Lockdown spells concern for Bangladesh's apparel industry amid 'peak season' for exports

Published 27 Jul,2021 via The Financial Express - The impact of the coronavirus pandemic has been keenly felt by nearly all industries, none more so than Bangladesh's key forex-fetching readymade garment sector as orders from big fashion houses dried up amid waning global demand.

But just as the dark clouds appeared to be clearing, the onset of the latest pandemic-induced lockdown restrictions, coinciding with the peak season for purchase orders, has stoked fresh fears among industry stakeholders.

They believe vaccinating garment factory workers en masse may be the only way out of a potential quagmire, reports bdnews24.com.

The ongoing 14-day lockdown came into effect after the Eid-ul-Azha holidays on Jul 23. This time, the shut-down orders have been extended to export-oriented manufacturing units as well. Having closed up for the holidays on Jul 19, the factories will not reopen until Aug 5 at least.

The situation presents an unusual predicament for the apparel industry, as garment factories were allowed to operate during the first phase of lockdowns in March 2020.

However, factory owners are reticent about resuming operations before the end of the lockdown in the face of an ever-worsening pandemic.

The government, for its part, has not budged from its promise of enforcing the 'strictest lockdown yet', with State Minister for Public Administration Farhad Hossain threatening legal action against owners who try to reopen their factories while restrictions are in place.

Bangladesh's single-day COVID-19 infection and death tallies hit record peaks on Monday. The South Asian nation counted 15,192 new cases and 247 deaths over a 24-hour period, according to the latest government data.

Shahidullah Azim, vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said there are no plans to reopen factories under the current circumstances.

"We thought the infections would decline but the opposite is happening. All the factories are closed and we will abide by the government's decision."

He fears that the situation could have serious consequences for the garment industry, given that June, July and August are the peak months for apparel exports.

Around 35 to 40 percent of annual exports are made during this period. The orders from Western markets for the winter season and Christmas are almost ready for shipment. However, the products will go unsold unless they are delivered soon."

'We may be asked to deliver the goods by air but then the transport costs will be three or four times higher. We are worried about all this. On top of that, we have to pay wages and repay loans.'

He noted that before the second wave of the pandemic struck, the garment sector was seeing signs of a turnaround, but this optimism is slowly starting to dissipate. Before the pandemic, Bangladesh exported garments worth $34 billion.

'The figure subsequently dropped to $6 billion. In the meantime, we have recovered $3 billion. I thought the exports would rebound this time but that is now unthinkable in this situation."

'There are also many orders in the supply chain of the factories, work on which are almost 90 percent complete. Some exporters are toying with the idea of finishing up the work with a small number of workers if the lockdown is prolonged."

'I have talked to government officials, police and other organisations about it. The talks are ongoing. But the main solution is vaccination. It is not possible to overcome this problem without vaccinating the workers."

Syed Nazrul Islam, senior vice-president of BGMEA and a garment trader in Chattogram, underlined the need to get the products ready for export.

He said factory owners in Chattogram were anxious to dispatch their shipments. "But now, we have to think about the situation in the country. We are not going to discuss reopening factories as COVID-19 infections are soaring."

"We have asked the government to make arrangements to help us complete the orders, which are almost finished, with around 50 to 60 workers and get them ready for export," said Nazrul.

"We are laying the groundwork. I hope something will come of it."

Nazrul, however, ruled out the possibility of asking the government to allow factories to open unless the coronavirus situation improves.

KMEA Vice-President Mohammad Hatem said no new decision has been taken regarding the reopening of factories.

'One hundred percent of owners demand factories be opened because everyone is under a lot of pressure. Today, a factory owner called and said that his shipment is due to be delivered by Jul 30. The buyer is threatening to cancel the order if he fails to deliver within this time, while 80 percent of the work is complete."

"If the factories open together on Aug 5 and everyone starts work simultaneously, the risk of infection will be higher," he said.

Hatem believes export-oriented factories should be reopened in phases to reduce the transmission of COVID-19.

He also mentioned a proposal to open export-oriented garment factories on Aug 1, but no decision has been taken as the talks are still ongoing.

Babul Akhter, president of the Bangladesh Garment and Industrial Workers Federation, said the closure of the factory till Aug 5 would not affect the payment of wages.

'The Eid holiday is from Jul 28 to 30 at many factories. Before the holidays, workers went home after putting in a lot of hours at a stretch. So, for the time being, there should not be any problem with the salary."

"But there are reasons to be concerned as owners always try to shortchange workers. Since the owners closed the factory on the orders of the government, they cannot cut wages using it as an excuse. It would be disappointing if they want to pay less. It could lead to unrest. '

Babul, too, echoed the view that the only solution to a potential crisis was to start a mass vaccination programme for the workers rather than closing down factories to keep the export-oriented garment sector afloat.

Copyright © 2021 International Publications Limited. Provided by SyndiGate Media Inc. (Syndigate.info)

DISCLAIMER: This content is provided to us “as is” and unedited by an external third party provider. We cannot attest to or guarantee the accuracy of information provided in this article from the external third party provider. We do not endorse any views or opinions included in this article.