RMG incurs $20m loss in December

The survey conducted by BGMEA over 38 export-oriented factories has come up with the claim of huge business losses in the RMG sector

The country’s readymade garment sector has incurred a loss of $20m due to cancellation of orders, extra-burden of air freight, delays in shipments, discount and vandalism in the wake of non-stop political unrest since December 1, 2013, says a survey.

The survey conducted by Bangladesh Garment Manufacturers and Exporters Association (BGMEA) over 38 export-oriented factories has come up with the claim of huge business losses in the RMG sector.

All the factories faced the order cancellations worth $5.35m and had to spend additional money of over $1.56m for air shipment, the survey said.

The survey also said those factories also had to pay $1.87m extra as they failed to ship the products on time. Apart from this vandalism, which occurred during the blockades, cost the exporters $2.8m while the delays in shipment cost $9.21m during the period.

“If such turbulent situation is prolonged, Bangladesh has to face the dire consequence in export earnings,” said BGMEA vice president Shahidullah Azim.  It might lead this export earning sector to deeper crises in the coming days, he added.

‘’Now, we are facing fund crisis problem as are not being able to ship our products  on time, we need to take air shipment option which is unbearable to us,”  said Abdus Salam Murshedy, president of Exporters Association of Bangladesh. He also said regular delay in shipment might put us in order crises as buyers are also trying to shift their focus from Bangladesh to other countries.

Reaz Bin Mahmood, BGMEA vice president (finance), said political unrest has already tarnished the image of country’s RMG sector and buyer’s confidence level over Bangladeshi products already went down. We are now facing several challenges over safety and security in boosting the confidence of the buyers amid political unrest.

Since November 1, the country has been going through series of blockades and hartals enforced by the opposition, breaking the supply chain of the country. According to BGMEA, since then there were 41 days of hartal and blockades, which spoiled 41 working days in this sector, leaving this sector in deeper crisis.

Source: Dhaka Tribune


Please enter your comment!
Please enter your name here