At least 97 factories were shut in the first quarter (January-March) of the current calendar year 2023, whereas 87 factories were reopened from closure at this time, according to the data from the law enforcement agency of the industrial sector.
Media (Bonik Barta) reported that due to the financial crisis, the demand in buyer countries has been crunched which impacted the purchase orders.
Industrialists claim that keeping factories running in the current situation has become a big challenge.
When the apparel sector was recovering slowly from the shock of the Covid-19, the Russia-Ukraine war started in February of 2022 bringing another serious shock.
The economy of the buyer countries is already in danger of recession and the purchase orders in the export-oriented factories are decreasing.
Moreover, small factories working on sub-contracts are especially at high risk right now.
The media cited sources from a closed factory named MOF Fashion which was closed due to a lack of work orders. Rim Knitting Limited, another factory among 97 factories, suffered the same fate.
Besides the lack of work orders, the financing crisis also played a major role in the closure of some factories, industrialists told the media.
Their statement is that some entrepreneurs have been forced to close their factories without getting the necessary support from the bank and there is uncertainty about how long the factories that have been closed will remain open.
Anwar Ul Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries (BCI), told the media that all the factories are suffering more or less due to the impact of the global situation.
However, small factories, sub-contract, or contract factories suffer more. If sales do not return to normal in major market countries, the factory will gradually decrease further.
Ashulia, Gazipur, Chittagong, Narayanganj, Mymensingh, and Khulna are the six major hubs of the country’s industries having around 9,544 factory units.
97 factory units shut in the last three months where 17 were members of the BGMEA, 7 were BKMEA, 3 were BTMA, 2 were under BEPZA and a total of 29 closed factories under the jurisdiction of the organization, and authorities and 68 were out of the purview of them.
However, the part of the factories that closed or opened in the last three months is mainly sub-contracted establishments.
Insiders said that some factories reopened due to the increase in the work orders of big factories. They also said that some factories are starting after the change of ownership and others have been forced to open factories after long preparations so that the bank’s support can continue.
Comment here