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Bangladesh exporters stare into dark abyss
Publication Date : 20-06-2012
Owners of garment factories loctaed in Ashulia on the outskirts of the Bangladeh capital Dhaka will have to bear heavy loss of export, time and, worst of all, buyers as production in more than 300 units remains stalled since Sunday following a weeklong labour unrest.
Against this backdrop, apparel exporters now plan expensive air shipment, timely delivery of products being their next big worry.
Factory owners say they also fear for workers' shortages in the coming days since many workers left the industrial belt on the outskirts of the capital in search for job elsewhere.
After a weeklong spate of street violence by the workers in the area demanding a pay raise, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) on Saturday announced the shutdown that began on Sunday.
Nassa Group Managing Director Mohammad Abdullah said five woven garment factories of his group remained closed since.
“I am waiting for the decision of the government and the BGMEA for reopening of the units,” he told The Daily Star yesterday.
The five units, which employ 12,000 workers, are directly losing at least 20 lakh taka (US$24,437) every day. The company will have to pay the employees and workers even when the production remains suspended.
“This is the direct loss but the indirect loss is enormous as well,” Abdullah said.
Despite financial pressure, Nassa now plans for air shipment to make up for the time lost on the shutdown. "Air shipments are very expensive," he added.
The group has 30,000 workers employed in its 34 units.
Dekko Group that operates five units at Ashulia expects a quick solution to the impasse that recurs almost every year.
“I am waiting for the decision from the government as I have shut down five of my 12 units over the last nine days,” said Shahadat Hossain Kiron, managing director of Dekko.
The next worry for the factory owners will be the manpower shortage as many workers left the area, either for their village homes or in search for work in Gazipur and other areas, Kiron said.
“The buyers are worried about the situation as much as the manufacturers,” he said, adding: “We are in international business. We always race against time and we are committed to the buyers."
“If the crisis prolongs, it will be a disaster for the country and the economy."
Ismail Hossain, managing director of Sharmin Group, said he kept shut three of five units of his company.
The three units based in Ashulia make 35,000 pieces of shirts per day. But with production on hold, the company sees red ink.
“If you fix even $5 a shirt, I am still losing $1,75,000 a day,” Ismail said.
Ashulia factories account for 20 percent of the total garment exports of Bangladesh. By one estimate, Bangladesh is exporting $10 million less a day due to the halt in production at more than 300 factories in the industrial belt.
But the BGMEA leaders are steadfast in their demand for security, return of normal work environment and punishment of those involved in vandalism.
It may be mentioned that the weeklong labour unrest that erupted on June 11 in the Ashulia industrial hub left more than 200 garment factories vandalised, some 300 vehicles damaged and about 500 people, including law enforcers, injured.
“We do not want to keep our units shut. But we need security [to reopen those],” said Shafiul Islam Mohiuddin, president of BGMEA, after a meeting with State Minister for Labour and Employment Monnojan Sufian at the latter's secretariat office in Dhaka yesterday.
“We announced the closure of our factories because we were helpless,” he added.
Mohiuddin said they discussed the security aspects in Ashulia with the members of the crisis management committee under the ministry.
The ministry will again sit with the labour leaders today to discuss reopening of the factories.
The BGMEA president said owners of the Ashulia-based factories had been losing production for nine days, including the six days of violence since June 11.
Meanwhile, Nazma Akter, president of Sammilito Garment Sramik Federation, a platform for garment workers, urged the owners to reopen the factories as soon as possible.
She said the unrest sparked over the rumour of a death of a storekeeper, and the demand for a pay hike was raised later. One of the major reasons for the unrest is frequent hike in house rent in the area.
“I want the factories to run smoothly. And the government should punish the real culprits.
“However, we have a meeting at the labour ministry tomorrow [today]. We will decide our next course of action after the meeting,” Nazma said.
Wazedul Islam, coordinator of Sramik Karmachari Oikya Parishad, said the workers were demanding a pay raise due to the price spiral of daily essentials and rising house rent.
Therefore, shutting down the units is a threat to the workers, he said.
“The owners should address the problems of the workers for a peaceful work environment to return," Wazedul added.