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Cushioning virus shocks

Buyers pledge to give RMG makers a helping hand

Agree to take in current shipments on deferred payment

Monira Munni | March 26, 2020 00:00:00

Some international buyers and partners have responded positively after the apparel industry has launched an appeal to stop cancelling or suspending shipments of apparel items in view of the pandemic, insiders say.

The Bangladesh Garment Manufacturers and Exporters Association, or BGMEA, has recently urged global buyers and the German minister to take in their goods and allow shipments and production until July so that it can minimise the impact on workers and businesses.

In response to the appeal, Germany has assured Bangladesh of finding ways to help its own textiles industry, amid the threat the new coronavirus has posed.

Besides, top three buyers from the European Union responded positively and agreed to take the existing shipments with deferred payments of 180 days, they said.

When asked, BGMEA president Dr Rubana Huq said the German federal minister has pledged to find a way how to safeguard the local readymade garment industry that employs millions of workers, most of whom are women.

About the buyers' response, she said they are positive to their appeal though they are the minority.

One UK buyer has promised to receive the existing shipments, but make payments make after 180 days, she said, adding another responded that they would reach a decision within a week.

Citing one of the largest buyers of locally-made apparels, she said it is better to work with that company, which also gave positive response.

German federal minister for economic cooperation and development Gerd Müller, in his response, said "I greatly hope that we will find an approach that will safeguard the survival of the textile industry in Germany and also in Bangladesh, with the millions of people working in that sector."

"I will not forget the workers in Bangladesh," he added.

Terming Bangladesh one of the most important partners of German textile industry, the minister said he has every understanding of the concerns expressed by the BGMEA chief.

In a letter to the German minister, Ms Huq explained the fact Bangladesh has a different manufacturing reality and requested measures so that German brands sourcing from Bangladesh do not cancel or hold any shipment up.

She also informed the German minister about Bangladesh's assurance to brands that the buyers can pay 90 days later. However, they still need to take the ordered goods, she argued.

As of Wednesday morning, according to the trade body, some 880 factories reported that buyers had cancelled or put hold on orders of more than US $2.46 billion due to Covid-19 illness caused by novel coronavirus strain.

In order to cushion the impact of the pandemic on the countries such as Bangladesh, Mr Müller on Tuesday said his ministry is currently evaluating a number of different support measures aimed at ensuring that the production companies are able to stay in business and safeguard jobs and incomes.

"In this current emergency, demand and orders for certain products, such as protective medical clothing in particular, are changing," he said, expressing hope that for this interim period, Bangladesh will receive orders for such products.

The pandemic has placed the world in a state of emergency, Mr Müller said.

Restrictions have been imposed on free movement, restaurants and shops had to close, he added.

This has hit the German textile industry hard, he said, adding that some companies have experienced a 70 per cent drop in consumer demand.

Associations representing the textile industry fear that a third of German textile businesses are under threat of collapse, Mr Müller said.

"What makes the situation even more difficult is that nobody knows how long the pandemic will maintain its grip on the world," he noted.

"Let me assure you that I share your concern regarding the social distress threatening to engulf textile companies and their workers in Bangladesh," said the German minister.

In response to the BGMEA president's appeal, he said he will pass her urgent request on to the representatives of the German textile industry.


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