Why factories are facing crisis

The crisis currently besetting the country's small and medium industries has not come all of a sudden. It has been in the making since the breakout of the Ukrainian conflict. Currently, the industrial sector of Bangladesh finds itself stuck in a veritable impasse as a considerably large number of factories have ceased operation. Those include the units that manufacture goods for both local and international markets. The overall plight stems chiefly from currency devaluation and decline in global demand for some products. High cost of production coupled with dearth of greenback has also reportedly prompted the factories to close down since early this year. Moreover, it has been learnt that a lot of factories which export goods couldn't survive thanks again to the losses they incurred due to currency-exchange-rate gap.
Given the situation prevailing in the industries sector currently, things do not bode well. Going by a data prepared by the Industrial Police (IP), around 313 factories under its jurisdiction have been forced to shut down since January to mid-August in the current calendar year. As a consequence 44,500 workers were laid off. Of the closed units, 60 are members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), 16 listed with the Bangladesh Knitwear and Manufacturers and Exporters Association (BKMEA). Besides nine are textile mills registered with the Bangladesh Textile Mills Association (BTMA); while five are under the Bangladesh Export Processing Zones Authority (BEPZA). Under the IP jurisdiction, 60 belonged to the BGMEA accommodating 16,943 workers and a total of 223 non-RMG units employed 16,173 workers.
However, there is a silver lining. In contrast to the gloom over factory closure, 114 new factories were launched. Those created fresh employment opportunities for some 12,500 workers, the IP data show. As part of an auspicious development, around 9,600 workers have been re-employed at 60 factories, including textile and RMG units. That a large number of factories in the country's emerging industrial sector suffered reversals is a development fraught with negative implications. All this might be pointing to the early signs of the return of industrial unrest. A most critical question which arises here is the country's capability to cope with the changed situation. The time may not be suitable for the industrial workers to give vent to their justified grievances. It's because a large portion of the country's ongoing afflictions besetting its fledgling industrial sector has its basic roots in distant lands.
Commenting on the distressing developments in the industrial and related areas lately, the vice president of the BGMEA says most of the factories have been closed because of the lack of work orders. He also says, categorically at that, some factories were shut following labour unrest caused by the managements' failure to make timely wage payments. This was said to have been caused by deferred LC openings. According to official data, despite the RMG sector's growth of over 10 per cent in the last fiscal, jute and leather goods sectors experienced negative growth by 1.74 per cent and 19 per cent respectively. Jute and leather industry, however, have immense prospect. Environmentally friendly jute and jute goods, particularly the innovative types like the poly bags made out of the fibre, required strong policy support which unfortunately is missing. In the same way, export of leather and leather goods has stumbled on the fracas over the non-functional central effluent treatment plant (CETP). The Leather Working Group (LWG) certification is a must for the country's leather industry to have access to global market but the industrial environment bedeviled by the CETP falls far below the international standard. Pragmatic policy and smart management could help overcome this crisis.