Coronavirus pandemic hit Bangladesh readymade garments (RMG) industry when it was observing export declines for few months due to higher production cost, falling product price in the global market etc.
When manufacturers were feeling frustrated to think about how they cope with such astonishing pandemic, Bangladesh government came with a huge stimulus package to protect the industry. However, the most important partner-the buyers-who actually source garments for their customer from Bangladeshi manufacturers-most of them have showed an unethical buying practice.
Except for a few brands they canceled orders, demanded abnormal discounts. Most importantly, they did not act as a partner, which create a critical crisis for the suppliers.
Considering this reality Textile Today took an interview with Dr. Rubana Huq, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), also the Managing Director of Mohammadi Group-where she opened up the situation going on in the RMG industry, future strategy for the garments industry, her opinion on buyers’ unethical buying practice, BGMEA’s initiative to tackle the situation etc.
Textile Today: We all know that Bangladesh textile and apparel industry is going through the worst period of its history where the present and future both are uncertain. You are giving praiseworthy effort from the beginning of your Presidency. How are you mapping the future strategy for the garments industry?
Rubana Huq: We are in a very difficult time to predict the future but there are certain indications toward the immediate future. Post-COVID will change the world a lot starting from a production floor in Bangladesh to retail stores in the West. We will have to deal with many new normal with regard to the health and safety, and buying and clothing habits of the consumers.
For us, the near term strategy would be to cope up with health guidelines in our factories so that we can run our factories at optimum capacity while keeping our workers less exposed to infection risks, take enough measures with the support of the government to safeguard the factories from being insolvent and to support them to stay in operation and continue working with buyers to get a clear roadmap and projection.
Textile Today: From now it is expected that many orders will come of protective gear. How Bangladesh can grab this opportunity? What about other value-added product markets?
Rubana Huq: With Covid-19 has unwrapped new realities around the globe which will change people’s habit on a lasting basis, Personal Protective Equipment (PPE) will certainly be one of the most essential commodities of our daily necessities. The increasing infection of Coronavirus indicates that as long as there is a vaccine against this deadly virus, the demand for PPE will also rise.
While we are observing that countries around the world are competing with each other to source PPEs of different types and grades, Bangladesh being a novice at making this item has shown good prospect to grab the global market.
The joint initiative from Pay It Forward, the Manusher Jonno Foundation, BGMEA, British retail giant Marks & Spencer, the Arunachal Trust, and the BUET Alumni Association has already boosted the PPE production in Bangladesh. We are already in discussions with multinationals with regard to explore the market of PPEs.
However, manufacturing PPEs have certain guidelines and regulations to follow and we need internal capacity building first.
The availability of required raw materials in specific quality and specification is also challenging for these items at this moment, but there are sources and we can develop those over time.
We were already advocating the relevant authorities from BGMEA to make focused efforts on sector diversification, and I think PPEs and other medical equipment could be an opportunity.
Textile Today: The coronavirus showed many loopholes in the policy, planning and strategy. So, rightsizing of the industry is need of the hour, what do you think?
Rubana Huq: We are not in a perfect world, and yes we have many drawbacks and deficiencies in our systems, and this is also true that we have many limitations being a least developed country.
Moreover, the COVID-19 pandemic has left the entire world to its wit’s end, and nothing in this situation can be compared to the usual situation. COVID-19 has really been a significant wake-up call for us to realize about our position in any kind of natural calamity or global pandemic.
We are currently working on fixing the damages that has been done in the industry and to mitigate, yet we are also gathering critical information about the industry. As we start copying up with post-COVID new normal, it will be a priority for us to have a clear visibility of the industry, how do they operate, their financial and business status. We will keep engaging with our member factories to track the developments and will issue advisories to them on the needful.
Textile Today: Brands and buyers used to say that they are our ‘strategic partner’ but when it is their turn they are not acting accordingly. What do you want to say about it?
Rubana Huq: Over the decades, the Bangladesh garment industry has achieved the position of second highest exporters in the world by earning the trust of the global buyers through timely delivery, quality products, competitive cost, and by offering them products produced in safest condition and being responsive to the environment. We have built this time tested relationship supporting each other, but this time it did not work at all.
When the world is truly experiencing a perfect storm, the customers we have been serving in good faith and reputation left us within moments. ‘Crisis reveals character’ and this COVID-19 has really been eye-opening for us to have an understanding on how ‘thin of ice’ we are walking on. As of today, a total of $3.18 billion worth of orders has been canceled from giant brands and retailers reported by 1150 factories. A similar number of factories are there who did not report us, therefore making the figure of cancellation double. They have left us stranded with around 2 billion dollars worth of raw materials that the factories have already procured against bank liabilities. Along with downsizing the previously placed order, many of the buyers are asking for abnormal discounts.
At a time when factories have exhausted all their credit lines and burdened with unpaid goods shipped already unpaid raw materials and stocks, we have to take care of the workers well being.
However, there are few exceptions in buyers and we truly admire them. We are currently in discussions with brands and retailers. The social partners and media are being extremely supportive to us in these discussions. We do also understand the difficulties our western partners might be facing, and we hope they will act sensibly.
Textile Today: How government can help the textile and apparel industry to survive this pandemic and after pandemic by its policy and other supports?
Rubana Huq: The RMG industry, where it stands proudly today, could not be here if it was not supported by government supports and policies. We are grateful to the government, and the industry thankfully reciprocating by adding crucial values to the economy through earning foreign currencies, generating employment for 4.1 million people and indirectly supporting livelihoods of 40 million people.
We are grateful to Honorable Prime Minister Sheikh Hasina for her very kind and supportive role as ever, we have seen her being outstandingly proactive during the global recession in 2009, during the Tajreen and Rana Plaza disaster in 2012 and 2013, after the Holey Artisan attack in 2016, and in other critical times.
This time as soon as the COVID-19 pandemic has hit Bangladesh, Honorable Prime Minister has immediately announced a stimulus package of 5000 crore BDT to pay salaries to the employers and workers, and Her Excellency did this instantly because She knows the industry and its vulnerability, and because She cares about the workers, and because She intended to give a direction to this industry for 3 months with protection.
And later on, the Honorable Prime Minister has declared a number of financial packages for the industries and businesses to avail low-cost loan to meet the shortage of working capital.
We have also received a number of banking-related policy supports which gave us great relief in this difficult time. These are not difficult for a government of resource constraint country and in the end of a fiscal year, so it is equally important to make sure that the supports are reaching to the vulnerable groups and the purposes are served. We need to coordinate and fast track approaches required.
Textile Today: From every corner all the negative statistics and fearing mantic are coming. Can you share some positive and vivid news for the industry and industry people so that they do not lose their hope?
Rubana Huq: Even though the apparel industry of Bangladesh is the single most hardly hit sector from the Coronavirus, it should not be forgotten that if we all work collectively with cautions and safety, we can still win this battle, together.
After being closed down for nearly one month, the factories have started opening up maintaining health and safety protocol provided by BGMEA. And the good sign is after re-opening having a gap of one month, the slowdown in export that reached 85% a day, has started being recovered already.
We have started reopening through limited scale operation, and the shipment decline has backtracked around to -65%.
The West is ramping up re-opening, we believe fresh new orders will start showing up again. As long as clothing is a necessity and Bangladesh’s industry is equipped to produce mostly necessary items (which is often seen as a weak point of our), we hope we will be back on track again if we continue to get right support. We must not forget that no obstacle is strong enough to shut down and outmaneuver our long earned success.