Bangladeshi garment accessories and packaging manufacturers fear losses of Tk15 billion (1500 crore) due if the coronavirus prolongs for six months as it would create a shortage of raw materials for the sector hindering the production.
Meanwhile, the business people called for searching alternative sources to procure raw materials to avert supply crunch and policy support with ease trading facilities to buy from the new destination.
Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) President Abdul Kader Khan came up with the remarks at a press conference to talk on the probable losses of the outbreak of the coronavirus in China.
“China is our largest trading partner and the outbreak of the coronavirus to cast a negative impact on global economic growth. Bangladesh is not out of it,” said Abdul Kader Khan.
“China is our largest trading partner and the outbreak of the coronavirus to cast a negative impact on global economic growth. Bangladesh is not out of it.”
Currently, there are 1,744 garment accessories and packaging manufacturing, which are producing 35 items and can meet 95% demands of the $34 billion RMG sector. The sector is highly dependent on the import of raw materials from China from where it imports about 40%-50% raw materials, said the business leader.
In the given context, if the deadly Coronavirus prolongs to six months, it could losses Tk1500 crore for the sector due to shut of production, for bearing the workers’ wages and utility services charges as well as business losses, said Khan.
However, the platform of the accessories makers yet to calculate the real losses or to get the data from their members. It also asked its members to lodge their problems and financial losses incurred due to a virus outbreak.
Called for search of alternative source
As per the BGAPMEA data, about 50% of raw materials are sourced from China, the sector people urged the government to search for an alternative source to avert the shortage and production cut.
As per the sector people, the capacity of storage depends on the size of the factories as well as the financial solvency and the capacity to cop of work orders. On average, at best a factory has storage of raw materials for two months, said Rafez Alam Chowdhury, Advisor to GAPMEA.
So, to avert production shut and ensure the supply of raw materials by searching alternative sourcing destination and providing policy support to buy from them for a temporary solution, said Alam.