Buyers withhold orders due to unrest

RMG makers at risk of facing fund crisis and being unable to pay workers’ wages

Some apparel buyers have stalled work orders fearing delayed shipments due to ongoing political unrest in Bangladesh.

“Sample was approved, time fixed and production order was scheduled to start from February, but now they step back due to the political unrest,” a leading RMG exporter seeking anonymity told Dhaka Tribune.

“They now want to make it in June,” he added.

He said he wouldn’t have enough work orders from next month. “This will put me in trouble to face fund crisis and pay workers’ wages.”

Another factory owner said he had an order of 10,000 pieces, but the buyers were not now replying to his e-mails.

“Everything was okay and orders could be served in a 10-day time. But political situation has damaged everything,” he said.

According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA), in 14 days of political unrest, the RMG sector incurred a loss of Tk700 crore.

The loss came from discounts, order cancellation, air shipment and production hampering.

Meanwhile, the BGMEA has started assessing loss of the country’s RMG industry in the current blockade.

A survey conducted by BGMEA showed the political unrest had led RMG buyers to cancel orders worth $6.4m, had to pay price discount of $2.2m, air shipment $2.1m, shipment delay $12.8m in 21 days of December 2013 political unrest.

“The global buyers are watching Bangladesh’s political situation through media and holding back orders. They are taking time to decide how much order they will place in this situation,” said Abus Salam Murshedy, managing director of Envoy Textile and ex-president of BGMEA.

He said the buyers would not leave the country but reduce orders if political unrest continued.

“They will take a wait and see policy to do business here,” said Murshedy, urging the political parties to find a peaceful solution to the present crisis.

“As political unrest is back, the buyers are not responding to the manufacturers’ emails. The buyers are afraid of political turmoil,” said Syed Faizul Ahsan Shameem, chairman of Dotcom Sweater.

He said if the present situation continued, the RMG export target of $50bn by 2021 would not be possible.

Since the RMG sector people witnessed incidents of torching vehicles and looting during the political unrest ahead of the January 5, 2014 national election, the police agreed to escort the vehicles to ensure safety of the shipping goods.

As per the decision, factory owners will have to reach the city outskirts of Signboard area in Dhaka by 9am for the first phase escort and at 9pm for the second phase.

Source: Dhaka Tribune


Please enter your comment!
Please enter your name here