Dr. Rubana Huq, President, Bangladesh Garment Manufacturers & Exporters Association (BGMEA) has recently shared her observation and experience during this pandemic in a conversation with Denim Focus editorial team. Some key discussion points are mentioned below for our readers-We hope that through the continued support from the government we will be able to stay in course throughout the second wave- Dr. Rubana Huq, President, BGMEA
Denim Focus: How do you see the textile & RMG industry of Bangladesh for 2021?
Dr. Rubana: While the RMG industry of Bangladesh is unprecedentedly disrupted by the first wave of Covid-19, and the recovery process has been quite challenging for the industry since the crisis still persists, rather the second wave is actually worsening the wound and will be continued in the New Year as the projection and evidence suggest.
Reconstruction of the industry from the damages done by Covid-19 and protecting the livelihoods of our workers is of topmost priority for us for 2021. We are ever grateful for the supports from the government which saved the industry and the livelihood of our 4.1 million workers from a possible catastrophic consequence of the first wave. We hope that through the continued support from the government we will be able to stay in the course throughout the second wave, though it’s very difficult to foresee the severity of the impact on the global economy and the recovery process.
While saving the industry from further disruption by COVID and maintaining safer operations, particularly the health and hygiene practices across the industry, would be the priority during the New Year, the sustainability of the industry would be of similar importance for us. COVID has exposed a number of vulnerability factors in the global trading system, like weaknesses in a contractual arrangement between parties, cancellation of confirmed orders, non-payment or delayed payment, bankruptcies of the global brands and resulting non-payments to suppliers. These need to be addressed to make trade safer and sustainable. Besides, we have prioritized a number of areas to focus on in the coming days ranging over trade and non-trade (social and environmental) issues in the form of seven pledges, i.e. pledge on industry innovation and efficiency, sustainability, culture export of Bangladesh, workers health, mental health, workers education, and early childhood learning of workers’ children. Besides, product and sector diversification, re-skilling and up-skilling for taking the challenges of 4IR, and most importantly preparing for LDC graduation and charting our path to sustainable graduation, effectively pursuing the matter of insolvency resolution would be on our cards.
Denim Focus: What was your observation in 2020 during COVID-19?
Dr. Rubana: The Covid-19 brought total mayhem worldwide affecting the global economy and the economy and industries in Bangladesh which are linked to the global economy significantly. Production, export and the financial viability of the RMG industry were severely impacted. While the industry was swamped by order Cancellation, deferred payments/ discounts by buyers, the cash crunch hit the backbone of the industry to maintain regular overhead payments including wages. Thanks to our Honorable Prime Minister for her gracious and visionary step by extending wage assistance loan and other stimulus packages for this industry, that enabled us to withstand the effect of the first wave. Since the cancellation of 3.18 billion dollars worth of goods, we have come a long way to overcome the situation as buyers have taken 90% of the canceled goods.
We are now into the second wave of COVID-19 and already experiencing its severity as it crippled the western world; cities in Europe and USA, which are the major markets of our clothing, are under lockdown or state of emergency. Export has been on a falling trend once again during October – December 2020, after a slight recovery in August and September 2020. To be more precise, RMG export in October 2020 has declined by 7.78% on the year-over-year (y-o-y) basis, while October 2019 had seen 19.79%, meaning that the growth in October 2018 and 2020 is -26.03%. Similarly, the y-o-y growth of export in November 2020 was -2.66%, but growth between November 2018 and 2020 is -14.32%. The just-published data for December makes it more appalling as export plunged by 9.69%. This wrapped the annual export performance with an unprecedented fall of 16.94%. Though the first wave was apparently more severe and cancellation during the second wave is not that rampant, but buyers are following a different approach to managing their supply chain. Instead of cancellation, we are experiencing a slowdown in order placements. This has an adverse impact on our industry since factories are not being able to have a forecast and plan their capacity. Though we don’t have an inclusive picture on the real-time ‘order’ scenario in the industry, but a survey on 50 factories shows that factories running at 30% less order, which is the in fact the picture industry-wide and getting worse day by day. Retail sales growth in both USA and EU has been on a declining trend (i.e. -16% in November and -13% in October 2020 respectively). With the detection of new strain of the virus and that being more contagious than the first one, we just missed the biggest sales season of 2020, Christmas.
Denim Focus: How we can promote our industry in the upcoming days?
Dr. Rubana: For over 40 years, Bangladesh has been recognized as a global manufacturing hub only. The industry has transformed so much in last two decades with regard to workplace safety, workers well being and social compliance, gender equality, and green industrialization, but little has been reflected in its narrative worldwide. I think it needs a collective effort from every quarter of the society as much as the industry needs to change itself toward a value-based industry. Constructive criticism and suggestions from stakeholders are always critical to stay on the path of progress; the anti-industry bias would not help the nation.
BGMEA has been proactively involved in portraying the inclusive picture of the industry and we took the initiative to report for the first time its sustainability performances through the lens of the Global Reporting Initiative’s (GRI) sustainability reporting framework. Globally, this reporting structure is validated and acclaimed by all the stakeholders and adopted by major businesses. We believe that sharing a collaborative story on sustainability should help us author the narrative of the industry’s stride and accomplishment, which will, hopefully, break the usual perception of the stakeholders and society at large. But our endeavors will remain incomplete without having a complementary role by the stakeholders.
Apart from traditional views, BGMEA is approaching branding from an unconventional perspective. We have become the second-largest manufacturers and exporters of apparel in the world, and we export to more than 160 countries, but we are yet to make the beginning of our journey from OEM to ODM. Whereas we have a rich cultural heritage and a rich history in weaving textiles like Muslin and Jamdani, exporting the culture of Bangladesh and thus making our own mark in the global fashion landscape will be a significant milestone for us in coming years. We are currently working on a program to use our heritage materials and artisans to design and develop western fashion, which will not only put Bangladesh under a different spotlight in the global fashion market but also would create opportunities for our indigenous industries and people.