Dhaka: Undaunted by a run of horrific
factory accidents that have hit Bangladesh’s garments industry, two
entrepreneurs bought Adorn Knitwear Ltd. earlier this year.
factory accidents that have hit Bangladesh’s garments industry, two
entrepreneurs bought Adorn Knitwear Ltd. earlier this year.
It is a small business not
far from the rubble of Rana Plaza, a Dhaka suburb building that
collapsed in April 2013 killing more than 1,100 people, most low-paid
seamstresses, and prompting a costly safety overhaul at plants large and
small. Whether people like Rezaul Karim Chowdhury, one of Adorn’s new
owners, can afford those improvements will be critical for the future of
a sector that accounts for over 80 per cent of this South Asian
nation’s export earnings, industry leaders say.
far from the rubble of Rana Plaza, a Dhaka suburb building that
collapsed in April 2013 killing more than 1,100 people, most low-paid
seamstresses, and prompting a costly safety overhaul at plants large and
small. Whether people like Rezaul Karim Chowdhury, one of Adorn’s new
owners, can afford those improvements will be critical for the future of
a sector that accounts for over 80 per cent of this South Asian
nation’s export earnings, industry leaders say.
Last month, Adorn’s
production lines were silent and its sewing machines gathering dust as
the lengthy process of checking the building for structural weakness was
underway. “We’re losing money every minute,” said Chowdhury, as he
looked around his factory, which has a list of potentially expensive
fixes to be completed before reopening.
production lines were silent and its sewing machines gathering dust as
the lengthy process of checking the building for structural weakness was
underway. “We’re losing money every minute,” said Chowdhury, as he
looked around his factory, which has a list of potentially expensive
fixes to be completed before reopening.
Many high-volume factories
depend on smaller firms, contracting out work to meet orders from big
Western retailers under tight deadlines. Up to 20 per cent of the 3,500
exporting garment factories subcontract, says the Bangladesh Garment
Manufacturers and Exporters Association (BGMEA).
Survival of fittest in Bangladesh’s garment sector | GulfNews.comdepend on smaller firms, contracting out work to meet orders from big
Western retailers under tight deadlines. Up to 20 per cent of the 3,500
exporting garment factories subcontract, says the Bangladesh Garment
Manufacturers and Exporters Association (BGMEA).
If that support system crumbles, some
factory owners worry Bangladesh’s $24 billion (Dh88 billion) industry
could lose the agility that took it to number two in the global league
of garment exporters. Since Rana Plaza, nearly two-thirds of the
country’s exporting garment factories have been inspected.
factory owners worry Bangladesh’s $24 billion (Dh88 billion) industry
could lose the agility that took it to number two in the global league
of garment exporters. Since Rana Plaza, nearly two-thirds of the
country’s exporting garment factories have been inspected.
Many have been handed lists
of structural, electrical and fire safety fixes and upgrades that could
cost hundreds of millions of dollars. Larger factories can generally pay
for those changes independently, or have access to a growing number of
affordable financing arrangements backed by wealthy customers.
of structural, electrical and fire safety fixes and upgrades that could
cost hundreds of millions of dollars. Larger factories can generally pay
for those changes independently, or have access to a growing number of
affordable financing arrangements backed by wealthy customers.
Hundreds of
smaller factories do not, leaving them exposed at a time when owners say
they are grappling with a slide in orders and an increase in minimum
wages for the industry’s workforce of more than 4 million. Already about
450 factories have gone to the wall since last year’s disaster, the
BGMEA says.
smaller factories do not, leaving them exposed at a time when owners say
they are grappling with a slide in orders and an increase in minimum
wages for the industry’s workforce of more than 4 million. Already about
450 factories have gone to the wall since last year’s disaster, the
BGMEA says.
“If all the factories are
becoming big, who will do the smaller things?” said Anwar-ul Alam
Chowdhury, chairman of Evince Group and a former BGMEA president. “Then
who will come to Bangladesh?”
becoming big, who will do the smaller things?” said Anwar-ul Alam
Chowdhury, chairman of Evince Group and a former BGMEA president. “Then
who will come to Bangladesh?”
At Adorn, labourers ripped up
flooring to expose steel rods that needed testing. Above them, the word
“crack” was spray-painted in red in three spots, all to be analysed by
engineers in weeks-long assessment.
flooring to expose steel rods that needed testing. Above them, the word
“crack” was spray-painted in red in three spots, all to be analysed by
engineers in weeks-long assessment.
Getting factories up to speed
after inspections may cost owners from $100,000 to $1 million apiece,
according to the World Bank’s International Finance Corporation (IFC).
after inspections may cost owners from $100,000 to $1 million apiece,
according to the World Bank’s International Finance Corporation (IFC).
The Accord on Fire and
Building Safety in Bangladesh and the Alliance for Bangladesh Worker
Safety, brand-backed initiatives that have inspected some 1,700
factories, offer mechanisms through which members are helping suppliers
compensate workers for lost wages due to closures and finance factory
revamps.
Building Safety in Bangladesh and the Alliance for Bangladesh Worker
Safety, brand-backed initiatives that have inspected some 1,700
factories, offer mechanisms through which members are helping suppliers
compensate workers for lost wages due to closures and finance factory
revamps.
Several major apparel firms
belonging to the Alliance or the Accord said they had made significant
investments to help suppliers improve safety. Not all factories have
needed outside funding.
belonging to the Alliance or the Accord said they had made significant
investments to help suppliers improve safety. Not all factories have
needed outside funding.
The US-based VF Corporation,
an Alliance member whose brands include The North Face and Wrangler,
announced it would guarantee up to $10 million for the IFC and
Bangladesh’s BRAC bank to lend its suppliers. So far, three VF supplier
factories have received $1.3 million in loans.
an Alliance member whose brands include The North Face and Wrangler,
announced it would guarantee up to $10 million for the IFC and
Bangladesh’s BRAC bank to lend its suppliers. So far, three VF supplier
factories have received $1.3 million in loans.
The IFC is in talks to do the
same with several more Accord and Alliance brands. Even with more help
coming, there are fewer options for the exporting factories that do not
sell to Accord or Alliance companies. According to the International
Labour Organization, they number roughly 1,800.
same with several more Accord and Alliance brands. Even with more help
coming, there are fewer options for the exporting factories that do not
sell to Accord or Alliance companies. According to the International
Labour Organization, they number roughly 1,800.
The BGMEA says it has asked
the government to help these factories get up to speed by setting up a
fund offering them low-cost loans, but the government says it is up to
owners to find a way to meet safety standards after inspections.
the government to help these factories get up to speed by setting up a
fund offering them low-cost loans, but the government says it is up to
owners to find a way to meet safety standards after inspections.
“It will be the
responsibility of the owner to pay, or he’ll have to close it,” said
Mikail Shipar, secretary of the Ministry of Labour and Employment.
responsibility of the owner to pay, or he’ll have to close it,” said
Mikail Shipar, secretary of the Ministry of Labour and Employment.
Some suppliers may be too
unhealthy to secure another bank loan to stay afloat, said Ian
Spaulding, senior adviser to the Alliance. “It’s going to happen
throughout the market, and that’s a natural correction that needs to
happen.”
unhealthy to secure another bank loan to stay afloat, said Ian
Spaulding, senior adviser to the Alliance. “It’s going to happen
throughout the market, and that’s a natural correction that needs to
happen.”
Saving smaller factories is
crucial for the local industry to keep its edge, but also for the
economy, said Mohammad A. Rumi Ali, a director at BRAC Bank. “If 75,000
people lose their jobs, and the majority are women, it’s a big cost,” he
said.
crucial for the local industry to keep its edge, but also for the
economy, said Mohammad A. Rumi Ali, a director at BRAC Bank. “If 75,000
people lose their jobs, and the majority are women, it’s a big cost,” he
said.
Down a dirt road clogged with
bicycle rickshaws in Badda, a congested area on the edge of Dhaka, a
small garment factory is squeezed into a row of buildings. The owner,
who requested anonymity, said he could not meet all the inspectors’
requirements, primarily because his business is in a rented building and
the landlord refuses to help.
bicycle rickshaws in Badda, a congested area on the edge of Dhaka, a
small garment factory is squeezed into a row of buildings. The owner,
who requested anonymity, said he could not meet all the inspectors’
requirements, primarily because his business is in a rented building and
the landlord refuses to help.
“I can’t do all of it,” he said. “Lower-class factories aren’t getting any help.”
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