarding payment issue, another American based retailer ‘Sears Holdings’ allegedly refusing to settle more than $40.0m in outstanding dues from 2-dozen Bangladeshi RMG makers.

According to Bangladesh’s leading garment trade body, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), buyers have so far canceled orders worth as much as $3.15b since the pandemic unfolded.

Factories are now operating less than 50 percent production capacity for a shortage of much-needed work orders. Citing a study of Mckinsey & Company, global consumption of cloths is expected to fall by 65 percent for COVID-19 and work orders also slum by 30 percent.

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Figure 2: COVID-19 impact scenario in BD apparel sector.

Bangladesh’s overdependence on apparel export may lose as much as $5.0b with the outgoing 2019-2020 fiscal year due to slump triggered by the global coronavirus pandemic. The govt. was set apparel export target at $37.42b for the fiscal year 2019-2020 with a 7.03 percent growth in export earnings.

EPB (Export Promotion Bureau) proposed an export target, $ 37.42b out of $ 44.40b will come for the country’s apparel sector which is over 84 percent of the total target.

During July – May, apparel exports stood at $ 25.70b down by 19 percent against $ 31.73b in the same period last year. Apparel export declines by 62 percent in May to $ 1.23b from $ 3.24b compare to last year due to the global crisis of COVID-19.

According to Pallak Seth, Founder and Vice Chairman of PDS Group (who are sourcing their 45% products from Bangladesh market), there will be a contraction of AW-2020 order book by 30-40% compare to last year because retailers are cautious of buying less. For SS-2021 there could be a reduction of up to 50% because all retailers are sitting on a lot of unsold inventory from SS-2020. So, they will bring that inventory next year. The real increase in demand will come in AW-2021, so the production cycle from April 2021 onwards will see capacities returning to 70-80% normalcy, but not the level they were before.

Our financial sector is already under tremendous stress in the ongoing pandemic. Economy showing signs of sluggishness. In this dire situation, millions of jobs are at stake. Employment creation is now stagnant. The opportunity of a job in informal and many formal sectors are shrinking at home and abroad. As per the recent report of ADB (Asian Development Bank), the number of job postings decreased by 87 percent in April this year, in comparison with the same month of 2019.

The number of job postings in April 2020 was down by 95 percent in textile and education industries, and by 92 percent in the manufacturing industry.  Businesses should get a much-needed boost. In this connection, our honorable Prime Minister Sheikh Hasina has so far announced a total of 19 stimulus packages worth Tk 1.03 trillion to offset the shock of novel coronavirus pandemic in various sectors of the country.

The sustainable approach requires the garments industry in the post-COVID-19 world. The silver lining is that the retailers are re-opening their stores’ phase by phase. One of the biggest retailers of Bangladesh, Primark was supposed to reopen all 153 stores in England by 15 June. They have 378 stores in all over the world and 189 stores in the UK. So far, they have reopened 112 stores in Europe with a decent response.

On the other hand, the end of June going to reopen the stores for the rest of the countries (Scotland, Wales and Northern Ireland) of the UK. Experts say we have to focus strongly on the virtual marketplace like Business-to-Consumers (B2C) idea as online businesses growing daily.

Apart from that, product diversification, technology up-gradation, value addition with new items like recycled products, non-cotton products (man-made fiber), circular product items could play a handy role further in the post-pandemic period.

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Figure 3: post-pandemic focus.

PPE (Personal Protective Equipment) would also be a vital product in the coming days in the context of health and safety issues. Beximco Group has recently exported 6.5 m pieces of PPE gowns to a US brand, Hanes. Nowadays a notable number of orders of PPE along with masks are coming in Bangladesh. Countries like the USA, Kuwait, Sri Lanka, and Nepal are showing their interests to purchase the PPE from our country.

APS Group along with the collaboration of Zaber and Zubair (ZnZ) Fabric Ltd, have been developed an antiviral as well as antibacterial knit fabric mask with water repellent treatment which confirmed a virus reduction of over 99.9%. On last 14 May 2020, ZnZ also launched a specially treated woven fabric namely ‘Corona Block Fabric’ to fight against deadly COVID-19. As per a recent report, they also took 1.5m pieces orders of masks with said fabric from a UAE buyer named ‘United Global Holdings’. The fabric is protected from all kinds of viruses and bacteria, wash durable, soft, safe and most importantly breathable.

So, considering the above circumstances, we have an enormous amount of opportunity ahead. We have to grab these opportunities through our intensive and coordinated efforts. End of the day, life must go on. Above all, we respect the hands that run our machines.

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