BGMEA Seeks President’s Support as 400 Garment Factories Shut Down in Three Years, Costs Surge 40%

Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have said that the country’s readymade garment industry is going through a difficult period due to the energy crisis, rising production costs and declining export orders. Around 400 garment factories have closed over the past three years, while production costs have increased by nearly 40 percent. To overcome the crisis, the BGMEA presented several recommendations to President Mirza Fakhrul Islam Alamgir, including increasing energy supplies, reducing interest rates on loans, introducing post-export financing facilities, improving infrastructure, and taking initiatives to sign new agreements to retain trade benefits after Bangladesh’s graduation from the Least Developed Country (LDC) category.

A delegation from the BGMEA board, led by its President Mahmud Hasan Khan, paid a courtesy call on the President at Bangabhaban on Wednesday. During the meeting, they discussed the current situation, challenges and prospects of the garment industry. The BGMEA said most garment factories in the country are operating at less than half of their production capacity due to inadequate gas supplies. This has made it difficult to fulfill export orders on time and increased the risk of losing orders from foreign buyers. Due to rising energy prices, high interest rates on bank loans and wage adjustments, garment production costs have increased by nearly 40 percent over the past three years. Around 400 garment factories have closed. The situation is putting not only the industry’s capacity but also employment at risk.

The association said that adding new Floating Storage and Regasification Units (FSRUs) could increase the capacity to supply gas from imported LNG. It also recommended keeping energy prices stable in the long term and withdrawing duties and taxes at the LNG import stage.

At the meeting, BGMEA President Mahmud Hasan Khan expressed gratitude for various government initiatives aimed at promoting domestic industry and business. He particularly highlighted the decision to delay Bangladesh’s LDC graduation in light of global economic realities, a Tk 200 billion special financing facility to reopen inactive and closed garment factories, measures to facilitate the procurement of bonded raw materials and direct exports for non-bonded factories, and initiatives to simplify customs procedures.

The President said it was important for Bangladesh to overcome the temporary challenges and retain its leading position in the global garment market. To this end, he assured the BGMEA of necessary policy support after discussions with the relevant government ministries and authorities for the sustainable development and protection of the industry.