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Bangladesh Textile Industry Fights Back as Buyers Scrap Orders

Last year Bangladesh’s textile shipments came to nearly $35 billion, making it the world’s second-largest exporter, after China

DHAKA — With the coronavirus pandemic affecting world economy, many of the 1,000 or so retailers who source products from Bangladesh have canceled or put on hold textiles orders. As of April, more than $3 billion in orders were in limbo, leaving 1,150 factories and 2.8 million workers, mostly women, facing poverty.

Bangladesh’s textile industry is therefore using a two-pronged campaign to salvage the country’s biggest export earner by cajoling big Western clothing retailers to honor previous purchase commitments and pay up the receivables.

On May 21, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) sent a letter to U.K.’s Edinburgh Woolen Mills Group, threatening to blacklist the retailer in Bangladesh unless it settles outstanding payments with suppliers by May 29. That has intensified a fracas between the conglomerate and BGMEA, which represents more than 4,600 apparel makers.

The Group whose key brands include Peacocks, Jaeger, Bonmarche, and Austin Reed, has canceled orders worth more than $30 million from nearly three dozen Bangladeshi factories.

The Group is not alone. Many of the 1,000 or so retailers who source products from Bangladesh have canceled or put on hold textiles orders. As of April, more than $3 billion in orders were in limbo, leaving 1,150 factories and 2.8 million workers, mostly women, facing poverty.

An estimated half a million jobs have disappeared since the deadly coronavirus arrived in Bangladesh on March 8 and the lockdown that followed on March 26. Nearly 400 factories have shut down in recent months, one-third of which have gone out of business.

The South Asian country’s economy relies heavily on the garment and textile industry, which accounts for 12% of its gross domestic product (GDP) and 84% of its merchandise exports.

With the help of its diplomatic missions abroad, the country’s commerce ministry is pushing Western retailers hard to honor their agreements with Bangladeshi companies, restoring orders that have been canceled or suspended.

Some deals are being renegotiated, while other buyers are promising to compensate those that have lost business.

Bangladesh is also going beyond public diplomacy. In a video conference with Bangladeshi expatriates in Ireland on May 23, Foreign Minister A.K. Abdul Momen urged the Bangladeshi diaspora living in Europe to mobilize public opinion against “unfair” cancellations of Bangladeshi textile orders by European fashion labels.

BGMEA has also stepped up its lobbying. The association is working with the United Nations and global rights groups, such as the International Labor Organization, Human Rights Watch and the Worker Rights Consortium, to promote ethical buying. BGMEA is also part of an alliance that includes trade associations from the world’s major apparel-producing nations.

Following a global uproar, H&M, Inditex, PVH, Marks & Spencer, Target, Primark, Decathelon and other international brands agreed to source apparel from Bangladesh without breaching previous agreements.

Last year Bangladesh’s textile shipments came to nearly $35 billion, making it the world’s second-largest exporter, after China. But its position is now in peril. In the 10 months through April, the country’s textile shipments shrank 14% to $24.48 billion, their lowest in five years.

The original report appeared in Nikkei

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