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H&M to Source More Apparel from Bangladesh

H&M may continuously be diversifying its supply chain but the Swedish fast-fashion retailer will up its sourcing in Bangladesh.

The company said it plans to increase its volume of apparel orders from the South Asian nation.

“H&M has maintained good relations with Bangladesh over the last 30 years. We have a long-term plan for Bangladesh,” Hendrik Heuermann, H&M sustainability manager in Germany told the Daily Star. “So we will continue business with Bangladesh.”

The retailer has been one of Bangladesh’s biggest apparel buyers, taking in roughly $5 billion in garment goods each year. H&M has more than 3,900 stores in 61 markets and sources roughly 80 percent of its products from Asia, according to the Daily Star. In recent years, H&M has turned to Ethiopia and Myanmar as sourcing alternatives, which will still supply the brand’s more basic items, and Bangladesh could supply more value added items like jackets, Heuermann said.

H&M recently moved into India with a retail location to cater to the country’s rising middle income population, but the retailer has no plans to open a retail location in Bangladesh now or in the near future, according to the Daily Star.

As with many retailers sourcing in Bangladesh when the country experienced its worst factory tragedy, the Rana Plaza building collapse in April 2013, H&M has been facing criticism for sourcing garments at too-low prices in Bangladesh, even though the retailer wasn’t making apparel in any of the Rana Plaza factories. And despite the pressure to improve safety standards and compliance in the country, Heuermann said Bangladesh is still a competitive place to produce garments.

In September, H&M reiterated its commitment to sourcing in Bangladesh, rolling out a better compensation package to factories in the country as part of its Fair Wage Method, to help improve safety conditions there. H&M also put the method in place in China and Cambodia and plans to have all of its suppliers on board by 2018.

“A lot of the riots and unrest we have seen in countries like Cambodia and Bangladesh are connected to the issue of wages,” Anna Gedda, H&M’s head of sustainability, told Bloomberg at the time. “If we can address the issue of wages and industrial relations, that will lead to more stable production prices.”