RMG sector faces nearly Tk 6,500cr in direct losses
Staff Reporter :
The country’s export-oriented readymade garment (RMG) industry has faced losses worth over Tk 6,500 crore due to factory closures caused by the recent unrest.
From July 18 to July 23, all RMG factories and export-import activities were halted due to clashes between law enforcement agencies and anti-quota protesters.
The turmoil led to the deaths of more than 200 people.
Apparel exporters reported potential losses of Tk 1,000 crore from late shipment discounts demanded by buyers and the high cost of air shipments.
Production halts and communication breakdowns with buyers created backlogs, disrupting export and banking operations.
SM Mannan Kochi, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), stated, “We have already faced nearly Tk 6,500 crore in direct losses.
The indirect losses are uncountable as of yet. Our key challenge is to release the backlogs as soon as possible.”
To recover losses, Kochi emphasized that overtime is essential, noting that customers are unwilling to accept shipment delays as they need goods quickly for Christmas.
Fazlee Shamim Ehsan, Vice-President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, “Due to delay in shipment, we will have to send the products through costly air freights, accept the penalty from buyers, and bear the high freight costs.
” Ehsan explained that exporters will incur an extra cost of at least Tk 1,000 crore due to late shipment discounts and high air freight costs.
Ehsan also warned, “We missed a lot of shipment deadlines, which may lead to order migration to our competitors. Due to the enforced internet shutdown, we may lose our customers’ confidence as well.”
Bangladesh is already struggling to retain its export growth, posting a 6.8 per cent year-on-year negative growth during the July-April period. The apparel sector, contributing about 85 per cent to exports, posted a 6.7 per cent year-on-year negative growth.