BGMEA President says Bangladeshi RMG factories forced to take discounted price orders to “survive”

BGMEA President says Bangladeshi RMG factories forced to take discounted price orders to “survive”
Bangladeshi RMG workers striking last year over pay and conditions.

In an interview with The Daily Ittefaq, a Bengali-language newspaper, the President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), SM Mannan Kochi, has said that with 50% rises in production costs, factory owners are forced to take orders from suppliers of large multinational retailers at discounted prices in order “to survive”. 

 

The increases in production costs, including electricity, gas, diesel and general transport costs are stretching factories producing Ready-Made Garments for large retailers. Kochi also stated that, additional inflationary factors, like increases in bank rates and workers wages mean that production costs are up 50%. 

 

When asked about a number of factory closures, Kochi suggested that new compliance obligations, established some of which established after the Rana Plaza tragedy, and worryingly, “non-payments from buyers” had forced factory closures. 

 

impACT International is highly concerned that despite multinational retailers placing significant pressure on factories to raise minimum wages for RMG workers, continue to “pay below the cost of production”. Through four human rights multi-stakeholder initiatives, which included 600-plus companies, like Adidas, H&M Group, Gap Inc and Zara, “banded together for a higher minimum wage for Bangladesh’s garment workers”, expressing that they “firmly believe that every worker should earn a living wage”, suppliers of RMG materials still do not pay at market price for these goods. 

 

impACT suggests that establishing a proper minimum wage for highly over-worker and exploited RMG workers is of course vital, industry-wide failures to pay factories properly for their goods reflects highly disingenuous attitudes, which reflect poorly on attempts to make a better, more equitable, working environment for those at the base of the supply chain. 

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