FBCCI warns of supply disruption, consumer hardships due to factory closure

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) today said consumers will suffer due to price spiral resulting from disruption in the supply chain if factories processing food and other essentials remain shut as part of restrictions to contain spread of Covid-19.

Likewise, it will not be possible for exporters to ship goods timely if they are to suspend production.

There is possibility of cancellation of export orders. There is also risk of losses of a lot of work orders for late summer, Christmas and for the next winter if factories are closed for 18-20 days, said FBCCI President Md Jashim Uddin in a press statement.

If one month’s export schedule is disrupted, it is going to affect the export schedule for six months, he said, urging the government to keep factories out of the purview of restrictions.

The government by the end of last week announced a strict lockdown for 14 days beginning from July 23 to combat the deadly virus that continues to wreak havoc to lives and livelihoods locally and globally.

The FBCCI president said priority must be given to protect lives, but all will be deprived from essential commodities and food if production remains shut, he said.

The caution from the apex trade body comes after garment, textile, terry towel and garment accessories makers sent a letter to Prime Minister Sheikh Hasina demanding that the garment factories be kept open during the lockdown.

In a joint statement, leaders of trade bodies in the garment and textile sectors said Bangladesh will lose $119.38 million per day just from garment exports if the factories are shut down for any reason.

On the first 14 days of the current fiscal year, the earning from the garment sector is estimated at $1.68 billion, they said in the statement.

If factories are kept shut for nearly three weeks, the garment sector will lose a lot of work orders and few billions of dollars, the letter also said.

International retailers and brands have been coming with a handful of work orders in Bangladesh as the clothing retail outlets have already been opened in Europe and the USA, they said.

They urged the prime minister to shorten the lockdown period so that the production continues in the factories to offset the losses, the letter said.

Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association, AKM Salim Osman, president of Bangladesh Knitwear Manufacturers and Exporters Association, Mohammad Ali Khokon, president of Bangladesh Textile Mills Association, Shahadat Hossain Sohel, chairman of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association and Abdul Kader Khan, president of Bangladesh Garment Accessories and Manufacturers and Exporters Association signed the joint letter.

FBCCI President Jashim said leaders of BGMEA, BKMEA, BTMA, Terry Towel Association, Packaging Association and Bangladesh Tanners Association requested the FBCCI to take initiatives to keep operation of factories on during the lockdown.

The FBCCI president also said there is risk of damage of imported raw materials if manufacturing activities are stopped.

Both importers and producers will incur losses financially as a result of this. It will also be tough for small factories to continue production if they suffer losses owing to keeping production suspended, he said.