With no let up in the spread of the coronavirus around the globe, the supply chain of Bangladesh’s readymade garments (RMG) sector is taking a hit as its main sourcing destination, China, is the epicentre of the outbreak. Prices of all garment accessories, including yarn and sewing threads, have already gone up, Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said in a statement yesterday. “Prices have increased by almost 50 per cent. This is killing us. If regular shipments from China do not resume within the next two weeks, we will not be able to procure any trim properly as most of the raw materials are imported from China,” she added. Huq said the items whose supply chain got disrupted included yarn, sewing threads, paper, plastic items (buttons), and twill tape. She also said even the dyeing cost was increasing unacceptably. “In general, we are possibly going to take a hit for three to four months,” she added. Mostafiz Uddin, founder and CEO of the Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE), said the coronavirus had already disrupted the business for garments suppliers in Bangladesh. “For raw materials and other inputs, we are still heavily dependent on China. In fact, more than 50 per cent of Bangladesh’s textile and textile-related goods, including garment accessories, are imported from that country,” he explained. “In addition, about 40 per cent of capital machinery and spare parts for the textile and garments industry comes from that country,” he added. Mostafiz said for all the progress made by the country’s RMG sector in recent years, the lack of vertical integration—Bangladesh only carries out one part of the supply chain process—had remained a major source of vulnerability. “It is Achilles’ heel for our industry,” he added. He also said that the coronavirus outbreak could be viewed as a wake-up call for the Bangladeshi RMG industry and also for the apparel industry globally. “This heavy dependence on China is unhealthy in many ways. As any disruption to the supply chain by an epidemic like the coronavirus can be devastating, there is a real risk that some businesses may never recover from the shock,” he added. On February 15 this year, Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) president Abdul Kader Khan said they feared losing an estimated Tk. 1,500 crore if the coronavirus outbreak in China lingered, as the sector was already running short of raw materials. “We fear that the supply of raw materials from China will remain suspended until March because of the outbreak. This would create a serious crisis in the garments accessories and packaging sector, as we need raw materials worth USD 4 billion per year and 40 per cent of that comes from China,” he added. Talking with The Independent yesterday, Abdul Kader said a total of 1,744 factories across the country had been producing 35 garments accessories and packaging items. “Raw materials for most of these factories come from China. Owing to the coronavirus outbreak and the prolonged holiday period for the Chinese new year, we have failed to resume the import of raw materials from different Chinese provinces,” he added. Abdul Kader said a large number of factories were seriously suffering from a dearth of raw materials. “Finding alternative destinations for raw materials is not an easy task as very few countries offer as competitive prices as China,” he added. Rafez Alam Chowdhury, advisor to the BGAPMEA, said most accessories-makers did not have a large capacity to store raw materials and were dependent on constant and regularised import. “The capacity of storage depends on the size of factories as well as the financial strength and capacity to cope up with the work orders. On average, a factory can store raw materials for two months. So, most of us have already run out of raw materials,” he added.
