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Garment owners to observe hunger strike against unrest on Feb 14

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) will observe a day-long hunger strike on February 14 protesting the current political unrest. It will urge government and opposition BNP  to find a solution to the deadlock immediately, BGMEA vice president Reaz Bin Mahmood said told Dhaka Tribune. Besides, the BGMEA will hold an Extraordinary General Meeting (EGM) tomorrow to finalise the details of the programme. The EGM will set agenda for the next course of action.  Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA) and other associations related to the sector will also attend the meeting.  A source of BGMEA said the body might decide to stop production at the factories until the crisis is over. He said the purpose of the move is to create  pressure on the government and BNP-led alliance to come to a consensus on the crisis. According to an estimate of the apex trade body FBCCI, the RMG sector has suffered a loss of Tk30,000 crore in one month since the start of non-stop blockade on January 6. Earlier, the BGMEA staged demonstration urging the political parties to end the crisis and ensure a business-friendly environment. At least 69 people were killed in the current spate of violence and over 580 vehicles were torched across the country. angladesh’s garment manufacturers and exporters yesterday said the industry is in a deep trouble again due to latest spate of political unrest. Earlier on January 28, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) organised a human chain in front of the BGMEA Bhaban in Dhaka. “The blockade that began on January 4 has already wiped off Tk4,50 crore of readymade garment sector,”

RMG inspection, Labour Act rules to be completed by April ‘US, EU, Canada satisfied over BD’s progress

Inspection of all ready-made garment (RMG) factories and the rules regarding Bangladesh Labour Act and export processing zone (EPZ) law will be completed by April, a high official said.   “The inspection of RMG units and finalisation of the rules on Bangladesh Labour Act and export processing zone (EPZ) law will be completed by April,” Ministry of Commerce (MoC) Senior Secretary Hedayetullah Al Mamoon told the FE. He said this after a three plus five informal group meeting on sustainability compact in RMG sector with the envoys of the US, Canada and some countries of the European Union (EU) at the ministry conference room.   “We informed the envoys about various measures taken for development of the sector, including the workers hotline as well as the progress on recruitment of inspectors for RMG factories.” He said the envoys expressed their satisfaction over the progress, made so far by Bangladesh in the RMG and textiles sector. They also said Bangladesh is a good example for RMG in the world, as all the stakeholders, global brands and retailers, and international communities have effectively collaborated in sustaining and revamping the labour-intensive industry here. US Ambassador to Bangladesh Marcia Stephens Bloom Bernicat, Ambassador and Head of Delegation of EU Pierre Mayaudon, Canadian High Commissioner Benoit-Pierre Laramee, Danish Ambassador Hanne Fugl Eskjaer, the Netherlands Ambassador Gerben Sjoerd de Jong, Ministry of Foreign Affairs Senior Secretary Md Shahidul Hoq, and Ministry of Labour and Employment Secretary Mekyle Shipar, among others, were present in the meeting.

Firms to conduct engineering analysis of RMG factories Criteria for carrying out DEA sought

The government is expected to select a number of engineering firms to conduct detailed engineering analysis (DEA) of readymade garment factories that have already been and are to be assessed under the National Tripartite Plan of Action, officials said. In this connection, the Department of Inspection for Factories and Establishments (DIFE) will seek applications from the interested firms through advertisement next week, they added. “The first meeting of the taskforce held last week decided to nominate some engineering firms that have expertise to carry out DEA,” Syed Ahmed Inspector General of DIFE told the FE. Earlier, the National Tripartite Committee under the Labour Ministry on December 23 last, formed two taskforces to oversee the post-inspection activities, including hiring of consultancy firms to conduct DEA, approve corrective action plan (CAP) and monitor its implementation of ongoing garment factory assessment under the government and the International Labour Organisation (ILO) joint initiative. Mr Ahmed, also head of both the taskforces, said an engineering firm must have at least three years of relevant experience and also is to be enlisted with the RAJUK. The company also must have two structural engineers with experience of 15 years, he said adding that none having below five years of experience would be considered. After scrutinising documents, the names of the selected consulting firms will be announced, he said.  “The list will also be sent to the two apparel apex bodies-BGMEA and BKMEA,” he added.  An official review panel, headed by the DIFE inspector general, was formed in 2013 to decide on shutdown of any garment factory, if found risky or non-compliant during inspection by any of the three initiatives – Accord, Alliance and government-ILO joint programme. The panel got recommendation of reviewing some 41 buildings that accommodated 84 garment factories from the three parties during their assessment last year. Finding risky, the panel announced immediate shutdown of 32 factories, while 21 units were partially closed, and 49 were asked to conduct DEA, DIFE sources said. Out of 49 factories, only five had conducted DEA while 30 units are conducting it now. The rest 14 are yet to take any step despite frequent reminders. The factories were asked to start DEA immediately (within six weeks) after visit of the review panel, they added. Professor Mehedi Ahmed Ansari of the BUET said DEA was recommended when owners or manufacturers of garments in a building failed to provide its drawing and design documents. It is time-consuming to know a building’s present situation, all the testing, including soil test, depth of building foundation, scanning of rod and columns and core test etc. There are some more factories with amber marking that are yet to take any move to conduct DEA as recommended by the BUET, he said. The BUET has asked about 100 factories for conducting DEA out of its 500 assessed units. However, Md Shahidullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) opposed the government’s move to select engineering firms. He suggested that there must be some criteria for carrying out DEA for the sake of transparency without mentioning any names of engineering firms.

Japan to relax rules for BD knitwear entry Decides to provide ODA for rail bridge over Jamuna

Japan has agreed on principle to further relax the rules of origin for allowing Bangladeshi knitwear products to enter its market and decided to provide official development assistance to build a separate railway bridge on the river Jamuna. This was disclosed by Foreign Secretary M Shahidul Haque at a briefing at the Ministry of Foreign Affairs on Friday saying it as big achievement for the government.  “Japan has agreed to relax the rules of origin for Bangladesh on principle while the modalities and other formalities in this regard are being worked out,” Foreign Secretary M Shahidul Haque told reporters at the ministry. He came up with the decision after the first-ever Foreign Office Consultations (FOC) between Bangladesh and Japan held at the Foreign Ministry. Earlier, Prime Minister Sheikh Hasina during her last visit to Tokyo requested her Japanese counterpart Shinzo Abe to relax the rules of origin, said the Foreign Secretary. Japan has not been giving  GSP benefit on certain knitwear products to Bangladesh as the country  needs to buy fabrics for those high quality products from outside. “Further relaxation in the rules of origin will ensure duty-free access to Japanese market,” he said adding that Bangladesh exports knitwear goods worth $500 million annually to Japan and it may rise. The foreign secretary said Japan expressed satisfaction over the progress of setting up a special economic zone for the Japanese investors. “You know the issue was finalised on Thursday.” Foreign Secretary M Shahidul Islam and Japanese Deputy Foreign Minister Shinsuke Sugiyama led Bangladesh and Japan sides respectively at the FOC which reviewed the entire gamut of bilateral relations. Trade and investment issues were discussed in the meeting apart from reviewing the progress and agreed projects. “Both sides expressed satisfaction over the progress. The progress is virtually good,” the foreign secretary said. The Japanese side made it clear that they want to help Bangladesh for its industrialisation through massive investment, he said. Concerning the five mega infrastructure projects that were identified by the two Prime Ministers, the Japanese side informed that they have already made a preliminary decision to provide ODA for the project of building a dedicated rail bridge over Jamuna paralleled to the Bangabandhu Bridge. For other four projects, namely Ganges Barrage, multimodal tunnel under Jamuna, Dhaka Eastern Bypass; and ecological restoration of four rivers around Dhaka, two sides are discussing on the modalities. “Tokyo reaffirms its commitment to further strengthen its bilateral relationship with Bangladesh based on the “Comprehensive Partnership” agreed upon between the two Prime Ministers last year,”,said Shinsuke Sugiyama. The Japanese side thanked the Bangladesh government for withdrawing its candidature for the non-permanent seat at the UN Security Council in favour of Japan demonstrating the high importance Bangladesh attaches to its relations with Japan. Bangladesh appreciated Japan’s decision of increasing the number of JDS scholarships for Bangladeshi students at 25 from 15.

Rana Plaza, Tazreen victims demand compensation

Relatives of garment workers who died in the Rana Plaza collapse and Tazreen Fashions fire and the injured workers formed a human chain beside the Dhaka-Aricha highway at Savar bus stand yesterday, demanding compensation. The demonstrators formed the human chain under the banners “Rana Plaza Garment Workers’ Union” and “Tazreen Fashions Garment Workers’ Union”. Nasima Akter, a victim of Tazreen Fashions fire, said it has been over two years since the fire occurred but she is yet to be compensated. “We cannot pay for food much less other necessities after losing our source of income,” she said breaking down in tears. She added that they are living inhuman lives.     Jorina Akter, president of Tazreen Fashions Garment Workers’ Union and a victim herself, said the victims need compensation immediately. “Families of those who died are living very miserable lives after losing their breadwinners, and those who were injured cannot work anymore,” she said. The government and BGMEA are wasting time so that the matter can be closed but the people will never forget what happened, said Emdadul Islam, president of Rana Plaza Garment Workers’ Union.     “If the workers take to the street it will be problematic for the government. To be compensated is our right,” he said. On November 24, 2012, a fire broke out at Tazreen Fashions, a garment factory in Ashulia, and killed 111 workers and injured many more.      On the other hand, Rana Plaza, which housed five garment factories, collapsed on April 24, 2013 killing 1,136 workers and injuring scores others.

EPZ investments up 12pc in H1

Investment in the country’s eight Export Processing Zones (EPZ) has increased by 12.17 per cent while export jumped by 11.72 per cent in the first six months of 2014-15 fiscal year compare to the same period of the previous fiscal year. Some US$ 213.39 million actual investment has been added during July-December period of the current fiscal year by the 437 operational and 123 under implementation enterprises of eight EPZs, says a press release. This figure was $ 190.23 million during the same period of 2013-14 FY. Among the total investment, $ 72.99 million has been made in Chittagong EPZ followed by Dhaka EPZ $ 48.80 million, Karnaphuli EPZ $ 30.69 million, Adamjee EPZ $ 32.17 million, Comilla EPZ $ 10.17 million, Uttara EPZ $ 10.71 million, Ishwardi EPZ $ 4.46 million and Mongla EPZ $ 3.42 million. The cumulative investment stands at $ 3401.46 million up to December 2014. Meanwhile, goods worth $ 2902.68 million have been exported by the operational industries of EPZs under BEPZA in the first half of the fiscal year 2014-15. It was $2598.56 million during the same period of the previous FY, which shows an increase of 11.72 per cent.
In the first half of the current fiscal year the enterprises of Chittagong EPZ has exported goods worth of $ 1191.48 million, Dhaka EPZ $ 928.68 million, Karnaphuli EPZ $ 309.44 million, Adamjee EPZ $ 219.30 million, Comilla EPZ $ 125.52 million, Mongla EPZ $ 44.29 million, Ishwardi EPZ $ 51.79 million and Uttara EPZ $ 32.22 million.

Bangladesh becoming a hub for non-traditional garment products

Bangladesh has become a hub for technical and non-traditional garment products as international retailers are coming with an increasing number of work orders.Bangladesh is the second largest garment exporter after China in woven and knitwear segments. Not only that, Bangladesh also supplies military uniforms, travel bags, backpacks, sleeping bags, tents, outdoor jackets, jute slippers and other jute goods.“Currently, Bangladeshi factories, especially the ones in export processing zones, are performing well in export of non-traditional items,” an official of Chittagong EPZ said, asking not to be named.Bangladeshi factories supply uniforms for the British army and French navy, the official said.Apart from non-traditional and technical garments, some factories in Chittagong EPZ produce computer accessories for renowned brands, wigs, spectacles, frames and lens of spectacles, and selection buttons of vending machines used in Western countries, the official said.“Very few people know that Bangladesh is the top exporter of army boots for some European nations. The boots are made in the factories housed in the EPZs of Chittagong,” the official said.He said Bangladesh produces high-quality ski jackets. The export prices of ski jackets, produced in the Bangladeshi EPZ factories, range between $1,200 and $1,500 apiece, he said. Bangladeshi workers, especially the female ones, are producing all these items in the factories. The factory owners, mostly foreigners, train the workers for two to three months for producing the technical products, he said.Mainly foreign investors are allowed in the EPZs to set up their factories. In recent years, many foreign investors established factories in the EPZs to produce technical and non-traditional garment items mainly due to higher cost of production in China.The US and some European countries are the main export destinations for such non-traditional and technical items, said Shahid Ullah, general manager (commercial) of HKD, a Korean company based in Chittagong EPZ.The company came to Bangladesh in 1991 and now runs three units in two EPZs in Chittagong. It exports tents worth more than $80 million a year, the factory manager told The Daily Star by phone.He said Bangladesh exports more than $100 million worth of tents a year from different factories. “The prospects for these products are bright as international retailers are coming with a lot of work orders every year,” Shahid Ullah said.Mashrul Anwar, commercial manager of Eusebio Sporting Bangladesh Ltd, a tent and sleeping bag manufacturer in Karnaphuli EPZ in Chittagong, said the demand for these non-traditional items is rising fast among Western customers.“We are also adding value to these products,” he said.Germany-based Commerzbank in a survey said the demand for technical and non-traditional textile items will rise 2 percent year-on-year in 2015.In the period from 2007 to 2013, the European manufacturers of technical textiles saw stronger growth than the European economy as a whole, said the survey released last month.Technical textiles are conquering more and more new application areas and are superseding conventional materials, the survey said.

No more relocation compensation for Hazaribagh tannery owners

No more compensation will be provided to tannery owners for relocating their factories from Hazaribagh area in the capital to Tannery Industrial Estate in Savar, said a parliamentary watchdog chief. “The government has provided many facilities and opportunities to tannery owners. They should relocate factories as soon as possible now to save people from pollution,” said Dr Md Abdur Razzaque, chairman of parliamentary standing committee on finance ministry. He made the statement during his visit to the tannery industrial estate in Savar yesterday. Two committee members – Hazi Rahim Ullah and Abul Kalam Azad accompanied him. Dr Razzaque said the tannery owners were given Tk250 crore as compensation, land, gas, electricity and other necessary facilities including roads.  He urged the tannery owners to shift their factories to Savar for the sake of people and environment. But the tannery owners said they won’t be able to relocate within March deadline. “The government gave us Tk250 crore in response to our Tk1,000 crore demand as compensation. But this is not sufficient,” said Shahin Ahmed, president of Bangladesh Tannery Owners’ Association. He said most of the owners had no enough fund to relocate factories in a short time.  Tannery owner Engr Abu Taher urged the government to provide low-interest loans for relocation works. Dr Razzaque admitted the necessity of low-interest loans for the owners. “We will definitely propose to provide loans at below 10% interest to owners. Otherwise, it will be tough for our tannery industry to keep pace with $220m world market,” he said. Sirazul Haider, project director of the tannery industrial estate, said they had already provided 202 plots to 155 industrialists to set up industries.  Moreover, 152 industry layouts have already been approved while some three industries still do not submit their layout plan, he said. “We have already constructed boundary, police camp, gas and electricity line. 50% works of CETP have been completed.” Sirazul Haider hoped the works of central effluent treatment plant (CETP) on 17.50 acres of land will be completed by June this year. He sought cooperation of tannery owners in relocation of factories. Amid growing environmental concerns, the government took the Tannery Estate project in 2003 for implementing it by 2005. But Bangladesh Small and Cottage Industries Corporation (BSCIC) could not yet fully implement it though over a decade has elapsed. Earlier, after a public interest litigation was lodged, the High Court in June 2009 asked the government to relocate the tanneries from Dhaka to a proposed leather estate at Harindhara, Savar by February 28, 2010 or face shutdowns. More than 200 factories in Hazaribagh release several thousand litres of untreated and highly toxic liquid waste into the Buriganga River, posing a serious threat to public health. Department of Environment reported some 22,000 cubic meters of raw and liquid waste from tannery units in Hazaribagh flow into Buriganga, where the oxygen level is zero instead of minimum six required for aquatic species.

RMG sector suffers 25pc output loss due to blockade Buyers shifting orders

The ongoing political turmoil has been disrupting production and supply chain of basic raw materials in the country’s apparel industry, putting attainment of the sector’s targeted export earnings at great risk, industry insiders said. According to them, the country’s largest foreign currency-earning sector has already suffered a 20-25 per cent production loss  over the last 20 days of non-stop blockade and political impasses. They, however, feared that if the situation prolongs further, it would lead to huge losses for the sector on account of shipment delay and cancellation of orders thus affecting overall export earnings.  “To meet the apparel export target of US$26.89 billion, we will have to ensure shipment of the RMG products worth about Tk 7.0 billion a day. But shipment of products worth about Tk 2.15 billion is being hampered each day due to production disruption following the political impass,” Md Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association (BMGEA) told the FE. Exporters could not carry their products, both raw and finished ones, smoothly from different ports due to the ongoing transport blockade and hartals, he said. The sector requires various accessories like button, zipper and yarn that are sourced from different parts of the country, he said adding if any component fails to  reach the machine timely, it will not be possible to give  final shape to the finished products. Echoing Mr Islam, Rafez Alam Chowdhury, president of the Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) said, “We did not get the required number of trucks or covered vans as they are not willing to go out in such a unstable situation.” Moreover, the carrying cost has also significantly gone up, he said adding that sometimes it is difficult to manage a transport offering a high price as the owner of the trucks or covered vans do not want to take risk following previous and recent arson attacks and vandalism. Though police are providing escorts in transporting goods to and from the Chittagong port, BGMEA vice president Md Shahidullah Azim said transportation of export goods under police protection is a piecemeal solution but the export business as a whole requires a stable situation. Production of apparel products fell by 20 to 25 per cent in recent times, he said adding buyers do not feel confident about coming to Dhaka and placing orders during any political instability. They (buyers), in view of such unstable political situation, are cutting both orders and prices of locally-made apparel products, said vice chairman and chief executive officer of DBL Md Abdul Rahim. His company has slowed down production by 10 per cent as its stock is about to be exhausted. The global buyers are now planning to shift some of their future orders to other competitor countries like Vietnam though it costs higher for them but they are managing it with price cut here in orders, he explained. Local manufacturers are now negotiating future orders with buyers outside the country, Mr Azim said. After Christmas vacation, this is the peak season for global retailers to place orders for autumn wears but the ongoing political unrest has frightened them for which the RMG industry could face fresh order crisis like the previous year. Meanwhile, 11 garment factories have suffered loss worth $15.11 million including order cancellation, discount, air shipment charges, delayed shipment and additional transportation cost from January 14 to 24 due to the ongoing blockade, according to the BGMEA. Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) said apparel exports to traditional markets, especially US and Canada, fell significantly while it slowed down in the European Union. “But it will have a negative impact on new and emerging markets which are not familiar with such a situation,” he warned. Locally-made apparel export (woven and knit) witnessed a 0.77 per cent growth during the first half of the current fiscal year.  Knit products failed to achieve the target by 2.41 per cent and woven by 7.27 per cent during the period.

Garment exports to US on the decline

Garment exports to the US, Bangladesh’s single largest export destination, declined 3.17 percent year-on-year to $4.64 billion during January-November last year, due to a slowdown in work orders after the Rana Plaza building collapse.Bangladesh was the sixth largest sourcing country for the US during the period though Bangladesh’s position was third even a few months ago, according to the US Department of Commerce.Exports to the US started declining when retailers from North American countries took a wait-and-see approach after the Rana Plaza disaster, said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association.“Buyers were also cautious in placing orders with the factories housed in shared buildings. This is the main reason behind the fall in exports,” he said.But, it is the current political deadlock that will harm exports the most,” Islam said. Everybody should come forward to resolve the problems so that exports remain unscathed, he added.Exports declined not only to the US, but also to other destinations such as Canada and the Netherlands, the BGMEA president said.On the other hand, Bangladesh’s competitors are performing better in major markets.In the US market, China remained on the top of the list with apparel exports worth $38.85 billion, followed by India, Vietnam, Pakistan and Mexico.Apart from India and Pakistan, now Cambodia, Vietnam and Indonesia are becoming major competitors of Bangladesh in the US market.“If Bangladesh’s political situation does not improve soon, even Sri Lanka and Myanmar may emerge as new competitors as the two countries are performing better after overcoming their domestic political crises,” Islam said.Previously many people used to think that buyers are bound to come to Bangladesh with handful of orders. “This is not the case anymore,” he said.Reaching the $50-billion export target by 2021 might not be possible if the political crisis is not resolved as soon as possible,” Islam said.

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