RMG shipments dip 16pc in July, but manufacturers optimistic

Shipment slumped due to the impact of Eid vacation, weeks-long lockdown, and a severe container congestion in the Chittagong port, manufacturers say

Readymade garment (RMG) shipments saw a 16% year-on-year dip in July of this year, but apparel manufacturers are expecting better performance in the coming months.

Shipment slumped due to the impact of Eid vacation, weeks-long lockdown, and a severe container congestion in the Chittagong port, manufacturers said.

According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the country exported apparels worth $2.60 billion last month, 16% lower than $3.08 billion in July last year.

The main destinations for Bangladeshi RMG products are the US and the EU, which have already opened shops following mass vaccination, leading to an increase in demand. 

Shahidullah Azim, vice-president of the BGMEA, said that June, July and August are the peak months for apparel exports as manufacturers export 35%-40% of the total RMG products of the year during this time.

“But exports have been disrupted this year due to the Eid vacation and factory closure due to the ongoing lockdown. The problem has further worsened by the container congestion at the Chittagong port,” he added.

However, he said that they are very optimistic about export performance in the coming months as manufacturers get huge orders from buyers right around this time.

“Despite the lockdown, all export-oriented industries, including the garments industry, have been reopened, which will increase production and increase shipments. We are expecting good days ahead,” he added.

If all goes well, the sector will be able to overcome the export situation of July and will also overtake Vietnam again, he added. 

Azhar Khan, chairman of Mithela Textile Industries Limited, said that although exports were slightly lower in July, they are optimistic that shipment volume will increase.

“We have been able to convince many buyers by reopening the factory on August 1. We are getting several purchase orders. If the factory is no longer closed due to the lockdown, our exports will definitely increase and we will regain the second position by surpassing Vietnam,” he added. 

Factories reopen 

Export-oriented factories of different industrial zones across the country have regained their momentum since Sunday, buzzing with activity after the government decided to reopen export-oriented industries amid an ongoing lockdown.

Sources from major export-oriented factories said that 85%-90%, in some cases 95%, workers were present at their respective workplaces on the first two days after the reopening of factories.

BGMEA Vice-President Shahidullah Azim said that around 90%-95% workers joined their respective workplaces at the BMGEA's member factories across the country. 

“There are around 2,000 active factories that are also BGMEA members. We are optimistic that the factories will restart their activities in full swing if the government relaxes restrictions after August 5,” he added.

A source from the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) also said that 85%-90% workers have returned to the factories under the association. 

An official of the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) said that more than 87% workers joined their respective factories on Sunday.

BGMEA’s plea to buyers 

Meanwhile, the BGMEA has urged buyers not to penalize suppliers for any reasonable delays caused by the lockdown.

BGMEA President Faruque Hassan made the request through the buyers' forum in Bangladesh, as well as to the individual buyers, in a letter on Sunday.

Production levels in many factories have significantly reduced alongside maintaining the health protocol standards and the cost of operation has increased due to workers’ transportation requirements and ensuring sanitization, reads the letter. 

Moreover, many factories have developed a huge backlog of orders due to the recent mandatory country-wide lockdown.