The repercussions of the large-scale order cancellations by the western buyers and lack of new work orders are now getting evident after around 419 garment manufacturing units were forced to remain closed since last couple of months due to want of new orders.
What’s even more alarming is that of the around 419 units, 100 have now shut down operations permanently!
According to reports, which cited high officials of the two apex apparel trading bodies of Bangladesh, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), 348 units are members of BGMEA while 71 are affiliated to the latter.
Further, these 348 BGMEA member factories – 80 of which are closed permanently – are spread out across various garment manufacturing hubs in the country with Gazipur accounting for 91, Chittagong 67, Ashulia 79, Dhaka 40 and Narayanganj 70.
“As to our information, 268 factories out of 348 closed have gone for temporary suspension, and the rest are closed permanently,” underlined BGMEA President Dr. Rubana Huq speaking to the media adding further that such closures are going to impact employment generation and the economy of the country.
The BGMEA President also maintained that factory closures have been happening ever since the infamous Rana Plaza tragedy, the pace of which has hastened in the recent years due to financial distress as the cost of doing business has gone up drastically thereby not only impacting the small and medium-sized units but also the big and compliant factories.
Further, the recent outbreak of COVID-19 and resulting order cancellations have had an adverse bearing on the garment manufacturing sector of the country.
Meanwhile, speaking to journalists, BKMEA Director Fazlee Shamim Ehsan said that 71 of their member factories are in dire financial condition as they have no new work orders and most of which they had earlier now stands cancelled thereby pushing them to financial distress and uncertainty.
It may be mentioned here that as per some estimates, a staggering US $ 3.18 billion-worth orders have been cancelled by the global buyers since the outbreak of the coronavirus epidemic.
