Home Recent Garment export orders rolling in once again

Garment export orders rolling in once again

It appears garment manufacturers are at last breathing a sigh of relief as work orders for apparel items from international retailers are coming back with the reopening of their stores in the European and American markets. The signs of recovery for the garment sector are also evident in the export figures of July when Bangladesh earned $3.24 billion from apparel shipment though the amount is 1.98 per cent lower than a year earlier. However, garment export receipts in July are 14.18 per cent higher than the monthly target of $2.84 billion. Of the total garment shipment, knitwear exports grew 4.30 per cent year-on-year to $1.75 billion while woven exports fell 8.43 per cent to $1.49 billion, according to data from the Export Promotion Bureau. Earnings from apparel shipment in April, May and June stood at $0.37 billion, $1.23 billion and $2.28 billion respectively. Personal protective equipment (PPE), masks and other hospital textiles made it to the list of new export items for Bangladesh as a good number of buyers are placing work orders for these items amid the coronavirus pandemic. If more retail stores reopen in Europe and the US, garment exports from Bangladesh will grow further as the pandemic has failed to dampen the demand for basic apparel items, exporters said. Sweater factories have now put their best foot forward to meet the deadline for the shipments of August, September and October, said Mostafa Sobhan Rubel, managing director of Dragon Sweaters. “My factories are fully booked until the end of September and my customers have also booked 60 per cent of my capacity from October towards the end of December,” Rubel said, adding that they have been able to completely reinstate more than 90 per cent of the cancelled orders. Abdullah Al Mahmud Mahin, managing director of Mahin Group, said he did not face any work order cancellation and currently, his factory is utilising more than 70 per cent of its capacity. Work orders have been rising since mid-July at his factory. If the current state of business continues, Mahin’s company’s earnings this year might be 20 per cent less than last year’s, but if a coronavirus vaccine arrives by mid-September, they will witness about a 15 per cent jump in profit. “I am very much optimistic that a huge number of work orders will come to Bangladesh if a vaccine is available by mid-September,” said Mahin, who supplies fabrics to renowned brands worldwide. AK Azad, managing director of Ha-Meem Group, said his factories are running at more than 60 per cent capacity at present. “My buyers have started placing work orders and gradually the volume of work orders is increasing.” Of the cancelled work orders, his buyers have already taken back 50 per cent of them and promised to take another 30 per cent. The remaining 20 per cent should be sold at cheaper prices to other buyers, Azad added. “I am currently utilising 65 per cent of my capacity. About 80 per cent of my work orders remained unaffected during the pandemic while 20 per cent or less have been reinstated,” said KM Rezaul Hasanat, chairman and chief executive officer of Viyellatex Group, another leading garment exporter. PPE is a small fraction of the clothing business and it cannot even cover 10 per cent of the total exports, he added. “COVID-19 has affected the garment sector in various ways. Initially, it broke the supply chain as we are reliant mostly on China for most of our raw materials,” said Sheikh Mohammad Danial, managing director of Finesse Apparels. But exports are now bouncing back, he said, adding that the queries from brands in Europe and the US have jumped. If the current trend in Europe continues, Bangladesh will start to see stronger export figures from the first quarter of 2021. More clothes are being bought online, with a massive 76 per cent rise in online sales in the US, he said. “This is the new reality for which we need to be prepared,” he added. Work orders were slowly coming back but knitwear sector is doing better than woven products, said Azimul Islam, managing director of Alif Group. “But the major threat is the second wave of the coronavirus infection in the Western market. If that happens, it will be a bigger disaster for us.” His knitwear factory is running at 70 per cent capacity and the woven one at 60 per cent. About 70 per cent of the cancelled work orders are being taken back but at a heavy discount and deferred payment terms, Islam added. “It’s too early to make a positive remark on the inflow of new orders since many factories are still struggling to survive due to financial hardships,” said Arshad Jamal Dipu, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). New orders are coming but at a slow pace. “We would also need to see at what price levels these new orders are being placed.” It’s difficult to respond since not all factories, which participated in the initial survey reporting $3.18 billion cancellations, provided follow-up data. “But we tracked suppliers to a few buyers around a month ago and found that 45 per cent of about $900 million worth of orders were reinstated, and by now this figure might have gone higher.” But the payment term is not pleasant, with deferred payment as high as 180-plus days, and discounts may also be common, he added.

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