RMG export order falls marginally in last six months

Issuance of UDs (utilisation declarations), dropped marginally during the January-June period of the current calendar year (2014) against the same period of the previous year indicating a downtrend in the apparel exports. UD is an important index for assessing the country's garment export performances.

The apparel manufacturers seek permission from the BGMEA's UD section after confirmation of letters of credit (LCs).

BGMEA issued 14,153 UDs during the last six months (January-June) of the current calendar year against 15,850 of the same period of the last year. The government gave an official power to the BGMEA to issue UDs in favour of export orders.

"Now the small and medium RMG units have no fresh work orders as the buyers are preferring large and compliant factories, slowing down issuance of UDs," Bangladesh Garment Manufacturers and Exporters Association (BGMEA) vice president Shahidullah Azim told the FE.

He said they issue UDs to its all members including small and medium manufacturers but in recent times a large number of factories went for a long vacation for want of work orders.

According to BGMEA research cell, export orders for January-June period of 2014 dropped by 20 per cent against the same period of last year.

Evince Group managing director Anwar-Ul-Alam Chowdhury Parvez said, "We are very worried as export orders have dropped significantly in last six months of the current calendar year compared to the corresponding period of last year."

He said almost all global brands including American and European Wal-Mart, JC Penny, Zara, Tesco, IKEA, Marks and Spencer, H and M, Uniqlo and Li & Fung are increasingly sourcing from compliant factories.

Giant Group managing director Faruque Hassan said for increasing the export orders they are desperately searching for new markets like Brazil, Russia, South Africa and Japan.

According to BGMEA, 5,600 factories are listed with the association. Of them, 3,600 are running and about 2200-2500 units have taken utilisation declarations (UDs) from the apex trade body during the last six months.