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Order problems disrupting 8-hour production cycle

Staff Correspondent
08 Feb 2023 00:00:19 | Update: 08 Feb 2023 00:00:19
Order problems disrupting 8-hour production cycle

Most of the readymade garment factories are unable to run for a minimum of eight hours a day as buyers are cancelling, delaying, and putting on hold work orders because of the ongoing global economic crisis.

Besides, in some cases, a number of factories keep production suspended two to three days a week, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Faruque Hassan told a press conference at his office in the capital’s Uttara on Tuesday.

“The suspension in production is the result of a significant fall in work orders. Many factory owners are even booking orders at lower rates to stay afloat,” he said.

Amid all this, the government is frequently raising gas and power prices, he said, adding the recent hike in energy prices will increase production costs, which will make it difficult to remain competitive in the global market.

Considering the work order situation, the apparel industry is not in a position to bear the burden of this sudden hike in electricity and gas prices,” Faruque said. 

He also said buyers are even demanding that suppliers share a portion of the losses they are incurring due to low sales caused by a fall in demand. “The decrease in demand stemmed from the global high inflation in the wake of the Russia-Ukraine war.”

The BGMEA leader said despite the fall in orders, value increased due to the export of some high-end products. He also expressed concern about the frequent thefts of export-bound garments from trucks on the Dhaka-Chattogram highway.

Exporters are facing huge losses due to the thefts while buyers are warning that they would not place orders, Faruque said. 

He said the BGMEA has demanded stern action against the miscreants involved in the thefts.

If necessary, the law should be amended to include tough provisions to punish the thieves as these incidents tarnish the image of the country and also that of the apparel industry in the international community, Faruque noted.

He said when the government increased fuel prices, the prices of essential elements required for power production were high in the global market. “But in the last couple of months, fuel prices fell in the international market. The government should now readjust prices.”

Talking about liquefied natural gas (LNG), he said when the government increased gas prices, LNG prices in the spot market were very high.

“But as far as I am concerned, current LNG prices are $17-18 per cubic metre in the global market. Besides, we get gas from three sources – local production, LNG under long-term contract, and the spot market. Gas prices should be fixed based on the average of the three sources,” he said.

He urged the government to increase power and energy prices rationally considering high inflation in the country and low export orders.