Garment retailers voiced concerns as blockade hits supply chain

Business Report

As the blockade and political turmoil in the country is reeling over the month representatives of major international retailers voiced their concerns and demanded restoration of stability to maintain their supply line uninterrupted.
Representatives of 65 international retailers who regularly source their apparels from Bangladeshi factories at a ‘buyers forum meeting’ with BGMEA leaders and Commerce Minister Tofail Ahmed made their pleas to end the uncertainty by resolving the crisis.
The meeting held on Monday last at Westin Hotel in the city saw buyers intense concerns who said they can’t remain at peace when the supply order are failing to reach the ports to meet the delivery schedules.
“Usually, during this time of the year we discuss with buyers future production plan and phase out exports schedules,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association to the media.
But this time he said they are busy watching the troubles hitting their supply lines and trying to reassure buyers that things will become normal soon. But the reality is that nobody knows where the end lies.
“We are discussing now how we will cope with the bad situation that stemmed from the political crisis,” he said. He said not only local manufacturers and exporters, retailers are also demanding now that the government should keep the Dhaka-Chittagong highway free from political violence for maintaining smooth supply chain.
He said retailers who attended the meeting purchase garments worth over $22 billion from Bangladesh a year — out of the total $25 billion garment exports a year as of last year. “So, the importance of the meeting cannot be denied,” Islam said.
Leading brands that sent representatives to the meeting include Walmart, Gap, JC Penney, C&A, Tesco, G-Star, H&M, Target, Inditex and Carrefour.
The domestic political crisis started destabilizing the industry and export at a time when Bangladesh was able to overcome the impact of Tazreen and Rana Plaza incidents which highly eroded buyers’ confidence in Bangladesh, the BGMEA president said.
Focusing on the financial impact of blockade so far, Islam said as per some estimate by the BGMEA, 19 garment factories have lost $19.02 million worth of business in 18 days of blockades and shutdowns. The companies incurred losses mainly due to cancellation of orders, discount to buyers and expensive air shipment of goods.
Due to political violence, garment makers or their representatives are now travelling to Hong Kong, China, India, Thailand and European nations, spending thousands of dollars, to attend meetings with buyers that were initially planned to take place in Dhaka.
They are not ready to visit Dhaka fering that they may get stranded here under political shut downs. Until now buyers did not pull out of contracts, but they have warned that they will do so if the political crisis lingers, Islam said.
Buyers also said Bangladesh will face an image crisis again if the political impasse continues for long, the BGMEA president said. Buyers and their representatives declined to comment after the meeting.
Commerce Minister Tofail Ahmed, coming out of the meeting said the buyers wanted to know about the latest situation in the political front. “I told them that there is nothing to be worried as the supply chain between Dhaka and Chittagong is still working very well,” Ahmed told reporters after the meeting.
“I assured the buyers that the situation will improve very soon,” Ahmed said.

Source: Weekly Holiday

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