Looking Back 2008
RMG breezes past 2008
Refayet Ullah Mirdha
Bangladesh’s ready-made garment (RMG) business was well in 2008, although some national and international anti-business issues marked the year as a turbulent one.
However, on the onset of the year, the country was faced with a severe competition in the global RMG market when the safeguard measures imposed by EU on Chinese market lapsed on January 1, 2008.
Earlier, the EU and US imposed a safeguard measure on the Chinese products on the first day of 2005 when the multi-fibre arrangement came to an end and the real global competition started. And the embargo on Chinese exports to the USA market expired yesterday.
Meanwhile, the local garment manufacturers and exporters faced a severe labour unrest from January 10 of the same year. A number of factories in the city’s Mirpur area came under attack by the infuriated workers at that time.
Soon after the labour unrest subsided, the hardship that faced by the RMG workers in the wake of soaring prices of basic commodities came to the fore. To cope with the situation, garment owners started selling rice and few other essentials to their workers at a subsidised rate.
High yarn price also turned a burning issue for RMG makers in the immediate past year. Since March, the price of this raw material for RMG products started climbing and it reached US$3.0 per kg from its previous rate of $2.30.
When the local manufacturers were doing very well despite some hurdles in the local and international markets, the government was creating pressure on them for gas rationing in their respective factories, but later it backtracked from implementing such a plan in April.
The manufacturers also opted for a lean manufacturing system from mid-2008 to offset their overall expenditure because of the cost of production increased by more than 16 percent on higher transport and petroleum costs, frequent outage of power, implementation of minimum wages for workers and the exorbitant prices of foods.
And, in a bid to disseminate knowledge on compliance issues, many garment factory owners staged motivational dramas on their factory premises during June-August period.
A good opportunity came for the Bangladeshi manufacturers when the Indian government allowed them to export 8 million pieces of RMG products to the neighbouring country under the Safta (South Asian Free Trade Area) agreement.
But, the Bangladeshi exporters could not exploit the full potentiality for the year although the Export Promotion Bureau (EPB) started approving certificates from May 21 in this connection.
Bangladesh succeeded in exploring some new markets like Japan, Romania, Poland, South Africa and Russia. These new export destinations helped a lot to minimise the possible bad impact stemmed from the global financial recession.
Bangladesh government fixed cotton waste price at US$1.60 per kg to discourage the smuggling of this important by-product of fabrics by a section of unscrupulous traders.
The BKMEA suspended the decision of fixing the baseline prices of some RMG products in the face of criticism from different quarters in July.
A new chapter was opened for Bangladesh when the government approved a local recruiting agency to export RMG workers to Russia in July.
The local textile manufacturers imported Tk 450 crore textile machinery, a record in such import, in July when the government cut duty on capital machinery in its 2008-09 budget.
In August, Bangladesh set a milestone in RMG (both woven and knitwear) exports worth $10.70 billion.
Since September some internationally renowned retail companies started demanding rebates on exported goods from Bangladesh.
Then again, labour unrest erupted. A considerable number of RMG units in Gazipur were set ablaze and more than 900 owners threatened to suspend production.
The labour unrest lingered until the celebration of Eid-ul-Fitr on October 2, 2008.
Two international important expositions — Knitexpo and Batexpo — were held on October 20 and November 6 respectively.
In November, some international buying houses opened their liaison offices in Dhaka to purchase RMG products directly. The Opening of such offices also helped a lot to recoup the losses of bad impact of global financial recession.
According to RMG makers, Bangladesh awaits a real test as the US restriction from China ended yesterday. The US is one of the main markets for Bangladesh.
Talking to The Daily Star, Anwar-Ul-Alam Chowdhury Parvez, BGMEA president, said such post-withdrawal time does not pose a threat for Bangladesh as the country has already sustained such tough time several times.
The chief of the apex trade body for the apparel sector suggested that the government take some pre-cautionary measures like lowering bank interest rate, introducing dual currency payment system, a further cut in fuel oil price and uninterrupted power supply to the apparel factories.
Parvez, however, cautioned: “Providing further 3 percent rebate to exporters by the Chinese government might be a problem for Bangladesh.”
Earlier in June the Chinese government provided 3 percent rebate to its exporters to boost exports.
When asked, K M Rezaul Hasanat, chairman of the Viyellatex Group, said the country will enjoy better exports from the second half of 2009 calendar year as more and more foreign orders are expected to pour in.
“But, it is too early to say what will be an impact of the withdrawal of US restriction from the Chinese market on our exports,” Hasanat said.
Courtesy: thedailystar.net
