Big buyers stop sourcing from RMG factories in shared bldgs

Many big apparel buyers have already suspended sourcing from the readymade garment (RMG) factories located in shared buildings following the Rana Plaza tragedy. Some others are reluctant to place orders in such units, the industry insiders said.
The renowned European and American brands like H& M, C & A, Kools, Kmart, Target, Gap, Walmart, Li & Fund and JC Penny are among the brands that are not sourcing apparel products from factories located in shared buildings, according to them.
However, the local apparel makers have expressed their deep concern over the issue. They said the suspension of orders from such factories would cause an adverse impact on many garment factories, putting jobs of thousands of workers at stake.
They also urged the buyers not to stop their orders before completion of a detailed assessment of the buildings as majority of the garment factories are located in either shared or rented buildings.
 "Yes, many big brands have said they won't place orders to shared factories. Some of them have already started implementing their decision in this regard especially after the Rana Plaza collapse," Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told the FE Monday.
The global buyers and retailers are upgrading their standards of compliance issues which are not allowing factories located at shared or rented houses, he said. The manufacturers also want to improve their workplace safety conditions.
 "But the change will not come overnight. They (brands) should give us some time to take necessary steps including relocation of such factories," he said. Since the inception of the business, manufacturers started their production in such shared or rented buildings. But the scenario is gradually changing as many have invested in industrial zones like Ashulia and Gazipur while new factories are set up in buildings built for industrial purpose.
A manufacturer, who has two factories in shared buildings and one at an independent building, said his buyers have informed him that they won't buy apparel products from his units located in shared ones.
"I now produce their products from the factory which is not shared with other establishments," he said.
A local representative of an US-based brand also confirmed that the big and renowned brands are not placing orders in the shared factories.
 "The decision not to place orders in such factories was taken years back while many are implementing especially after the Rana Plaza incident," the official added.
Md Shahidullah Azim, vice president of the BGMEA said brands are now shaky to place orders in such factories as there are other organisations there along with garment units.
If a fire drill is done in such a factory, only the factory management undergoes the process while the other establishments don't, he said quoting the buyers' representatives. In case of an accident, none is ready to take the responsibility as it happened in the Rana Plaza.
 "Factories in shared and rented buildings are the reality of the industry. If they maintain the compliance issues, there should be no problem," he said adding those factories are trying to relocate but the process needs time.
"Before assessing the factories, buyers should not stop or withdraw orders," he said.
Fazlul Hoque, former president of the Bangladesh Knitwear Manufactures and Exporters Association (BKMEA) said after the Rana Plaza incident, buyers, especially the well-known brands, have become cautious about the issue. Five factories were located at the Rana Plaza with many other establishments.
They think, factory owners might not be aware of the building's strength and other safety issues if the building accommodates different types of businesses, he said.
Terming the issue a 'critical one', he said factories located in shared or rented buildings should be given top priority in the inspection programmes by Accord, Alliance and the government to find out the problems and take measures.
"Shutting down of factories is difficult for the sector but  the faulty ones would surely be closed after assessment," he said. Many families depend on a unit for their livelihood.
According to the BGMEA, 55 per cent buildings accommodating garment units are industrial purpose-made while 30 per cent buildings are shared ones. The rest are rented.
The BGMEA-listed factories stand at 5,500, while running factories are 3,500. About 2,000-2,200 units have taken utilisation declaration (UD) from the association while about 800-1,000 factories took UD from the BKMEA out of its 2,000 registered members.
Majority of the factories are located in either shared or rented houses mostly at Mirpur, Mohammadpur, Chowdhurypara, Rampura, Malibagh, Narayanganj and Chittagong.
According to Chittagong manufacturers, 70 to 80 per cent factories are located in shared buildings.
Mehedi Ahmed Ansari, a BUET Professor, who is also involved in the government-led inspection process, opined that the shared building might not have any risk if it properly follows its structural design.