The readymade garment sector of the country is facing an adverse situation due to a lack of work orders, the dollar crisis, hikes in gas and electricity prices and the high cost of production.
As the owners failed to cope with the situation, they closed down a total of 113 readymade garment factories in Chattogram.
The demand for clothes made in Bangladesh is now low in the European and US markets. The pace of new export orders is also slow. Besides, the Russia-Ukraine war has reduced the purchasing power of Western consumers.
Reliance Apparel Ltd, an export-oriented garment factory located in BSCIC Industrial Estate, had not been getting work orders from foreign buyers for a long time.
Emdadul Haque, assistant manager of Reliance Apparel Ltd, went to the Chittagong Bond Commissionerate and applied for the cancellation of the company's bond licence. The commissioner cancelled the licence after they found that the company's export-import remained closed due to a financial crisis and lack of work orders from foreign buyers.
SN Sportswear Limited, a company in the Bakalia area, was also facing the same problem. They also applied for bond licence cancellation and the Chittagong Bond Commissionerate cancelled their licence on September 27.
For the same reason, the bond licence of Amazon Apparels Ltd was cancelled on October 3. They also applied for cancellation of the bond licence as they did not get work orders.
The country’s garment industry is largely dependent on European and US markets. Bangladesh, the world’s second-largest apparel exporter after China, accounts for 6 per cent of the global market.
However, due to the dollar crisis and the hike in manufacturing costs, western buyers are now cancelling work orders and shifting them to China and Vietnam.
According to BGMEA sources, there were 694 registered factories in Chattogram. As there was no sign of production, Chittagong Bond Commissionerate cancelled the licences of 126 factories in the last 3 years from 2021 to November 30, 2023.
The institutions whose licences have been cancelled include Link Accessories Limited, Accessories Mart, The Chittagong Fashion Gamentors Limited, Mishu Apparels Ltd, Modartis Limited, James Packers and Cartoons Ltd, Gangshi Industrial Co Ltd, Rainbow Apparel Ltd, Mint Accessories Ltd, Khaja Elastic and Label Industries Ltd, Vanguard Fashion Ltd, YB Gamentors Ltd, Multi Textiles, Ryan Knit Ltd, Techno Dress Ltd, Antar Fashion Ltd, New Millennium Fashion Ltd, Glare Fashion Ltd, BSA Gamentors Ind, PHP Knopf Continuous Galvanizing Mills Ltd, Pabon Textile Mills Ltd, Sitex Sweaters Ltd, Kimtex International Co Ltd, Dresswell Ltd, Oventex and Accessories Ltd, IFFCO Gamentors Ltd , Dress Ltd, Swadesh Gamentors Ltd, Azim Mannan Gamentors Ltd, Global Trousers Ltd, IFFCO Gamentors Ltd, Global Specialized Gamentors Ltd, Global Apparels Ltd, D-Water Tech Limited, Factory Bay Area, Specs Limited, Global Gamentors Limited, Sumo Sweaters Limited, Clifton Gamentors Limited, Jaffa Gamentors and Textiles Ltd.
The institutions whose licences have been cancelled also include Anwara Apparels Ltd, Arena Fashion Ltd, Abul Khair Steel Products Ltd, Nespan Fashion Management Ltd, Sagarika Textiles Ltd, Shah Mohen Apparels Ltd, Combined Texwear Ltd, KZM Apparels (Pvt) Ltd, Fergasam (Bangladesh) Ltd, Bapican Automax Gamentors (Pvt) Ltd, Salma Apparels Ltd, U-Tex Designers Ltd, KNS Packaging Ind Ltd, Riverside Apparels Ltd, ZM Apparels Ltd, Mark Fashion Wear Ltd (Unit-01), Valiant Gamentors Ltd, HN Gamentors Ltd, Premium Style Ltd, Maxima Engineering Ltd, Surma Leather and Footwear Industries Ltd, RSI Apparels Ltd, Ambia Packaging, Chittagong Ambia Accessories Ltd, Global Knitwear Ltd, Fur Chemical Industries Ltd, Sun Glory Apparels Ltd, Wally Tex Ltd, M and S Sweaters Ltd, International Sart Line Ltd, Friends and Friends Apparels (Pvt) Ltd.
BGMEA vice-president Rakibul Alam Chowdhury told The Business Post recently, "Bangladeshi factories are gradually closing down. The apparel sector is in recession. There are many reasons for the closure of exporting firms. One of the main reasons is a lack of work orders.”
Most of the export-oriented factories in Chittagong have closed down due to a lack of work orders, he added.
After the Rana Plaza collapse, he said, under the National Tripartite Plan of Action (NTPA), Accord, Alliance and national initiative started the garment factory assessment programme. Among these, 85 per cent of the factories under the Accord and Alliance have been inspected, but less than 1 per cent of the factories have completed 100 per cent repairs under the national initiative. “As a result, many export-oriented companies have closed down.”
He further said, “Bangladesh-made clothes are exported to European and American markets. Of this, 60 per cent goes to the European market and 40 per cent to the American market. But for the past few years, purchase order is not what it used to be. The European market saw a 20 per cent decrease in orders and the American market decreased by 30 per cent.”
“Usually, we receive the February-March orders in November-December. But this year the orders have not come yet. And if it doesn't arrive by December 15, there will be no chance of getting more orders this year.”
When asked about the cancellation of the bond licence, Chittagong Bond Commissioner AKM Mahbubur Rahman said the bond commissioner has the power to cancel the bond licence due to various reasons.
“Most of the 126 institutions whose bond licences have been cancelled this time have applied for the cancellation of their bond licences due to the financial crisis and a lack of purchase orders.”