Supplier decries Tesco's threat to cancel orders
Liberty Fashion Wears Ltd yesterday demanded justice after British retailer Tesco threatened to cancel its work orders.
The apparel exporter claimed the threat was based on a "flawed" inspection report that largely contradicted the assessment by local authorities and experts.
“We are a victim of a plot. There are no ethics in the business," Mozammel Huq, chairman and managing director of Liberty Fashion, told reporters at a briefing at the National Press Club in Dhaka.
His company organised the press conference to protest Tesco's decision to cancel an order worth $2 crore from the Savar-based factory, which has been making products for the world's third largest retailer for 14 years.
The factory is eager to resume production in one of its buildings, which has remained closed following an inspection report from Medway Consultancy Services (MCS), a British surveyor appointed by Tesco that called for immediate closure of the unit for safety reasons.
Surveyors of MCS visited the factory in May to check the structural design. In its report, MCS marked building 2 "Red", while indicating that the factory can continue production in 11 of its other buildings, said Huq.
Tesco's surveyor team recommended immediate evacuation of the building due to the precarious state of its columns, beams and slabs.
The MCS inspectors forced the company to close the building, said Huq.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) found Tesco's withdrawal from Liberty Fashion rather heavy-handed.
An expert panel, comprising professionals from Bangladesh University of Engineering and Technology and Rajuk, has also inspected the factory and cleared Liberty Fashion's building of any immediate risk, a direct contradiction to the findings of MCS.
“The factory owner does not need to evacuate the building immediately. However, he must conduct a comprehensive test analysis to find out if there are any big risks for the future,” said the expert panel.
Huq said he has started to act on the recommendations of the expert panel.
The civil engineering department of Buet also did not raise any major question about its safety and structural design and only urged the factory to reduce its moveable loads in the storage areas and advised against adding any new floors.
Ali Asgar and Associates, a professional engineering firm, also gave clearance to the factory.
The building was constructed in 2005 and was extended in 2007 to its present form—three-and-a-half stories high, with each floor spanning 44,000 square feet.
Huq, who employs 5,000 workers to manufacture 30,000 pieces of jeans, said he is losing Tk 50 lakh a day because of Tesco's decision. "The MCS inspectors also told BGMEA that the building would collapse within 60 years. But that has not happened," said Huq.
The building in question is a key part of the factory's production chain. The factory's production has dropped to 4 lakh pieces a month from 6.5 lakh pieces because of the closure.
Other buyers are also not placing orders with us, as work has stopped and panic unduly created by MCS," said Huq. The company is currently working on orders that were previously placed by buyers.
However, Tesco said it would reconsider its decision if the test results from Buet's investigation team favours Liberty Fashion, Huq previously told The Daily Star.
“Now that the Buet team has cleared the building, I hope Tesco sticks to its word and reinstates the order,” he said.
Liberty Fashion wrote 19 letters to Tesco's Bangladesh office in Dhaka since the first week of June this year, but the retailer has not responded to any of the letters properly, he added.
Huq has already sent an open letter to Sir Richard Broadbent, chairman of Tesco, urging him to intervene and compensate the factory Tk 300 crore it lost due to closure of the building in the last four months.
"If the factory shuts down, it will not only lose Tk 300 crore, but 5,000 of its workers, 80 percent of whom are women, will be unemployed," Huq said.