Nearly 176 garment units have been closed in the aftermath of Rana Plaza complex collapse, a senior industry leader said.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said non-compliance, western retailers' audit, recent wage hike, and last year's political turmoil have negative impacted on orders, resulting in the shutdown of the apparel units.
"Since April 2013, specially after the Rana Plaza incident, a total of 176 garment factories have been closed," Shahidullah Azim, a vice president of BGMEA, said Saturday.
"Buyers are no longer placing orders in units located in shared or rented buildings," he added.
The industry apex body feared that many factories might face shutdown following the assessment programmes by Accord and Alliance, the private initiatives of North American and European retailers.
Some of the owners willingly closed their manufacturing units as they could not afford to run their businesses, Mr Azim said.
He noted that many of the owners failed to meet the compliance requirements and had to bite the bullet.
The recent political impasse ahs also forced some of the units to lay off their factories, he said.
Out of the closed 176 units, some of the factories were facing difficulties in paying workers enhanced wage as cost of production went up significantly gone up, though buyers did not raise prices, he added.
Mr Azim said global retail titans have already stopped sourcing from the readymade garment (RMG) factories located in shared buildings following the Rana Plaza tragedy while other buyers are reluctant to place orders in such units.
European and American buyers such as H&M, C&A, Kools, Kmart, Target, Gap, Wal-Mart, and JC Penny are no longer sourcing apparel products from factories located in shared buildings, according to industry insiders.
The BGMEA said Cherry Pvt Ltd, Softex Cotton, Fame Knitwear, Diamond Sweater, and Benevolent Fashions are among the local factories, which were forced to stop operations after the assesment programmes carried out by the Accord and the Alliance.
But according to Department of Inspection for Factories and Establishments (DIFE) sources some seven garment factories were closed down permanently while production was suspended in 13 units, following the western retailers' factory assessment programmes.
The shutdown and production suspension took place after the official review committee visited the units after having opinions of the Accord and the Alliance regarding their structural flaws, they added.
However, the BGMEA leaders feared that many more factories are likely to be shut down following the assesment programmes.
The global buyers and retailers are upgrading their standards of compliance issues and the manufacturers also want to improve their workplace safety conditions, they said adding that a comprehensive exit plan should be developed for those units that would fail to meet the compliacne issues.
The BGMEA president Md Atiqul Islam sought a comprehensive exit plan for those units that might not able to run their businesses.
The exit plan should be developed considering the post-inspection problems, especially payment of workers, their re-employment, owners' bank and customs liabilities, their current orders, Mr Islam said.
