Business

Advertisement

 

419 RMG factories in Bangladesh remain closed due to lack of orders

Moinul Haque | Published: 21:02, May 21,2020 | Updated: 22:01, May 21,2020

 
 

A file photo shows workers of a garment factory setting fire to waste papers and leaves on a road during their protests for wages at Kamalapur in Dhaka in April. Some 419 readymade garment factories in the country have remained closed for the last two months as the global buyers halted placing work orders due to the coronavirus outbreak. — New Age photo

Some 419 readymade garment factories in the country have remained closed for the last two months as the global buyers halted placing work orders due to the coronavirus outbreak.

Garment sector leaders said that the production in 348 member factories of the Bangladesh Garment Manufacturers and Exporters Association and 71 factories registered with the Bangladesh Knitwear Manufacturers and Exporters Association had remained suspended since the last week of March.

Of the 419 factories, nearly one hundred units went for permanent  closure and the rest are waiting for work orders to resume production, the leaders of BGMEA and BKMEA said. 

According to the BGMEA officials, of the 348 member factories of the trade body, 268 factories were closed temporarily due to lack of work orders, and the rest 80 were closed permanently.

Of the 348 factories, 91 are located in Gazipur, 79 at Ashulia in Dhaka, 70 in Narayanganj, 67 in Chattogram and 40 units are located in the Dhaka city.

BKMEA leaders said that 71 of their member factories had remained closed for the last two months due to lack of work orders and a few of them went for permanent closure.

The country’s apparel sectors’ trade bodies on March 25 announced production closure in the RMG factories in line with the general holidays announced by the government to contain the coronavirus outbreak in the country.

The factory owners started reopening the factories from April 26 with the consent from the government amid the surge of infection of coronavirus.

According to BGMEA data, a total of 1,150 member factories of the trade body reported that the global buyers cancelled orders worth $3.18 billion due to the coronavirus pandemic.

‘As far as we are informed, 268 factories out of 348 closed have gone for temporary suspension, and the rest are closed permanently. We don’t have the exact data of employment by these factories, but an estimate of 400-500 thousands workers would not be an exaggeration,’ BGMEA president Rubana Huq told New Age on Wednesday.

She said that the closure of factories was not a new phenomenon, the trail started after the tragic factory building collapse in 2013 as more than thousand factories had been closed since then due to workplace safety issues.

‘In recent years another wave of closure has hit the industry, and this is mostly caused by financial difficulties and economic struggles mostly because the cost of production is soaring and we have an unfavourable currency exchange rate,’ Rubana said.

While the industry was already passing through a critical stage, a number of factories were closed during April-December 2019, the COVID pandemic just made it extremely difficult not only for the distressed factories but also for large and compliant factories, the BGMEA president said.

Rubana said that such scaling down of industry capacity would certainly reflect on the country’s exports and employment, and the sector would have to go a long way to fight with this unprecedented pandemic and resulting economic downturn.

BKMEA senior vice-president Mohammad Hatem said that some 71 member factories of their trade body remained closed for the last two months due to lack of export orders.

A few units were shut permanently, he added.

Want stories like this in your inbox?

Sign up to exclusive daily email

Advertisement

 

Advertisement

images