Garment order cancellations coming thick and fast

Work order cancellations by international retailers due to the ongoing coronavirus pandemic have cost Bangladesh's garment sector $1.98 billion in revenues as of yesterday, exporters said.

The total value of the work orders that were called off stood at $1.51 billion just the day before.

Work orders for some 634.8 million pieces of garment items have been cancelled, that too in just 729 registered garment factories, as of 6:30pm yesterday, according to statistics from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

"The situation is worsening. Letters requesting the termination of previously placed orders are coming to us every day," BGMEA President Rubana Huq told The Daily Star over phone.

Although buyers are either cancelling or delaying their work orders on a daily basis, wage payments to workers will have be made on time, she said.

The total value of the cancelled work orders was calculated on the basis of the data of the past five days.

So far, about 12 lakh workers have been affected by the situation, she added.

On the bright side, a few BGMEA member factories are making personal protective equipment (PPE), such as surgical masks and gowns, for doctors and nurses who are struggling to treat coronavirus patients in the country.

On the decision whether factories should be shut down amid the pandemic, Huq said the BGMEA has advised member factories to make the decision at their own discretion.

"We don't have the authority to order any closures. That right is reserved for the government," the BGMEA president said.

In light of the country's grim situation, Huq yesterday sent a letter to Gerd Muller, federal minister for economic cooperation and development of Germany, a major apparel export destination of Bangladesh.

In the letter, the BGMEA chief urged Muller to ask German retailers who source their apparel products from Bangladesh to not cancel or hold up their work orders.

"At our end, we are facing uncertainties of an unimaginable extent," the letter read.

The number of garment factories that have had their work orders cancelled is increasing day by day. Some of the brands and retailers who have cancelled their orders are leading names in the apparel market.

Huq in her LinkedIn account has shared a list of buyers who have cancelled their work orders from Bangladesh.

"While businesses in Germany receive government support to address their losses, we here have an existential crisis as we still have to pay the workers' wages," the letter continued.

The BGMEA even assured several brands that they can delay payment for their orders up to 90 days after delivery, encouraging retailers to confirm their orders.

"In the face of cancellation, it is only evident that we will fail to pay our workers which will create a serious social unrest and I am certain that no German brands would like to see that happen on their account," it said.

This unfortunate turn of events is a global disaster that neither humanity nor commerce can afford, Huq added.

"Bangladesh has a different manufacturing reality. We would be deeply grateful if you could kindly urge the German brands to take in all their goods, and allow shipments and production to continue till July at least. Without this support, we will have a disastrous impact on our labour force and our businesses," she said in the letter.