Many apparel makers are now resorting to cost-cutting measures to compensate for the losses that have been thrust upon them by the ongoing prolonged and disruptive political programmes, industry insiders said. One of the handy measures they have, allegedly, chosen is the downsizing their workforce. Some of the owners have also decided to cut a few other expenditures including one on corporate social responsibility (CSR). Owners of a number of apparel units have expressed their fear that they may not be in a position to pay the wages to their workers if the current political troubles persist further. They have claimed that the buy orders have declined even up to 50 per cent, in some cases, while the sector has already suffered a 25-30 per cent production loss over the last 45 days. Some factories located in Malibagh, Khilgaon, Mirpur, Savar, Ashulia and Narayanganj terminated a good number of workers during the last two months, alleged labour leaders. Sirajul Islam Rony, president of Bangladesh National Garment Workers Employees League alleged that each day there were two to five incidents of worker termination, especially in the capital city. “While work order has been declining on the one hand, our cost of doing business has gone up on the other. And the situation has forced the manufacturers to compensate for their loss in various forms,” Md Hatem, former vice president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told the FE. He dismissed the allegation of workers’ termination but said instead of two helpers one operate now handles a single stitching machine. There are a good number of large units that offer many benefits which are not mandatory by law, Md Shahidullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said. Some of them have suspended such programmes as part of their cost cutting measures, he said adding “We are now worried over payment of workers’ wages, future inflow of orders and image of the country.” If there is scarcity of orders, how the manufacturers pay their workers, Mr Azim said adding if such political turmoil does not end immediately, it would take a heavy toll on the sector. “Global apparel buyers and retailers are worried over sourcing garment products from us. They have a fear whether we will be able to make timely shipment as the ongoing situation has already affected the whole supply chain,” BGMEA president Md Atiqul Islam said. Some of them had postponed their scheduled visit to Dhaka while many others are choosing an alternative place outside the country like Bangkok, Hong Kong and New Delhi to negotiate their orders out of security concern, he added. Though the manufacturers are going abroad for negotiating orders, some of the buyers are cutting volume of orders and thinking of shifting the orders to other countries, garment makers said. Mr Hatem said the prevailing situation forced him to accept a buy order from a European retailer at a discount rate of ten cents. “Last year I produced women’s items for the buyer at a rate of $1.80 per piece. This time I have accepted the rate at $1.70,” he mentioned. On the other hand, the apparel exporters are not getting the required number of trucks or covered vans as the latter are not willing to go out in such an unstable situation, Rafez Alam Chowdhury, president of the Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) said. Moreover, the carrying cost has also significantly gone up, he said adding that sometimes it is difficult to manage a transport offering high fare as the owner of the trucks or covered vans do not want to take risk following previous and recent arson attacks and vandalism. Meanwhile, 35 garment factories have suffered an estimated loss worth $23.23 million on account of order cancellation, discount, air shipment charges, delayed shipment etc., between January 14 and February 19, according to the BGMEA. BGMEA has drafted a list of demands including extension of instalment payment by two to three years for term/project loan and forced loan, 3 per cent cash incentive for export to EU market and fixing of lorry risk insurance rate at 0.02 per cent to remain competitive. The list would be sent to the government this week.
