Garment makers chase growth despite factory disasters

Three months after the Rana Plaza factory building collapsed, crushing more than 1,100 people to death, garment makers in the nearby industrial zone of Gazipur appear as busy as ever in an industry that employs 4m Bangladeshis and accounts for most of the country's exports.
Labels on the lacy, plum-coloured tank-tops produced by some of the 7,000 workers at the Echotex factory in Gazipur are already printed with Christmas greetings and will be shipped to the UK next month. They are among the millions of garments made each year by the factory for retailers such as JSainsbury, New Look and Fat Face.
Each line of workers produces about five completed items of clothing a minute, and Echotex is planning to expand the factory from 50 lines to 70.
“There's no negative impact on export orders,” says Atiur Rahman, governor of Bangladesh Bank, the central bank, when asked about the state of the garment industry after one of the world's worst-ever industrial disasters. “In fact, export orders may have increased.”
Factory owners and economists are not so sure, with some expecting data for orders executed after the Rana Plaza catastrophe to show clothing exports have been affected.
Bangladesh's clothing shipments have risen fivefold in the past decade to more than $24bn a year, making the country the world's second-largest garment exporter by value after China. But criticism of the country's safety record has put pressure on some foreign companies to withdraw their business.
Disney, previously an Echotex customer, decided to withdraw from Bangladesh in March after a fire at Tazreen Fashions last November killed 112 garment workers.
While Redwan Chowdhury, Echotex's director of human resources, says the withdrawal will not greatly affect Echotex's business, he worries such pull-outs might send a negative signal to the rest of the world. “That will affect the reputation of the country as a whole,” he said.
Rubana Huq, managing director of Mohammadi Group, another large clothing company, said the Rana Plaza disaster has made international buyers extremely careful about the Bangladeshi producers they deal with and prompted them to look at alternative manufacturing countries.
“Customers have been looking at Cambodia very seriously. I wouldn't be surprised if we had a 5-10 percent shift,” she said. “Bigger brands have continued purchasing in the same manner at the same pace from Bangladesh, but there are brands and retailers that did not have big stakes, like Disney, and there is some shying away [from Bangladesh].”
Government ministers, factory owners and trade unionists, however, agree that in the long run, the Bangladeshi garment industry is likely to keep expanding rapidly -- provided there are no further catastrophic accidents.
That is because wages in China, by far the biggest exporter, are increasing rapidly and only Bangladesh among its competitors has the combination of low wages, a large workforce and the right skills to produce clothes rapidly and in large quantities for global retailers. Those Echotex-made tank-tops, which cost about $4 to make, will go on sale in UK high streets for £18.
What is likely to change is the structure of Bangladesh's garment industry and its 5,500 factories, with the large, modern manufacturers taking over or imposing safety controls on the hundreds of subcontractors that have sprung up to serve them at times of high demand. Some could be forced to move to new premises or even close.
The twin disasters of Rana Plaza and Tazreen -- and the safety and ethics audits hurriedly commissioned by buyers and big brands to inspect the factories that make their clothes -- have uncovered a gulf in safety standards and labour practices between the best and the worst.
At Rana Plaza -- a badly built structure whose owner built illegal extra floors to rent to garment makers -- supervisors at the five clothes companies in the building ordered employees to work on the day of the collapse, even after cracks appeared in the concrete pillars and floors the day before.
It is hard to imagine such a sequence of events at Echotex's purpose-built factory in Gazipur. Chowdhury proudly shows off facilities rare in Bangladeshi industry: sophisticated fire safety equipment; a three-stage effluent treatment plant; a crèche; and a kitchen that cooks free lunches for employees. Add in the range of bonuses and social security benefits offered to workers, and staff retention is high. The average turnover of employees in the Bangladesh garment industry is about 12 percent a month, according to Chowdhury. “We are at 3 or 4 percent,” he says.