Ashulia RMG factories face $110m losses

Khadija Akhter

The Ready-made Garments (RMG) sector is the main foreign exchange-earning industry in Bangladesh. It is also vital for addressing employment demands in a country with a large population. However, the growth and stability of this labor-intensive sector have recently been threatened by severe labor unrest in the Ashulia zone.
Khandoker Rafiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Business Eye that the unrest in Ashulia has resulted in losses of at least $110 million. He also reported that 30 factories were severely vandalized and torched.
He noted that international buyers are now very concerned, which could negatively impact the country's brand image. The entire sector could face significant losses due to this unrest. He further predicted that orders could decline by 15% in the next session, with some buyers possibly shifting their orders to competitors.
Vice President Rakibul Alam Chowdhury estimated that at least 30% of orders could be lost, and factory owners may face additional challenges in securing new orders. He also mentioned that around 700,000 to 800,000 workers are employed in the affected areas, and the situation could have a severe impact on the economy.
Chowdhury added that workers from the pharmaceutical sector had joined the protests, complicating efforts to bring the situation under control.
The protests were sparked by demands for an increase in the attendance bonus, a halt to worker layoffs, higher tiffin allowances, wage increases, and equal employment opportunities for male workers.
Bangladesh's garment shipments dropped by 5.2 percent, amounting to $33.04 billion, during the July-May period of the last fiscal year compared to the same period the previous year, according to data from the Bangladesh Bank.
International buyers are also putting pressure on apparel exporters to ship goods quickly, as they need to stock their stores with new designs ahead of Christmas, the largest retail sales season in the Western world.