RMG orders drop 18pc in Feb, 5.0pc in March
Friday, 10 April 2009
FE Report
The country's garment manufacturers will try hard to hang on to their last year's record earnings in the wake of falling export orders amid global trade collapse, officials said Thursday.
"The financial crisis has already started to adversely impact our industry. So our main target is to maintain the market share of US$11.88 billion," Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told reporters after attending a view exchange meeting with the representatives of buyers at his office in the BGMEA Complex in the city.
The meeting with representatives from some 40 local and foreign readymade garment (RMG) buyers was organised to discuss the latest position of the sector in the wake of the global crisis.
According to Export Promotion Bureau (EPB), the export earning of woven garments, knitwear, terry towel, textile fabrics and home textiles grew by 20.59, 26.17, 20.32, 83.74 and 15.55 per cent respectively during the first seven months of the current fiscal year over the same period of the previous fiscal year 2007-2008.
However, Mr Murshedy said according to Utilisation Declaration statistics, export orders have dropped by 18 per cent in February and 5 per cent in March.
"The consequent reflection would be visible in our April and May exports."
The BGMEA president said the sourcing trend of our major importing countries also reveals dull picture as the US imports of knitwear and woven-wear have shrunk by 5.11 and 7.58 per cent respectively in January 2009 compared to January 2008 and the European Union's import of woven garment dropped in terms of quantity, especially the last quarter of 2008 posted a drop of about 5.0 per cent.
"All these figures are giving a very gloomy forecast for the apparel market, at least for the year 2009."
Mr Murshedy said the manufacturers were experiencing tremendous pressure on prices over the past few months in major apparel items they exported.
"Our factories have been operating close to the break-even point and such pressure on price would soon turn them non-viable."
He said Bangladesh products are costlier than those of its competitors. So our regular buyers are redirecting orders to China and Pakistan. It will be tough to do business, if prices are not made competitive."
At the meeting the buyers put emphasis on increasing the efficiency of the labourers, Mr Murshedy said.
He said: "They urged the manufacturers to increase productivity, efficiency, quality and compliance standards to remain in business at this critical hour."
"We also have to be competitive in terms of prices of gas, electricity and infrastructure cost."
The buyers sought to exploit new markets like South Africa, New Zealand, Australia and Brazil, he added.
The BGMEA president said he had sought cooperation of the buyers on a few issues such as flexibility in shipment, price, discount and cancellation of orders and compliance to overcome the crisis.
He said: "We are receiving requests for discounts, sometimes below the breakeven cost."
Mr Murshedy also said China, Pakistan and Vietnam had taken steps through offering stimulus packages to protect their industry during the crisis.
"The government has to find out what our competitors are offering to their factories under their stimulus packages. It will help us take a decision for our own good."
They are even using the currency exchange rate as a tool to give the manufacturers a breathing space to survive, the head of the apex apparel export trade body said.
He said the problems of power shortage, infrastructure inadequacy and high cost of finance had affected most of the garment manufacturers.
Mr Murshedy said they were trying to increase the weekly working hours to 72 from the current 60 hours. Talks are on with the government in this regard, he added.
BGMEA Secretary General Md. Fashihur Rahman, Second Vice President Md. Shafiul Islam Mohiuddin and Vice President (Finance) Md Siddiqur Rahman were present during the briefing.
The country's garment manufacturers will try hard to hang on to their last year's record earnings in the wake of falling export orders amid global trade collapse, officials said Thursday.
"The financial crisis has already started to adversely impact our industry. So our main target is to maintain the market share of US$11.88 billion," Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told reporters after attending a view exchange meeting with the representatives of buyers at his office in the BGMEA Complex in the city.
The meeting with representatives from some 40 local and foreign readymade garment (RMG) buyers was organised to discuss the latest position of the sector in the wake of the global crisis.
According to Export Promotion Bureau (EPB), the export earning of woven garments, knitwear, terry towel, textile fabrics and home textiles grew by 20.59, 26.17, 20.32, 83.74 and 15.55 per cent respectively during the first seven months of the current fiscal year over the same period of the previous fiscal year 2007-2008.
However, Mr Murshedy said according to Utilisation Declaration statistics, export orders have dropped by 18 per cent in February and 5 per cent in March.
"The consequent reflection would be visible in our April and May exports."
The BGMEA president said the sourcing trend of our major importing countries also reveals dull picture as the US imports of knitwear and woven-wear have shrunk by 5.11 and 7.58 per cent respectively in January 2009 compared to January 2008 and the European Union's import of woven garment dropped in terms of quantity, especially the last quarter of 2008 posted a drop of about 5.0 per cent.
"All these figures are giving a very gloomy forecast for the apparel market, at least for the year 2009."
Mr Murshedy said the manufacturers were experiencing tremendous pressure on prices over the past few months in major apparel items they exported.
"Our factories have been operating close to the break-even point and such pressure on price would soon turn them non-viable."
He said Bangladesh products are costlier than those of its competitors. So our regular buyers are redirecting orders to China and Pakistan. It will be tough to do business, if prices are not made competitive."
At the meeting the buyers put emphasis on increasing the efficiency of the labourers, Mr Murshedy said.
He said: "They urged the manufacturers to increase productivity, efficiency, quality and compliance standards to remain in business at this critical hour."
"We also have to be competitive in terms of prices of gas, electricity and infrastructure cost."
The buyers sought to exploit new markets like South Africa, New Zealand, Australia and Brazil, he added.
The BGMEA president said he had sought cooperation of the buyers on a few issues such as flexibility in shipment, price, discount and cancellation of orders and compliance to overcome the crisis.
He said: "We are receiving requests for discounts, sometimes below the breakeven cost."
Mr Murshedy also said China, Pakistan and Vietnam had taken steps through offering stimulus packages to protect their industry during the crisis.
"The government has to find out what our competitors are offering to their factories under their stimulus packages. It will help us take a decision for our own good."
They are even using the currency exchange rate as a tool to give the manufacturers a breathing space to survive, the head of the apex apparel export trade body said.
He said the problems of power shortage, infrastructure inadequacy and high cost of finance had affected most of the garment manufacturers.
Mr Murshedy said they were trying to increase the weekly working hours to 72 from the current 60 hours. Talks are on with the government in this regard, he added.
BGMEA Secretary General Md. Fashihur Rahman, Second Vice President Md. Shafiul Islam Mohiuddin and Vice President (Finance) Md Siddiqur Rahman were present during the briefing.