RMG orders galore

It is good news that Bangladesh readymade garment (RMG) manufacturers are receiving more orders from overseas buyers than they can handle at the moment. This comes at a time when the essential foreign currency earning sector suffered one crisis after another in the last two years during the Covid-19 pandemic.

A report on the topic published yesterday in this daily says that large volumes of orders are coming to Bangladesh mainly because of the escalation of Covid-19 infection cases in Vietnam, and some other international factors. As a result, overseas buyers are now looking at Bangladesh to have their garments made here. Interestingly, the local RMG leaders think the situation has created the opportunity for them to take collaborative steps for negotiating better prices from the buyers.  

The RMG sector is yet to get back to the pre-Covid days as it struggles to recover from multifarious hardships triggered by the pandemic, the most important of which was the fear of cancellation of ongoing orders. The general feeling is that it will take months to salvage the financial losses, particularly because of the long shutdown. Sector leaders sense the urgency of resolving many other pressing issues, especially price negotiation with buyers.

We recall that the country’s target from garment export in the 2019-20 fiscal was USD 38.20 billion. But with the onset of Covid-19 and resulting chaos and confusion, exports declined to USD 27.83 billion. Bangladesh exported RMG products worth USD 34.13 billion in the 2018-19 fiscal. Many factories had closed down in the middle of 2020 as workers left for their ancestral homes because of the pandemic.

No denying, COVID-19 posed a serious challenge to the RMG sector as it is a labor-intensive sector where the fear of getting infected was more prevalent among workers. In the absence of sufficient and appropriate knowledge regarding the impact of the virus, factory owners could not take any concrete decision on how to run their factories. At the same time they were faced with the threat of order cancellations and price renegotiations by buyers during the early stages of the pandemic. On average, BGMEA member factories experienced a decline in revenue of almost 17.4 per cent in 2020 compared to 2019. Side by side, employment declined by 7.4 per cent in the second half of 2020 compared to pre-COVID-19 levels.

One study shows that in terms of workers’ health, about 3.6 per cent of RMG factory workers had experienced symptoms of or tested positive for COVID-19. According to a BGMEA report, exports during the first 15 days of April 2020 were 84 per cent lower than that of the corresponding period in 2019. 

 This is encouraging to note that the RMG and textile sector leaders are considering building up the technical textile market, as they envisage export of low-cost RMG products cannot be a sustainable business in the long run. At the same time they suggest efforts should be made to focus on developing skills and adopting technology for boosting productivity and capacity utilisation in factories.

In view of the shortage of raw materials, RMG leaders urged the textiles and jute ministry to boost research initiatives, so that yarn and fabrics made from the golden fibre (jute) can become global brands. This would meet the demand of the buyers for environmentally sustainable clothing options, and jute-based fabrics can take advantage of this rising demand. In this regard, more research to improve quality is needed as the existing types of jute-based yarn and fabrics are not good enough to be used by the readymade garment industry for making export-quality products. Also attention should be given to the need to increase value addition in the apparel sector by using yarn and fabrics produced by local textiles mills.

This needs to be mentioned that the readymade garment sector in Bangladesh still remains at the top of all other economic sectors in terms of earning foreign currency for the country. Authentic data sources corroborate the fact that about 84 per cent of the country’s total export earnings come from this vital sector. Therefore, it is imperative that all local and foreign stakeholders work in a concerted manner as per a time-befitting policy for its growth and sustainability.