The manufacturers’ association predicts business may plunge in November, as export growth in key markets slowing down
The ongoing gas and power crunch is hurting the readymade garment industry severely, as apparel-makers face production costs spiralling and export orders plummeting, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
“If such a situation continues, the country’s garment industry will be in serious trouble in the coming months,” BGMEA President Faruque Hassan said at a press conference in Dhaka on Sunday.
Faruque Hassan also expressed doubt about attaining the annual export target for the current fiscal year.
According to the BGMEA president, many apparel factories are already struggling with worker payments. The association is assisting its members to get bank loans to pay the workers.
But the BGMEA itself is in the dark about how long the energy situation would continue, Faruque Hassan told the programme while inaugurating the “Centre for Innovation, Efficiency, and OSH” at the BGMEA office.
He said the export growth was good in the first two months of the current fiscal year. But after the July-August period, work orders have been declining gradually.
Referring to the latest data by the Export Promotion Bureau, the BGMEA president said apparel exports registered a 7.52% fall in September, while knitwear dropped 9% and woven 5.66%.
The BGMEA president said there will be negative growth of around 20% in October. “We fear business will worsen in November. Growth in key markets including the US and Germany is slowing due to the Ukraine-Russia war, global economic instability, inflation and impact on retail markets”.
“It is worrying that buyers switch to other countries when work orders to a specific country plummet,” he added.
He requested the government to ensure uninterrupted gas and power supply to the export-oriented factories.
The BGMEA president also called for keeping the deduction of tax at source unchanged, which has been increased to 1% this year.
The BGMEA president also emphasised ensuring transparency and accountability along with increasing apparel competitiveness. “If we can present ourselves to the buyers as an acceptable, reliable and green platform and make the industry sustainable, then our exports will cross the $100 billion-mark.”
