• Monday, Dec 05, 2022
  • Last Update : 09:54 am

BMCCI: Situation to worsen post-pandemic for RMG order cancellations

  • Published at 04:28 am July 19th, 2020
Women make up a significant portion of Bangladesh’s workforce Rajib Dhar/ Dhaka Tribune

BGMEA and BKMEA have been urged to work together with the government and support each other

The situation of RMG sector will worsen after the Covid-19 pandemic as orders worth US$3.1 billion have already been cancelled in Bangladesh.

To fight the situation, Bangladesh's garment industries are urged to work together with the government and support each other for saving the industry.

Speakers of a web talk series (session-7), titled “RMG industry pre-covid and post-covid,” organized by Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI), expressed their concern over the situation, based on the current and post-pandemic circumstances, on Saturday.

Syed Moazzam Hossain, former president of BMCCI, said: “500 industries stopped working in the last two months. I do not know how many more will stop next. It is getting difficult to sustain them.

“If 50% garments run at the end of the year, 50% jobs will be lost in the garment sector only. A total of 2,000 industries have already closed down and three million people have lost their jobs. So, imagine what a disastrous situation will arrive in the post-pandemic time,” he added.

“The peak time will be in November and December. However, till then we have to run our garment industry and continue our businesses, otherwise it will be a complete deadlock. The government’s policy needs to be very pro-active and positive so that we can start negotiating with our buyers,” said Moazzam.

He also said: “Of the three billion dollar order cancellations, we hope to get back 50%-60% of them after negotiating with the buyers as 100% of the raw material is already in house.

“We are getting back some of the old orders but no new orders are coming. As the international scenario suggests, I think we will not get the expected orders between July 2020 and March 2021, which we had in previous years.”

BGMEA, BKMEA and government to work together

Moazzam urged Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) to work together with the government and support each other.

“The looming crisis in the RMG industry will have a multiplied chain reaction on the whole economy and salvaging this industry will be beneficial for other sectors too,” said Faisal Samad, senior vice president of BGMEA.

If businesses close today, nothing will remain in existence including entrepreneurs and workers, he added.

Faisal said the orders, which were cancelled, did not have any replacement yet but were rescheduled. Buyers said they cannot take the products, since they have cancelled earlier, but might reinstate the order after 6-10 months.

“Technically the orders are not reinstated, but there is hope that they might,” he added.

Speakers of the session hope BGMEA will help promoting business in Malaysia.

Mohammad Khalil Ibrahim, minister counsellor, High commission of Malaysia in Bangladesh said: “Bangladesh has the opportunity to increase business in the Malaysian market. However, as mentioned by other panelists, Bangladesh needs to diversify the apparel industry -- not just rely on cotton, but go for other materials such as synthetic to beat the crisis.”

He mentioned that Malaysia and the Philippines see losses over 4.5%, which are higher in magnitude than that in China. Likewise, the RMG sector in Bangladesh is now at the risk of losing orders for the  entire Autumn and Winter buying seasons.

Mohammad Khalil expressed his best wishes for the quick recovery of Bangladesh’s apparel sector.

BMCCI President Raquib Mohammad Fakhrul conducted the interactive session and facilitated the whole webinar. Nur Mohammad Amin Rasel, senior deputy secretary of BGMEA, also presented a trade analytical paper.

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