RMG
BGMEA president seeks American Apparel & Footwear Association’s support in responsible purchasing practice
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has written to President and CEO of American Apparel & Footwear Association, Stephen Lamar, seeking support in terms of responsible purchasing practices.
“To ensure uninterrupted and smoother operation in the industry, it is important that prices of all goods which will be shipped from 1 December, 2023 are duly adjusted/ up-charged covering the increment in wage component,” BGMEA President Faruque Hassan wrote.
The American Apparel & Footwear Association (AAFA) is a national trade association representing apparel, footwear and other sewn product companies, and their suppliers, which compete in the global market.
From now onward, the BGMEA president said, all business negotiations and deals will have to be made adhering to the new minimum wage policy.
Read: Owners are free to close their garment factories until vandalism ends: BGMEA
“Therefore, I would humbly request you to kindly pursue the AAFA members to collaborate with their Bangladeshi suppliers with due empathy and consideration,” the BGMEA chief wrote in his letter.
“With every effort and action we take, we mean to complement our long term goal, which is to grow mutually and sustainably. We are working with our government relentlessly to ensure more favorable environment for business,” Faruque said.
“You are following the improvements made and progress by the government to create better infrastructure and policies supporting envisioned growth and efficiency. I am sure with your continued support and collaboration we will continue to thrive," said the BGMEA President.
In his letter to Lamar, the BGMEA chief said the minimum wage in 2023 for garment workers was declared by the government on November 7.
Read: BGMEA provides financial assistance to families of deceased workers
The declaration was made based on the proposal submitted by the Minimum Wage Board, and was widely consulted and agreed by the stakeholders including workers’ and employers’ representatives, he said.
As per the new minimum wage, the gross minimum monthly wage of the 7th grade workers has been set at Tk 12,500, equivalent to around USD 113.63 – a 56.25 percent increase of the gross wage while the basic wage has gone up by 63.41 percent.
The new minimum wages comes at a time when the global economy is going through an unprecedented situation, so is Bangladesh’s economy, said the BGMEA chief.
“The RMG industry in Bangladesh is feeling the heat of this crisis, especially with soaring inflation, all our input costs have increased significantly including fuel, gas, electricity, transportation,” he said.
Read: BGMEA ready to implement new pay structure govt announces by Dec: BGMEA President
From the first of July this year, Bangladesh Bank has increased interest rates which made trade and investment finance more costly.
“You are aware that since 2013, the industry had to make a huge investment to ensure international standard workplace safety, which we have done diligently despite all the difficulties,” he wrote.
“Now to align with global climate action agenda, our factories are making further investment to reduce GHG emission and be more resource efficient. Not only that, for ensuring workplace safety, comfort for our workers and to reduce fatigue, factories are upgrading machine, process and production method,” said the BGMEA president.
“Through all these efforts, Bangladesh has emerged as a reliable, sustainable and one of the most preferred sourcing destinations,” Faruque said, adding that all these initiatives and investments have impact on the business, in relative and absolute term.
Read: BGMEA seeks NBR support to sustain RMG industry's global competitiveness amidst ongoing challenges
“Now, with the increase in the minimum wages, this industry has taken the challenge to ensure better living standards of the workers while maintaining competitiveness,” he said.
The raise in the minimum wage, especially 63.41 percent raise in the basic wage, leads to higher benefit for the workers in terms of overtime benefit, earned leave encashment, festival bonus and other allowances, Faruque said.
“The implementation of the new wage structure would exert a huge financial impact on the factories. This will be challenging for many of our factories to implement the new wage in the current economic and financial circumstances,” he wrote in the letter.
However, Faruque said, ensuring decent living standards of the workers is a top priority for them, as well as for global brands and retailers.
“Since we have accepted the new minimum wage, we will ensure implementation of it, and we need your support in terms of responsible purchasing practice,” the BGMEA president wrote in the letter to the CEO of American Apparel & Footwear Association.
BGMEA provides financial assistance to families of deceased workers
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has provided financial assistance to the families of three deceased readymade garment workers.
BGMEA President Faruque Hassan handed over the assistance cheques to the bereaved families of Anjuara Khatun, Rasel Hawlader, and Md. Imran.
On the occasion a ceremony, held at the BGMEA Complex on Saturday, was attended by BGMEA Vice Presidents Shahidullah Azim and Md. Nasir Uddin, along with Directors Inamul Haq Khan (Bablu) and Haroon Ar Rashid.
BGMEA President Faruque Hassan acknowledged the invaluable contributions of millions of garment workers in propelling the readymade garment industry to its esteemed position today.
He emphasized the pivotal role of worker welfare in the RMG sector and urged both workers and entrepreneurs to unite for the collective benefit of the industry.
"Each and every garment worker plays a significant role in shaping the success of our readymade garment industry. The welfare of our workers is of paramount importance, and we must remain united to uphold their rights and interests," BGMEA President said.
Highlighting the significance of the garment industry in the country, Faruque added, "Beyond being Bangladesh's largest export earning sector, the garment industry is a lifeline for millions of workers and their families."
RMG sector must overcome multifaceted challenges to remain lucrative: Study
Readymade Garments (RMG) industry will undergo a significant transformation in its trade benefit regime by 2029 as the GSP moratorium ends, coinciding with Bangladesh’s exit from its Least Developed Country (LDC) status in 2026, said a report.
LightCastle Partners, a prominent national management consulting firm, in partnership with Policy Exchange Bangladesh, unveiled the report’s findings on Saturday.
Challenges confronting the RMG sector encompass rising labour costs, heightened competition from low-cost nations, and the imperative to improve working conditions and sustainability practices, reads the report.
To effectively align with global demand and mitigate risks, the industry must enhance operational efficiency through automation while fostering an environment that facilitates the workforce’s transition. Currently, less than 15% of its operations are mechanized, the study revealed.
LightCastle Partners in collaboration with The Policy Exchange of Bangladesh conducted an extensive research endeavor titled: "Threads of Progress: A Comprehensive Landscape Study of the Apparel Industry and the Future for Women Workers".
The research findings were published at a discussion at a hotel in the capital this (Saturday) afternoon.
Forty-two national and international industrialists, international buyers, innovators and other officials of garment industries in Dhaka, Savar, Gazipur, Chattogram including more than fifty-plus women workers were interviewed as part of the research.
The initiative—funded by the H&M Foundation with The Asia Foundation operating as the backbone organization— is a part of the two-year-long ‘Oporajita: Collective Impact on the Future of Work in Bangladesh’ initiative, with a collective goal to future-proof livelihood of women garment workers in Bangladesh, equipping them for a future where the apparel sector is defined by automation and digitalization.
The report said, about 84.5% of the country’s total export earnings comes from the RMG sector where 40 lakh workers are engaged, most of whom are women. Hence, it is imperative to increase their skill along with ensuring fair wage.
The report’s highlighted that the COVID-19 pandemic significantly impacted the industry, resulting in the cancellation of international orders and an estimated loss of USD 3.15 billion. In 2022, our efforts to bounce back from the impact of the COVID-19 pandemic were hampered by the emergence of additional challenges, including geopolitical conflicts, a weakening global economy, and concerns about another recession.
The apparel industry faced multifaceted challenges including electricity and gas shortages, coupled with exchange rate fluctuations and dollar crises, which disrupted apparel production by increasing costs for factory owners. Reduced demand from the United States and the European Union also triggered a crisis in the industry. These led to adverse effects on garment workers' physical health and reduced employment opportunities.
Furthermore, trade tensions between the United States and China present opportunities for Bangladesh to expand its market presence. Sustainable sourcing of inputs is essential to reduce supply chain emissions and compete with other countries. Trade barriers may also intensify competition from other countries, necessitating improvements in logistics for reduced shipment time and costs.
Thus, developments in feeder vessels and deep seaports offer potential cost and time savings. Moreover, as technology evolves and reduces the need for labour, Bangladesh needs to enhance its production capacity in higher value-added product categories.
Md. Abdus Samad Al Azad, joint secretary (FTA-1), Ministry of Commerce, said, “We need to take proactive steps in shaping our policies and shifting our attention from cotton-based clothing to Man-Made Fiber (MMF) materials”.
Shahidullah Azim, vice president of BGMEA, said, “At present, there are only 2-3 recycling centers for RMG waste in Bangladesh. If we export recycled yarn, it has the potential to generate revenue of 5-6 billion dollars. Moreover, we need to get ready for exporting more value-added products and encourage policy initiatives related to diversifying fibers.”
Zahedul Amin, Co-founder & Director, Finance, Strategy & Consulting Services of LightCastle Partners, Samiha Anwar, Business Consultant of LightCastle Partners, were also present.
Dr. M. Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, moderated the discussion, while Radi Shafiq, Portfolio Manager of LightCastle Partners; and Mrinmoy T. Sobhan, Business Consultant of LightCastle Partners, highlighted the research findings.
BGMEA ready to implement new pay structure govt announces by Dec: BGMEA President
President of The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Faruque Hassan on Tuesday warned that a group of outsiders is instigating the innocent garments workers to create unrest in the industry before announcement of a new pay structure for the sector.
He said the government may announce the new minimum wage for garment workers by November and the BGMEA member factories would implement it by December. So there is no logic to workers' unrest and movement before announcement of the wage.
Faruque said this at a press conference on the recent worker unrest centering and minimum wage in the garment sector held at the BGMEA Building at Uttara in Dhaka on Tuesday.
“We hope that the Minimum Wage Board will announce the new pay structure by November and whatever the government announces as the new salary structure, all the entrepreneurs in the garment industry will accept it, no matter how many challenges there are in the industry. The new wage structure will be effective from next December,” said BGMEA president.
He said, “We are fully aware, of how much our workers brothers, and sisters are suffering due to the increase in the cost of goods as well as living costs at the local for recent international. We sympathize with every entrepreneur in their suffering.”
“One of the main responsibilities of our entrepreneurs is to keep every worker brothers and sisters as well as possible. Workers are the lifeblood of our garment industry. If they are good, the industry will be good,” he added.
Farooq said, "We are deeply concerned, for the past few days, due to the instigation of outsiders, workers in some garment factories are leaving the factory without working, vandalizing the factory, as a result, many entrepreneurs are forced to close the factory.”
More worrying is that due to the incitement of outsiders, various institutions including garment factories, leather factories, chemical go-downs, fabric go-downs, and shops have also been damaged, he said.
Garment workers propose Tk 20,400 as minimum salary, owners propose Tk 10,400
The representative of garment workers on Sunday proposed Tk 20,400 as minimum monthly salary while the owners representatives proposed increasing their minimum salary by Tk 2400 to Tk 10400.
President of Jatiya Garment Sramik Kormachari League (JGSKL) Sirajul Islam Rony, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and representative of garment owners Md Siddiqur Rahman submitted their proposals from their respective sides Liaqat Ali Mollah, Chairman of the Minimum Wage Board at his office in Palatan in the capital on Sunday.
After receiving the proposals from both sides, Liakat Ali said that the labour side is asking for Tk 20,400 and the owner side is asking for Tk 10400. “There is quite a gap in the proposals of both parties.”
Read: Bangladesh keen to export readymade garments to Nepal, seeks collaboration to unlock opportunities“The fifth meeting of the wage board will be held on November 1. The meeting will propose reducing the gap,” he said.
Former president of BGMEA Siddiqur Rahman said there is always a difference in the proposals of the workers and the owners.He said, “Keeping in mind the state of the global economy and the various contexts of industrial entrepreneurs, we have made this proposal.”
Read: Bangladesh working to secure strong position as high-value garments sourcing hub: BGMEA chiefHighlighting the rationale of the proposal, he said, that after the Covid-19 pandemic, the Russia-Ukraine war, and then the Israel-Hamas war started. All things considered, wages should be increased.However, “Since the Chairman has asked to reduce the wage proposal of the workers and owners, we will discuss with the owners as soon as possible and inform them in the next meeting,” he added.In addition, private research organization Center for Policy Dialogue (CPD) proposed to make the minimum salary Tk 17565 after evaluating the quality of life of the workers.
IMF delegation meets BGMEA President to discuss challenges and prospects of RMG sector
A delegation from the International Monetary Fund (IMF), led by IMF Mission Chief for Bangladesh, Rahul Anand, paid a courtesy visit to Faruque Hassan, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) at the BGMEA Complex in the capital’s Uttara on Sunday.
Accompanying Anand were several key members of the IMF delegation, including Jayendu De, IMF Resident Representative to Bangladesh and Bhutan; Chris Papageorgiou, Division Chief; Piyaporn Sodsriwiboon, Deputy Division Chief; Estelle Xue Liu, Senior Economist; SeokHyun Yoon, Senior Economist; Suphachol Suphachalasai, Senior Economist; and Richard Varghese, Economist.
BGMEA Directors Asif Ashraf, Neela Hosna Ara, Chair of BGMEA Standing Committee on Labour and ILO Affairs ANM Saifuddin and Chair of BGMEA Standing Committee on Foreign Mission Cell Shams Mahmud were also present during the meeting, said a press release.
The discussions during the meeting revolved around various topics related to the readymade garment industry of Bangladesh. These included the current status of the industry, the global trade situation, and its implications on the country's export performance.
Read: BGMEA seeks NBR support to sustain RMG industry's global competitiveness amidst ongoing challenges
The meeting also discussed the challenges and prospects that lie ahead for the RMG sector, read the release.
The issues concerning Bangladesh's graduation from the LDC status and its potential impact on the economy and trade also got due importance in their discussions where they emphasized the necessity for preparedness to address the challenges that may arise in the post-LDC era.
BGMEA President Faruque Hassan provided the IMF delegation with insights into the Sustainability Strategic Vision 2030, which aims at fostering the growth of the RMG industry in a more sustainable way, keeping positive impacts on the economy, the environment, and the lives of the people of Bangladesh.
Read: Indian delegation meets BGMEA president to discuss trade,investment potential
He highlighted the Bangladesh’s impressive strides in the area of environmental sustainability, including recycling and circular economy while keeping the efforts continued to pursue more excellence.
As part of the higher growth vision, Bangladesh’s RMG industry is actively focusing on diversifying its product range to include value-added items, particularly non-cotton products, he further noted.
The industry is also increasingly embracing innovations and technologies to boost productivity and efficiency, thus remaining competitive amid evolving global trade trends, Faruque Hassan further stated.
Additionally, a strong emphasis is being placed on skills development, including re-skilling and upskilling, to meet the growing demand for a skilled workforce.
Read: BGMEA, Vietnam counterpart discuss potential collaboration
The industry is exploring opportunities to tap into emerging markets and drive sustainable growth.
The BGMEA President urged the IMF to support the growth and development of Bangladesh's RMG industry, highlighting its pivotal role in the country's economic development and global trade.
RMG exports to EU up 11.47% in July-September of FY 2023-24
As per the latest statistics of the Export Promotion Bureau (EPB), readymade garment export to the European Union reached US$ 5.51 billion during July-September of FY 2023-24, 11.47% up compared to the same period of the previous fiscal year.
Read: CPD recommends minimum wage of Tk 17,568 for RMG industries
“Our exports to Spain, France, Netherlands and Italy showed 23.26%, 8.67%, 18.97% and 23.22% growth respectively. On the other hand, export to Germany, the largest export market in the EU, declined by 4.41% with an amount of US$ 1.45 billion compared to the July-September 2022-23 FY, said a press release sent by Mohiuddin Rubel, director at BGMEA.
Read: BGMEA seeks NBR support to sustain RMG industry's global competitiveness amidst ongoing challenges
“Our RMG export to the USA stood US$ 2.07 billion in the first three months of FY 2023-24 with 2.77 % growth. At the same time, exports to the UK and Canada reached US$ 1.45 billion and US$ 352.86 million, with 21.35 % and 5.44% growth respectively,” he said.
During July-September, of FY 2023-24, apparel export to non-traditional markets grew by 24.93% to US$ 2.24 billion from US$ 1.80 billion in the corresponding period of previous year, said the BGMEA director.
Read more: 6 RMG workers dead after bus runs them over on highway in Trishal
Among the major non-traditional markets, exports to Japan, Australia and South Korea increased by 39.44%, 54.11% and 37.01% respectively but export to India declined by 7.69%, he added.
CPD recommends minimum wage of Tk 17,568 for RMG industries
The Centre for Policy Dialogue (CPD) on Sunday (October 8, 2023), based on research of living expenses, recommended minimum wage of Tk 17,568, at the entry level, for export-oriented apparel industries.
Currently, the minimum wage for garment workers, set by the wage board on December 1, 2018, stands at Tk 8,000 – a sum frequently scrutinised, particularly given the prevailing economic crisis.
Read: Lack of awareness a serious risk on pollution: CPD
CPD said, if the foreign buyers pay an additional 7 cents per apparel product, factory owners will not be under pressure to pay this wage.
The CPD made this proposal at the minimum wage revision, monitoring, and recommendation dialogue for the garment sector. The event was held at a hotel in Dhaka’s Gulshan.
CPD Research Director Khondokar Golam Moazzem unveiled the proposal. He explained that the proposed increase in minimum wage has been made through findings from a comprehensive survey on the garment sector, conducted by CPD.
The research institute said that they are making the proposal after surveying 228 workers in 76 factories.
The CPD research director and senior research assistant Tamim Ahmed presented the keynote paper at the event.
Read: Bangladesh will need $10 billion annually to import primary fuel for power generation: CPD
BGMEA President Faruque Hassan, BKMEA Executive President Mohammad Hatim, Owners’ Representative in Minimum Wage Board and former president of BGMEA Siddikur Rahman, Minimum Wage Board Workers’ Representative Sirajul Islam, among others, were present at the event.
The government set a new minimum wage board on April 10, 2023, tasked with determining the new minimum wage for the RMG industry through discussions at the tripartite level.
The board has already met several times, and the new minimum wage is likely to be finalised within the next month.
Read: It is the ‘profession’ of TIB and CPD to find loopholes in budget, Hasan Mahmud says
The issue of minimum wage is immensely important, particularly given that it has a substantial impact on the RMG industry’s overall competitiveness and the livelihood of workers. Hence, it is crucial to examine the current structure of wages and to determine a new wage in a way that allows workers to have a fair minimum wage.
Bangladesh’s apparel exports to US saw 21.77% decline in Jan-Aug: OTEXA
The United States’ apparel imports from Bangladesh have declined by 21.77 percent during the January-August period of 2023.
The US imported USD 5.18 billion worth of apparel from Bangladesh during the first eight months of 2023, compared to USD 6.62 billion during the same period in 2022, according to data published by the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce.
Also read: RMG exports for July-August this year grow by 12.46%
Bangladesh is the third-largest apparel supplier to the United States.
According to OTEXA data, the United States’ overall apparel import from the world has declined by 22.77 percent in January-August 2023 to USD 53.45 billion, from USD 69.21 billion in the same period of 2022.
All the top apparel import sources of the US including China, Vietnam, Bangladesh, India and Indonesia have shown significant negative growth in terms of both value and volume.
Also read: RMG exports: Bangladesh earned $3.95 billion in July, says BGMEA
The US’ import from China, the largest apparel import source, has declined by 29.47 percent whereas their import from the second largest source, Vietnam, also dropped by 24.57 percent.
Import from the other countries such as India, Indonesia, Cambodia, Mexico, Honduras, Pakistan and South Korea also declined by 21.59 percent, 26.09 percent, 27.28 percent, 8.87 percent, 22.26 percent, 29.24 percent, and 11.74 percent respectively.
Also read: Bangladesh's RMG export to USA grows 6.31% in FY 2023-24
BGMEA calls for streamlined bond services to boost RMG competitiveness
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the Customs Bond Commissionerate in Chattogram to enhance the speed and simplicity of custom bond-related services to boost the competitiveness of the RMG industry.
The call was made when a delegation of BGMEA headed by President Faruque Hassan held a meeting with A.K.M. Mahbubur Rahman, Commissioner of Customs Bond Commissionerate, Chattogram.
BGMEA First Vice President Syed Nazrul Islam, Vice President Rakibul Alam Chowdhury, former First vice president Moinuddin Ahmed Mintu, Directors A.M. Shafiul Karim (Khokon), M. Ahsanul Hoq, former Directors Helal Uddin Chowdhury, Anjan Shekhar Das, Khondaker Belayet Hossain, Mohammad Atique and, Chair of BGMEA Standing Committee on Trade Fair Mohammed Kamal Uddin, and Chair of BGMEA Standing Committee on Cash Incentive Humayun Kabir Salim were present at the meeting held at the Customs Bond Commissionerate office in Chattogram on September 18.
Also read: BGMEA urges Custom House to make services faster and simpler for RMG industry’s competitiveness
The meeting was also attended by Joint Commissioners Kamona Sheesh and Md. Mizanur Rahman, Deputy Commissioners Tapan Chandra Dey, Suman Chakma and Mohammad Kawsar Alam Patwary.
The meeting centered on important discussions concerning issues and challenges faced by the RMG sector in relation to bond-related services.
During the meeting, President Faruque Hassan underlined the immense potential that Bangladesh holds in the global market and emphasized that simplified bond services would play a pivotal role in harnessing this potential.
He particularly emphasized the necessity of eliminating complexities in the customs bond procedures, and resolving problems that causes delay in services.
Also read: BGMEA calls for collaboration to create enabling environment for responsible business practices
Streamlining this process, he noted, would shorten lead times, thus contribute significantly to its global competitiveness.
In response to these concerns, the Commissioner of the Customs Bond Commissionerate assured the BGMEA delegation of the necessary cooperation in addressing the issues raised during the meeting.
In the meeting, both sides expressed willingness to work closely together to create a more conducive environment for RMG businesses to thrive.
Also read: DSE, BGMEA join forces to support RMG enterprises in capital market