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419 RMG units remain shut for shortage of work orders

Monira Munni | May 23, 2020 00:00:00

A good number of garment factories remained closed for last two months due to a shortage of work orders caused by the ongoing coronavirus pandemic, industry insiders said.

Many of them also faced order cancellation while their payments were either denied or yet to get any confirmation when they would receive money, they added.

A total of 419 readymade garment (RMG) factories--348 registered with BGMEA and 71 with BKMEA--did not reopen since April 26 even after a month-long closure in line with public holidays, according to the two trade bodies.

According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA), some 268 factories out of 348 were closed temporarily and the rest 80 permanently.

The majority of the RMG units gradually reopened since April 26 despite labour leaders' strong opposition that reopening would help spread the virus if adequate health safety measures are not ensured.

When asked, BGMEA president Dr Rubana Huq said factory closure is not a new phenomenon. More than thousand factories closed over workplace safety issues since the factory building collapse in 2013.

And in recent years, she said, another closure wave has hit the industry, and this is mostly caused by financial difficulties and economic struggles mostly because of soaring costs of production and unfavorable currency exchange rate.

While the industry was already passing through a critical stage, more than 60 factories closed during April-December 2019. The Covid-19 pandemic just made it extremely difficult, not only for the distressed factories but also for large and compliant factories, she added.

"The reported factories are new addition to this list of closure. As far as we are informed, 268 factories out of 348 closed have gone for temporarily suspension, and the rest are closed permanently," she told the FE on Wednesday.

She, however, could not give the exact data on employment by these factories.

Such scaling down of industry capacity would certainly reflect on exports and employments, she said, adding that they have to go a long way to fight against this unprecedented pandemic resulting in economic downturn.

The BGMEA, however, is constantly monitoring the situation engaging with their factories. The association is trying to get buyers back to discussions and working in coordination with government, its chief said.

According to BGMEA, a total of 1,150 of its member factories reported that global buyers cancelled orders worth $3.08 billion followed by the outbreak of coronavirus.

Talking to the FE, Fazlee Ehsan Shamim, a director of BKMEA, said some 71 factories did not reopen since April 26 because they did not have work orders or faced cancellation, putting those units in a dire financial crisis.

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