Garment sector reeling from shutdown

DBL Group, a leading garment exporter, usually ships apparel worth around $50 million each month.

But this month, their shipment will fall by at least 30 percent since production had to be halted following a spell of violence centring the quota reform movement and the government's imposition of a nationwide curfew.

Being a large group, DBL has its own production facilities, including spinning and dyeing units alongside factories for production of garments and accessories.

However, all their units were shut because of the violence over the past four days. At the same time, a few goods-laden trucks were waiting at the Chattogram port to unload export cargo.

"So, the losses are enormous," said DBL Group Managing Director MA Jabbar, adding that the biggest blow was the dent to the confidence of international clothing retailers and brands.

DBL Group is not alone.

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A man-made disaster and the major economic losses it caused

As production remained halted for four days, all small, medium and large garment exporters faced similar challenges.

Moreover, business owners could not contact international business partners because of an internet blackout since July 18. However, as broadband internet services gradually began to come back online since Tuesday night, the situation has been improving.

The impacts of the shutdown were felt more acutely by small and medium factories, which cannot afford big losses given their comparatively weaker financial strength.

A factory owner in Rupganj, who ships T-shirts and polo shirts worth $6 million each month to American and Canadian retailers, could not timely receive raw materials, sourced from both at home and abroad.

The unit needs at least $3 million worth of raw materials each month, including yarn, which accounts for 70 percent of the total raw material requirement, chemicals and fabrics.

Although the factory owner placed orders with a few local spinners and millers for yarn and fabrics, they could not supply the raw materials as transport operators stayed off the roads fearing violence.

Effectively, the shutdown put factory owners in a double bind because they could neither contact buyers nor continue production.

This is the peak time to confirm prices for goods to be shipped next summer and spring, but the owner could not send quotes online due to the internet blackout.

Now, more money will have to be spent since employees will have to work overtime in order to adhere to the strict lead time set by international buyers, the owner said, asking not to be named.

There were hopes that business would regain momentum from July onwards compared to previous seasons, when the impacts of the Covid-19 pandemic, Russia-Ukraine war, and high inflationary pressures took a toll on business. Instead, a new disruption has shaken up the sector, the owner added.

Syed M Tanvir, managing director of Pacific Jeans, a leading denim exporter based in Chattogram, shared a similar experience.

Tanvir declined to comment on details regarding losses, only stating that they were huge. He said their factories have been closed since Saturday, adding that the supply chain was also severely disrupted.

The lull in production at garment units has also adversely impacted those involved in the primary textile sector, including the main suppliers of yarn, fabrics and other raw materials.

Hundreds of tonnes of unsold yarn have piled up in mills due to the shutdown, transport operators' reluctance to carry goods and a fall in demand.

Fazlul Haque, managing director of Israq Spinning Mills, said he usually sells 100 tonnes of yarn each day. But unsold yarn began piling up before the beginning of the shutdown. At present, the situation has been exacerbated and there is a stockpile of over 2,000 tonnes of yarn at his factory.

Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA), said huge losses were incurred, adding that an assessment was ongoing. The BTMA called a meeting of the mill owners today to get more information about losses from owners, he said.

However, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has already completed its primary assessment of losses, saying that they amounted to Tk 6,400 crore over the past four days.

BGMEA President SM Mannan Kochi said that garment factories would have to pay around Tk 1,000 crore to workers despite no work being done over the past four days.

The amount of losses in the garments accessories sector is also high, he added.

According to the BGMEA, nearly 950 trucks with exportable garment items were waiting at the Chattogram port to be unloaded.

Garment and textile mills resumed operations yesterday, with workers and officials using their official identity cards as curfew passes.