RMG buyers slashing orders as violence continues


The garment sector is set to brace uncertainties marked by a sharp drop in orders and switching of more buyers to India, Vietnam and Cambodia. The ongoing blockade has changed the industry perspective from a steadily rise in business to a fast falling one hit by buyers fear to come to Bangladesh and place new orders.
Most garment makers fear that they are going to face order shortfall from June as retailers are regularly declining to visit Bangladesh in political turmoil drying the flow of orders since early January fearing to get trapped in violence.
The buyers representatives who were due in January and February to have a look at the factories and put new work orders for forthcoming summer held back from coming here said BGMEA (Bangladesh Garment Manufacturers and Exporters Association).vice president Shahidullah Azim last week,
He told the media that although there is some improvement in roads and highways for  transportation of export goods from factories to Chittagong port and raw materials from the port to factories, retailers are still shying away from the country.
They are rather asking garment makers to visit third countries like Bangkok, Hong Kong or India to hold meeting on new orders.
In the monthly buyers’ forum meeting, held in Dhaka on March 2, retailers said they are not placing the full order fearing further volatility of the political situation. In some cases, they are even slashing orders by more than 30 percent and diverting them to Vietnam, Cambodia and India.
The retailers who attended the meeting account for $22 billion of the sector’s $25 billion annual exports, according to Azim. “So, we will face an order shortage after June,” the BGMEA leader said.
Managing director of Viyellatex, a leading garment group, said retailers who have full-fledged offices in Dhaka are placing orders in high volumes. But most retailers who are not running local office, they are the ones slashing most their orders diverting to third country sources.
General manager of Fakir Apparels Ltd, a Narayanganj-based garment manufacturer, said he had a meeting in Hong Kong last week that was originally scheduled for Dhaka, but as they refused to travel to Bangladesh, we have to go over here.
He however said the internal situation has improved a lot as they can carry goods easily now to and from the port to factories. For instance, he can now ship three lakh pieces of garment products from Narayanganj to Chittagong port a day without any problem.
But, foreign retailers are still cancelling trips to Bangladesh in fear of arson attacks and violence and using the excuse for slashing the orders.
They need clear indication of improvement of situation in ground to stop switching to third country destinations, the industry sources said.

Source: Weekly Holiday