• Thursday, Feb 02, 2023
  • Last Update : 09:24 am

BGMEA chief: RMG in crisis with factories running at 55% capacity

  • Published at 11:36 am June 4th, 2020
Photo: Mahmud Hossain Opu/Dhaka Tribune

Buyers have cancelled orders worth as much as $3.15 billion since the pandemic unfolded

The Bangladeshi apparel sector may lose as much as $5 billion in the outgoing 2019-20 fiscal year due to the slump triggered by the global coronavirus pandemic, says the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

According to its President Rubana Huq, the factories are now running at only 55% percent capacity due to lesser work orders.

“Global consumption of clothes is expected to fall by 65% and our work orders will also slump by 30%, which means export earnings will take a hit," she told an online media call on Thursday.

Buyers have so far, cancelled orders worth as much as $3.15 billion since the pandemic unfolded with factories in Bangladesh left with imported unused raw materials piling up in warehouses, said the trade body leader.

"It will be not possible for factories to keep all of their workers as they are now running at almost half of their capacities due to less orders. Owners might have to lay off workers from as early as this month,” said Huq.

The BGMEA chief claimed that retailers, who had pledged to take 26% of the cancelled orders, are now demanding discounts and delaying payment against shipped merchandise.

She, however, sees a silver lining in the US’s move to cut its order from China by 52%.

“If we can survive the pandemic, Bangladesh will be a good sourcing destination for apparel goods," said Huq, who heads the Mohammadi Group.

To make the readymade garment industry and its supply chain sustainable after the pandemic, the BGMEA chief urged manufacturers to focus on virtual marketplaces, as online businesses are growing daily.

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