Staggering political turmoil may push down apparel orders by 40pc
Readymade garment exporters feared that the export orders for next summer and winter seasons might drop by 40 per cent as most of the global buyers have cancelled their visit to Bangladesh due to political instability surrounding the national elections. The exporters now have to go to any third countries or to the buyers’ countries to negotiate order whereas they used to negotiate the orders in Bangladesh, industry insiders told New Age.
They said that buyers are very much scared over the ongoing political turmoil and they (buyers) appeared to be losing their confidence on Bangladesh as most of the exporters have failed to make shipment in time in last three months.
Though the exporters are going aboard for negotiating orders, most of the buyers are cutting the volume of orders and instead shifting the orders to other countries, garment makers said.
Shovon Islam, managing director of Sparrow Group, flew to Hong Kong on Tuesday morning for an order negotiation meeting with an American brand.
Ann Taylor, a major American apparel retail chain store for women, is doing business with the Sparrow Group for last few years but this year the brand did not agree to come to Bangladesh and instead invited the exporter to go to Hong Kong for negotiating orders, Shovon told New Age on Monday.
He said that the global buyers felt insecure to come to Bangladesh due to frequent political violence and he had to go to New Delhi in India to negotiate orders with another American buyer last week.
‘We are very much worried over the situation as on one hand, buyers are canceling their meeting in Bangladesh and on the other, they are canceling their orders which were placed earlier,’ Shovon said.
In the first week of January, Banana Republic brand of GAP, canceled an order of 1.2 lakh pieces of pants worth Tk 2 crore as they were worried over the production and supply chain disruption in Bangladesh, he said.
Shovon fears that the orders of fall season would drop by 40 per cent as political instability and deteriorated law and order situation disappointed the global buyers.
Md Moshiul Azam, Managing director of Fame Sweaters Ltd, said that they had to go to Thailand five times in last two months to negotiate orders and would have to go twice by January 15. Earlier, Azam used to negotiate the orders in Bangladesh.
‘Not only Thailand, we had to go to EU countries for several times in November and December to negotiate orders. All the buyers reduced their volume of orders as they lost their confidence over the supply chain in Bangladesh,’ Azam said.
Buyers are not feeling comfortable to work with Bangladesh under political uncertainty and aggravated law and order situation and they are shifting their orders to India, Vietnam and Pakistan despite high prices, he said.
M Mohiuddin Chowdhury, director of Clifton Apparels Limited, said that they have arranged several negotiation meetings with the buyers in the US, China, Singapore, Hong Kong and Bangkok in last two months.
It is very much difficult for the exporters to arrange meetings in third country as the process is highly expensive and huge loss of man hour, he said.
No new buyers are visiting Bangladesh and almost 50 per cent of traditional buyers are cutting their volume of orders in the face of political turmoil, Mohiuddin said.
Calvin Klein, an American brand, is doing business for long with Clifton Apparels Limited in Chittagong. But recently the brand canceled its orders considering the increasing political violence, he said.
Mohiuddin also said that the global buyers were observing the situation
and if the post-election violence continues, obviously they will take decision to shift their orders to alternative source.
Buyers have been observing the situation for one year long and they were mentally prepared to wait up to election. But post-election violence may push them to think about alternative sources, he said.
On the outskirts of Dhaka, Babylon Garments, located on the outskirts of Dhaka, which supplies shirts, trousers and other apparel for global retailers including Wal-Mart Inc, is one of the biggest players in Bangladesh’s $22 billion garment industry that has seen orders cut nearly in half in the last three months – the worst drop in two decades, reports Reuters.
‘December is usually a season when we are packed with orders to a point where we can’t take any more but look at this year – it’s a completely different story,’ said Muhammad Saiful Hoque, assistant general manager of Babylon Garments, as workers sewed checked shirts for British-based Tesco Plc.
A Wal-Mart spokesman said the country sources from more than 70 countries, which allows it to plan for any potential supply chain interruptions. He said he was not aware of any issues related to developments in Bangladesh and Cambodia.
Michael J Silverstein, a senior partner with the Boston Consulting Group based in Chicago, said Bangladesh is a critical supplier of clothing for world markets and too large to replace.
‘The majority of the customers believe Bangladesh will not go dark, for example stop shipping,’ he said. ‘They do believe there will be delays and a need for alternative supplies.’
Bangladesh’s garment industry accounts for 80 per cent of the country’s exports and is so important to the economy that it has typically been spared from the political unrest that periodically racks the South Asian nation, even though many textile tycoons are politically active.
-With New Age input
