BGMEA asks members to consider shutdown of factories | The Daily Star
12:00 AM, March 27, 2020 / LAST MODIFIED: 02:28 AM, March 27, 2020

BGMEA asks members to consider shutdown of factories

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday said its members can consider shutting factories to avoid the spread of the coronavirus.

However, if a factory management decides to run the factory it will have to follow the highest hygiene and safety measures such that the workers are safe, said the board of the apparel makers' platform.

The decision was taken at a board meeting of the BGMEA in Dhaka chaired by Rubana Huq, president of the association, yesterday.

The decision from the BGMEA came a day after Prime Minister Sheikh Hasina announced a Tk 5,000-crore stimulus package for the export-oriented sector to brave the fallout of the coronavirus pandemic.

Garment shipments account for more than 80 per cent of the national exports of Bangladesh and the sector employs more than 40 lakh workers. 

The prime minister has given specific directives and called for taking some measures to ensure protection and good health, said Huq in the meeting.

Under these circumstances, those who are in a position to announce general holiday for workers, they can do so.

Those who think that they would keep factories open, they have to do so by ensuring the highest precautionary measures.

"From a humanitarian point of view, as the largest industry we should follow the prime minister and set an example. Hopefully, you will consider announcing general holiday."

Factories will remain closed as long as the general holidays of the government continue, she said.

All government and private offices except those involved in emergency services such as law enforcement agencies and hospitals, will be closed from March 26 to April 4 to prevent the promulgation of coronavirus.

The garment factories have been in operation amid the coronavirus fear since Bangladesh reported the maiden cases of infections on March 8.

Since then, the virus has sickened 44 people and led to the death of five, according to the Institute of Epidemiology, Disease Control and Research (IEDCR).

However, factories that plan to make personal protective gear (PPE), an item crucial to fight coronavirus, can remain open, according to Huq.

Some factories have already started making PPE.

The stimulus package from the government came as the amount of losses in the garment and leather and leather goods sectors continues to swell since international retailers are cancelling or putting on hold orders every day.

Many western retailers have already shut down their stores in their respective countries because of the collapse in demand.

The closing of stores in Europe and the US badly impacted Bangladesh's apparel and leather goods export.

As of 5.00pm yesterday, $2.67 billion worth of garment export orders were cancelled by international retailers, according to data compiled by the BGMEA.

Some 959 garment factories reported a loss of 826.42 million units of work orders.

The cancellation will affect 1.95 million workers in woven, knitwear, denim, sweater, accessories, spinning, weaving and other related businesses.

The entire apparel industry of Bangladesh has been hit hard due to the global outbreak of coronavirus and apparel brands responded to it by cancelling or deferring orders, said Mostafiz Uddin, managing director of Denim Expert, a leading denim exporter.

It is, however, too early to comment on whether an individual country would lose competitiveness or not, according to the entrepreneur.

"It will depend on how well countries tackle the challenge and what measures they take."

Due to COVID-19 fears, the 12th edition of the Bangladesh Denim Expo, which was scheduled to be held on April 6 and 7, has been postponed.

Bangladesh is a major supplier of sweater products to the world and exports approximately $3.5 billion worth of items annually.

Over the last 30 years, Bangladesh has grown into a sweater hub as many entrepreneurs invested heavily, said Mostafa Sobhan Rubel, managing director of Dragon Group, a local sweater exporter.

"The outbreak has started to impact the sweater segment badly."

As almost 80 per cent of manmade sweater yarns are imported from China the lockdown in the world's second-largest economy has slowed the supply chain, Rubel said.

"Now with the spread of the virus globally, Bangladesh's sweater exporters are now in a dilemma."

For the sweater factories, the period of November to February is off-season and they run at less than 50 per cent of their installed capacity. Peak season starts from March and run through October.

"Just as we were approaching the peak season with huge orders booked until and July, the virus struck the entire world where our sweaters are exported," Rubel said.

Due to the global shutdown, some buyers are asking Bangladesh's sweater-makers to keep the goods on hold and some are even cancelling orders, he said.

The leather and leather goods export has also been affected.

"We are running at only 30 per cent of our capacity due to coronavirus," said Saiful Islam, president of the Leathergoods and Footwear Manufacturer & Exporter's Association of Bangladesh.

So far, the amount of work order cancellations in the leather goods and footwear industries stands at $316 million, he said.

The Bangladesh Tanners Association has announced closure of all 154 tanneries from Thursday until April 4, according to Shakawat Ullah, general secretary of the association.

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