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‘Compliant’ RMG factories shining as orders roll in

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Apparel factories with a good track record of workers’ welfare are receiving increased orders from global retailers and buyers, industry insiders said.

Big factories compliant with labour standards have seen a sharp increase in work orders in recent months.

Workers’ safety system, firefighting equipment, evacuation mechanism, proper installation of machines and healthy work environment are among the social compliance issues.

Leading groups say they are now busy meeting the growing orders as buyers have kept faith on the compliant companies.

On the other hand, export orders have been decreasing with non-compliant factories running on shared buildings.

“Global buyers have been turning to some of selected RMG factories placing fresh orders, which are maintaining good compliance,” Aminul Islam, general secretary of Bangladesh Garment Buying House Association, told the FE.

He said after the Rana Plaza incident, the international big brands have given orders mostly to the compliant factories.

Anwar Shahid, Managing Director of Shimex International Ltd, leading Garment Buying house told the FE, in recent time many international brands and buyers are coming, but they are considering the fire and structural safety of garment factories before placing import orders.

He said new orders to the compliant factory have increased more than 15 per cent in recent times.

He said almost all American and European retailers and brands including H&M, C&A, Kool’s, Kmart, Target, Gap, Walmart, Li & Fung and JC Penny are increasingly sourcing from compliant factory.

Of 5,500 factories listed by BGMEA, 3,500 are running and about 2000-2200 units have taken utilisation declaration (UD) from the association. On the other hand, about 800-1000 factories took UD from the BKMEA out of its 2,000 registered members. Of them more then 50 per cent can’t comply with safety standards.

“A big number of international buyers are now turning to bigger and better compliant factories, resulting in increased orders,” former president of Bangladesh Knitwear Manufacturers and Exporters Association Fazlul Hoque told the FE.

He said the $22 billion industry is under pressure from the from the government and international community.

After the recent tragedies, local and international initiatives such as Accord, Alliance are closely monitoring the sector now.

In recent times, a large number of international buyers have already suspended sourcing from factories located on shared factories, he added.

Nasir Uddin Chowdhury, managing director of Eastern Apparels Ltd told the FE; “It is true that there are no shortage of work orders for compliant factories. But the medium and small factories which could not fulfill safety standard are going to face orders shortage.”

According to EPB data, the knitwear and woven garments exports posted 16 per cent and 13 per cent growth respectively in the first nine months of the current fiscal year.

RMG contributed $21.51 billion to the country’s export basket in the last 2012-13 fiscal year, and eyeing $24.14 billion in the current fiscal year.

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Report: Shah Alam Nur
Source: Financial Express

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