Buyers offer Bangladesh lower RMG prices despite rise in green factories

Staff Correspondent | Updated at 11:13pm on January 25, 2020

Global brands and buyers are gradually offering lower prices for readymade garment products to Bangladeshi factories although the number of green factories has increased considerably in the country in the last few years, according to the Bangladesh Garment Manufacturers and Exporters Association.

The BGMEA on Saturday gave a presentation at a discussion on ‘RMG Industry: Green Growth’ held at the public relations and media centre of the trade body at Gulshan in the capital.

BGMEA president Rubana Huq said that although the buyers were not giving additional prices for products, the entrepreneurs were investing additional money to make their units green to create sustainable businesses. 

‘Green initiative in the Bangladeshi readymade garment sector has grown on its own and we also need to encourage responsible consumption,’ she said. 

Rubana said that there should be a large-scale project in the RMG sector that would help to address environmental issues so that businesses can go green.

She also said that government policy and incentive, buyers’ demand, consumer behaviour and availability of technology are the key factors that can enable the industry to become green.

Representatives from the International Labour Organisation, International Finance cooperation, buyers, economists and government officials attended the discussion.  

The trade body said that despite decrease in the unit price of products by 1.61 per cent between 2014 and 2018, the number of USGBC certified green factories stood at 108 and more than 500 factories had registered for obtaining green certification.

The BGMEA research identified lack of skills in assessing investment in green technology, finance and lack of awareness as the major challenges in mainstreaming green growth in the readymade garment sector.

It said that although the Bangladesh Bank had green transformation and refinance schemes in place at 8 to 9 per cent interest rate, the need to fulfil a range of conditions had limited the access to finance for many entrepreneurs.

Speakers at the discussion emphasised development of a national standard for green industry and adoption of a comprehensive policy to support the industry.

They also said that adoption of green technology was a must for sustainable economic growth and Bangladesh needs home-grown solutions to face the challenges faced in building a green industry.

Speakers said that it was easy for large-scale factories to arrange green funds but medium- and small-scale factories were not getting access to finance.

They suggested that the government and its development partners should introduce guarantee schemes for the SMEs so that they could go green.

ILO country director for Bangladesh Tuomo Poutiainen, Centre for Policy Dialogue research director Khondaker Golam Moazzem, among others, spoke at the event.