The Ministry of Home Affairs has sounded the alarm over instability that might be triggered in the country’s highest foreign exchange-earning apparel sector due to coronavirus pandemic, officials said. The sector might also face a disastrous situation very soon if the corona pandemic prolongs, it said. The ministry in a report has suggested both commerce and labour ministries taking coordinated measures to tackle any possible unstable situation, the officials added. The home ministry in a report referred to the closure of more than 50 small and medium scale garment units last year due to financial and bank loan crises. What is more, many other RMG units are in the process of being closed for an apparent lack of work orders, it said. The sector imports some 70 per cent of machinery, fabrics, yarn, bottoms and chemicals from China, but imports are stopped now, the report mentioned. “For this, a good number of workers of small and medium-sized factories, will lose jobs. The unemployed workers might create unrest in the sector and get involved in illegal activities.” The report also suggested making necessary coordinated policy efforts to face any possible odd situation. Commerce and labour ministries, BGMEA and BKMEA have been advised to ensure that small- and medium-scale apparel units receive orders from buyers. Sources said coronavirus would affect the national economy and the labour force as well if garment sector is hampered. Currently, more than 3.0 million men and women are employed in the ready-made garment (RMG) sector. They recommended finding out an alternative import source. “Otherwise, it’d be difficult to control the prevailing situation.” RMG industry insiders have also expressed fear that they might face challenges in paying salary and bonus ahead of the upcoming Eid. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Dr Rubana Huq said, “We’re facing a grave situation following the outbreak of coronavirus epidemic.” “The brands are reducing their orders and are asking us to hold on to uncut fabric,” she added. Ms Huq has urged the apparel makers to hold their shipments as global consumption is coming to a halt. She said, “This will have serious consequences as we see an imminent liquidity crisis which will lead to financial disruptions to the manufacturing units.” “Right before Eid when we’ll have to pay bonus,” Ms Huq explained, “falling exports and shipments are the worst possible challenges that the industry may face.” China is the main source of importing yarn, fabric, machinery and electronics. Due to this global plague, the stock of raw garment materials that are mainly imported from China has been declining, thus making apparel makers halt production. Bangladesh’s exports to China accounted for more than $830 million in fiscal year 2018-2019 and imports from China more than $13.85 billion. An available document shows the import volume was 17 times more than that of export.

A section of international buyers has informed the Bangladeshi apparel exporters that they would reduce their existing export orders by 15-30 per cent amid an adverse impact of coronavirus outbreak in China and its subsequent spreading to many other countries across the world, said Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq on Wednesday. She told reporters at a programme in Dhaka that they were getting three types of requests, including reduction in the volume of export orders, from international buyers due to the epidemic. Some buyers are requesting to make air shipment of export products while the others are seeking discount on prices, she said. ‘They are arguing that demand for readymade garment products are declining as many brand shops in the countries affected by coronavirus are shut down as a measure to contain infection,’ she said. So, there is no doubt that the export sector will severely be affected due to the epidemic, she said, adding that the question was now what the degree of the damage would be. The BGMEA is also in close contact with the international buyers working in Bangladesh, she added. Rubana said that only one international buyer, out of 41 members of buyers’ forum based in Bangladesh, said that they felt some risks in business while others said there were no risks. Later, the lone international buyer also withdrew its observation following communication of the BGMEA, she said. The government is assuring about all types of policy support to exporters to face the impact, she said. There was a meeting held on Tuesday with the prime minister’s principal secretary, Ahmad Kaikaus, where a number of secretaries also attended, to discuss the issue, she added. ‘We requested the government to keep ready a disaster fund to support the exporters when needed,’ she said. The BGMEA also requested the Bangladesh Bank to extend all-out support so that exporters did not face any problem in banking related to the release of goods which were now reaching the country after a delay due to the outbreak. Members of the BGMEA were also asked to inform their individual problems they faced in the situation, she said.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has protested a report of US Senator Robert Menendez on labour rights and safety in the country’s apparel factories. Last week, Menendez, who sits on the committee on foreign relations in the Senate, submitted a report to the committee titled “Seven Years after Rana Plaza, Significant Challenges Remain”, expressing concerns over the welfare of the workers in the garment industry. “I believe that we need to address all your concerns with as much accuracy and transparency and with our best intent to try and change the general narrative on labour practices in Bangladesh,” said Rubana Huq, president of the association, in a letter to Menendez on Monday. “It’s common to begin any conversation and report with a tragedy. It’s also true that repetitive reference to a national tragedy often belittles all the progresses that have been achieved and lessons that were learnt often undervalued,” she said, referring to Rana Plaza collapse. More than 1,100 Bangladeshis were killed and thousands injured when Rana Plaza caved in on April 23, 2013 in the nation’s deadliest industrial incident. A tripartite Readymade Garment Sustainability Council (RSC) has been formed in Bangladesh, comprising six representatives from workers, brands and the industry each. “As far as safety remediation is concerned, we have accepted all external recommendations and have brought revolutionary changes in all aspects of safety in record speed, and thus have proved ourselves worth of any stakeholders’ confidence,” the letter said. The report of the ActionAid deserves further clarification as the sample size of the interview-based report seems over-generalised, it said. The association called for more substantiated details about physical abuse and mistreatment of a worker named Shopna interviewed in the report. Trade union activist Kalpana Akter’s allegation of rape of a female worker should have been brought to the attention of the association instantly for taking action, the letter said. Responding to the allegation of harassment and low wage payment, the association said the workers of Youngone are paid well above the nationally set minimum wage of Tk 8,000. The Accord on Fire and Building Safety in Bangladesh receives regular phone calls from workers about occupational health and safety. The RSC will address these calls from everyone, including non-Accord and the Nirapon factory safety programme, the BGMEA said. The Accord received 36 calls in 2019 and 2020, the letter said. On the complaint of termination of workers by 104 garment factories in December 2018, the letter said a committee was formed in May last year to assess the appropriateness of the number of terminated labourers and filed cases and to find justified solutions. Bangladesh amended the labour laws and increased the minimum wage for garment workers in 2018. “There have been many good practices in the industry,” the platform said. For instance, the BGMEA has rolled out a mental health awareness programme in 50 factories. The BGMEA visits factories to ensure that a five-member anti-sexual harassment committee is set up. It has visited 1,221 factories so far. In Dhaka and Chattogram, where most of the factories are located, 453 and 17 factories have respectively established the committee. The association has piloted an e-wallet to allow workers to go cashless, adding ease and convenience to their lives. The project will be initiated by June this year. Besides, more than 100 garment workers are studying at the Asian University for Women in Chattogram. These workers are supported with their wages by the entrepreneurs, while many generous donors also contribute to their academic pursuit. The first batch would graduate on May 9, the letter also said. “With 4.4 million workers, we may have isolated incidents happening, as is the case anywhere else in the world including the US. But from our end, I assure you, our positioning will not be one of defence. Rather, we would like to correct what has gone wrong,” Huq said. She called on the senator to share his findings with the BGMEA in detail.  

The Coronavirus epidemic poses a threat to the country’s apparel sector, as foreign buyers have started revising their business strategies amid the prevailing critical situation. Sector insiders opined that export earning of the country’s US$34-billion ready-made garment (RMG) sector, which is witnessing a negative growth in the current fiscal year (FY), 2019-20, might decline further, if the situation prolongs. They feared that work orders might plunge due to disruption in supply chain. It includes delay in importing raw materials like fabrics, accessories, dyes and chemicals, buyers’ adopting ‘wait and watch’ policy, and possible slowdown in demand from consumers’ side. H&M, one of the largest apparel buyers that sources more than US$3.0 billion annually from Bangladesh, has cancelled its officials’ factory visits and all meetings with external visitors, and also reduced its Dhaka office activities. The Swedish retailer, however, requested its local suppliers to conduct self-inspection of products and make shipments accordingly. It also asked the factories concerned to continue production of orders already placed or booked. The retailer conveyed its latest business strategy to all its supplier factories on Sunday as part of precautionary measures immediately after three COVID-19 patients have been identified in the country. Talking to the FE, Sayeed Ahmed Chowdhury, general manager of Square Denim, said: “One of our US buyers has refixed its demand by cutting 30 per cent of total work orders.” Buyers are pressing for timely shipments, and are not willing to extend lead time. But supply of raw materials has already been disrupted. The company had to make costly air shipment to meet the lead time of a buyer, and it partially provided the cost. Explaining the supply chain disruption, he also said they source 32 to 40 per cent of their raw materials, like – fabric, accessories, dyes and chemicals, from China. Fazlee Shamim Ehsan, director of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said his company was negotiating an order with one Italian buyer. “But the buyer has informed us that it will not give the order now, and will inform us in this regard in April.” The prices of basic raw materials, including sewing thread and level yarns used in production, are still high due to the virus outbreak. However, Chinese suppliers, after resuming their operation partially, have started communicating with local factories, he told the FE on Monday. He feared that the supply chain, especially of man-made fibre and woven fabric, might be affected, as majority of those are imported from China. Talking to the FE, Mahmud Hasan Khan, a former vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), opined that buyers might defer their shipments considering the overall situation, and so, local suppliers might incur financial loss. The industry people noted that the ongoing crisis in China will cause delay in arrival of raw materials from there, late shipment and delivery, and cash flow crunch. According to the industry people, about 46 per cent of raw materials for the local RMG industry are sourced from China. Bangladesh imported textile fibres and articles worth $5.02 billion, out of its total $13.63 billion import, from China in FY 2018-19. Taking the contingency into account, the BGMEA has opened a Corona Control Room at its Uttara office, and requested all member factories to call at the hotline number 0173442211. The trade-body in a circular also requested all its members to abide by instructions, provided by the government, for ensuring safety of all officials, employees and workers of the industry. The BGMEA also asked its members to make all the workers aware of Coronavirus to take precautionary safety measures by raising awareness through safety, participatory and OSH (occupational safety and health) committees in the RMG units.