Most orders are being canceled; if conditions do not improve, hundreds of factories across the country will close within the next six (6) months. Over the last six months, overseas purchasers have canceled nearly 20% of ready-made garment purchases. They are apprehensive owing to labor unrest. Entrepreneurs have expressed concerns about manufacturing in the Ashulia area. According to the BGMEA and BKMEA, if the situation does not improve, approximately 100 factories across the country are set to close within the next six months.
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Most orders are being canceled:Â Savar and Ashulia are home to 450 garment factories, both small and large. Following the July revolt, several factories experienced worker unrest. Nearly 200 factories identified by the BGMEA and BKMEA have already shuttered.
Business owners have claimed that overseas purchasers are closely monitoring the labor unrest in Ashulia. They’re hesitant to make orders with these factories.
BKMEA President Mohammad Hatem stated, “Brands and purchasers are now extremely cautious and careful while placing orders in any factory within the Ashulia belt. They have a tremendous lack of confidence. Evidence that our orders were redirected elsewhere will become apparent soon.”
Business owners say the effects of six months of unrest will last until June of next year. If the issue is not addressed, another 100 factories could close within the next six months.
Mohammad Hatem stated, “They may be negotiating with banks to resume operations. Otherwise, they may shut down forever. In other words, we fear that around 100 additional factories may close within the next year.”
Shams Mahmud, Managing Director of Shasha Denims, stated, “If we can maintain all of our plants functioning, we will be able to repay bank debts and pay workers’ salaries. But if I have to operate the factory at 20% capacity, I will not be financially stable.”
However, analysts believe that international corporations are buying relatively inexpensive clothing from Bangladesh. As a result, they also rely on Bangladesh. As a result, despite the immediate unpleasantness, there is no serious risk of losing the market on a wide scale.
Khondaker Golam Moazzem, CPD’s Research Director, stated, “Neither Vietnam nor Cambodia have such a vast supply base. As a result, there is no risk of a major market shift from here. However, for temporary reasons, some orders may be diverted elsewhere for a limited time.”
However, business owners believe that taking proactive steps to obtain orders for the next winter season is critical to rebounding from the losses.
Most orders are being canceled….Most orders are being canceled….Most orders are being canceled….
