[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

Reforming wage structure, policy in RMG sector

Against the backdrop of spiralling workers' unrest with attendant violence in the Readymade Garment (RMG) units in Ashulia, Savar, Gazipur and elsewhere, the UN agency dealing with labour-related issues, ILO, has identified five key areas that demand urgent attention. Evidently, the international l

thefinancialexpress.com.bd

Reforming wage structure, policy in RMG sector
Published :
Oct 01, 2024 22:02
Updated :
Oct 01, 2024 22:02

Against the backdrop of spiralling workers' unrest with attendant violence in the Readymade Garment (RMG) units in Ashulia, Savar, Gazipur and elsewhere, the UN agency dealing with labour-related issues, ILO, has identified five key areas that demand urgent attention. Evidently, the international labour body has been closely monitoring the escalation of agitation among the garment workers, their grievances and the complexities involved that reflect systemic problems requiring speedy redress. The key issues identified by the ILO and the suggested remedies include wage structure, policy and labour law reform and strong social and legal protections and industrial relations, and occupational safety and health (OSH).The first step towards addressing the issues causing destabilisation in the garment and other industries is to acknowledge those by all the stakeholders involved. The next step would be to conduct constructive dialogues between the RMG factory owners, workers and government officials in a spirit of collaboration and good faith so that workers' rights are recognised and protected, while the sustainability of the RMG industry is also ensured.

Admittedly, workers must be motivated to develop a sense of ownership of the factories they work for a healthy industrial relations system in the RMG sector or any other industry. Continued unrest in the country's highest foreign exchange earning sector is only indicative of a trust deficit between workers and employers. The ILO's input in this case is definitely timely and welcome for riding out the crisis. Notably, the international labour body did highly commend the September 24 agreement reached between the RMG workers and employers as a 'landmark' accord. But hardly a week had passed since that agreement when violent clashes between workers and law-enforcers erupted on Monday last in the Ashulia area leading to the death of one worker and critical injuries to several others. Clearly, the situation appears to be grave since following the latest violence, owners of the Ashulia area has sought protection of their factories, their staff and workers against what they termed 'outsiders' who are out to destroy the industry.

Obviously, this latest development flies in the face of the 'worker-employer agreement' termed 'landmark' by the ILO. Even so, the latest unrest only points to how germane the ILO inputs and suggestions are to the crisis-ridden RMG sector. Now that the overall atmosphere in the RMG industry is getting toxic for reasons yet to be identified, the interim government needs to put its foot down to protect this vital sector of the economy. At the same time, it should see to it that the measures suggested by the ILO to restore a healthy worker-employer relationship in the entire industry are implemented duly. In this context, the suggested move to reform the wage structure and policy towards a gender-responsive national wage policy as well as reforming the minimum wage mechanism (through inclusive consultations between workers and employers) should be started without delay. Similarly, amendment to the Bangladesh Labour Act, introduction of an independent alternative dispute resolution institution and reform of the labour court system should also be initiated. Also, for social protection of workers, the ongoing pilot scale 'Employment Injury Scheme'should be institutionalised and legalised. To ensure occupational safety and health (OSH) for workers, the government would be well-advised to ratify the related conventions nos. 155 and 187 for developing a comprehensive OSH system in the sector.

Finally, the owners of the RMG factories should take the leading role to keep their workers happy in the interest of improving industrial relations and establishing peace and stability in the sector.​

 

[Saif]

Why do RMG workers always get a raw deal?

Since its inception, the ready-made garment (RMG) industry has gone through many ups and downs over the last four decades. Now the industry has reached a stage where it can take pride in its achievements as the world's second-largest garment supplier as well as the main source of foreign income for

thefinancialexpress.com.bd

Why do RMG workers always get a raw deal?
Atiqul Kabir Tuhin
Published :
Oct 02, 2024 21:39
Updated :
Oct 02, 2024 21:39

Since its inception, the ready-made garment (RMG) industry has gone through many ups and downs over the last four decades. Now the industry has reached a stage where it can take pride in its achievements as the world's second-largest garment supplier as well as the main source of foreign income for Bangladesh. While Saudi Arabia, Venezuela, and Iran among others may take pride in their petroleum exports, Bangladesh is up there with RMG exports.

The apparel sector accounts for over 84 per cent of the country's total export earnings and employs around four million workers directly and many more millions indirectly. While the overall economy of Bangladesh has significantly benefited from the growth of the RMG sector, resulting in the emergence of a nouveau riche class, millions of workers who have contributed to the industry's success through their hard work, blood, sweat and tears remain trapped in a cycle of poverty and exploitation.

Their occasional outbursts of frustration for drawing attention to meet their needs are manifestations of the growing unrest in the RMG sector. Issues such as salary arrears, reluctance to pay mandatory festival bonuses, non-implementation of labour laws etc., plague many of the approximately 3,500 RMG factories in the country. A research report published by the Centre for Policy Dialogue (CPD) shows that Bangladeshi garment workers get the lowest monthly wages compared to other garment-producing countries like Cambodia, China, India, Indonesia and Vietnam.

That is understandable in many respects to keep prices down and to maintain international competiveness, but, seemingly, it is always at the expense of the garment workers - who get the short end of the stick and that cannot be right.

Of late, the International LabourOrganisation (ILO) has identified five key issues troubling Bangladesh's readymade garment (RMG) industry, and recommended reforms. These include amending the wage structure, labour law revisions, and establishing mechanisms for dispute resolution.

In 2023, during the latest minimum wage negotiations, workers demanded Tk 25,000, while owners proposed Tk 10,400. A comprehensive cost-of-living study by the Bangladesh Institute for Labour Studies (BILS) had shown that workers need at least 23,000 taka to stay above the poverty line. And yet, Tk 12,500 was finalised as minimum wage and workers were apparently forced to accept that through violence, lawsuits, and even gunfire. Four workers lost their lives, challenging the decision.

In 1994, the first wage board for Bangladesh garment sector was established, setting the minimum wage at Tk 930 per month. After 30 years and many substantial increases in the cost of living, this has been increased to a mere Tk 12,500, while revenue from garment exports surged from $223 million to over $40 billion during the same period.

Making profit is nothing bad and the industry would not exist without profit, but it seems to lack fair play when considering the plight of the workers. Repeated incidents of unrest and violence in RMG sector raise numerous questions. Why must workers continually risk their life and limb to press their demand for the implementation of minimum wages? Why is it not automatic, perhaps once yearly? Why does the demand for increase in pay and perks lead to severe consequences in the industrial sector? Why are owners permitted to suppress workers' demands by using violent force? As the RMG industry keeps Bangladesh afloat, why is not the government doing more to protect all those involved? Why, for example, are not the workers benefitting through a profit-share scheme?

Workers have every legitimate reason to be angry about the various injustices in wages and working conditions. It is said there is no organisation or independent trade union through which they can properly voice their concerns and grievances. Workers, many of whom are illiterate, find it extremely hard to express themselves and have their grievances addressed.

Following the horrific Rana Plaza collapse in 2013, international pressure led to the relaxation of the registration process to allow for the formation of trade unions in the garment industry. To date, 1,300 trade unions have been registered in this sector. A majority of these unions or committees are led by individuals loyal to the owners or an offshoot of the factory itself. Those who are not loyal face various forms of harassment after every movement. Most factory owners, understandably, are averse to the concept of unions, because they fail to recognise that healthy union activity is key to maintaining stable industrial relations. On the other hand some of the unions allegedly serve the interests of political parties rather than those of the workers, further undermining the workers' ability to seek fair treatment.

Lack of an effective labour court system in Bangladesh is another problem. The few labour courts that exist are ill-equipped to provide justice for workers. Institutional support for workers is virtually non-existent, and without a proper mechanism for addressing grievances, workers are left with little recourse but to take to the streets and risk life for their rights.

As the RMG industry is the mainstay of the economy, the government must show a greater interest and offer much better protection for the workers. The government and industry leaders must prioritise the establishment of a strong and effective institutional framework for setting wages and resolving disputes. Wage increases should be predetermined and enforced over fixed periods to prevent workers from resorting to protests. The practice of wage arrears, fraud, and deceit must be eradicated. ILO calls for amendments to the Bangladesh Labour Act to align with international standards, expanding coverage to all workers and simplifying trade union registration. In addition, the ILO urges the establishment of an alternative dispute-resolution institution and reform of the labour court system.

For the RMG industry to remain competitive on the global stage, ensuring workers' rights is not just a matter of moral obligation and justice, but an economic necessity. International trade is becoming more increasingly influenced by concerns about human rights and environmental sustainability. Consumers are forcing brands to become more selective, prioritising ethical supply chains. While everyone seeks quality garments cheap, they do not want to wear the guilt it was made in a sweatshop. Therefore, the industry must take proactive steps to improve workers' wellbeing and safety, moving beyond merely fulfilling basic obligations.​

 

[Saif]

Apparel exporters demand $10m in Debenhams dues

A platform representing three dozen local apparel manufacturers has demanded over $10 million payment for fashion items they supplied to the UK retail giant Debenhams.

www.thedailystar.net

Apparel exporters demand $10m in Debenhams dues

PHOTO: REUTERS

A platform representing three dozen local apparel manufacturers has demanded over $10 million payment for fashion items they supplied to the UK retail giant Debenhams.

At a press conference at the Economic Reporters Forum (ERF) in Dhaka yesterday, they said they will file a case against the local forwarder of the now-bankrupt British store chain unless the payment is made within 15 days.

Md Zahangir Alam, convener of the Debenhams vendors' community platform, said that due to the negligence of the forwarder Expo Freight Limited (EFL), they have not received the payment to date.

The 36 vendors were supplying readymade garments (RMG) to Debenhams, a 150-year-old UK-based public limited company.

As Debenhams was a highly reputable company in the UK and other Western markets, Alam said they were selling the goods through sales contracts.

"The payment terms were to surrender the bill of lading to the nominated forwarder, EFL in this case, after receiving the export proceeds in the bank," he said.

"We have been supplying the goods for the past decade following these terms," he added.

Alam said the 36 companies supplied garments worth $70 million before Debenhams went bankrupt due to the Covid-19 pandemic. "Out of the $70 million, the suppliers have received nearly $60 million over the last four years, but $10 million remains unpaid."

"Now, Expo Freight Limited is legally responsible for paying the arrears to the suppliers as it handled the shipments to the now-bankrupt British retailer Debenhams," he said.

"We have relentlessly tried to resolve this matter and to some extent, we have succeeded. But due to the negligence of the EFL, we have not received the export value to date," said Alam.

On April 9, 2020, Debenhams filed for liquidation in the UK and the court appointed an administrator.

Subsequently, the Bangladeshi vendors came together and formed the platform called the Debenhams Vendors Community.

Alam said the main objective of this community is to negotiate, liaise, realise the dues and make collective decisions regarding the goods lying in the port and transit.

He said that among the 36 suppliers, whose total export value exceeds $5 billion annually, many are small and medium-sized companies that cannot absorb such losses.

"These companies will face unrecoverable losses if the arrears are not paid on time," he added.​

 

[Saif]

Faulty NIDs deprive garment workers of welfare fund benefits

Many garment workers have been facing challenges in accessing financial benefits from the Central Fund for the industry because of inaccuracies in their national identity (NID) cards, analysts said yesterday.

www.thedailystar.net

Faulty NIDs deprive garment workers of welfare fund benefits

Although workers in the garment industry are entitled to many benefits, they often fail to avail them due to a lack of awareness. Many of them cannot even access the central welfare fund due to inaccuracies in their national ID cards. Photo: Star/File

Many garment workers have been facing challenges in accessing financial benefits from the Central Fund for the industry because of inaccuracies in their national identity (NID) cards, analysts said yesterday.

The Central Fund for the welfare of garment workers was set up in 2016, with the country's apparel makers contributing 0.03 percent of their export proceeds to the fund each fiscal year.

As per the conditions of the fund, the workers must submit their NIDs to take financial benefits from the fund.

However, at the end of the day, not all workers can access the money as their NID cards are littered with mistakes, speakers said.

They made the comments at a roundtable discussion, titled "Social Protection for RMG Workers in Bangladesh", jointly organised by The Daily Star and the UN Capital Development Fund at The Daily Star Centre in Dhaka.

According to the ministry sources, there is around Tk 1,000 crore in the Central Fund at present.

Md Abdus Samad Al Azad, director of the Central Fund under the Ministry of Labour and Employment, said his ministry plans to remove barriers in fund disbursement by correcting complexities related to Mobile Financial Services (MFS) and finding an alternative to NIDs.

He said faulty NIDs are the biggest factor depriving workers of social protection measures.

Azad added that payments from the Central Fund would gradually be digitised so workers could avail funds easily and without hassle.

Government officials, senior officials from different garment factories, international cooperation bodies, union leaders and officials from different NGOs also participated in the discussion, which was moderated by Tanjim Ferdous, in-charge (NGOs and foreign mission) of The Daily Star.

The Central Fund is one of many social protection measures for garment workers. Other such schemes include the Social Protection Programme for Unemployed Workers by the European Union and Germany, the National Social Insurance Scheme, the Employment Injury Scheme, the Mental Health Initiative for RMG Workers, the Mother and Child Benefit Program, Child Daycare Centers and the Universal Pension Scheme.

Unfortunately, most workers cannot enjoy such benefits as they lack awareness about these facilities. Bureaucratic hassles and complex processes present other major barriers.

While presenting the keynote paper, Shariful Islam Chowdhury, project analyst of UNCDF Bangladesh, said most RMG workers are unaware of such programmes.

He recommended increasing awareness, collaborating with industry associations, integrating factories with the universal pension scheme, and digitising the central fund so workers can benefit from these measures.

Masing Newar, assistant field officer of the World Food Programme, echoed Chowdhury's views.

Newar said her office offered social protection measures for garment workers, such as child and mother and nutrition programmes. But many do not know about these measures, so they do not avail of them.

Joly Talukder, vice-president of the Bangladesh Garment Sramik Trade Union Kendra, urged the government to publish a white paper on the Central Fund for more transparency.

ANM Saif Uddin, chairman of the Standing Committee on the International Labour Organization and Labour Affairs of the BGMEA, said the BGMEA had built eight schools in Dhaka and one in Chattogram that offer free education for the children of garment workers.

But most of the workers do not know about these facilities.

This is also the case for the eight healthcare centres in Dhaka and a full-fledged hospital in Chattogram. These institutions are run by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), but workers are unaware of them.

Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, suggested bringing all social protection measures under a central framework.

Such a move would ensure that workers can enjoy benefits and enhance monitoring by the authorities, he said.​

 

[Saif]

Boosting efficiency, image of RMG sector

The rapid expansion of readymade garments industry (RMGI) over the past four decades has made significant contribution to the socio-economic uplift of Bangladesh. It is also a matter of satisfaction that a majority of workers employed in this sector are female. At present, about 75 per scent RMG fa

thefinancialexpress.com.bd

Boosting efficiency, image of RMG sector
Helal Uddin Ahmed
Published :
Oct 08, 2024 00:27
Updated :
Oct 08, 2024 00:27

The rapid expansion of readymade garments industry (RMGI) over the past four decades has made significant contribution to the socio-economic uplift of Bangladesh. It is also a matter of satisfaction that a majority of workers employed in this sector are female. At present, about 75 per scent RMG factories are located in the Dhaka region, viz. Dhaka city, Savar, Ashulia, Gazipur and Narayanganj. But the recent turmoil in these factories have once again proved the need for maintaining a stable working environment through coordinated efforts and team-work of all stakeholders including the workers and owners.

Initiatives should be taken now to enhance the competitive edge and efficiency of the RMG sector for its sustainable growth. Loopholes in the regulatory framework should be addressed to reduce the time-lag in sending or receiving consignments. The time-frame for customs clearance should be reduced drastically and the whole exercise should be digitalised by shedding unnecessary dependence on manual procedures.

With the exception of a few units, most garments manufacturers in the country lack research and development (R&D) set-up. But the R&D teams in the factories of competitor countries are usually stronger. The local factories normally take 3 to 4 months for product development (from design to sample preparation). But countries like China spend only 15 to 30 days for the purpose. Lack of efficiency and weak productivity have become critical factors, as a result of which average production cost unnecessarily goes up, thereby offsetting the advantage of lower labour cost in Bangladesh.

Repairing and developing the road infrastructure at places like Ashulia and Gazipur have also become urgent now, as better road communication would decrease the time wasted during transportation of RMG consignments. Alongside adequate port facilities, the overall logistic framework including reliable supply of utilities like electricity should be ensured, so that all related activities including import of inputs and export of RMG products can be performed seamlessly without unnecessary delays.

In the backdrop of a rapidly changing market scenario across the globe, the entrepreneurs need to enhance their investments in automation and digitalisation, as production efficiency can be improved through adoption of modern technology and digital systems. Besides, value-addition can be enhanced through curtailing dependence on manual labour. For tapping the growth potentials, due importance should also be attached to the skill development of workers, which in turn would lead to enhanced productivity. These skills include communication cum technological knowhow and expertise. Moreover, ensuring a safe work-environment accompanied by fair wages and other benefits for workers is very important for fruitful team effort. A stable and motivated workforce can be maintained if workers' rights are upheld and regular dialogues are held between the factory management and trade union members.

The recent proliferation of online trading has added an element of unpredictability in RMG business. Many buyers prefer to do business online now instead of undertaking physical visits. Consequently, the nature of business is fast changing and smaller establishments have to compete with bigger ones on equal footing via the worldwide web for attracting buyers. The shape and form of retail marketing are also undergoing significant changes, and appropriate adjustments are needed to remain competitive. However, the big buyers usually maintain consistency in their sourcing, and usually do not make sudden or erratic moves.

The RMG products also need diversification in the light of a changing global scenario. A gradual shift towards sportswear, specialised apparels and dresses can aid in this move to high-value garments from that of low-value traditional ones. But items like shirts, trousers, jackets, t-shirts and sweaters still dominate the export basket of Bangladeshi RMG. Greater product diversification has therefore become urgent for improving the situation.

The power of innovation should also be applied in the use of fabrics and other ingredients. Utilising environment-friendly and sustainable fabrics will not only meet global expectations, but will also help Bangladesh in playing a leading role in sustainable fashion marketing across the globe. For this, good governance and policy supports have to be ensured. A stable political climate as well as neutral cum non-partisan business environment are essential for the growth of local RMG industry. Specifically, reforms should be undertaken in the banking, customs, and taxation sectors in order to ensure transparency, efficiency, and accountability. The industry should comply with the global standards for remaining competitive globally. Maintaining the highest quality through compliance with the standards of production and processes, and upholding labour rights and environmental sustainability are crucial for future growth of the industry.

Overall, the 'Bangladesh' brand should be projected in the right manner as a reliable supplier in the global market. The country's achievements in the area of sustainability should also be highlighted. For example, the leading role played by Bangladeshi RMG factories in green industrialisation can be publicised. This would also enhance Bangladesh's reputation as an ethical source. Besides, measures should be taken for ensuring fair prices from international buyers, which will also help in providing higher wages and improved work-environment for workers. This, in turn, may attract more skilled workers to the RMG industry.

The social and ethical considerations should be given top priority by the factory owners and the government. The image of Bangladesh's RMG industry will be automatically bolstered if corruption is curtailed and transparency in business processes cum official procedures are ensured. Regular dialogues between the employers and workers and strict adherence to ethical labour standards and fair management practices will help the industry in meeting social obligations and boosting its reputation worldwide.

For expanding the RMG exports to new and emerging markets, diplomatic initiatives may be undertaken by the government alongside BGMEA and BKMEA. Boosting exports to the potentially high-growth non-traditional markets will help reduce dependence on the traditional export markets like the EU and USA, and assist in overcoming associated risks. A competitive edge in the global market should be maintained through strengthening supply chain management - especially by reducing lead time and enhancing efficiency. This should include adoption of best practices and application of modern technology for optimal production.​

 

[Saif]

Some RMG work orders shifted to other countries for unrest

Some garment work orders have shifted to competitor countries as a result of the recent spell of labour unrest in major apparel manufacturing belts across Bangladesh.

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Some RMG work orders shifted to other countries for unrest
Square Group CEO Tapan Chowdhury says in conversation with ERF members

Although textile and garments is the biggest and most successful sector in terms of contribution to the economy, employment generation and women empowerment, businesspeople in the industry are facing some challenges due to labour unrest, said Tapan Chowdhury, chief executive officer of Square Group. Photo: Rajib Raihan

Some garment work orders have shifted to competitor countries as a result of the recent spell of labour unrest in major apparel manufacturing belts across Bangladesh.

Renowned entrepreneur and garment exporter Tapan Chowdhury made the remark during a conversation with members of the Economic Reporters' Forum (ERF) at its office in Dhaka yesterday.

Chowdhury, chief executive officer of Square Group, said his company, which produces garment items for leading clothing brands, had seen a portion of work orders shift to other countries, especially Sri Lanka, as buyers want to avoid uncertainty and ensure smooth and timely supply of goods.

However, it is expected that these brands will return with a handful of work orders for his company and Bangladesh as a whole if stability and normalcy are restored.

Chowdhury, also managing director of Square Pharmaceuticals, said the law-and-order situation in major garment-producing areas is better now than it was during the initial days after the interim government was formed.

Replying to queries, he said Bangladesh's graduation from the group of Least Developed Countries (LDCs) should be postponed as the sudden erosion of the preferential trade benefits may present challenges for businesses.

He added that investors had delayed plans to set up industries in the Active Pharmaceutical Ingredients (API) Industrial Park in Gazaria of Munshiganj as gas connections were yet to be provided.

He further said that Square Group plans to list more companies under the conglomerate on the stock markets if better opportunities arrive in the future, although he conceded they are now facing difficulties in managing their two listed companies.

"We are feeling very comfortable after a big change," he said regarding the political changeover and the business environment in the country.

"We are hopeful as the interim government's tenure is short and they want to bring a positive change. The advisers to the interim government are also saying that such an opportunity will not come again."

During a recent visit to the US to attend the United Nations General Assembly, chief adviser Prof Muhammad Yunus asked major clothing brands to source more garment items from Bangladesh, Chowdhury said.

The Square Group CEO also voiced his support for the action being taken by the interim government against corrupt businessmen.

He recalled how he was involved in the family business with his father, where he learned not just to manage day-to-day operations, but also the importance of values and ethics in running businesses.

Chowdhury also mentioned a few instances of how some leading pharmaceutical companies failed to survive due to their tendency to dodge taxes.

He said it was very unfortunate that the reforms adopted by the previous caretaker government were not continued by the immediate past government.

"I want to believe change will come. I hope the interim government will be successful. The political leaders should also know that power does not exist forever."

Although the textile and garment sectors are the biggest and most successful sectors in terms of contribution to the economy, employment generation and women empowerment, they have been facing some challenges due to labour unrest.

However, Chowdhury said the employees of Square are considered family members and this is the main strength of the company's values.

The workers, especially female workers, also have a huge contribution to the sector's success, he said.

"They spend their primes working in the garment sector and then contribute to their families, but it does not affect their productivity," he said, adding that female garment workers in Bangladesh are extremely disciplined.

"We want stability in the country. The decision of who will run the country will come through a vote," he added.

Large industries are investing in the heavy industrial sector and if the opportunity presents itself, Square Group also has plans to invest in large and heavy industries.

Since the county does not have a petrochemical industry, there is a lack of APIs.

Chowdhury added that the price of medicine is fixed through stringent consultation among regulators. As the drug administration monitors the process, companies cannot fix prices at will.

However, he said prices of oncology medicines are higher as most are imported.​

 

[Saif]

Bangladesh lags behind competitors in RMG export to the US

Instead of expanding the volume of export of the readymade garment products to the US, Bangladesh is falling behind its competitors in the sector in exporting to the country. Though the export of RMG products of all top five exporters to the US in the first eight months decreased, the amount of...

en.prothomalo.com

Bangladesh lags behind competitors in RMG export to the US
Staff Correspondent
Dhaka
Published: 13 Oct 2024, 19: 37

Workers at a readymade garment factory File Photo

Instead of expanding the volume of readymade garment exports to the US, Bangladesh is falling behind its competitors in this regard. Though the export of RMG products of all top five exporters to the US in the first eight months of the year decreased, the decrease for Bangladesh is larger.

This was revealed in the latest report of the Office of Textile and Apparel (OTEXA) of the US Department of Commerce.

It said the US traders imported apparel products worth USD 51.3 billion from various countries around the world in the first eight months this year. The amount is 4.11 per cent less than the corresponding time last year.

According to the OTEXA, Bangladeshi entrepreneurs exported RMG products worth $4.71 in the US markets in that time period which is 9.16 per cent less than the time last year. The amount of export was $7.29 billion between January and August last year.

Bangladesh is the third largest exporter with 9 per cent market share while the share of China is 21.18 per cent, the largest exporter of RMG products to the US. The country exported products worth $10.69 billion which is 2.98 per cent less than the time last year

Vietnam is the second largest exporter of RMG products to the US. The country is also gaining momentum fast in recuperating from the drop in exports. It exported products worth $9.56 billion from January to August this year. The amount was $9.66 in the previous year.

India and Indonesia are the fourth and fifth largest exporters of RMG products to the US. The exports of India to the country dropped by 1.47 per cent while the drop was 7.16 per cent from Indonesia.

Though the production and export of RMG products for three months was hampered due to the quota reform movement, student-people uprising, floods and labour unrest, the entrepreneurs remain hopeful of the US market due to the formation of the interim government with Nobel Laureate economist Dr. Muhammad Yunus at the helm.

President of the apex body of knitwear manufacturers, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Fazle Shamim Ehsan, told Prothom Alo, “The buying of essential goods not made in the US declined due to inflation. The foreign buyers are a bit worried over the ongoing unrest in the markets. But we will turn around if we can ensure some kind of good governance."

Responding to another question, Fazle Shamim Ehsan said, “We are hopeful about the US market.”

Given the positive global identity of the chief adviser of the interim government, Dr. Muhammad Yunus, he pointed out, “If we could take avail some tariff facilities from the US, our export volume will rise.”​

 

[Saif]

Garment export to US falls 9.16% in Jan-Aug

Data released from the Office of Textiles and Apparel (OTEXA) showed the fall

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Garment export to US falls 9.16% in Jan-Aug
Data released from the Office of Textiles and Apparel (OTEXA) showed the fall

Representational image. File photo

Garment export to the USA fell by 9.16 percent year-on-year to $4.70 billion in the January-August period of the current year because of a fall in demand for apparels in American markets, according to data from the Office of Textiles and Apparel (OTEXA).

The data on apparel and textile import from different countries has recently been released by the OTEXA, which undertakes industry analysis, contributes to US trade policy development, participates in trade negotiations and trade promotion and addresses trade barriers.

In combined, the textile and garment shipment from Bangladesh to the USA also fell by 8.98 percent year-on-year to $4.84 billion in the January-August period this year, the OTEXA data also said.​

 

[Saif]

37pc audits in RMG factories identify critical violations in working hours and wages

About 37 per cent of audits conducted in Bangladeshi readymade garment factories during the period of January to September 2024 revealed critical violations related to working hours and wages. More than half of all critical non-compliances in Bangladeshi factories during this period were related t

thefinancialexpress.com.bd

37pc audits in RMG factories identify critical violations in working hours and wages
QIMA REPORT
Monira Munni
Published :
Oct 18, 2024 09:12
Updated :
Oct 18, 2024 09:12

About 37 per cent of audits conducted in Bangladeshi readymade garment factories during the period of January to September 2024 revealed critical violations related to working hours and wages.

More than half of all critical non-compliances in Bangladeshi factories during this period were related to working hours and wages, compared to about one-third globally, according to a recent report.

"From January to September 2024, critical violations related to working hours and wages were found in 37 per cent of audited factories in Bangladesh, more than double the rate of 2023," according to QIMA report.

QIMA is currently operating in more than 100 countries offering supplier audit, laboratory testing and product-inspection services in Asia, Africa, Australia, Europe and North America and South America.

According to the report, the global incidence of such critical violations identified during factory audits was 16 per cent while the rate was 20 per cent and 11 per cent in China and Vietnam respectively.

The rate was 9.0 per cent and 17 per cent in Bangladesh in 2022 and 2023, according to QIMA report.

Citing its previous reports, QIMA said compliance with working hours and wages has long been a pressing issue in global supply chains and the latest audit findings echo trade union concerns, suggesting that worker compensation issues in Bangladesh are 'endemic and pervasive'.

More than a decade after the Rana Plaza tragedy, Bangladesh is no longer synonymous with deadly working conditions, it said, adding a year-long surge in protests by garment workers has highlighted ongoing issues with working hours, pay, and freedom of association in the Bangladeshi RMG sector.

The report, however, said despite these challenges, a recent agreement reached between the industry players and worker representatives in late September offers a glimmer of hope for improvement in Bangladesh's garment industry.

Bangladesh's textile and apparel sector has struggled throughout 2024, it said, adding with dozens of factories shutting down due to labour unrest, global brands and retailers have had to turn elsewhere to stock up for the holiday season.

QIMA data shows that demand for textile and apparel inspections in Bangladesh in Q3 of '24 only grew by 3.0 per cent YoY, at the same time as demand for the same services in China, India, Indonesia and Vietnam has spiked.

The inspections demand by global buyer in the third quarter of 2024 increased by 25 per cent in China, 49 per cent in Vietnam, 30 per cent in Indonesia while 65 per cent in India respectively, according to QIMA.

When asked for comments, Nazma Akter, president of the Sammilito Garment Sramik Federation, partly disagreed with the findings, saying that the report did not provide clear details about the violations and also failed to mention the number of factories involved.

She, however, said that there are issues related to timely monthly wage payments, which she believes are not much high. The latest wage structure has not been fully implemented in all factories, leading to wage issues across different grades, she added.

She also noted that the latest labour unrest in major industrial belts was the outburst of long political suppressions, including absence of freedom of expression.

She called on the stakeholders, including global buyers, to support the industry by continuing to source from Bangladesh to help sustain the country's economy and employment.​

 

[Saif]

Unrest in the RMG sector and harm to the economy

Bangladesh's reputation has been harmed as a brand in the outside world. Factories are being shut down due to the political unrest and labour demands

en.prothomalo.com

Unrest in the RMG sector and harm to the economy
Ashfaq Ahmed
Published: 18 Oct 2024, 14: 50

At an RMG factory Prothom Alo

The readymade garment sector is one of the major driving forces of Bangladesh's economy. This export-oriented sector is contributing to the GDP as well as generating employment.

According to the World Trade Organisation (WTO)'s report, 'World Trade Statistics 2023: The Insights and Trends', in 2023 Bangladesh remained at the second top place globally in readymade garment (RMG) exports, as in 2022. Exporting RMG less than Bangladesh by 7 billion dollars, Vietnam ranks third. And at the top place, as always, is China.

According to the WTO report, Bangladesh exported RMG worth 38 billion dollars (3,800 crore dollars) worth of readymade garments last year. In 2023 Bangladesh’s share of the global RMG market was 7.38 per cent. The year before, that is 2022, the volume of RMG exports totaled 45 billion dollars (4,500 crore dollars).

However, political unrest, the fall of the government and the recent labour unrest has created concern that a large chunk of the work orders may be diverted to other countries. This is being viewed as a potential crisis for this export sector.

If factories are closed, unemployment will mount, leading to further unrest. The office of the chief advisor has assured that the situation is under control. However, apprehensions persist that the miscreants may instigate trouble at any time

Down the years, Bangladesh’s RMG sector has steadily advanced to reach this position. All those involved in this sector have toiled tirelessly for the development and expansion of this industry. However, it has been noted that since the fall of the last government there have been certain efforts to disrupt the sector.

After the change in political landscape, labour unrest has emerged in Savar and Ashulia of Dhaka, Kaliakoir of Gazipur, Araihazar of Narayanganj and other industrial belts. Certain vested quarters are trying to use this unrest in their own interests.

Several reasons behind the labour unrest in the country’s RMG sector are coming to the fore. There is the conflict over the ‘jhut’ (waste fabric) trade, ownership problems, outstanding dues, instigation by outsiders and certain new demands being raised by the workers.

A look at the unrest in the RMG sector over the past one month will reveal that after the political changeover, the leaders and activists of various parties have begun to assert themselves. This has appeared in reports of a leading newspaper of the country too.

Even a large party like BNP has taken action against these elements following the allegations. The report mentions that certain names of the party’s leaders too, though action remains pending. One of the accused persons even reportedly demanded benefits from the export-oriented Fakir Group in Narayanganj.

If a look is taken at the problems that have befallen the RMG sector till mid-August, it will be seen that the RMG factories, textile mills and even spinning mills have been under lock and key.

Later, after acquiescing to extortion, these factories were restarted. Only when promised to be paid “toll”, did a group of these activists, under political shelter, reopen the locks of around 57 establishments in Narayanganj’s Araihazar, Satgram, Gopaldi and Duptara. Many of the accused have been expelled from the party.

Concerning these errant BNP men who have been using the party’s name, BNP’s senior joint secretary general Ruhul Kabir Rizvi has said, “I request all persons including the concerned establishments to be alert concerning such motivated aggression. These people do not represent BNP.”

It must be understood that after the mass uprising, a constructive mindset has emerged among the people of Bangladesh. The national elections will be held. The political parties like BNP need to undergo reforms to tally with the mindset of the people and only then can they be totally ensured of the people’s mandate.

No establishment gathers strength on its own. There are thousands of workers and international brands involved. Production worth millions of taka and the supply chain of the RMG and other industries and sectors, are involved too. If cases and attacks continue on political considerations in this manner, what message will this deliver to our buyers abroad! Who is benefitting from this unrest? It is for the government to find out. The government and all concerned quarters must pay attention to these signs and speedily find a solution.

The situation is gradually improving, but it will take time to fully recover. Former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Rubana Huq, recently told the media, the two-week closure has caused harm to the industry. But the biggest harm is that our buyers are moving elsewhere. The fact is within December, 25 to 30 per cent of the orders will move away. Bangladesh National Labour Federation's general secretary Marium Akhter feels that outsiders are behind the worker unrest. It is still unclear when this promising sector will be fully functional again.

Bangladesh's reputation has been harmed considerably as a brand in the outside world. The factories are being shut down due to the political unrest and labour demands. Production has been hampered. In the meantime, new orders in the RMG sector are being diverted to Vietnam, India, Myanmar and other such countries.

A recent report quoting figures from the US Department of Commerce's Office of Textiles and Apparel (OTEXA), said that in the eight months from January to August, Bangladesh exported readymade garments worth 4.71 billion (471 crore US dollars) In the corresponding period last year 7.29 billion US dollars of readymade garments were exported. Presently Bangladesh is the third highest exporter of readymade garments to the US.

Bangladesh at present faces serious economic damage. Money has been laundered in huge sums, banks have been riddled with uncontrolled corruption, inflation has spiralled and there has also been a spate of natural calamities, all contributing to pushing the economy to the brink.

At this juncture, if the readymade garment industry is chucked into dire straits, the entire country's economy will be harmed. If factories are closed, unemployment will mount, leading to further unrest. The office of the chief advisor has assured that the situation is under control. However, apprehensions persist that the miscreants may instigate trouble at any time.

* Ashfaq Ahmed is a journalist and writer​

 

[Saif]

RMG work orders returning as labour unrest subsides

After more than a month of disruption due to the political changeover and subsequent labour unrest in major industrial belts, international apparel retailers and brands are returning to Bangladesh with work orders for upcoming seasons.

www.thedailystar.net

RMG work orders returning as labour unrest subsides

After more than a month of disruption due to the political changeover and subsequent labour unrest in major industrial belts, international apparel retailers and brands are returning to Bangladesh with work orders for upcoming seasons.

Local garment suppliers said more Western retailers and brands are now visiting the factories and inquiring about production as normalcy has returned to the sector.

They said Western buyers are placing orders for the next autumn and winter seasons.

"I haven't noticed any major challenges in the inflow of work orders for the upcoming seasons," said Kutubuddin Ahmed, chairman of Envoy Legacy. "They haven't shifted orders away from here."

However, many factories are facing increased costs for having to make air shipments due to production delays caused by the unrest, Ahmed added.

He said a stable production environment is crucial for both suppliers and retailers.

During the unrest in September and early October, apparel factories in major industrial hubs were shuttered. Consequently, some summer orders have already been relocated to Bangladesh's rivals.

On top of the lost production and missed work orders for small and medium-sized factories, Ahmed said manufacturers are struggling as some banks are unable to open letters of credit (LCs) due to a liquidity crisis, US dollar shortage and reduced loan repayment capability of their clients.

Requesting anonymity, a major European buyer said their company did not shift any work orders out of Bangladesh due to the unrest.

"Production facilities are improving but uncertainty remains and our headquarters is concerned about the factories that were affected by the labour unrest," the buyer said.

Although buyers do not plan to reduce order quantities, overall volumes may not reach previous levels as any unrest has some negative consequences, he added.

"I have been meeting with buyers to assure them that normalcy has returned to the industrial zones and factories have resumed production," said Kalpan Hossain, managing director of Dekko Legacy Group.

Hossain's factories were shut down for 23 days in September and five days in October. This translated into a daily production loss of 80,000 pieces of trousers and jackets, valued at $4.8 lakh.

"Buyers want stability as they also need to ensure timely shipment of goods and profit," he said.

If a stable business and political environment continues, it is expected that upcoming seasons will be good for business, Hossain added.

"None of my buyers have shifted work orders so far," said Sharif Zahir, managing director of Ananta Group.

Zahir said he is hopeful that the upcoming seasons will be good as buyers are placing a significant number of orders now that normalcy has been restored.

The labour unrest was largely centred at manufacturing hubs around Dhaka. As a result, production at garment factories located in other areas was quite unscathed.

"I have work orders for the next seasons as the environment was relatively peaceful in Chattogram compared to other industrial zones in Dhaka," said Vidiya Amrit Khan, deputy managing director of Desh Group.

To sustain buyers' confidence, she said maintaining stability and a normal business environment are very important.

Requesting anonymity, a garment manufacturer from Rupganj upazila in Narayanganj said buyers are demanding discounts for their products due to shipment delays.

Apart from political stability and tight competitiveness, there are other challenges at the home front facing apparel manufacturers and textile millers. These include consistent gas and power supplies.

Khorshed Alam, chairman of Little Group, said his yarn production has declined 50 percent due to gas shortages and load shedding.

His Ashulia-based mill usually produces 24,000 pounds of yarn daily, but is now slumping to 12,000 pounds.

According to Alam, while the demand for yarn is increasing with the resurgence of garment work orders, inadequate gas supply remains a major obstacle.

Kyaw Sein Thay Dolly, managing director of Cloths R Us, said the labour unrest particularly hurt small and medium enterprises.

"Now both we and the buyers want to be optimistic," she said.

Khandoker Rafiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the unrest impacted autumn garment production.

He said the BGMEA will hold a meeting with representatives of international retailers and brands next week to reassure them of the restored business environment and the association's commitment to meeting deadlines.​

 

[Saif]

Garment industry lost $400m to worker unrest

The garment industry of Bangladesh has suffered collective production losses of nearly $400 million due to a series of labour unrest in September and early October, exporters said.

www.thedailystar.net

Garment industry lost $400m to worker unrest
BGMEA says

The garment industry of Bangladesh has suffered collective production losses of nearly $400 million due to a series of labour unrest in September and early October, exporters said.

However, the industry has now regained stability as the labour situation in major industrial belts improved, according to Khandoker Rafiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

He made this remark during a press conference at the BGMEA office in Dhaka yesterday.

Islam highlighted that maintaining law and order alongside discipline is now the major challenge for the garment industry as factories are currently operating as usual.

Also, the BGMEA chief urged the interim government to allow the use of gas from CNG refuelling stations as industrial units are not getting an adequate supply of the fuel.

Over the past few years, many garment and textile units have been using compressed natural gas (CNG) purchased from refuelling stations to power production equipment as they are not getting enough supply from government pipelines.

Furthermore, Islam asked the authorities not to disconnect factories from utility services, such as gas or electricity, for failing to pay bills for the next three months as most of them were affected by the labour unrest.

Additionally, he sought government intervention to lower bank interest rates to a single digit and suggested that a joint security force led by the army should be formed to ensure safety at the garment industrial belts.

Other requests placed by the BGMEA included allocating interest-free bank loans for 39 manufacturing units based in Ashulia that were unable to pay their workers' wages for September amid the unrest.

In regard to improving the ease of doing business, Islam sought the interim government's cooperation in expediting the loading and unloading activities at Chattogram port.

The BGMEA chief also urged to ensure that none of the reform or punitive measures for certain sectors, companies or individuals end up adversely impacting industrial operations in the country.

The interim government recently formed a taskforce involving officials of the Bangladesh Bank and National Board of Revenue to create a more business friendly environment.

Besides, the formulation of a sustainable power policy, which includes fixing a rational price for electricity and ensuring its adequate supply, is needed, he said.

The BGMEA's charter of demands included keeping the recycling of waste fabric, locally known as jhut, and other garment products away from the outside influence by formulating a separate policy.

Shams Mahmud, a director of the platform for apparel makers and exporters, said the BGMEA is continually engaging with foreign stakeholders to attract them more.

"We are constantly updating our partners and different brands on the evolving situation," he said. As a part of the dialogue, the BGMEA will be meeting with the American Apparel & Footwear Association, which represents over 1000 brands from the US.

"We will update them about the current situation," Mahmud added.

Abdullah Hil Rakib, senior vice president of the BGMEA, said they have asked the chief adviser to lobby the US for lowering the tariff on garment shipments as the Western nation has suspended its trade benefits under the Generalised System of Preferences (GSP) for all countries.​