RMG industry wants higher prices from intl buyers

Bangladeshi apparel businesses called upon international buyers for maintaining responsible buying practices to obey their given conditions properly.The business insiders also said that their businesses are under pressure not getting proper prices of their products. They have reformed their factories costing huge money following Accord and Alliance but the buyers do not pay good prices, UNB reports.”Our production cost increased vastly compared to several years in various reasons. Besides, we have been able to develop our products’ quality. But buyers do not maintain responsible buying practices.

They want to buy at same cheap rate that was set long ago,” Mohiuddin Rubel, representative of Bangladesh at the United States Green Building Council (USGBC)’ s chief executive officer’s advisory council told UNB.The director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) also said that the number of Bangladeshi garment factories that received the top billing from USGBC is the highest in the world.”Bangladesh has highest number of green factories in the world.

So we urge buyers to adhere to responsible buying practices when they source apparels from Bangladesh. We also request Accord and Alliance to consider the issue of increasing prices,” he also said.He added that there are 87 green factories out of around 3000 factories in the country.However, the Alliance, a consortium of North American brands and buyers, on Bangladesh Worker Safety and the Accord, a platform of European brands and buyers on Fire and Building Safety started working in Bangladesh after the Rana Plaza accident on April 24, 2013 that killed 1,138 workers.

They ended their five year tenure here on May 31, 2018.Recently after hearing, the Appellate Division of Supreme Court has given an extension of 281 days to Accord from May 8 this year.Mohiuddin, Managing Director (MD) of Bangladesh Apparel Exchange and also Director of Denim Expert Limited added, “Accord and Alliance forced to reform our factories but on the other hand, the buyers reduced prices of our products than expected.””Our ability has increased here. Once we made low range products and now we can make middle range products. Besides, we are going to value addition, robotics of fourth industrial revolution and making green factories but sadly buyers not increasing prices rather decreasing.

They want to pay years old prices but now all our things including products quality developed.””Even though, we’ve some image crisis in international markets after Rana Plaza incident. However, we have taken initiatives to overcome the image crisis. We hope a positive message will be got there in future. So we need our government’s support,” he added.Another businessman Hasin Arman Ayon, director of MB Knit Fashion Limited said that unhealthy competition and lack of negotiation skill are the main reasons behind low prices.”We have reformed our factories costing huge money due to Accord and Alliance in our country. But they do not take any initiative to increase price rates of Bangladeshi products,” he also claimed.He said, “We bought a jockey pump at Tk64 lakh, after some days Accord said to dump the new pump not matching with their conditions.

However, we have made our factory eco-friendly costing huge money but we do not get proper price of our products.””We urge the accord and alliances to take initiative for raising prices of Bangladeshi products otherwise we have to face a big crisis,” he added. Asif Ibrahim, Director of BGMEA and Managing Director of Keilock Newage Bangladesh Ltd told UNB that their industry is passing many challenges following competitiveness.”We do not get good prices as per our expectation in the international markets. If we don’t get proper prices why we will build green factories costing huge money?,” he questioned.Asif added that they hope good days of Ready-made Garments (RMG) industry of the country will come after overcoming the image crisis. “We are working to increase our institutional capacity and sustainability.”According to Dhaka Chamber of Commerce and Industry (DCCI) president Osama Taseer, RMG industry faces pressure from increasing labor cost. It takes up 15 percent of the total production cost.

”Around 381.35 percent minimum wage hike witnessed from 2006 to 2019 and 50 percent wage hike for entry level workers in 2019 compared to 2013,” he added.According to BGMEA study on Apparel industry in Bangladesh 2018, Accord and Alliance covered factories completed more than 90 percent of their remediation activities. 422 factories have remediated more than 50 percent, 79 factories have relocated new places and 130 factories joined Accord and Alliance.”1200 garment factories have been closed down over the last 4 years due to failing in compliance standard.

The remediation cost for 80 percent of the factories was estimated at between $100,000 and $250,000 each,” it also read.Former BGMEA president Siddiqur Rahman said that production cost increased around 8 percent every year although the price of apparel in world market did not increase. Around 30 percent production cost increased from 2014 to 2018.According to BGMEA President Dr. Rubana Huq, “We’re facing many challenges in product diversification, improving image crisis, technological development, innovation and value addition. Our orders have been reduced as consumer demand has been changed in global markets.”She also said the owners of 30 garment factories have been forced to shut down their units in May. “Even many owners paid salaries of their workers after selling their machinery.

”The BGMEA chief also said the living cost of garment workers has increased sharply which should be taken into consideration.”However, we are in crisis of positive image and we should build image in the international market with the support of all specially through the media. The Era of Collaboration has begun only to make this industry sustainable. BGMEA will work hard to establish our positive image and branding in the international market,” she added.Centre for Policy Dialogue (CPD) Research Director Dr Khondaker Golam Moazzem told UNB that in the last six years since Rana Plaza collapse, Bangladesh has been able to develop its image in local and abroad taking various initiatives including reforming factories, increasing labors wages and developing products quality.

But some labour demonstrations tarnished their image to buyers somewhat.Golam Moazzem added that now many small factories owner are struggling to sustain in the apparel business to meet their cost. So the government should give separate fund for them and brand buyers should come forward to increase price rate of apparel products of Bangladesh.”The authorities concerned should go forward in a planned way to develop the country’s important industry. Production has to increase reducing production cost.

There are many green factories being built, that is positive for the industry. But other issues should be considered as well,” the researcher said.

News Information

Posted On : 1 Jul 2019

Post By : BdGarments

Category : Apparels/Garments

News Source : https://rmgbd.net/2019/06/rmg-industry-wants-higher-prices-from-intl-buyers/

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