The readymade garment (RMG) exporters are optimistic about a strong recovery as orders from international buyers are steadily coming in, the industry is poised for recovery, signalling resilience and renewed confidence in the face of challenges.
They also said that they are getting positive responses from top buyers in major destinations like the USA, UK, EU and other countries regarding the upcoming spring and summer season of 2025, signaling a turnaround is expected by December of this year.
Moreover, the global image and acceptability of the Interim Government’s Chief Advisor Dr Muhammad Yunus will help bring back trust and confidence of the buyers.
Earlier, since the end of last year, Bangladesh has experienced ongoing violence, leading to multiple factory shutdowns ahead of a controversial national election.
Then, the recent student quota reform movement and mass uprising left the readymade garment factories to be closed for at least 10 days in July and August with a total internet blackout.
Bangladesh saw widespread student protests starting from July 1, escalating into deadly violence since July 15 when the ruling party, along with its affiliates and law enforcement, attacked protesting students which resulted in at least 650 casualties.
Soon, the protests eventually evolved into a demand for the end of the Sheikh Hasina regime, leading to her resignation and flight to India on August 5. Professor Yunus subsequently took charge as the interim government’s chief advisor.
Although law and order in the country was critical in the first week following the August 5 revolution, the situation is now almost under control, and the interim government is working to establish greater stability, said the RMG manufacturers.
Number of orders signal recovery
According to a report of Financial Times, top international fashion brands were shifting orders away from Bangladesh because of the turmoil that surrounded the fall of former Prime Minister Sheikh Hasina and some local manufacturers labelled it around 10%-13%.
However, the manufacturers said that they are getting positive confirmation from their buyers regarding placing orders for the upcoming spring and summer seasons.
Shovon Islam, managing director of Sparrow Group, told Dhaka Tribune that the top buyers from the US, UK, and Europe are responding positively which is encouraging for them.
“This year, the summer was long in the UK and Europe so they took some time in placing orders. On the other hand, the US was observing the political situation of Bangladesh,” he added.
There were some incidents of shifting orders during the peak of the protests and internet blackout, he went on saying that most of them were “chasing orders”, not “actual orders” and buyers’ response to actual orders is now very positive.
“This morning, I spoke with my top US buyers like Express, American Eagle, US Polo, and they were very positive.
Echoing the similar sentiment, BGMEA Director Mohiuddin Rubel told Dhaka Tribune that the matter of order shifting is relative.
“Some manufacturers said they received slightly lower orders than normal, while others said they received more orders. I think top brands have kept their commitments while some middle and lower-tier buyers couldn’t and considered some alternatives,” he added.
He also said that they couldn't communicate due to the internet blackout, so there might be issues of a bit of mistrust, but they hope everything will be fine with time.
Export may follow right track
Due to a major data discrepancy, Export Promotion Bureau (EPB) has not been publishing export data since June.
However, according to the National Board of Revenue (NBR), Bangladesh earned $3.1 billion in June and $3.19 billion in July by exporting RMG items, which is expected to follow the similar path in August.
Shovon Islam, also a director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that the export volumes will be sluggish over the next three months but they hope that from the first quarter of next year, the export will see a big jump.
Remaining challenges
Mohiuddin Rubel said that all the factories are operational but since the law-and-order situation is not fully stable yet, there will be some challenges.
“The biggest challenge now is to stabilize security and speed up operations of the NBR, customs, and ports. As the banking sector is also unstable, there is a crunch in cash flow,” he added urging to address the irregularities and gaps in the regulatory policy.
Shovon Islam said that the current challenges are more internal than external. The liquidity crisis in factories impacted their payment of wages which is causing some cases of labour unrest.
Ray of hope
BGMEA Vice President (Finance) Md Nasir Uddin Said that currently, almost all factories are operating at full capacity. They are working hand to hand with the army and police to resolve the significant backlog of 10 days of protest time.
Manufacturers said that hopefully the mentioned problems will be resolved.
Shovon Islam said that the global image of Chief Advisor Muhammad Yunus will help them a lot as western buyers are gaining confidence in him.
Mohiuddin Rubel said that they hope everything will stabilize gradually and the order that was shifted elsewhere is gone, now they have to proceed with futures.
“Muhammad Yunus is a globally recognized person; his personal image will help to restore our image at our major destinations like the US and EU” he added.
