Country’s apparel-sector operators have become jittery fearing substantial drop in winter orders from key export destinations. The pared-down production activity during three months of political turbulence has already taken a toll on them. Industry-insiders foresee an oncoming crunch as manufacturers are being compelled to cut jobs and run wheels of production much below their capacity. Top ready-made garment (RMG) executives say they see not so sunny picture of the trade in the next peak season as the buyers are not placing expected orders even for the fall, let alone the winter. They feel the global business partners are losing their confidence in the Bangladesh RMG sector. And this unmerited credibility gap is taking a toll by way of negative impacts on the key export industry. For a prolonged blockade — accompanied by frequent strikes, shutdowns and political violence — for last three months, the apparel export orders, particularly for winter season, have dropped 35 per cent, according to the apex trade body in the sector. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) research cell claimed that, during the time, more than 100 global buyers and their representatives had cancelled their business trips to the blockade-bound country. Such cancellation of visits was resulting in the decline in placement of fresh work orders by the global brands and retailing chains. Export Promotion Bureau (EPB) statistics show apparel exports having grown only over 3.18 per cent on average during the first eight months of the current fiscal year (FY) 2014-15. This amply proves a slump from a 14 per cent growth during the corresponding period of last FY. “Fresh export order of readymade garments (RMG) for winter season got reduced drastically this year due to the ongoing countrywide blockade and hartals,” AK Azad, Managing Director of Apparel Gallery Ltd, a sister concern of Ha-Meem Group, told the FE. The leading clothing manufacturer and exporter forewarned that following the decline in work orders for the winter season the sector from the potential export destinations like the USA and the EU countries over the next six or seven months would hurt the sector seriously. Mr Azad, also former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said they have observed a number of global buyers doing business here for long are now diverting their fresh orders to several other countries, including India, Vietnam and Sri Lanka. For absence of political stability, he noted, the local entrepreneurs are losing their competitiveness and Sri Lanka, India and Pakistan are becoming a new threat for the local RMG sector. Engineer Md Atiqur Rahman, chairman of Amotex Ltd, a sister concern of Standard Group — another leading RMG manufacturer and exporter–also had seen their fresh orders having fallen drastically in the last three months. The businessman noted that for giving fresh work order the global business partners primarily demand peaceful political environment but, in recent times, the situation had been very turbulent. “For shortage of fresh working order we could not utilize our hundred-percent working capacity,” Mr Rahman said. He said January-March is a peak time for getting winter-season work order but the exporters could not get to their goals in export trade. The leading global buyers who used to place orders on different occasions also cancelled their work orders “on a big scale”. He said, “On average we get orders for 100,000 pieces, or more, from the global business partners. But that has now dropped to 40,000 to 50,000 pieces.” Md Shahidullah Azim, vice-president of BGMEA, said due to shortage of work order many of employees were passing idle time at the factories. He mentioned that the apparel sector has been playing a vital role in creating new job opportunities but in recent times recruitment has almost come to a halt. Mr Azim said the entrepreneurs are facing challenges as new export orders have fallen drastically in last three months following the political instability. “We have a goal to reach $50 billion worth of RMG exports by the year 2021. For archiving the target the sector needs more than 18 per cent growth of export, but in last July-March the sector grew only over 3.18 per cent,” the leader of the apex trade body said. Ahsan H Mansur, executive director of Policy Research Institute (PRI), said export order fall is not a good sign for the country’s economy. “If the export order dropped, the domestic industries had surely been affected,” the economist noted. And it will cause negative growth of the country’s RMG products, he said.
Source:
https://www.thefinancialexpress-bd.com/2015/04/13/88672
