More than 300 new apparel units were set up in the last two years while 450 factories were closed down facing a flurry of odds including recent wage hike and safety and compliance requirements.
Of the total new units, new entrepreneurs established some 137 while the rest emerged as part of expansion of the existing ones, Md Shahidullah Azim, vice president of the BGMEA told the FE.
Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said non-compliance, western retailers' audit, recent wage hike, and previous year's (2013) political turmoil had negative impact on orders, resulting in the shutdown of the readymade garment (RMG) units.
On the other hand, the new factories were set up maintaining safety and compliance requirements despite odds that especially emerged after the Tazreen fire and Rana Plaza building collapse.
The new units have created employment for about 1,80,000 workers though about 2,50,000 were rendered jobless due to the factory closure, he noted.
Explaining the reasons of factory closure, the BGMEA leader said, "Many of the owners failed to meet the compliance requirements and closed down the units."
Of the closed 450 units, some were facing difficulties in paying workers' enhanced wages as cost of production significantly went up and buyers did not raise prices, he added.
Some of the owners willingly closed down their manufacturing units as they could not afford to run their businesses, another manufacturer pointed out.
The political turmoil of 2013 also forced some of the entrepreneurs to lay off their factories, he said adding buyers' 'unethical' business practice was also responsible for the shut down.
"On one hand, they (buyers) put pressure for ensuring safety and compliance, on the other, they are not raising prices of the products," he alleged.
Mr Azim said global retail titans have already stopped sourcing from the RMG factories located in shared buildings following the Rana Plaza tragedy while other buyers are reluctant to place orders in such units.
Among these are European and American buyers such as H&M, C&A, Kools, Kmart, Target, Gap, Wal-Mart, and JC Penny.
According to industry insiders, the new units also included some factories that are relocated closing their non-compliant ones.
Majority of the new units were set up at Gazipur, Valuka and Mymensingh though some units have also been established in Magura, Jessore, Nilphamari, Habiganj and Sylhet districts, they added.
Faisal Khan Mojlish, managing director of Origin Apparels Ltd-which started operation in 2014-said, "There is no other alternative but to be compliant to bag orders and survive."
His 45,000 square feet unit is located at the industrial shade at Gazipur with seven exits and other safety requirements.
Mr Mojlish said, about 600 workers made shipment of woven products to a EU-based buyer recently.
The number of BGMEA-listed factories came down to 4,222 from 5,876 with the cancellation of some 1,654 memberships from 2002 to 2014.
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