[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

Cut in export incentives to weigh on textile sector

The government’s decision to further cut incentives on export receipts will badly hurt the domestic textile sector which bears an investment of $22 billion, a top leader of Bangladesh Textile Mills Association (BTMA) said yesterday.

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Cut in export incentives to weigh on textile sector
BTMA says

The government's decision to further cut incentives on export receipts will badly hurt the domestic textile sector which bears an investment of $22 billion, a top leader of Bangladesh Textile Mills Association (BTMA) said yesterday.

Moreover, the primary textile sector, which has been working as the garment industry's main backward linkage, will lose its competitiveness in international markets, said BTMA President Mohammad Ali Khokon.

The government needs to formulate a long-term roadmap for the textile and garment sector to survive and grow well into the country's graduation into a developing nation, he said.

Other comparator countries have already devised such plans and those are working well, he told a press conference at the BTMA office in Dhaka.

For instance, India graduated from least developed country (LDC) status in 2004 and still provides a lot of incentives as alternatives to direct cash subsidies for the growth of the textile and garment sectors, said Khokon.

As a result, the difference in the cost of production of a kilogramme of 30 count yarn in Bangladesh and India is currently 22 cents, he said.

Unfortunately, this advantage is leading to 13 percent of Bangladesh's annual demand for yarn being met with imports from India, causing the local primary textile sector to suffer, he added.

Indian yarn sellers are flooding the Bangladesh market with their cheap products and dominating local yarn manufacturers, he said.

Asked whether the BTMA would ask the government to enforce anti-dumping initiatives, Khokon said lodging complaints is not something that the BTMA should take up.

The government will deal with state level issues and in this case, it can be assisted by the apex trade body, the Federation of Bangladesh Chambers of Commerce and Industry, he said.

The BTMA chief also demanded the withdrawal of a Bangladesh Bank circular of June 30 this year.

The circular announced that cash subsidy on use of local yarn had been reduced to 1.5 percent from 4 percent as a part of preparations for the LDC graduation in 2026.

In January, the government had also reduced the cash subsidy on export receipts to some extent.

However, Bangladesh will enjoy trade benefits of the European Union (EU) as an LDC up to 2029 as the EU always offers graduating LDCs a grace period of three years, said Khokon.

Moreover, the 13th ministerial conference of the World Trade Organization (WTO) held in Abu Dhabi in February this year decided to extend the LDC trade benefits to graduating LDCs for three more years, he said.

So, still there is a long time to go until final LDC graduation. The government should continue the trade facilities up to that time for the growth of the economy, the BTMA chief also said.

The government should also formulate a long-term policy support to address challenges in the post LDC graduation period, he added.

Of the major costs behind the production of every kg of yarn in Bangladesh, gas accounts for 27 cents whereas it was 11 cents prior to a price hike, he said.

Similarly bank loan interest accounts for 11 cents whereas it was 8 cents around a year ago, he said.

The mills have been running at 50 percent capacity because of low gas pressure, he added.

The government also increased the price of gas to Tk 31 per unit for the textile sector but kept it at Tk 15 per unit for power plants, which is discriminatory, he added.

Currently, the textile sector needs 3,800 million metre cubic feet of gas per day (MMCFD) but the government can supply 2,631 MMCFD.

Damage inflicted during the recent Cyclone Remal has reduced the gas supply to 2,350 MMCFD, for which the local millers are facing a severe gas crisis.

Regarding cotton imports, the BTMA chief said since Bangladesh does not produce any cotton, the local millers import nearly $4 billion worth of the fibre, helping to turn the country into the second-largest garment exporter after China.

Along with the continuation of cotton imports, the government should also facilitate imports of man-made fibres as the demand for garment items made from artificial fibres has been rising worldwide and an opportunity has been created for the country, he said.​

 

[Saif]

Hazards of textiles' 'forever chemicals'

A recent study by the Environment and Social Development Organization (ESDO) and International Pollutants Elimination Network (IPEN) titled 'Persistent Threat: PFAS in textiles and water in Bangladesh' sheds light on a critical issue that demands immediate attention from policymakers and garment an

thefinancialexpress.com.bd

Hazards of textiles' 'forever chemicals'
ATIQUL KABIR TUHIN
Published :
Jul 06, 2024 21:36
Updated :
Jul 06, 2024 21:36

A recent study by the Environment and Social Development Organization (ESDO) and International Pollutants Elimination Network (IPEN) titled 'Persistent Threat: PFAS in textiles and water in Bangladesh' sheds light on a critical issue that demands immediate attention from policymakers and garment and textile industry leaders. The report reveals alarming levels of toxic PFAS (per- and polyfluoroalkyl substances) in surface and tap water samples collected near industrial areas, particularly those associated with the textile industry in and around Dhaka.

PFAS are a large, complex group of synthetic chemicals that have been used in consumer products around the world since aroind the 1950s. PFAS are widely used for their water and stain-resistant properties in various consumer products, including textiles. These chemicals, however, earned the nickname of 'forever chemicals' because scientists say they could take hundreds or even thousands of years to degrade long after their initial use. If PFAS leak into water, they could remain there for centuries. As the textile industry accounts for about 50 per cent of global PFAS use, Bangladesh stands at the epicentre of this environmental crisis as the world's second largest apparel manufacturer.

To address the issue, Dr. Shahriar Hossain, senior policy and technical advisor for ESDO and lead author of the study, said "Regulating thousands of PFAS chemicals one-by-one would take decades and leave our children at risk. We urgently need global controls on all PFAS chemicals as a class." His call for a class-based approach to banning PFAS chemicals is both practical and necessary. Given the complexity and sheer number of PFAS compounds, a piecemeal regulatory approach would be insufficient and dangerously slow.

The long-time health implications of exposure to PFAS so far known are well documented. These chemicals have been linked to fertility problems, developmental issues, thyroid disruption, weakened immunity, liver damage, and cancer. Despite these serious risks, the textile industry and policymakers have been slow to respond. The study detected PFAS in 87 per cent of the surface water samples collected, with many samples exceeding proposed regulatory limits by alarming margins. One sample from the Karnatali River in Savar contained PFAS levels more than 300 times above the proposed EU limit, with PFOA and PFOS levels thousands of times higher than Dutch advisory limits.

The study also highlights the significant influence of major international fashion brands sourcing products from Bangladesh. These brands have the power to drive change by demanding PFAS-free products and being transparent about the presence of these chemicals in their products. Some brands have already committed to eliminating PFAS, demonstrating that safer alternatives are available and viable. The textile industry must follow suit and prioritise public health and environmental sustainability over short-term economic gains. If necessary the government must force them to follow suit.

Siddika Sultana, executive director of ESDO in Bangladesh, rightly points out that "the fashion export industry should not get a free pass to contaminate our rivers, lakes, and taps with PFAS." The industry must be held accountable and stricter regulations are essential. Bangladesh currently lacks specific regulations on PFAS, a gap that policymakers must urgently address. Implementing a class-based ban on PFAS chemicals and setting stringent contamination limits are critical steps toward mitigating this pervasive threat.

Clean water is the essence of all life. Not just for humans, but also for animals and plants. It is the very foundation of a healthy ecosystem. Yet, Dhaka's rivers, once teeming with life, are now being polluted, strangled, and choked by industrial and human waste. This is not just a major concern for now, but also for our very survival and collective future. We need to stop the rot and veer away from our suicidal ways immediately. Industry, policymakers, and the public alike must work together to clean up Dhaka's water and ensure a healthy future for all.​

 

[Saif]

Bangladesh is a promising destination for business, BGMEA president tells Chinese delegation

BGMEA president SM Mannan (Kochi) has said with strategic location, political stability, growing infrastructure and logistics, Bangladesh is a promising destination for business and investment. He provided an insightful overview of Bangladesh’s vibrant apparel industry, highlighting its stra

thefinancialexpress.com.bd

Bangladesh is a promising destination for business, BGMEA president tells Chinese delegation
Published :
Jul 07, 2024 20:21
Updated :
Jul 07, 2024 20:21

BGMEA president SM Mannan (Kochi) has said with strategic location, political stability, growing infrastructure and logistics, Bangladesh is a promising destination for business and investment.

He provided an insightful overview of Bangladesh's vibrant apparel industry, highlighting its strategic shift towards manufacturing high-value woven and man-made fibre (MMF)-based garments.

A delegation representing leading Chinese textile and apparel enterprises visited the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Sunday to explore collaboration opportunities in the textile and apparel sector, UNB reports.

Led by Huang Liansheng, Managing Director of the China Textile Industrial Corporation for Foreign Economic and Technical Cooperation (CTEXIC), the 15-member delegation engaged in fruitful discussions with the leaders of BGMEA including President SM Mannan (Kochi), Senior Vice President Khandoker Rafiqul Islam, Vice President Abdullah Hil Rakib and Vice President Rakibul Alam Chowdhury.

The meeting focused on exploring investment opportunities, and expanding business horizons between Bangladesh and China in the textile and apparel industry.

Mannan (Kochi) highlighted the increasing investment by Bangladeshi manufacturers in technology upgradation to enhance production capabilities and efficiency in manufacturing high-end complex garment items.

The BGMEA leaders underscored the potential for Chinese investment in high-end textiles and backward linkage industries in Bangladesh, which promise mutual benefits for both nations.

They also emphasised China's support in enhancing capabilities through the exchange of knowledge and technical expertise.

Huang Liansheng, Managing Director of CTEXIC, expressed the delegation's purpose during their visit to Bangladesh, emphasizing their interest in assessing the business and investment environment and policies of the country.

"During our visit to various factories, we are pleased to witness significant improvements in the working environment in Bangladesh. The workers here exhibit a positive and energetic attitude," he remarked. "Many Chinese companies are eager to explore business and investment opportunities in Bangladesh."

Huang Liansheng further said, "We intend to share our positive experiences with other Chinese companies that have not yet ventured into Bangladesh, encouraging them to explore the business potential this country offers."

BGMEA Directors Md Ashikur Rahman (Tuhin), Shams Mahmud, Rajiv Chowdhury, Abrar Hossain Sayem, Md Jakir Hossain, Md Nurul Islam, Md Rezaul Alam (Miru), M Ahsanul Hoq, Mohammed Rakib AL Naser, and Md Absar Hossain were present at the meeting.​

 

[Saif]

Knitting industries call indefinite strike for price hike

Production shutdown begins today

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Knitting industries call indefinite strike for price hike
Production shutdown begins today

The knitting industries across the country have called for an indefinite strike demanding a price hike of the raw materials they produce for the knitwear sector.

Production will remain shut in the factories from July 15 and it will continue until further notice, Md Selim Sarwar, president of Bangladesh Knitting Owners Association (BKOA), said in a statement.

Over 700 knitting industries, which supply knit fabrics, collar, needles, button and needle oil, demanded the raise because of increasing US dollar rates and gas and power prices.

These industries supply nearly 70 percent of the fabrics that are used in export-oriented knitwear garment factories, said Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

"Their demand for a price hike of their goods is logical, but they have not discussed the issue before going for the production shutdown in their factories."

Instead of calling a strike, these industries should sit with the knitwear manufacturers as the prices of those goods need to be increased, he said.​

 

[Saif]

How our RMG industry empowered women

The RMG industry has provided lakhs of women, with their first formal employment opportunities.

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How our RMG industry empowered women

FILE PHOTO: STAR

Over the past few decades, Bangladesh has emerged as a global hub for the ready-made garment (RMG) industry. The sector has played a pivotal role in transforming the socioeconomic landscape of the country. At the heart of this transformation is the empowerment of women, who make up the vast majority of the RMG workforce. A report by the International Labour Organisation (ILO) reveals that, as of 2020, our RMG sector employs around 32 lakh women. This sector's growth has created numerous job opportunities for Bangladeshi women, contributing to their economic empowerment while also playing a vital role in the growth of the economy.

The RMG industry has provided lakhs of women, particularly from rural areas, with their first formal employment opportunities. This shift from informal, often agricultural work, to formal employment in garment factories has had profound implications for their economic status and independence.

Earning a regular income has allowed women RMG workers to contribute to their household finances, often making them primary breadwinners. This financial independence has given them decision-making power within their families and communities. These women now have the means to invest in their children's education, healthcare, and better living conditions, leading to a positive cycle of development and improved quality of life.

Employment in the garment sector has also facilitated skills development. Many women enter the industry with little or no formal education. Through on-the-job training and experience, they acquire valuable skills in sewing, quality control, and production management. Some factories also offer literacy programmes and vocational training, further improving their capabilities and future employment prospects.

Beyond economic benefits, the RMG industry has been instrumental in fostering social empowerment of women in Bangladesh. By stepping into the workforce, women have challenged traditional gender roles and norms that often confined them to domestic duties. The presence of women in factories has gradually shifted societal perceptions of women's roles as well. As more women work outside home, the acceptance of women as economic contributors has increased.

Working in the garment industry has also facilitated greater social mobility for women. Employment has enabled women to move from rural areas to urban centres, exposing them to diverse cultures and ideas. This exposure has broadened their horizons, increased their awareness of rights and opportunities, and inspired many to pursue further education and career advancements.

However, this growth is not without challenges. Workers often face issues such as stagnated wages, long working hours, and challenging working conditions. These challenges have also sparked advocacy and efforts to improve labour rights and working conditions in the industry. Indeed, the rise of the garment sector has led to the growth of labour unions and advocacy groups fighting for workers' rights. These organizations have been instrumental in negotiating better wages, improving working conditions, and ensuring compliance with the labour law. Women workers have played a crucial role in these movements, often leading protests and strikes to demand fair treatment.

The Bangladesh government, along with international bodies and NGOs, has taken steps to address these challenges. The government had to take initiatives such as the Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety to improve factory safety standards following the Rana Plaza disaster in 2013. Additionally, programmes aimed at promoting fair wages and gender equality in the workplace have been introduced, further supporting the rights of female garment workers.

Women's increased economic participation has contributed to community development. As women invest in their families and communities, there is a noticeable improvement in areas such as health, education, and infrastructure. Empowered women are more likely to participate in community decision-making processes, advocating for issues such as clean water, sanitation, and better schools.

I truly believe that Bangladesh's RMG industry is a testament to the transformative power of employment in empowering women and lifting them out of poverty. While challenges remain, the strides made in economic and social empowerment, skills development, and advocacy for rights are undeniable. As the industry continues to evolve, it holds the potential to further enhance the lives of crores of women, driving not only the economic growth, but also social progress and gender equality in Bangladesh.

Mostafiz Uddin is the managing director of Denim Expert Limited. He is also the founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).​

 

[Saif]

Bangladesh may see fastest growth in cotton consumption: report

Bangladesh and Vietnam are expected to experience the fastest growth in cotton consumption and trade over the decade due to their competitive labour and production costs, which will lead to significant expansions in their milling capacities, according to a global report...

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Bangladesh may see fastest growth in cotton consumption: report
Moinul Haque 15 July, 2024, 22:42

A worker oversees a cotton processing machine at a factory in Habiganj recently. Bangladesh and Vietnam are expected to experience the fastest growth in cotton consumption and trade over the decade due to their competitive labour and production costs, which will lead to significant expansions in their milling capacities, according to a global report. | New Age photo

Bangladesh and Vietnam are expected to experience the fastest growth in cotton consumption and trade over the decade due to their competitive labour and production costs, which will lead to significant expansions in their milling capacities, according to a global report.

The report titled 'OECD‑FAO Agricultural Outlook 2024‑2033' said that over the next decade, global consumption of raw cotton was projected to increase by 1.7 per cent annually, driven by population growth and rising incomes in middle- and low-income countries.

The demand in the textiles and apparel sectors, as well as competition from substitutes, would remain key factors influencing raw cotton consumption, said the outlook, a collaborative effort by the Organisation for Economic Co-operation and Development and the Food and Agriculture Organisation of the United Nations.

The report projected that the global cotton trade would expand by 2.1 per cent annually, reaching 12.4 million tonnes by 2033, driven largely by increased mill use in Bangladesh and Vietnam, which heavily rely on imports to support their expanding textile sectors.

It also said that imports of raw by Bangladesh and Vietnam would grow by over 3 per cent annually, significantly contributing to global trade dynamics.

The OECD-FAO Agricultural Outlook said Bangladesh's mill consumption of cotton would increase to 2.42 million tonnes, which was 1.71 million tonnes in 2023.

The report showed that the country's import share of cotton would be 18 per cent in 2023 while the China would gain the highest 23 per cent of global share.

The United States would remain the largest exporter, with its share of world trade reaching 31 per cent by 2033, it mentioned.

Global cotton production is projected to steadily increase to 29 million tonnes by 2033, marking a 17-per cent rise from 21.14 million tonnes in the base year of 2004.

The growth will primarily stem from key producers; India is expected to contribute approximately 38 per cent to the global increase, followed by the United States (27 per cent) and Brazil (21 per cent).

The report also said that the reliance on imports, coupled with the projected growth in consumption, underscored Bangladesh's crucial role in the global cotton market.

According to the outlook, the phase-out of the Multi-Fibre Arrangement in 2005 initially favoured Chinese textile producers, but Bangladesh and Vietnam saw robust growth in their textile industries driven by abundant labour, low production costs and government support measures.

It said that Vietnam's accession to the World Trade Organisation in 2007 and significant foreign direct investments, particularly from Chinese entrepreneurs, further boosted its textile sector.

Additionally, free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement facilitated greater market access for Vietnamese textile exports.

Similar foreign investments and FTAs contributed to Bangladesh's emergence as a major global player in textiles.

Furthermore, the report also said that the US-China trade dispute increased mill use in Bangladesh and Vietnam, driving their textile industry expansions.

In Bangladesh, investments in spinning capacity driven by increasing domestic demand for yarn and fabric are expected to raise cotton fibre consumption by 3.3 per cent annually, solidifying its position in the global textile market and significantly contributing to its economic development, the outlook observed.

Despite this shift, China is expected to retain its position as the largest cotton processing country in 2033, followed by India, with annual consumption growth projected at 0.9 per cent and 1.5 per cent respectively over the next decade.

According to the outlook, the global cotton production would grow as a result of improved yields and higher compliance with sustainable standards.

The leading producing countries — India, China, the United States, Brazil and Pakistan — are expected to account for about 77 per cent of global output by 2033.

The report identified that over the past decades, global demand for textiles fibres has sharply increased, driven mainly by population and income growth, particularly in low- and middle-income countries and the expanding demand has been largely supplied by chemical fibres.

Synthetic fibres offered diverse advantages over cotton, such as durability, wrinkle resistance, moisture-wicking properties and competitive pricing, leading the textile manufacturing industry to increasingly favour them over cotton fibres, it said.

As a result, global consumption of natural fibres, including cotton, reached its peak at 26.5 million tonnes in 2007, but declined to approximately 24.4 million tonnes in the period from 2021 to 2023.

Since the early 1990s, non-cotton fibres have steadily gained market share, reaching 78.2 per cent in 2023, while the cotton's share declined to 21.8 per cent, the report showed.

It also said that per capita consumption of non-cotton fibres continued to rise significantly, contrasting with stagnant or declining trends in per capita cotton consumption in recent years.

According to the Bangladesh Textile Mill Association, the country's cotton imports in the financial year 2023-24 stood at 7.5 million bales.​

 

[Saif]

Garment sector reeling from shutdown

DBL Group, a leading garment exporter, usually ships apparel worth around $50 million each month.

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Garment sector reeling from shutdown

Most garment and textile factories reopened yesterday after being kept shut for four days due to violence centring the quota reform movement and the imposition of a nationwide curfew. The units are now racing to meet the strict lead times set by international buyers. The photo was taken at a garment factory in the capital's Jurain yesterday. Photo: Palash Khan

DBL Group, a leading garment exporter, usually ships apparel worth around $50 million each month.

But this month, their shipment will fall by at least 30 percent since production had to be halted following a spell of violence centring the quota reform movement and the government's imposition of a nationwide curfew.

Being a large group, DBL has its own production facilities, including spinning and dyeing units alongside factories for production of garments and accessories.

However, all their units were shut because of the violence over the past four days. At the same time, a few goods-laden trucks were waiting at the Chattogram port to unload export cargo.

"So, the losses are enormous," said DBL Group Managing Director MA Jabbar, adding that the biggest blow was the dent to the confidence of international clothing retailers and brands.

DBL Group is not alone.

As production remained halted for four days, all small, medium and large garment exporters faced similar challenges.

Moreover, business owners could not contact international business partners because of an internet blackout since July 18. However, as broadband internet services gradually began to come back online since Tuesday night, the situation has been improving.

The impacts of the shutdown were felt more acutely by small and medium factories, which cannot afford big losses given their comparatively weaker financial strength.

A factory owner in Rupganj, who ships T-shirts and polo shirts worth $6 million each month to American and Canadian retailers, could not timely receive raw materials, sourced from both at home and abroad.

The unit needs at least $3 million worth of raw materials each month, including yarn, which accounts for 70 percent of the total raw material requirement, chemicals and fabrics.

Although the factory owner placed orders with a few local spinners and millers for yarn and fabrics, they could not supply the raw materials as transport operators stayed off the roads fearing violence.

Effectively, the shutdown put factory owners in a double bind because they could neither contact buyers nor continue production.

This is the peak time to confirm prices for goods to be shipped next summer and spring, but the owner could not send quotes online due to the internet blackout.

Now, more money will have to be spent since employees will have to work overtime in order to adhere to the strict lead time set by international buyers, the owner said, asking not to be named.

There were hopes that business would regain momentum from July onwards compared to previous seasons, when the impacts of the Covid-19 pandemic, Russia-Ukraine war, and high inflationary pressures took a toll on business. Instead, a new disruption has shaken up the sector, the owner added.

Syed M Tanvir, managing director of Pacific Jeans, a leading denim exporter based in Chattogram, shared a similar experience.

Tanvir declined to comment on details regarding losses, only stating that they were huge. He said their factories have been closed since Saturday, adding that the supply chain was also severely disrupted.

The lull in production at garment units has also adversely impacted those involved in the primary textile sector, including the main suppliers of yarn, fabrics and other raw materials.

Hundreds of tonnes of unsold yarn have piled up in mills due to the shutdown, transport operators' reluctance to carry goods and a fall in demand.

Fazlul Haque, managing director of Israq Spinning Mills, said he usually sells 100 tonnes of yarn each day. But unsold yarn began piling up before the beginning of the shutdown. At present, the situation has been exacerbated and there is a stockpile of over 2,000 tonnes of yarn at his factory.

Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA), said huge losses were incurred, adding that an assessment was ongoing. The BTMA called a meeting of the mill owners today to get more information about losses from owners, he said.

However, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has already completed its primary assessment of losses, saying that they amounted to Tk 6,400 crore over the past four days.

BGMEA President SM Mannan Kochi said that garment factories would have to pay around Tk 1,000 crore to workers despite no work being done over the past four days.

The amount of losses in the garments accessories sector is also high, he added.

According to the BGMEA, nearly 950 trucks with exportable garment items were waiting at the Chattogram port to be unloaded.

Garment and textile mills resumed operations yesterday, with workers and officials using their official identity cards as curfew passes.​

 

[Saif]

RMG exporters in a race against time to offset losses

Local apparel exporters are in a frantic race to recover the losses they incurred during the latest spell of violence centring the quota reform movement and nationwide curfew, with international retailers and brands pressuring them to ensure timely delivery of goods.

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RMG exporters in a race against time to offset losses

Photo: Star/File

Local apparel exporters are in a frantic race to recover the losses they incurred during the latest spell of violence centring the quota reform movement and nationwide curfew, with international retailers and brands pressuring them to ensure timely delivery of goods.

Following the shutdown of factories and mills for four days, apparel exporters are planning to keep their production units open on Friday and pay overtime bills to meet lead times as they believe increasing productivity can offset a portion of losses.

Due to the situation over the past week, suppliers had to cancel hundreds of pre-scheduled meetings and factory inspections. They also could not communicate with foreign buyers due to an internet blackout, which began on July 18 and persisted until July 23.

The disruption in production, delivery and shipment took place at a time when the sector is struggling to recover its international trade.

Bangladesh's garment shipments fell 5.2 percent to $33.04 billion in the July-May period of the last fiscal year compared to the same period a year prior, according to data from the Bangladesh Bank.

International buyers are also piling pressure on apparel exporters to ship goods quickly as they have to fill their stores with new designs ahead of Christmas, the biggest retail sales extravaganza in the Western world.

The months of July, August and September are the peak time for the shipment of goods to be sold during Christmas.

"Buyers do not want to hear about any crisis. They want on-time delivery of goods," said a garment exporter who ships T-shirts and polo shirts to the US and Canada.

The global apparel supply chain has been struggling to recover from the severe fallout of the Covid-19 pandemic, the Russia-Ukraine war, and historic inflationary pressure on Western consumers.

It was dealt another blow this year in the form of the Red Sea crisis, which triggered commercial vessel operators to nearly double shipping charges.

The shipment of goods from Bangladesh to Europe is taking at least a month more than in previous times due to the crisis, which has forced commercial vessel operators to forgo the traditional route through the Suez Canal and navigate an additional 3,500 kilometres around the Cape of Good Hope in Africa.

As such, in many cases, international clothing retailers and brands are asking for expensive air shipments so goods can reach stores timely.

If a kilogramme of garment is sent to Europe through waterways, it costs around 10 cents or less. But if the same shipment is sent through air from Dhaka airport, it costs more than $4.

An apparel exporter, asking not to be named, said: "I have planned to keep my factory open on Friday so I can ship goods timely and avoid work order cancellations and expensive air shipment."

However, another exporter said it would be difficult to cater to the work orders because of a raw material shortage, which happened because goods could not be transported to factories over the past week.

Faruque Hassan, managing director of Giant Group, said his American buyers could not place work orders during the past week. So, he sent two of his officers to the US so that he does not lose business.

It will take more than one month to overcome the losses of one week, he lamented, adding that port, customs and transport services should be expedited so the business can run smoothly.

"My buyers are yet to seek discounts or cancel orders, but I am sure that I have to make a lot of air shipments to meet deadlines," said another major exporter, seeking anonymity.

Overtime is the main measure to recover losses, he said, adding that customers are not willing to accept any delays in shipment as they need goods quickly to prepare for Christmas.

Mohammad Ali Khokon, president of Bangladesh Textile Mills Association, said the primary textile sector, which includes spinning, weaving, dyeing and finishing activities, lost $58.8 million over the last six days because of shutdown and internet blackout, which is about $9.8 million per day.

Although buyers are not cancelling work orders or seeking discounts, they are putting a pause on work orders or delaying them, which is creating a stockpile of yarn and fabrics in mills.

Khokon also sought a government waiver from extra port charges during the shutdown.

SM Mannan Kochi, president of the Bangladesh Garment Manufacturers and Exporters Association, said he would sit in a meeting in a day or two with the international buyers and request them to not cancel work orders or seek discounts.​

 

[Bilal9]

RMG exporters in a race against time to offset losses

Local apparel exporters are in a frantic race to recover the losses they incurred during the latest spell of violence centring the quota reform movement and nationwide curfew, with international retailers and brands pressuring them to ensure timely delivery of goods.

www.thedailystar.net

RMG exporters in a race against time to offset losses
View attachment 7097
Photo: Star/File

Local apparel exporters are in a frantic race to recover the losses they incurred during the latest spell of violence centring the quota reform movement and nationwide curfew, with international retailers and brands pressuring them to ensure timely delivery of goods.

Following the shutdown of factories and mills for four days, apparel exporters are planning to keep their production units open on Friday and pay overtime bills to meet lead times as they believe increasing productivity can offset a portion of losses.

Due to the situation over the past week, suppliers had to cancel hundreds of pre-scheduled meetings and factory inspections. They also could not communicate with foreign buyers due to an internet blackout, which began on July 18 and persisted until July 23.

The disruption in production, delivery and shipment took place at a time when the sector is struggling to recover its international trade.

Bangladesh's garment shipments fell 5.2 percent to $33.04 billion in the July-May period of the last fiscal year compared to the same period a year prior, according to data from the Bangladesh Bank.

International buyers are also piling pressure on apparel exporters to ship goods quickly as they have to fill their stores with new designs ahead of Christmas, the biggest retail sales extravaganza in the Western world.

The months of July, August and September are the peak time for the shipment of goods to be sold during Christmas.

"Buyers do not want to hear about any crisis. They want on-time delivery of goods," said a garment exporter who ships T-shirts and polo shirts to the US and Canada.

The global apparel supply chain has been struggling to recover from the severe fallout of the Covid-19 pandemic, the Russia-Ukraine war, and historic inflationary pressure on Western consumers.

It was dealt another blow this year in the form of the Red Sea crisis, which triggered commercial vessel operators to nearly double shipping charges.

The shipment of goods from Bangladesh to Europe is taking at least a month more than in previous times due to the crisis, which has forced commercial vessel operators to forgo the traditional route through the Suez Canal and navigate an additional 3,500 kilometres around the Cape of Good Hope in Africa.

As such, in many cases, international clothing retailers and brands are asking for expensive air shipments so goods can reach stores timely.

If a kilogramme of garment is sent to Europe through waterways, it costs around 10 cents or less. But if the same shipment is sent through air from Dhaka airport, it costs more than $4.

An apparel exporter, asking not to be named, said: "I have planned to keep my factory open on Friday so I can ship goods timely and avoid work order cancellations and expensive air shipment."

However, another exporter said it would be difficult to cater to the work orders because of a raw material shortage, which happened because goods could not be transported to factories over the past week.

Faruque Hassan, managing director of Giant Group, said his American buyers could not place work orders during the past week. So, he sent two of his officers to the US so that he does not lose business.

It will take more than one month to overcome the losses of one week, he lamented, adding that port, customs and transport services should be expedited so the business can run smoothly.

"My buyers are yet to seek discounts or cancel orders, but I am sure that I have to make a lot of air shipments to meet deadlines," said another major exporter, seeking anonymity.

Overtime is the main measure to recover losses, he said, adding that customers are not willing to accept any delays in shipment as they need goods quickly to prepare for Christmas.

Mohammad Ali Khokon, president of Bangladesh Textile Mills Association, said the primary textile sector, which includes spinning, weaving, dyeing and finishing activities, lost $58.8 million over the last six days because of shutdown and internet blackout, which is about $9.8 million per day.

Although buyers are not cancelling work orders or seeking discounts, they are putting a pause on work orders or delaying them, which is creating a stockpile of yarn and fabrics in mills.

Khokon also sought a government waiver from extra port charges during the shutdown.

SM Mannan Kochi, president of the Bangladesh Garment Manufacturers and Exporters Association, said he would sit in a meeting in a day or two with the international buyers and request them to not cancel work orders or seek discounts.​

It's only been about a week's worth of delays, I am sure the factories will bounce back into production nicely.

What will not be recovered however is the lives lost because of this lady's bullheaded attitude and greed. People will not forget this easily. There will be a high cost exacted from her and her sponsors.

 

[Saif]

It's only been about a week's worth of delays, I am sure the factories will bounce back into production nicely.

What will not be recovered however is the lives lost because of this lady's bullheaded attitude and greed. People will not forget this easily. There will be a high cost exacted from her and her sponsors.

I wonder why the Bangladeshi entrepreneurs are not establishing factories to manufacture textile machineries. Textile is the largest industry in Bangladesh and the annual import of textile machineries from abroad stands at $4 billion. So, local production of textile machineries could save the country $4 billion a year.

 

[Saif]

RMG factories resort to weekend production to minimise loss

The garment and textile millers kept factories open on last Friday in an effort to meet the sharp deadline set by their international retailers, as the latest weeklong countrywide violence ate up four vital days of their peak production season.

www.thedailystar.net

RMG factories resort to weekend production to minimise loss

Garment makers are desperately trying to meet deadlines as July, August and September are the peak season for shipping goods to buyers. Photo: Palash Khan

The garment and textile millers kept factories open on last Friday in an effort to meet the sharp deadline set by their international retailers, as the latest weeklong countrywide violence ate up four vital days of their peak production season.

Amid the perennial inadequate supply of gas and power outages, last week's internet shutdown came as a major challenge for the manufacturers, as they failed to send the inspection reports to their buyers online, which they have to do regularly.

The local garment manufacturers are frantically trying to cover up the losses as July, August and September are the peak months for shipping goods to the western buyers, which they will sell in the upcoming Christmas, the biggest retail sales season in the western world.

Many owners are also running their factories for additional hours, using overtime to adhere to the strict lead time in an effort to avoid going for expensive air shipments, giving big discounts or cancellation of work orders from the buyers.

The violence centring the quota reform movement eroded the foreign retailers' confidence in Bangladesh to a great extent, as many of the local garment suppliers have received 30 percent to 40 percent fewer work orders than usual as the buyers are following a go-slow policy.

Consequently, the international retailers and brands did not place fresh work orders and also did not confirm the price level for the goods meant for the next summer and spring, which they were supposed to do last week, the exporters said.

"I have been running my unit even on Friday as I have counted a huge loss because of the four-day factory shutdowns following the violence," said a garment exporter asking not to be named.

However, the exporter could not run the factory on Friday in full swing because of long power cuts.

"I am worried about how I will pay the workers' July salary as I made a loss this month and I failed to confirm goods' prices due to the internet disruption," the exporter said.

Shaif Ullah Mansur, managing director of Chattogram-based Mellow Fashions Ltd, said he used to run night shifts in his factory in peak production seasons when pressure from the buyers increases.

But this year he preferred not going for night shifts amid fears of being affected by violence although the work pressure is immense now. Mansur said the monthly income from his 800-worker factory is Tk 5 crore and he lost Tk 1 crore of his monthly income because of the weeklong violence.

"My American buyers are now asking me whether I am capable of supplying the goods in time if new work orders are placed."

Mohammad Zaber, managing director of Noman Group, the single largest textile and garment exporter of Bangladesh, said his company lost 40 percent of the monthly work orders because of the factory and mill shutdown and internet suspension.

This is the peak season for Zaber's company for the confirmation of work orders for the next summer and spring seasons.

He said his company has been communicating with the buyers for a time extension for shipment. Moreover, the shipment time extension does not end the problem, he said.

The commercial shipping vessels, which carry the export goods, have to follow a tight global schedule to meet the increased competitiveness since the beginning of the Covid-19 pandemic, the Russia-Ukraine war and the Red Sea crisis, he said.

Instant communication is very important in garment trade and both the buyers and suppliers use WhatsApp now, but the sad part is the service is down now, he added.

Two garment exporters said they lost one million pieces of garment production each during the last weeklong violence and now he is working day and night to cover up the losses and ship goods timely.

Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association, said many factory managements ran their units on Friday but still many of them will have to face air shipment.​

 

[Saif]

Govt to waive port demurrage for RMG raw materials

The shipping ministry yesterday announced that it would waive demurrage charges for imported containers carrying accessories and raw materials for the readymade garment sector which could not be delivered from the Chattogram port as operational activities were hampered for the past seven days.

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Govt to waive port demurrage for RMG raw materials

The shipping ministry yesterday announced that it would waive demurrage charges for imported containers carrying accessories and raw materials for the readymade garment sector which could not be delivered from the Chattogram port as operational activities were hampered for the past seven days.

Violence centring the quota reform movement, the government's imposition of a nationwide curfew, and a five-day internet blackout prevented the goods from being delivered on time from the country's premier seaport.

A press release issued by the shipping ministry's Senior Information Officer Md Jahangir Alam provided the update, but it did not specify a timeframe.

State Minister for Shipping Khalid Mahmud Chowdhury announced the decision at a meeting with a delegation of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) at his office in Dhaka yesterday, the release said.

BGMEA President SM Mannan led the delegation.

During a visit to the port on July 25, the state minister assured the media that the government would waive demurrage charges for delayed delivery of imported containers.

Addressing the meeting with the BGMEA yesterday, the state minister said the port remained operational despite the turmoil of the past week.

But due to the internet blackout, which affected the functioning of the port and customs authority, garment exporters failed to take timely delivery of their import consignments from the port, said the minister.

He said the decision was taken with the aim of assisting RMG factories to continue import and export activities through the port and ensure export shipments within the lead time fixed by the buyers.

BGMEA Vice-President Rakibul Alam, who was present at the meeting, told The Daily Star that the waiver would be effective for import containers that could not be taken out after the expiry of a four-day free stay.

Imported containers are allowed to stay at the port yards free of charge for the first four days after being unloaded from vessels.

For a 20-foot loaded container, the port charges demurrage at $6 per day during the first week following the four free days. It then charges $12 each day during the second week. From then onwards, it charges $24 per day.

For a 40-foot container, the charges are double.

Chittagong Port Authority (CPA) Secretary Md Omar Faruk said they heard about the decision but were yet to get an official letter in this regard.

Upon getting an official decision, the port authority will comply, he said.

Cargo and container delivery from the port yards gradually came to a halt since July 17 due to the volatile situation before the internet blackout, which began on July 18, caused further disruptions.

The lack of assessment facilities due to the absence of the internet as well as the countrywide curfew created a container congestion at the port.

On July 22, the Chattogram port was encumbered with 42,150 TEUs (twenty-foot equivalent units) of containers, occupying over 79 percent of the port's storage capacity of 53,118 TEUs.

Smooth operations of a port are hampered if containers occupy over 60 percent of its storage capacity, port officials said.​