Apparel industry needs strategic plan for future growth: ICCB
The situation in the Bangladeshi garments sector has been improving gradually, but more comprehensive attention and cooperation of owners, regulators as well as buyers is needed to achieve significant results, said a leading chamber yesterday.
The sector came into worldview after the tragic deaths of 1,243 workers in the collapse of Rana Plaza in Savar and in the factory fire of Tazreen Fashions in the recent months, said International Chamber of Commerce-Bangladesh (ICCB).
“Such failure must be tried quickly according to law and should act as a deterrent,” according to the editorial of the April-June 2013 issue of the chamber's news bulletin released yesterday.
The Savar incident was widely covered worldwide because of Bangladesh's position as the number two apparel exporter in the world, ICCB said.
Many international NGOs as well as consumers campaigned for restricting purchase of Bangladeshi garments until the factories ensure workers' safety and labour rights, and many workers are also singing a similar tune, it said.
The apparel manufacturers and experts are suggesting a set of reform roadmap for a sustainable apparel sector broadly dealing with: factory classification, factory health and safety standards, compliance monitoring, responsibilities of trade associations, new RMG economic zones.
They also suggested relocation of unsafe factories, financing the RMG reforms, minimum wage increase linked with efficiency and productivity, trade unions for better worker representation, formation of workers' welfare fund and branding through international public relations engagement.
Nobel laureate Prof Muhammad Yunus and the social business team said if the buyers agree to pay a little extra for a "Happy Workers Tag", the proceeds could be utilised to ensure workers' health, dormitory, pension, provident fund, children's care facilities etc. “The idea deserves serious attention of the buyers,” the chamber said.
The strength of the country's apparel sector is well understood through its ability to supply high-end items to famous global brands.
Currently, more than 30 percent of total RMG export is high-end products. The sector generates a total of $21.5 billion in exports, employing more than 4 million workers dispersed among 5,400 factories, most of which are rural poor women.
Currently, the sector accounts for 80 percent of exports and contributes 16 percent to GDP.
International retailers have interest to stay in Bangladesh, as the country is one of the few places in the world that has enough workers, manufacturing capacity and experience to provide what retailers demand: high volume, low prices and good quality etc.
According to McKinsey & Company, Bangladesh's apparel exports will reach $36 billion by 2020.
Analysts believe that the country's potential is even greater, as the present yearly global apparel export is $412 billion and Bangladesh's share is only 4.8 percent.
The EU and the US are the two largest importers of Bangladeshi garments, which accounts for 86 percent of the total exports, representing only 6 percent of their total apparel demand.
China currently meets 30 percent of total apparel demand of the EU and the US.
Therefore, the four main stakeholders -- the government, suppliers, buyers and workers -- must work together to develop a long-term strategy to realise the potentials of Bangladesh's readymade garments market.
The owners and the government, on the other hand, may consider setting up a foundation to provide support to the garment workers and their children for education and healthcare, including the victims who are otherwise incapable of earning their living.
The existing 5,400 factories could make yearly contribution of Tk 1 lakh for the foundation, the chamber said.
After the recent shocks, the garment manufacturers hope that instead of deserting the Bangladesh's apparel sector, the Western buyers would provide resources and financial support and work together to make Bangladeshi factories more compliant.