Hartal starts to take its toll

Garment buyers shying away from Bangladesh; exporters losing Tk 200cr a day

Hartal starts to take its toll

The garment sector loses around Tk 200 crore a day owing to the disruption in production caused by hartals, BGMEA President Atiqul Islam said yesterday.
International buyers are shifting orders to other destinations, as Bangladeshi garment makers struggle to maintain the lead time for shutdowns, he said at a press conference at the office of Bangladesh Garment Manufacturers and Exporters Association in Dhaka.
According to a BGMEA estimate, 32 garment factories lost orders worth $2.5 million, and had to give discounts worth $1.1 million and spend an additional $3.4 million on air shipment because of hartals between January 31 and April 20. The shutdowns also delayed shipment of garment items worth $9.28 million.
“This estimate covers only 32 of the 5,500 garment factories in the country,” said Islam.
The nation saw shutdowns for a total of 21 days between January 31 and April 20. And the BNP-led alliance was the first to observe a hartal this year on January 31.
The alarming news for Bangladesh is that the exports of garment items from Vietnam and Cambodia rose recently by 22 percent and 15 percent. “It means we are losing business to our competitors,” Islam said.
“We are really concerned over the current political situation. We want security for our factories.”
He said garment makers had to pay an additional Tk 390 crore for air shipment following disruption in production caused by shutdowns between January and March.
It costs only 30 cents to send one kilogram of goods by sea freight, but the cost goes up by 1,280 percent to $4.15 a kg in case of air shipment, said Islam.
“One major air shipment is enough to bankrupt a garment exporter.”
Given the present global financial condition, the garment sector is under pressure.
Moreover, an 8 percent devaluation of the greenback against the local currency in April pushed the sector into a further crisis with the year-on-year cost of production increasing by 13 percent, he said.
Besides, the value of garment items fell by 8.81 percent in the USA and by 11.46 percent in the EU in October last year, according to BGMEA data.
“Not only export-oriented garment factories, but also the domestic textile industry faces losses due to shutdowns,” said Jahangir Alamin, president of Bangladesh Textile Mills Association.
Businesspeople are trying to help resolve the current political crisis through the Federation of Bangladesh Chambers of Commerce and Industry, said AKM Salim Osman, president of Bangladesh Knitwear Manufacturers and Exporters Association.
Businessmen from all over the country will meet in the capital on April 26 to exchange and disseminate opinion on the current political and economic situation, he said.

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