Political unrest makes H&M wary of Bangladesh
Swedish fashion retailer Hennes & Mauritz (H&M) wants to source more products from Bangladesh due to the country's cheap labour, but political unrest and violent strikes bar the company from expanding here, Dow Jones Newswires said in a report yesterday.
"The often-recurring strikes and demonstrations disrupt production and cause delays. We want to grow in Bangladesh […] a stable market will benefit us -- buyers, the suppliers and the workers," Dow Jones quoted H&M's head of sustainability Helena Helmersson as saying.
H&M, the world's second-largest clothing retailer, sources 25 percent of its products from Bangladesh and aims to increase the figure.
H&M is not the only big retailer looking to expand in Bangladesh.
The local industry already accounts for about 80 percent of Bangladesh's exports and employs about 30 lakh people.
Research firm McKinsey expects apparel exports from Bangladesh to double by 2015 and triple in 10 years, with big buyers moving from China as capacity constraints and wage inflation erode profit margins, the report said.
But Bangladesh has been plagued by political turmoil, with violent street protests erupting last month following the disappearance of a leading opposition figure, the report added.
In addition, working conditions remain poor, with substandard lighting, overcrowding and long working hours being common.
In 2010, 21 workers were killed by a fire at a factory making products for H&M and other retailers. Furthermore, apparel workers have no real collective force in Bangladesh.
"The situation is highly fragmented," Helmersson said. "There are about 56 garment and textile workers' unions."
H&M said it aims to use its influence to apply pressure on its suppliers in Bangladesh to improve working conditions.
In 2011, it held talks with government representatives, unions, and the biggest suppliers about its expansion plans and the surrounding issues.
"We told them how we would like to grow in Bangladesh, but that the ongoing instability in the country makes it difficult for us to plan production and makes us wonder if we dare grow there," Helmersson said.
She added H&M wants suppliers to set up democratic labour committees that can negotiate wages and working conditions with factory owners, and a programme will be rolled out and tested this year and next.
"We are big buyers in Bangladesh and we want to take greater responsibility for working conditions there," Chief Executive Karl-Johan Persson said. "And we reward the suppliers who take the greater social responsibility with more business, larger orders and longer contract,” the report said.
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