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Coronavirus: Primark sets up fund for Bangladesh RMG workers after order cancellations

  • Published at 11:18 am April 4th, 2020
Cash incentives for RMG exports: pros and cons
Mahmud Hossain Opu/Dhaka Tribune

The retailer had no choice but to cancel the orders as it already had a backlog of stock in stores

Primark has set up a fund to pay the wages of factory employees in Bangladesh who worked on clothing orders that were cancelled by the budget fashion chain because of the ongoing Covid-19 pandemic.

The retailer, known as Penneys in Ireland and owned by Associated British Foods Plc, said it would cover the wage component of clothing orders that were scheduled for shipment within 30 days after it called off all deliveries, reports The Irish Times quoting Bloomberg.

The fund will also support workers in Cambodia, India, Myanmar, Sri Lanka, and Vietnam.

The report said Primark has closed all its shops across the UK, Europe, and the US following the outbreak of the deadly virus, costing it £650 million, or $796 million, of lost revenue a month.

After the closure of stores, the retailer asked all of its suppliers to stop production.

The retailer has already paid for stock that was in stores, in depots, or in transit before it took the decision to scrap further orders.

Paul Lister, general counsel at Primark, said its in-country teams were already working to identify the factory staff who should benefit from the fund.

He added that the move will cost Primark millions of pounds.

"We think we can do this very quickly. Accuracy is not the most important thing here. The most important thing is to make sure the workers get paid."

Payments to workers will be adjusted to reflect any government support packages provided in each of the countries.

Paul Marchant, the Dublin-based chief executive of Primark, said the retailer had no choice but to cancel the orders as it already had a backlog of stock in stores. 

"Finding a way to ensure that workers in our supply chain in these countries are paid has been a priority over the past two weeks."

As of Saturday, Bangladesh has so far recorded six deaths from Covid-19, a pandemic announced by the World Health Organization (WHO).

The fast spreading coronavirus, which was first reported in China's Wuhan, has claimed 59,197 lives and infected 1,099,711 people across the world till 11:05am on Saturday, according to worldometer.

As many as 228,975 people have recovered from Covid-19, a disease caused by a new strain of coronavirus, which has spread to 205 countries and territories across the planet.

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