The whole world has been suffering a lot from the COVID-19 pandemic. Every sector of the industry has been affected. The textile industry is the main remittance earning source for Bangladesh. This industry has been affected a lot due to lockdown everywhere and a shortage of orders. As everywhere vaccination has been started and the COVID-19 infection situation is better now. Fortunately, Bangladesh is receiving plenty of orders now. Team Textile Focus talked with industry stakeholders to know about their business in 2021 and furcating for 2022.Abdullah Al Mamun, Business Unit Manager, Marks & Spencer shared his views—
Textile Focus: How are you observing 2021 for your business?
Abdullah Al Mamun The pandemic has wreaked havoc on global apparel supply lines, with Bangladesh, India, Vietnam, and other countries bearing the brunt of the damage. Their exports have plummeted, factories have shuttered, workers have lost their jobs, and incomes have decreased.
Bangladesh, the world’s second-largest garment exporter after China, has been hit hard by the pandemic. According to the BGMEA, exporters received 30% fewer orders from December to March compared to pre-pandemic levels. However, when orders began to rebound in recent months, the sector was hit again by the second round of European lockdowns.
For manufacturing jobs, foreign reserves, and women empowerment, Bangladesh’s economy remains heavily reliant on the ready-made clothing industry. The industry accounts for 11.2 per cent of the country’s gross domestic output. More than 4,600 RMG manufacturers make up the country’s largest industrial sector, employing 4.1 million people and accounting for 36 per cent of manufacturing employment. The RMG industry is on the verge of a humanitarian and commercial disaster never seen before.
The government has imposed statewide holidays until April 25, 2020, to flatten the coronavirus spread curve. All business and industrial activity have ceased, except for emergency services. Because their retail locations in Europe, North America, Asia, and elsewhere are largely shuttered, many overseas purchasers are cancelling or deferring confirmed procurement orders. International customers have cancelled or suspended $3.16 billion worth of shipments involving 1,142 companies, affecting 2.26 million workers, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). Millions of workers face joblessness as fresh orders dry up due to a drop in global garment demand. 1 million workers have reportedly been laid off or furloughed. According to a survey conducted by BRAC University, 47% of RMG workers reported not receiving their wages and felt uncertain about their current job status with their respective employers.
The impact on the RMG industry will be far-reaching, with serious implications for various industrial, consumer, and service sectors. As backwards-linkage industries expanded, the RMG industry’s value-added increased gradually and now stands at 63.2 per cent. A huge capital-intensive textile sector has been built to supply yarn and fabric to the export-oriented RMG industry, with a $6 billion investment. The textile value chain currently has 1,461 manufacturing units, with 425 in yarn manufacturing, 796 in fabric production, and 240 in dyeing-printing-finishing operations. Button, zippers, hangers, threads, and other accessories are available from a vast variety of accessory vendors, the majority of which are small and medium companies (SMEs). They’ve all lost their money. Some are parked on the side of the road. The burden of bank loans has landed on those who have attempted to keep the system running. Small and medium firms are unable to compensate in this environment.
COVID-19’s impact is just beginning to be felt, and it will continue to grow rapidly. The entire impact will become apparent in the next months or years. Staying ahead of the curve and preparing with proper emergency and post-crisis aid in many forms is necessary to minimize the impending economic and probable social crises.
For greater efficacy and sustainability in a risk-measured way, it may be necessary to sequence ADB’s sovereign and non-sovereign operations. COVID-19 has an impact on several economic sectors in addition to the RMG business. Assistance to the RMG business, which is the largest contributor to urban poverty reduction, may benefit other related supply chain industries, allowing the economy to normalize greatly and more quickly.
Textile Focus: What is your expectation and planning for 2022?
Abdullah Al Mamun: In ten years, the globe could be a very different place. If the Covid-19 pandemic has taught us anything, it is that nothing in life or business can be taken for granted. Even after all of this, we must pivot and develop new plans. We need to make amends for the loss. Some demands are fulfilled, while others are not. For the coming year, we must start from scratch once more.
We are beginning to have a better image of how the sector would look as we move beyond Covid-19 since most of the key worldwide markets for Bangladeshi garments entered a lockdown phase and closed many of their shops. The most obvious point to make right now is that it does not appear that things will return to normal anytime soon. Once the dust settles, it appears that we will all be functioning in a radically altered environment. A few patterns have emerged among our customers—brands and retailers.
The first is that throughout the shutdown, there was a clear shift toward internet purchases. H&M and Inditex have seen explosive growth in their online clothes sales. Both of these major retailers claim that substantial swaths of the digital shift will be permanent. I believe there will be a trend toward smaller minimum order numbers. Our customer base is changing, becoming more seamless and responding to the demands of their customers—the general public—faster than ever before. As suppliers, we must be ready to adapt, and our products must be more nimble, agile, and flexible. In the new world, the capacity to respond quickly to demand tiny, speciality lines could be critical. Second,
I believe there is a trend toward even shorter lead times pressure on our RMG industry is now great, but in the future, it will be a buyer’s market more than ever. Beyond Covid-19, things aren’t going to get much simpler. At our end, the industry will have to rationalize, and suppliers will have to adjust correspondingly. Those that can adapt to the new environment will be the cream of the crop. Though the lockdown in western cities is progressively being lifted, the protective lifestyle will not be abandoned anytime soon, as the risk of viral re-infection will always be present. As a result, personal safety equipment will have a permanent and prominent presence on store shelves. As a result, factories should include protective clothing in their product categories.
There is little doubt that in the post-Covid-19 era, garment producers who innovate and investigate diverse PPE production will have more chances. The amount of autumn/winter orders in Bangladesh is substantial, with even more confirmed orders for spring/summer 2021-22. Until March 2022, many of the factories are fully scheduled. Export earnings will reach or exceed pre-pandemic levels in 2022 if export growth continues. However, this expansion comes with a slew of difficulties.
Modern technology aids in the reduction of production expenses. Furthermore, you must take the appropriate action at the appropriate moment. In this, the government must play a responsible role. The interest rate on bank loans will have to be reduced. Because this sector generates significant export revenue, everyone must operate more responsibly. Only by overcoming the crisis will it be possible to behold the face of light.