Al Amin :
Garment manufacturers have urged the government to give them additional policy support to help the sector overcome the negative impact of the ongoing Covid-19 pandemic.
The supports are enhancement of the existing incentives from 4 percent to 10 percent for next two years, immediate implementation of stimulus package and reduction of corporate tax in the sector, they said.
According the BGMEA sources, around 320 out of 2200 of its member factories were closed in the last few months. On the other hand, BKMEA said around 110 out 850 of its member factories were closed during the time.
“Under this circumstance, we need government’s support to survive at this moment. Among the other supports, we need enhancement of incentives from 4 percent to 10 percent for next two years immediately,” said Hatem Ali, Vice-President of the Bangladesh Garment Manufacturers and Exporters Association (BKMEA).
Hatem said also garment industry, the major foreign currency earning sector, will be facing a big trouble, if the policy makers delay to implement the incentive package.
He further said Bangladesh earned $3.24 billion from apparel shipment in July though the amount is 1.98 per cent lower than a year earlier and the export earnings from the sector are likely to more below 1.6 billion in August, September and October.
Ahead of the Christmas Day, the export earnings from the sector may rise, but the country may experience a negative growth in export, he observed.
Prof Dr Mustafizur Rahman, Distinguished Fellow of CPD, said, “We need to give importance to a few aspects – business package, exchange rate policy, early release of stimulus packages, ease of doing business, bringing down the lead time and making the market more competitive.”
“We also need to encourage more foreign investors to invest in the RMG sector of Bangladesh, which will play a significant role,” he added. The sector insiders said that buyers started to place work orders after reopening of the stores of the retailers in European and American markets, but insufficient to meet operational cost of the factories at the moment.
Moreover, the prices of the orders placed by the buyers are at least 10-15 percent less than the prices of normal time with delayed payment as they feared of second wave of the ongoing pandemic, they said.
“It is too difficult to carry out the orders, though some factories are receiving due to realize their operational costs and banks loans,” said Faisal Samad, Senior Vice-President of the BGMEA.
Shams Mahmud, President of the DCCI, said orders are coming but it is slow as the buyers from the western countries are moving forward cautiously fearing the second wave of the Covid-19 pandemic.
He also observed that there is a scope of increasing export earnings from the sector by developing the sector technologically and making valued items.
“At the moment we are using 60-70 percent of our capacity. But the major threat is the second wave of the coronavirus infection in the Western market. If that happens, it will be a bigger disaster for us,” said Azimul Islam, Managing Director of Alif Group.
Garment export receipts in July are 14.18 per cent higher than the monthly target of $2.84 billion.
Of the total garment shipment, knitwear exports grew 4.30 per cent year-on-year to $1.75 billion while woven exports fell by 8.43 per cent to $1.49 billion, according to data from the Export Promotion Bureau.
Earnings from apparel shipment in April, May and June stood at $0.37 billion, $1.23 billion and $2.28 billion respectively.
The export earning target was $38.20 billion the immediate past fiscal year. But the country exported $34.13 billion worth of RMG products in the 2018-19 fiscal.
