RMG exporters in tight spot as costs rise

The readymade garments exporters are now facing a tight schedule as the cost of backward and forward linkage increased after production was hampered by the 13-day Eid-ul-Azha holidays and ongoing restrictions imposed due to the Covid-19 pandemic.

Presently, the cost of transportation, container charges and vessel rent has gone higher but buyers are yet to adjust the additional costs for their orders.

Therefore, RMG exporters now seek a long-term master plan and policy support from the government to avoid such issues in future.

Stakeholders of the industry raised the issues at virtual discussion – Revive the livelihood of RMG – organized by Bangladesh Apparel Youth Leaders Association (BAYLA) on Sunday.

The discussion was moderated by Sakib Ahmed, senior vice president of BAYLA and Deputy Managing Director of Broadway Group.

“During this Covid-19 period, cotton and accessories prices were increased greatly. Yarn and fabrics manufacturers increased the prices to make more profit. But the RMG owners cannot afford it,” said Fazlee Shamim Ehsan, director of the International Apparel Federation (IAF).

When I attend a IAF meeting, representatives from our competitors blame Bangladesh for ruining the global RMG market by offering products at the lowest prices,” he said.

“Therefore, Bangladesh needs to find ways to negotiate better with buyers to ensure a fair price,” said Ehsan.

“We should also set guidelines according to the pandemic situation. When we think about the country’s economy, shutdowns cannot be the only answer. We need to find ways to keep our factories running even despite the coronavirus crisis,” he added.

“From July last year to June this year, we were able to deliver 90 percent of our orders on time. This was because of the support of the BGMEA and BKMEA, which is making our industry stronger,” said Shovon Islam, managing director of Sparrow Group.

“For ensuring a fair price, we need to develop research and development and explore ways to diversify our products. It will help us to get a better price for our goods,” he said.

Bangladesh Garments Manufacturer and Exporters Association Director Barrister Shehrin Salam Oishee said, “Recently, Vietnam came to the 2nd position in the global RMG sector. Vietnam reached the position because of its geographical location. They have improved their Covid-19 situation by ensuring hygiene rules and vaccines instead of imposing lockdowns. We have to take the same approach.”

The speakers also said that the RMG industry was affected the most by the pandemic. Since its outbreak, the industry faced several problems due to lack of orders, financial issues, shutdown of factories, among other major problems.

Moreover, the government closed all the factories in the country last month due to severe lockdown.

However, the recent decision to reopen factories has brought the industry back on track.