“Covid-19: Business impact on Accessories sector” Barrister Mir Tahseen Ahmed

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Barrister Mir Tahseen Ahmed

Managing Director, Oishee Accessories Limited

According to information provided by the Bangladesh Garments Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA), there are 1,733 companies registered with it that carry out various kinds of accessories-related business in Bangladesh.

A majority of these factories are backward linkage industries associated with the supply chain of the many Ready Made Garment (RMG) manufacturers operating in Bangladesh. As a result, any disruption in the smooth operation of these RMG factories inevitably ends up adversely affecting the regular functioning of the accessories manufacturers.

The global emergence of the Corona Virus (COVID-19) pandemic since the beginning of last year represents a major disruption in this field. This is because pandemic-centric lockdowns implemented in the US, the EU and other crucial Western markets resulted in the wholesale cancellation of RMG orders. Such unexpected cancellation caused the closure of many RMG factories which in turn resulted in the shutdown of many accessories manufacturers that relied exclusively on work orders procured from the said RMG factories.

Those accessories manufacturers that did manage to survive the first wave are now dreading the re-emergence in 2021 of a second wave of the COVID-19 pandemic which has the potential to once again halt the operation of many such factories due to the reasons discussed above.

Furthermore, in Plastic related industries, there is now an increasing emphasis by the international buyers on ensuring the production of recyclable goods as consumers are now becoming even more environmentally conscious in the post-pandemic world.

In order to successfully tackle these challenges, during the first wave, the Government of Bangladesh implemented an $8 Billion Dollar stimulus package for all industries (including accessories manufacturers)

In view of the re-emergence of a second wave now, a similar stimulus package must be reintroduced to ensure the continued survival of accessories manufacturers in the country. Moreover, in conjunction with the World Bank, the Government has set up a financial assistance program through which Plastic related industries can, in due course, evolve to become environmentally sustainable having a high emphasis on the use and production of recycled materials.

However, the rules for qualification to be enlisted in this program are too stringent and need to be relaxed to ensure the participation of a maximum number of companies in a COVID-affected world.

 

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