Readymade garment exporters say that they are struggling to survive the crisis caused by a drop in orders due to a second wave of the coronavirus pandemic in the US and Europe.
They fear a fresh downturn in the industry of around 4 million workers, executives, and small and medium investors.
The clothing industry that fetches 80 percent of Bangladesh’s export earnings is one of the forces driving the economy.
The sector faced a tremendous challenge after the coronavirus outbreak reached Bangladesh and other countries in the region in March last year.
In April, exports plummeted and continued to shed two-thirds of earnings year-on-year to drop below $1 billion per month on an average in the following months.
Workers demonstrated in industrial areas of Dhaka, Gazipur, Savar, Narayanganj and other parts of the country over back pay and sudden layoffs at the time.
The industry weathered the crisis thanks to the credits taken by the owners from the government stimulus package to pay the workers.
A slight growth from September to November raised hopes of a robust rebound during the Christmas holiday season in the West. But the year 2021 has brought no good news.
“I’m desperately trying to stay afloat,” said Khan Monirul Alam Shuvo, managing director of Fashion.com Ltd.
Mohammad Atique, who runs Arion Dresses in Chattogram, said he would be able to continue business in January and February, but has no orders yet for March.
Washim Zakariah, director of Posh Garments in Dhaka’s Tejgaon who has been involved with RMG business since 1988, said he never saw such dire situation in the country’s exports.
“This should be the peak season keeping us busy for 11 hours a day. Usually, the orders are booked 90 days beforehand. But this time we can complete all orders by February even if we work for just eight hours a day. We have no orders to deliver in March,” he said.
The factory that employs 1,200 workers exports women’s garments to 12 European countries, Mexico, Turkey and Singapore. Usually, to make a profit, the factory must run for 10 hours a day, Washim said. They are running the factory for eight hours a day now which makes them earn just enough to cover partial costs, he said.
Arion generally exports its products to Europe. It has been exporting garments on a small scale with 350 workers and officials since 2003. “The woven and knit sectors together are operating at 65 percent capacity. There are no advance orders for March,” said its owner Atique.
Dhaka EPZ’s Softex Sweater has a monthly export capacity of $1 million. The factory also has no export orders for March.
Softex was running at 44 percent of its capacity in January, said Rezwan Selim, managing director of the company. The figure will drop to 20 percent in February, he estimates.
“Orders usually arrive three months in advance. There are no orders for March. The number of workers has been reduced to 850 from 1,300,” said Selim.
Shops are closed in Europe, one of the largest markets of Bangladesh’s apparel products, due to lockdowns, he said. “Orders have dropped alarmingly. It’s a very bad situation. It’s difficult to say how we will survive going forward.”
Fashion.com Lud MD Shuvo said orders for woven products at his factory dropped by 18 percent in December. He currently has 45 days’ worth of work in the woven section and 35 days in the knit section. Generally, the factory would run for 10 hours a day but now the number of hours has been reduced to eight.
“Yarn prices have gone up while product prices have dropped in the new orders. Now, knowing that a small loss is certain, we are moving forward with the orders only to keep the factory operational,” he said.
Cotton prices have risen due to a decline in production, said Shuvo. The price of yarn per kilogram has increased to $3.6 from $2.6.
The peak season in the garments sector runs between November and March, he said. It’s difficult to complete projects even after working 10-11 hours per day in this period. There is no time to breathe.
“Summer in Europe starts in March. We were supposed to get orders for T-shirts now. But we haven’t received any,” said Shuvo.
The foreign buyers are cutting the prices of the apparels, he said.
“The prices of fabrics are exceeding the prices of clothes. There are no orders in the factory and the buyers are taking advantage of the situation,” he alleged.
The garment exporters are now looking forward to Covid-19 vaccines, hoping it will rid them of the uncertainties.
Leaders of the garment industry owners’ association said the country’s garment sector will get hit very hard as the second wave of the pandemic strikes countries in the developed world.
The impact of the second wave of the coronavirus is worse than the first one, said Anwar-Ul Alam Chowdhury Parvez, former president of Bangladesh Garments Manufacturer and Exporter Association.
“The situation in the UK, Germany and France is pretty bad. The US isn’t faring too well either. Sales in Christmas, including in the fashion world, were poor. They had to stop selling,” he told bdnews24.com.
