Garment exports show resilience
Garment exports show resilience
Shipments rise 16pc in the last one year despite industrial disasters like Rana Plaza collapse
The one word that describes the garment sector is resilience. Exports beat doomsayers, rising around 16 percent to $23.86 billion year-on-year during April 2013 to March 2014 despite industrial disasters like the Rana Plaza building collapse.
“Our apparel exports are on a growth trajectory as major global brands are working with local garment makers to improve workplace safety,” said Mustafizur Rahman, executive director of Centre for Policy Dialogue.
The initiatives of the global retailers and brands to ensure fire safety and structural integrity in the garment factories send a positive message to the international community, he said.
Apparel exports grew at double digits despite various hurdles as the garment makers have welcomed the transformation initiatives undertaken by major retailers, said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association.
BGMEA has shut production at 13 risky factory buildings in and around Dhaka city on prescriptions from factory inspectors of European and North American clothing retailers, he said.
Garment makers are also working to relocate risky factories to purposely-made buildings, Islam said.
After the Rana Plaza accident, international brands and retailers are offering lower prices for Bangladeshi garments, which ultimately increased the volume of orders, said David Hasanat, managing director of Viyellatex Group, a leading garment exporter.
“Global retailers are using the Rana Plaza issue as a bargaining tool to cut prices,” he said, adding that the garment sector witnessed price cuts by around 6 percent over the last one year despite a rise in production costs.
Hasanat said his company registered a 14-15 percent export growth in the last one year, compared with the previous year.
The building collapse, however, certainly affected the overall export growth, the CPD executive director said.
Though the country registered around 13 percent export growth in the first nine months of the current fiscal year, the rate could have been more than 20 percent had the building collapse not occurred, he said.
Garment makers also echoed the same. “We could have grabbed more orders had there been no industrial accidents and political unrest,” Islam of BGMEA said.
Global retailers cancelled orders worth around $110 million from 57 factories housed in shared buildings in the last six months, according to Islam.
Currently, growth rates for apparel shipment are on the decline. In March, garment exports saw a 3.67 percent year-on-year growth, the lowest since November, according to Export Promotion Bureau.
“The sluggish growth is expected to continue until September as a negative image that was created globally after the building collapse is taking its toll,” said Abdus Salam Murshedy, managing director of Envoy Group.
Envoy Group saw its orders drop 10-15 percent in the last one year, he said.
Exports will face another blow when Accord and Alliance, the two platforms of global retailers, will start factory inspections in full swing as many plants will have to be shut during the safety checks, he said.
Rahman of CPD said Bangladesh has immense potential to increase its apparel exports due to the quality and costs of its products. "If we can brand Bangladesh as a compliant country, many orders, especially from China, will pour in.”
The government will have to fulfil the promises made after the Rana Plaza collapse, Rahman said.
Bangladesh is now the second largest garment exporter after China. The country has around 4,000 active garment factories, employing nearly 3.6 million people directly, 80 percent of whom are women, according to BGMEA.
Garment exports accounted for 79.62 percent or $21.5 billion of the country's total overseas sales of $27 billion in fiscal 2012-13, according to EPB.