PPE a silver lining for ailing garment industry

The country's garment industry could benefit from the ongoing coronavirus pandemic due to the soaring demand for certain products, said KI Hossain, president of the Bangladesh Garment Buying House (BGBA), yesterday.

Soon after the coronavirus outbreak in Wuhan, China last December, the global demand for personal protective equipment, hospital bed sheets, masks and other isolation fabrics rose sharply.

Similarly, the domestic markets also saw a sharp increase in demand for these goods. Therefore, garment manufacturers should exploit this opportunity to make better business, according to the BGBA president.

"The market size for these goods is now worth several billion dollars and we can easily grab this market as we already can produce those items at our garment factories," Hossain said while addressing a press conference held at the Economic Reporters Forum office in Dhaka.

Besides, local companies further down the supply chain such as spinners, weavers and dye factories, could also greatly benefit if this industry is exploited at home and abroad, he added.

Bangladesh's garment industry has suffered greatly because of the novel coronavirus. With governments all over the world declaring nationwide lockdowns to curb the spread of the deadly pathogen, there was a drastic fall in the demand for apparel products.

Buyers from the US and the EU, two of Bangladesh's biggest export destinations, then began to cancel or hold their orders. Subsequently, local manufacturers and other businesses related to the industry were hard-pressed to maintain their operating expenses with almost zero sales.

However, in response to a query, Hossain said that he is not in favour of terminating the workers of buying houses. About four lakh people are employed by the 826 buying houses in Bangladesh, he said.

The BGBA president also criticised a few foreign companies, such as Debenhams, which laid off all 69 of its staff members at its Bangladesh office.

"I suggest the government to investigate how certain foreign buying houses have been conducting their business here while violating the country's regulations," he said.

There have been cases in the past when a foreign buying house suddenly terminated a good number of its skilled workforce before closing its operations without making any payments to suppliers.

Most of those suppliers are unable to force the foreign companies to make their payments and so, it is a big loss for the country.

However, Hossain urged the authorities concerned not to blacklist any international retailers due to order cancellation as it will merely ruin Bangladesh's 'bright image'.

"Despite the situation, the solution is not to cut off our ties with the retailers with whom we have a warm relationship just to punish a few bad buyers," he said.

The total value for cancelled or deferred work orders has amounted to $800million so far.

To help the garment industry survive the coronavirus pandemic, Hossain demanded that the government allocate an easy loan service for apparel buying houses from the previously announced Tk 20,000 crore bailout package.

Hossain also urged the government to reduce advanced income tax from 10 per cent to 5 per cent in the upcoming national budget for fiscal 2020-21.