The garment industry in Bangladesh, a cornerstone of the nation’s economy, is currently grappling with unprecedented challenges due to the ongoing political turmoil. The situation stems from widespread protests and civil unrest triggered by the government’s inability to peacefully address the grievances of the student movement, which has led to significant industrial disruptions.
The turmoil has put factory operations in jeopardy, raising concerns about the future of international orders and the overall stability of the industry. Key industry figures have shared their perspectives on this critical juncture, highlighting the precarious position of factory operations and the potential impact on international buyers.
However, despite these challenges, the industry’s strong foundation pillars are the strength of the country. In FY ’09, Bangladesh’s apparel exports stood at just US $ 12 billion. By FY ’24, this figure has surged to over US $ 46 billion, reflecting a remarkable increase of approximately US $ 34 billion over 15 years under the previous government. This growth demonstrates that a short-term disruption or political unrest, such as what occurred in the country recently, cannot undermine the resilience and agility of Bangladesh’s apparel supply chain.
What export fraternity is saying?
In the initial two days following the former Prime Minister’s exile, Bangladesh’s industry faced significant uncertainty, leading many factories to remain closed. However, starting today, August 7th, a considerable number of factories have resumed operations, with some reporting an average worker attendance of 75% – 95%.
The situation has brought to the fore the delicate balance between business interests and political realities. Rizvan Riasat Aurko, Director of Fashion Globe Group, underscores the need for a focus on business stability. “Attendance in our factory is approximately 95 percent. The BGMEA and BKMEA should be reorganised once the new administration is formed. If the current situation persists, buyers will consider moving to India, Myanmar or Vietnam. We must focus on business and take appropriate action swiftly.”
Ashna Huq, Director of Incredible Fashions Ltd., expresses hope for stability stating, “Our factories are open from today and we have recorded over 80% attendance of workers. We are however waiting for the interim government to be announced and for the situation to stabilise. Going forward, we will proceed, depending on BGMEA directives.”
Armana Group – a leading denim apparel manufacturer in Bangladesh – has also signalled positivity. “Our office reopened from 6th of August with 40% capacity and today the attendance is over 75%. However, while things might return to normal, it can take months. It remains to be seen what the new interim government will do to ensure law and order so that factories can run smoothly,” says Sandeep Golam, Director, Armana Group.
“We’re actively managing the transformation to overcome the crisis with immediate actions. We’re also developing an economic reform proposal from youth leaders of the RMG industry. The BGMEA is also working on a way forward to figure out how to boost things under the new interim government,” informs Abrar Sayem, Director, BGMEA and Director, Sayem Group.
Uncertainty can’t be overlooked!
The turmoil has significant implications for international trade relations and future orders. Faisal Samad, MD of Savartex Group, notes the potential for negotiation challenges. “With shipments for the Christmas season likely delayed, negotiations with buyers will be significant. Future order booking for the next season could face issues, but long-term impacts might be minimal if the situation stabilises.”
Sohel Sadat, Chairman and Managing Director of Shin Shin Apparels Ltd., reflects the cautious sentiment prevalent among factory owners. “Our buyers are trying to understand the situation but haven’t taken a negative stance yet. If the unrest continues, there will be cause for alarm,” he says.
The industry is not only dealing with immediate operational challenges but also with the broader implications of political instability. Azeezur Rahman Khan, General Manager of Thianis Apparels Ltd., highlights the security concerns affecting operations. “Our factory was closed today and we won’t reopen unless BAYLA or the BGMEA recommends for it. None of the international buyers have cancelled orders, but we will need to work harder to keep them. We’ve heard of orders shifting to Sri Lanka, but our buyers haven’t discussed movements yet.”
The uncertainty also extends to long-term planning and strategic decisions. Ataur Rahman Khan Akhir, CEO of Maktex Group, expresses the prevailing sense of unpredictability. “The BGMEA announced the closure today, so the factory was not opened. International buyers haven’t mentioned anything yet, but that may change depending on the situation.”
From an international perspective, brands are closely monitoring the situation. An anonymous source from an international brand shares their concerns off the record. “We understand the current situation is not in the factory’s hands. However, we request manufacturers to provide extra effort to ensure timely delivery. If the situation persists, long-term order placements might be uncertain due to compliance requirements from the EU.”
H&M said it was “concerned about . . . the violence” and “is continuously monitoring the developments”. Steve Lamar, President of the American Apparel & Footwear Association, which represents companies including Adidas and Gap, says their “primary goal” is “to keep our workers safe and minimise disruptions”.
This political and industrial instability forces the industry to re-evaluate its operational strategies. Ashish Sharma, Director of Threadmill, emphasises the importance of completing existing orders amidst the chaos. “Our top priority is to complete the existing orders as soon as possible. Most factories, including mine, were closed today. Securing further extensions might be difficult if things don’t settle quickly.
As the unrest continues, the focus remains on maintaining business operations and securing the trust of international buyers. Md. Ehsanuddin Khan, Director of Sonia & Sweaters Ltd., stresses on the need for flexibility. “Right now, our focus is on completing and shipping the current orders. Factories may remain closed for a few days. Buyers will need to be flexible as the situation is beyond anyone’s control.”
Optimism about a return to normalcy exists but remains cautious. Subhasis Gupta, Former Country Manager of Bettex Hong Kong Ltd., believes that business operations will resume soon. “None of the garment factories have been targeted in the violence. I believe normal business operations will resume in the next 2-4 days, with some delays in completing existing orders.”
The industry’s future hinges on the resolution of the political crisis and the establishment of stable governance. Zarin Rashid, Director of TRZ Garments, urges for patience saying, “It’s still too early to make definitive statements. We need to wait until the interim government is established before drawing conclusions.”
As Bangladesh navigates this period of political uncertainty, the garment industry stands at crossroads. The ability of factory owners, industry leaders and international buyers to adapt and respond will determine the sector’s resilience and future growth. The coming weeks will be crucial in shaping the trajectory of one of Bangladesh’s most vital economic sectors.
