• Thursday, September 18, 2014

Garment factories' profits erode

CPD analyses impact of shutdowns, blockades on apparel manufacturing

Star Business Report

The average losses incurred by a garment factory due to the most recent spell of shutdowns and blockades would cross $600,000, the Centre for Policy Dialogue said yesterday.
The think-tank came to the inference based on the findings of an impact assessment survey conducted by the Bangladesh Garment Manufacturers and Exporters Association on 42 units between December 1 last year and January 11.
“Whilst no comprehensive damage assessment is available, it is highly conceivable that the sector has suffered significant cost escalation and profit erosion,” the CPD said.
The BGMEA survey found the total loss incurred by the 42 units is $26.1 million.
“In some instances, business deals could not be stuck and orders got cancelled and shifted because of the uncertainties,” the CPD said.

It also said that transportation cost experienced a significant rise during the blockade: the payment for a truck which previously varied between Tk 12,000 and Tk 15,000 increased to Tk 45,000 to Tk 60,000.
The exporters were forced to choose the expensive air shipments to meet the deadlines set by the international retailers. Air shipment volumes increased 38.7 percent to 157,000 tonnes during the January-November period of 2013 from a year ago.
Currently, the number of active woven garment factories in the country will cross 4,000 while the number of active knitwear factories will cross 1,500 while the number of spinning mills is 395, according to textile and garment-related trade bodies.

Published: 12:00 am Sunday, January 26, 2014

Last modified: 11:34 pm Sunday, January 26, 2014

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