Garment sector's losses piling up as factories remain shut

Garment factories kept production suspended on July 20 and decided to keep the units closed  on July 21 as well considering the safety of the workers and the factories amid ongoing countrywide violence and curfew imposed by the government.

For now, the leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) decided to keep the factories shut until July 21.

The boards of directors of the two associations will sit again on July 21 to decide whether the factory shutdown will be extended or not, BGMEA President SM Mannan Kochi and BKMEA Executive President Mohammad Hatem told The Daily Star over phone.

The suspension of the internet is also hampering the garment sector as factories cannot send inspection reports to international retailers and brands online, which is a must every day to keep the buyers updated, said Faruque Hassan, managing director of Giant Group, a garment exporter.

In the last two days, many goods-laden trucks failed to reach Chattogram port from the factories, but factory owners could not convey that to the buyers as there was no internet, he added.

"If the curfew continues, it will be difficult to keep the factories open," BKMEA's Hatem said.

He said the BKMEA member factories were shut on July 20 after the association announced the factory closure a day earlier.

But a few factories at Konabari and Gazipur opened on July 20 as factory owners and workers did not know about the imposition of the curfew, the BGMEA chief said.

Garment is the main export earner of the country, contributing over 84 percent to national exports a year.

The sector is losing over $500 million every day due to the closure of factories, industry insiders said.

The indirect losses are greater than direct losses in the case of factory closures, said Faruque Hassan, also a former BGMEA president.

"If a factory is closed, buyers either cancel the work orders or seek discounts or air shipment.

They may also shift work orders to other countries due to delays in production."
Widespread violence due to student-led protests and the imposition of a curfew also created obstacles for the garment exporters in regards to transporting goods.

Representatives of international retailers and brands who were scheduled to visit factories or set to hold business meetings cannot come to Dhaka because of the irregular flight schedule of the airlines following the violence and curfew.

This is the peak season for shipments of goods for the next winter season.

If the shipment cannot be made on time only the losses will be piling up in the sector, the exporters said.