1,200 factories shuttered in four years

BGMEA says

Star Business Report
Some 1,200 garment factories have been closed down over the last four years because of their lack of compliance and falling behind in the competitive landscape, BGMEA said yesterday.

“It is our apprehension that some more factories will be shuttered soon as they are failing to make profits,” said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association, the garment makers' platform, at a press conference at its office in Dhaka.

Bangladeshi garment products have been losing competitiveness because of longer lead time, poor productivity and poor demand for apparel worldwide, Rahman said.

In 2014, the global market size for apparel was $483 billion; in 2017, the figure declined to $454 billion.

Between 2014 and 2018, the prices of Bangladeshi garment items declined in the US market by 11.72 percent while the cost of production increased 29.54 percent, the BGMEA chief said. Similarly, the prices of locally made garment items declined in the EU markets.

But at the same time, each of the garment owners has spent Tk 3-5 crore for fixing the electrical and structural loopholes as per the recommendations of the Accord and Alliance experts.

The cost of production will go up further after the implementation of the recommended minimum wage of Tk 8,000 from December this year, Rahman said. At present, the garments sector's minimum wage is Tk 5,300.

The wage comprises nearly 5 percent of the total production cost of garment items, according to industry insiders.
However, a section of people have been dissemin
ating wrong information for creating a chaotic situation in the garment sector ahead of the implementation of the proposed wage structure, he said.

For instance, the National Garment Workers Federation at a recent press conference said only 3 to 5 percent of the total workers in the garment sector are in the seventh grade.

“This information is wrong,” Rahman said, adding that more than 20 percent of the workers belong to the seventh grade or the entry level now.

The BGMEA leader also praised the statement of the Clean Clothes Campaign, the International Labour Rights Forum and the Maquila Solidarity Network, which urged 25 international retailers to hike the prices of garment items sourced from Bangladesh.

At the same time, American Apparel and Footwear Association, which last year sent a letter to the prime minister of Bangladesh for increasing the wage of the workers, should now urge the buyers to increase the prices of the products.

The garment sector has been witnessing a peaceful and calm situation over the last four years as there were no incidents of unrest. But, if a section of trade unions disseminates wrong information there is a possibility of unrest in the sector, he said.
A lot of workers will lose their jobs if any garment factory is shut down for any reason, he added.

  Courtesy: The Daily Star Business Oct 16, 2018