Resilience in value chain stressed for RMG sector recovery

Ibrahim Hossain Ovi

To face the current and future crisis, caused by the Covid-19 pandemic, successfully, Bangladesh’s apparel sector has to build strong resilience within a relatively diversified but existing value chain, said experts.

A true partnership between brands, suppliers, governments and international organisations are key to build resilience, they said.

They made these observations at an international webinar titled “Recovery of the Apparels Sector of Bangladesh and Sri Lanka: Is a Value-chain-based Solution Possible?” jointly organised by the Centre for Policy Dialogue and the Institute of Policy Studies of Sri Lanka (IPS) in partnership with Southern Voice on Tuesday.

“The value of a value chain is truly optimised when its stakeholders work collaboratively, particularly during a crisis,” said Husni Salieh, Director, Strategic Transformation, MAS Holdings, Sri Lanka.

Building resilience within a relatively diversified but existing value chain can face the current and future crisis successfully, said Salieh.

Dan Rees, Director of Better Work, International Labour Organization, insisted that sector-specific measures might not be enough to address the existing challenges.

He also added that to build strong resilience and protect the workers, trust and cooperation among the stakeholders and a long-term plan is required.

The recovery of the global apparel value chain from the Covid-19 disruptions faced a setback owing to a prolonged demand slump, he said.

ILO could consider playing an entrepreneurial role in bringing together international buying countries and supplying countries to restructure global demand management, said Rehman Sobhan, founding chairman of CPD.

He further added that tripartite exercise involving the government employers and workers should be carried out to produce a mutually accommodating system of unemployment insurance to address not just the immediate impact of the Covid-19 crisis but a long-term crisis.

Meanwhile, Mostafiz Uddin, Founder and CEO, Bangladesh Apparel Exchange asked for ensuring responsible buying practice by the global buyers as the sector, he said, witnessed unethical practices such as order cancellation and delayed payment.

“There is a lack of responsible business practices among the brands during the ongoing crisis. The brands should consider their suppliers as business partners and act responsibly,” he said.

After witnessing several incidents of work order cancellation and payment cancellation or non-payment, Mostafiz observed no change in contacts, which, he said “is very crucial” for partnership and to create a win-win situation.

Buyers' representatives, however, focused on digitisation and products diversification.

“The pandemic showed the importance of acceleration of digitalisation in doing business. Bangladesh and Sri Lanka should consider how the market could be made more agile and flexible in terms of product diversification, services connected to the products and addressing the sustainability to achieving the possibility of trading higher than in the past,” said Pierre Börjesson, Head of Sustainability - Global Production, H&M Group.