COVID-19 Situation of Bangladesh Textile & Garment Sector

Noble Corona Virus; COVID-19 Situation of Bangladesh Textiles & Garments Sector :
Published on 19th March 2020
Part- 1 of 3

Bangladesh Textiles & Garment Industry needs order, on time shipment & payment guarantee, and financial resources to sustain in this sector as COVID-19 hits around the globe at this moment. 

Just one month ago, beginning of February 2020,  Bangladeshi Garments Factories Management understood that  they might to have to face fabric and accessories shortage at their supply chain due to COVID-19 virus attacked worldwide, especially in China. Here must be informed that Bangladesh is still taking approx 40%-50% fabrics and accessories from China and other foreign countries at present.  In Wuhan in China, COVID-19 virus attacked on last year in December 2019 and they first started to understand about the fully new noble CORONA virus was seriously pandemic epidemic, so China Government fully closed & lock down Wuhan of Hubei Province for at least 45-50 days. Gradually that virus was outbreak some other Chinese big cities, so China Government have been decided to extend their Chinese New Year holidays, send peoples in quarantine as a result they stopped sending ships to outer world, resultant is very simple because China is the country who are manufacturing raw materials of so many industries, not only for garment and textile sector around the world. 

Bangladeshi textile and garment owners 2 months ago thought that China will anyhow manage to tackle this complex business situation anyhow and improve and get rid from that disease, Bangladeshi owners might thought that COVID-19 virus might not hit USA or EUROPEAN countries so buyers forum will arrange to provide new orders, and Bangladesh can supply clothing as usually like earlier by changing some accessories and fabric suppliers from outside of china.

But all thought were go in vain. Now USA & EUROPEAN big counties are facing COVID-19 attacks and buyers community closed the school, colleges, offices etc. So, buyer which placed earlier orders to Bangladesh, now told vendors to stop making goods, or hold the finished goods at vendor's stores, hold the shipments. Which might result a big impact on Bangladesh garment and textile owners if goods not shipped on time because payment will not arrive at vendor banks in Bangladesh which might hit very critically during Eid-Ul-Fitr on next 24th May 2020. That time workers of Bangladesh want salary and bonus to enjoy the Eid with their own towns or villages. Due to COVID-19, this time it will be very difficult to manage those money if goods not shipped out from Bangladesh. Effects of COVID-19 now started and clearly we have seen that factory is going to face order cancellation or reduced order qty from ultimate customers, ready clothing shipment halt in Chittagong port etc.

Immediately Bangladesh Government along with BGMEA, BKMEA, BTTHMEA, IEB (TED) should take necessary steps and talk to buyers community about this humanitarian issues and urge customers to take the finished goods and arrange to release the payment from their banks.

In Bangladesh, at present situation almost all garments factories are start counting loss every day basis as buyer has stopped or hold almost all orders. So many crisis may arise from this COVID-19 issues which impact may be seen just after one month in Bangladesh.

By the by, most of the textile mills, spinning mills, garment factories are facing money crisis due to various issues for last 2-3 years, almost every factory was asking funds from their bank, but due to older over due bank was not releasing any money to those bank projects. In this volatile situation, COVID-19 issues surely hit enough Bangladesh economy there is no doubt. 

Government should take immediate action and took the responsibilities of classified projects who couldn't paid return on investment (ROI) to banks. At this moment, if bank will not further help those projects, those projects will be loss project, and machines of those projects will be wastage if factory will not run or shut down for 6-12 month. Already some factory has been closed. At this very crucial moment, GOVERNMENT should release open tender to the foreign investors about such specific projects and request foreign investors to invest in Bangladesh as Joint-Venture basis, or some other ways, without financial further involvement or investment on those projects, it might not possible to keep alive those projects, machines, assets etc. So, immediately owners, BGMEA, BKMEA or other industry owners association seat with Government bodies and talk to their problems, if it is not done on time and properly, there will be a big storm might hit this garment sector, no doubt. 

This observation is not taken from any data or source, it is fully writers thinking  and observation about this sector.

To be continued....... Part-2 will be published soon.