Keraniganj RMG hub's Eid sales take another blow
Loss of business during peak season caused by the fresh lockdown left many traders in the lurch, compounding their struggle to recover from last year’s losses
The Covid-19 pandemic has dealt yet another blow to the traders in Keraniganj – a readymade garments (RMG) hub near Dhaka – this Ramadan, as lockdown measures introduced to curb the spike in infections caused traders to lose nearly 70%-80% of their usual Eid-al-Fitr sales.
Though the hub was better prepared this time around to recover last year's losses, the ban on inter-district public transportation services prevented the majority of wholesalers and retailers in the country from visiting, thereby leaving the Keraniganj traders at a serious loss.
Al-Amin Sarker, proprietor of the New Sadia Garments at Rafiq Tower, manufactured around 10,000 jeans and gabardine pants in hopes of making a hefty profit during the Eid-al-Fitr. He so far managed to sell only 2,000 pants as of 8 May, and there is less than a week left before Eid.
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Detailing his predicament, Sarker told The Business Standard, "Wholesalers and retailers from all over Bangladesh personally visit different showrooms in Keraniganj during the Eid season to buy apparel products.
"We also feature some new designs ahead of each Eid. But most of our new stock has remained unsold this year as many clients could not reach us amid the lockdown. Some traders rented microbuses and visited Keraniganj in groups, but the number of such clients is too few. "
Sarker added that he is sending out some apparel products of older designs through cargo delivery companies, but the deliveries are not enough to meet the demands of traders located outside of Dhaka.
New Sadia Garments is selling jeans pants for Tk450-Tk740 and gabardine pants for Tk400-Tk500.
Sarker continued, "We received almost no business in the previous Eid-al-Fitr due to the pandemic, but since then, our sales made gradual recovery in the last 10 months. But the fresh lockdown has now eaten up most of our Eid sales.
"I had taken out a bank loan of Tk7 lakh, and planned to pay it back after the Eid sales. So far I only made 20% of my usual Eid sales this year. This is a serious matter of concern for me as I have to pay back my loan."
Eid season helps Keraniganj stay afloat
Keraniganj traders say the money they make during the Eid season helps them stay afloat for the rest of the year.
Cloth makers in Keraniganj – located on the banks of the River Buriganga – supply 70%-80% of the local garments sold around the country, said insiders, adding that it is known as the country's hub for lower and middle-class garment production.
Traders here make 70% of their sales during the Eid-al-Fitr, and the peak season begins from Shab-e-Barat to mid-Ramadan.
Wholesalers and retailers from across the nation, including businesses from Dhaka's New Market, Narayanganj's Gausia and Chattogram's Riazuddin Market begin visiting this hub from at least 90 days before Eid-al-Fitr.
Keraniganj traders suffered a near total loss of business during Eid season last year because of the pandemic. And now, under the current circumstances, they are struggling to pay factory and showroom rents, workers' wages, buy machinery and raw material, and repay bank loans.
This year, the government in a bid to stem the tide of rising Covid-19 infections had declared a fresh lockdown across the country from 5 April, just a week after the Shab-e-Barat – observed on 29 March.
The traders had kept their shops closed from 5 to 24 April following the government directive, and missed out on a lot of sales because of it.
Mahi Fashion from Gaibandha stocks readymade garment items worth Tk8 lakh to Tk10 lakh ahead of Eid each year. But the outlet currently has a stock worth only Tk3 lakh, as they could not visit Dhaka this season amid the fresh lockdown measures.
Addressing the issue, one of this outlet's staff said, "We typically buy various garment items from Keraniganj every year after visiting different showrooms in person, and then we send the back goods via delivery services to our shop in Gaibandha.
"However, we could not do it this year due to the ban on inter-district transportation services."
'Tk3,000cr in profit lost'
The markets in Keraniganj offer a variety of jeans pants differing in both quality and price – from Tk130 to Tk1,000. Popular shopping malls also buy Denim products from here.
The wholesale markets also offer fatuas at Tk110-130, punjabis at Tk250-Tk600, shirts at Tk150-Tk1,000, kids clothing items at Tk300-Tk400 and women's wear at Tk300-Tk800.
The pandemic has made all those activities come to a halt last year. Our business now stands at 20%-30% of the usual Eid sales, which is better than the last year
Currently, the apparel hub has 5,000 factories and 10,000 shops in around 300 malls, according to Keraniganj Garments Traders and Shop Owners' Cooperative Association. Around 3 lakh to 3.5 lakh people are employed in the factories and shops here.
General Secretary of the association Muslim Dhali said, "The pandemic has made all those activities come to a halt last year. Our business now stands at 20%-30% of the usual Eid sales, which is better than the last year.
"However, we have lost profit reaching around Tk3,000 crore this year, and the losses in terms of turnover far more than that. Around 80% of traders depend on bank loans, and they will certainly have difficulties over paying the money back due to the ongoing crisis."
The hub has nearly two dozen banks and 30 transportation companies. Besides, backward linkage industries such as textile, fabric, buttons and polybag production units have sprung up centring the denim units.
Uncertainty over workers' payments
The workers at Keraniganj either receive a monthly salary or get paid on the basis of each dress sold. Factory owners are currently not so sure whether they will be able to pay their workers full salary as the apparel business lacks momentum.
"Last year, I took out bank loans and spent my own capital to pay workers' salaries and meet day-to-day expenses of my family. I made a serious effort to turn my business around this year and pay factory and showroom rents in time. Now I cannot find a way to survive," said Muktar Dewan, owner of the Golenur Garments at Keraniganj Zila Parishad Market.
Reiterating the same issue, New Sadia Garments' owner Al-Amin Sarker said he employs 13 people who work in his small factory, but he too faces uncertainty over paying their salaries and Eid bonus.
