Call gets louder as FBCCI too wants factories open in post-Eid lockdown

The call to keep all factories out of the purview of the post-Eid lockdown is getting louder with the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) being the latest party to press for not enforcing the restrictions on factory operations.

To keep the economy afloat, FBCCI President Md Jasim Uddin on Friday urged the government not to shutter industries during the 14-day lockdown beginning from 23 July.

The restrictions on factory operations will halt production, which will result in a complete disruption of the supply chain, he added.

With Covid-19 infections and deaths taking an alarming spike, the government has decided to shutter all factories, including the export-oriented garment industry, during another phase of strict lockdown after Eid-ul-Adha.

The FBCCI's call comes a day after leaders from the apparel sector wrote to the prime minister, requesting her to allow ready-made garment factories to run from 1 August when the next phase of the lockdown will be in force – to keep their commitments with international buyers.

Otherwise, they might incur massive losses, said leaders of the sector.

Health experts warn that the exodus of Eid holidaymakers to their village homes from Dhaka during the one week interval of the lockdown will result in a significant rise in infections. Allowing factories to keep operations during the post-Eid lockdown will aggravate the situation.

So, they opine that it would not be logical to keep factories open during the next round of strict lockdown, risking the lives of workers.

But, the FBCCI says all – from producers to consumers – will feel the pinch if factories remain closed.

"If products are not supplied and marketed properly, prices will increase, much to the suffering of low-income buyers," the FBCCI president said in a written statement.

If the one-month export schedule is disrupted, it will have a negative impact on the next six-month export schedule. At the same time, if production stops, there is a possibility that imported raw materials will be wasted, said Jasim Uddin.

The FBCCI president also expressed concern that the supply of life-saving medicines will be disrupted too owing to the new restrictions.

Also, if tanneries remain closed for two weeks, collected hides during Eid can rot due to a lack of timely processing, he added.

The clothing sector leaders handed over their letter to Prime Minister Sheikh Hasina to Cabinet Secretary Khandaker Anwarul Islam at a meeting on Thursday.

After the meeting, Bangladesh Garments Manufacturing and Exports Association (BGMEA) President Faruque Hassan said, "We have requested for allowing factories to remain open considering the overall situation. The cabinet secretary also reassured us that he would hold a meeting with the prime minister on Saturday to discuss this issue. A decision will be announced after the meeting."

The First Vice President of the Bangladesh Knitwear manufacturers and Exporters Association (BKMEA), Mohammad Hatem, said, "We have not made any demand for a specific date to reopen factories. We have just explained to the cabinet secretary the overall industry situation amid the pandemic.

"We also mentioned that if workers go to their villages and return to cities during this long vacation, it may lead to a further spike in Covid-19 infections. This is because most workers come from the northern and southern parts of the country that are identified as red zones."

In their letter to the prime minister, apparel makers said if factories remain closed for 18-20 days due to Eid holidays and post-Eid lockdown, they might lose work orders for late summer, Christmas and upcoming winter.

The apparel makers also expressed concern about the possibility that buyers might move to alternative sourcing countries despite higher prices there if Bangladesh's RMG industry remains shut for a long period due to the lockdown.

They apprehended that the country's export sector might face a tough situation and many entrepreneurs would go bankrupt due to prolonged factory closure.

If Eid holidays are taken together, the industry will have to remain closed for at least 18 days in a row, which apparel exporters say would be too big for them to cope with.

BGMEA Vice-President Shahidullah Azim said, "June, July and August are our peak season for exporting apparel items, especially winter clothes.

"Bangladesh exports around 40% of its apparel items during this period. A factory closure at this crucial time might cause our buyers to cancel their orders, which will cause heavy losses to the RMG sector.

Fazlul Hoque, managing director of Plummy Fashions Ltd – the greenest knitwear factory in the world, earlier told The Business Standard, "Just when the apparel industry is on the recovery path, the factory closure will have a disastrous impact on our recovery process.

"The duration will actually be about three weeks including the Eid vacation and weekly holidays, which might motivate workers to visit their native homes amid the pandemic. If this happens, the pandemic will get worse as rural regions lack adequate medical facilities."

Apparel makers are now busy securing orders for the next spring and summer seasons, which is a big opportunity to achieve a better performance in the coming days. But the long shutdown has put them in an uncertain situation, he added.

The former BKMEA president also said RMG workers are now busy with orders meant for the next winter. "If we fail to ship the orders by sea, those would require costlier air freights to reach the retailers."

BGMEA Director Abdullah Hil Rakib also told TBS that they were under pressure to ship winter apparel items within July-August and a strict shutdown would seriously affect their business.

"We do not know what will happen if we send May's products in August," he said.

Shovon Islam, managing director of Sparrow Group, said, "Factories are open in all South Asian countries such as India and Vietnam. If we keep the factories closed for that long, it will be suicidal in terms of delivery and shipment."

He said an alternative could be imposing the lockdown on 20-29 July, and reopening factories in the last week of this month.

M Shahadat Hossain, chairman of the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association, told TBS that if a factory owner has to incur Tk2 crore in bank interest a month, a 15-day factory closure for him means a gap of Tk1 crore.

"Some of the Western countries have reopened everything while others are to follow suit. Now, if we fail to maintain the supply to the export markets, they certainly will switch to alternative sources. For me, the government decision is reckless," he noted.

"We are looking into it. Too early to comment. Depends on Covid situation over next days," said Prime Minister's Private Industry and Investment Adviser Salman F Rahman.