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Bangladesh Factories Stay Open, but BGMEA Pres Points to Bigger Set of Problems

As Bangladesh buckles down to keep coronavirus from spreading in the country, factories there are still open.

The country’s efforts at lockdown don’t appear as extreme as what India put in place earlier this week, though as Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Rubana Huq told Sourcing Journal Wednesday night, “We have been advised to stay indoors in order to contain the virus.”

So far, factories have been exempted from closure.

“They have not been included in the list of compulsory closure and hence factories are independent and can use their own discretion,” Huq said, adding, however, “We have just seen around 30 factories giving leave on grounds of no work and of the requests from workers for closure.”

As of Wednesday, the World Health Organization (WHO) reported six new cases of COVID-19 in the country over the past day, bringing Bangladesh’s confirmed count to 39.

With some transportation services restricted in the country, factories remaining open may face challenges getting workers, but they are making efforts to surmount them.

“Transportation for workers are generally available for those who commute from close distances. The companies who are open are taking special permission to ply the short routes and will operate,” Huq said.

Factories, she said, are taking all possible precautions as retail order cancellations have put them under greater strain.

“With all the cancellations, factories are facing uncertainty and are operating with the utmost caution and hygiene for all workers, and are continuing to exercise their own discretion with regard to their operations,” Huq said. For many, closure to protect workers from coronavirus can’t even be an option. “On one hand we have buyers cancelling and telling us that they can’t take orders now, and in cases where they are partially taking, they are also imposing ship dates strictly so that we can’t slide and also can’t close. So, our members are suiting their own needs.”

As of Wednesday night, Huq said 936 factories out of 4,264 have reported 800 million pieces of cancelled or on-hold goods, amounting to $2.58 billion worth of exports. Now, as many as 1.92 million workers are at risk.

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And as the end-of-the-month pay period nears, the struggle is becoming increasingly real.

“The industry pays $400 million towards settling the wages of the workers. Thus, there’s a salary reality against the expectation of the workers to be reckoned with. The month end salary is usually given around the 7th of the month. We have arrangements with banks to be ready for disbursement around that time. Very rarely can a factory pay by month end,” Huq said. “So, since COVID-19 has been a relatively recent development for Bangladesh in terms of scale and impact, there’s little or no ready liquidity for the owners at this point of time as few or no export documents will be lodged this month.”

From here, layoffs at factories look to be imminent.

“In case of layoffs, we don’t get paid before we submit export documents. So, in absence of export, there is no document. In absence of any pledge, there is no chance for us to appeal to banks for advance payments,” Huq said. “The industry is at a loss.”