Bangladeshi apparel makers book only 35%
orders of its production capacity for July-Dec of 2020
Since the global retailers are placing fewer work orders due
to fall in demand, the Bangladeshi apparel makers have been
able only to book 35% orders of its production capacity.
On the other hand, taking advantage of the work order
shortage, the global buyers offered fewer prices pushing the
average prices down by 14%.
A survey conducted by the Bangladesh Garment Manufacturers
and Exporters Association (BGMEA) over 100 apparel
manufacturers to learn about the actual scenario of work
orders in hands amid the COVID-19 pandemic for the second
half (July-December) of the year 2020 revealed the data.
This means the manufacturers have to run the factory with
capacity incurring losses as they have to bear the operation
cost as well as the workers’ wages.
On the other hand, the decline in prices of goods will rub
salt to the wound of the manufacturers and they might have
to downsize the workers to survive.
As per the findings of the survey, prices of apparel goods
booked by the global retailers for the July-December period
of 2020 have seen an average 14% fall due to a shortage of
enough work orders.
On the other hand, for the consolidated period of July-Dec
2020, only 35% capacity has been booked, leaving the balance
65% capacity empty.
Against the full capacity of 365.78 million pieces, the
manufacturers have confirmed 127.50 million pieces for the
second half of 2020.
As per the survey findings, for July itself, the percentage
of work orders booking is 56% of the total production
For December, the manufacturers received the lowest work
orders, which is only 17% of the total production capacity.
Against the capacity of 60.56 million, the manufacturers
booked only 10.27 million pieces’ orders.
Also, on average, the price trend has been showing a 14% dip
in the second half of 2020 as compared to last year. The
huge shortfall in order in the market has also made the
price to take a nosedive, it added.
Men’s undergarments have the highest price decline of 43%
followed by babies’ garments 35%, denim trousers 10%,
jackets and suits 14%, sweater 13%, T-Shirt 21%, Woven
Shirts 16% and Woven Trouser 12% decline in prices.
Only knitted bottoms got a price hike of 6% this year, the
survey findings showed.
How it will impact the sector
Running factories with less capacity will leave the sector
in further crisis including downsizing workers and closure
of production, opined factory owners and economists.
On the other hand, shortage of work orders may force small
factories to shut their production as they have the lesser
financial capacity to survive, they said.
“With the 35% working capacity, manufacturers will not be
able to bear the expenses of operational costs. On the other
hand, the downswing in prices will create further cash
crunch,” Chairman of BGMEA Standing Committee on PR Khan
Monirul Alam Shuvo told Textile Today.
We are facing a scenario where market demand is so low
compared to supply and the global COVID-19 pandemic
situation is not improving in the export destinations, said
We are now incurring additional expenses due to running the
factories with proper health and safety protocols. On top of
it the order situation and price situation have both dropped
like this, making our lives extremely difficult, which may
deepen the crisis, he added.
Meanwhile, economists think that the situation may improve
in the coming month if the COVID-19 situation comes under
“The prevailing situation in the garment sector is not
favorable as the global demands of products fall. To
overcome the situation, the sector people have to fight with
the competitors to grab orders by offering reasonable
prices,” said Ahsan H Mansur, executive director of Policy
To do this, the factory should try cutting production costs
by increasing efficiency, while the government should
provide financial support with low cost to tackle the lean
period, said the economist.
He also urged the government as well as the sector people to
ensure health safety and control the infection of
coronavirus so that the buyers get confidence to place
The ultimate turnaround of the economic activities will
depend on the COVID-19 controlling as the concern is safe
movement of people, he added.