For July to December 2019, most listed textile companies in Bangladesh declared poor financial results due to declining product prices, increased financial cost, overvalued local currency and rise in production cost. Of the 53 listed textile companies that have declared financial results recently, only nine were able to post profit growth while nine declared loss and the rest 31 witnessed a sharp fall in profits in July to December 2019 compared with that in the same period of the previous year. Profits decreased due mainly to a decrease in sales prices and an increase in financial expenses.
Bangladesh is losing its competitive edge globally. Exchange rate has remained high for a long time while competing countries have devalued their currencies to gain share on the international market. Lending rates to businesses in Bangladesh are high in terms of international standards and have subsequently increased the financial cost.
The cost of utility bills including gas and electricity has also increased that pushed up production cost for companies. Shortage of gas supply to factories hindered production. The new wage structure raised expenses of companies. Despite all investments made in workplace safety, compliance, implementation of the new wage structure and green industrialization, the unit price has remained significantly lower.