Faced with intense global competition and myriad challenges like devaluation of the US dollar, 319 readymade manufacturing factories would have to shut shop in Bangladesh soon. This was underlined by the country’s apex garment manufacturers’ body, Bangladesh Garment Manufacturers and Exporters Association’s (BGMEA), recently.
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“It is a matter of concern that 618 factories have shut down in [the] past three years after their productivity dropped due to various reasons. 319 more factories are also going to close down,” BGMEA President Rahman Siddiqur Rahman, reportedly said, while dwelling on the host of challenges facing the garment industry, the country’s biggest foreign currency earner, adding that the sector is facing the challenge of gas and power crisis, high interest rate of bank loans, devaluation of US dollar and cut in product prices.
It may be mentioned here that Bangladesh is second only to China in exporting apparels to western brands. Sixty per cent of the export contracts of western brands are with European buyers and about 40 per cent with American buyers.
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Noting that Bangladesh’s garment export had been growing by an average of 10 per cent over the past five years, the BGMEA President called for halving the tax at source for the sector to 0.3 per cent in 2016-17, like the previous fiscal year, besides suggesting that no value added tax should be imposed on garment accessories, and duty-free import of fire extinguishers should be allowed so as to help the entrepreneurs tackle the challenges.
