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1,550 trucks and covered vans with RMG products went to Chittagong in last five days

indexProduction at the country’s readymade garment factories fell substantially as the owners were facing difficulties to bring raw materials due to ongoing political unrest marked by hartals and blockades. Besides, the global retailers have also stopped putting orders on apprehension that the suppliers would not be able to meet the shipment deadlines due to political uncertainties ahead of next general election.

“Around 30% to 40% raw materials are being brought to the factories through alternative means due to the series of blockades,???Shahidullah Azim, BGMEA vice president, told the Dhaka Tribune.

He said around 40% production is being hampered due to raw materials shortage. It would be tough for the sector to meet the export target as both the shipment and production are facing setback, he added. Most of the factories are in crises as they cannot bring raw materials due to a collapse in the transportation system, said Nasir Uddin, a factory owner.

The factorieswere also facing setback in order crisis because the buyers are not willing to place orders on apprehension that the suppliers would not be able to send back the products in time, he added. “The production of my factory has fallen by 25% to 30% due to supply shortage of raw materials,??? said Sultan Mahmood, a factory owner in Gazipur. Supply shortage of raw materials is causing high production cost and less productivity, he added.

The industry would have to bear extra charges on air shipment and discount, he said. Though the government has pledged to send RMG products to Chittagong for shipment by police escort, the factory owners are not showing much interest fearing arson on the street, said a BGMEA director.

According to BGMEA, a total of 1,550 trucks and covered vans with RMG products went to Chittagong in last five days while only 150 vehicles with raw materials arrived Dhaka with police escorts. The covered van and truck owners doubled the fare during blockades. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) sent letters to its members asking information about financial losses the factory owners suffered due to political unrest in last few months. BGMEA sent a letter to Bangladesh Bank yesterday seeking its help to get interest-free loans as shipment disruptions have made them “unable to pay monthly wages of workers.???

– Ibrahim Hossain Ovi

http://www.dhakatribune.com/commerce/2013/dec/06/input-shortage-takes-toll-rmg-production

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