Committed to PEOPLE'S RIGHT TO KNOW
Vol. 5 Num 743 Fri. June 30, 2006  
   
Business


Share extra production costs as labour wages rise
Knitwear exporters urge buyers


The country's knitwear exporters yesterday urged the buyers to share the additional expenditures for production that resulted from increase in labour wages and implementation of compliance issues.

The call came at a briefing session on recent incidents in RMG sector at a hotel at Gulshan in Dhaka.

Organised by Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the briefing was attended by diplomats, buyers, government representatives, BEPZA representatives and media personalities.

"We urge the buyers, development partners and other agencies to raise the purchasing rate of our products so that we can cover up the enhanced cost', said BKMEA President Fazlul Hoque.

Dwelling on the last month's labour unrest in the readymade garments sector, he said, "How can we supply products at previous rate when we have increased labour wage to a significant amount in line with the demands placed by the RMG workers?"

Chief of the apex trade body of the knitwear industry in this connection reminded the buyers of their 'moral responsibilities' to raise the rate of Bangladeshi products rationally, as they are now buying the same products from India and Pakistan at a higher rate.

Hoque lamented that the exporting finished apparel item witnessed a downward trend in its prices while the prices of raw materials shot up to 20 percent in the last five years.

"So, it is not possible to pay the labourers a higher salary if we are not paid adequately," he said.

Some of the buyers who attended the session denied affording to the additional charges caused by the compliance issues.

"In a free market economy it is not their responsibility to contribute to the compliance charges," a buyer said, suggesting that Bangladeshi garments sector should upgrade competitiveness to survive in a challenging world market.

"The only advantage the Bangladeshi apparel sector now enjoys is cheap labour rate, the other sectors are lagging far behind compared to the global scenario. Upgrading competitiveness may yield good results in lowering the production cost," said Razaul Karim, vendor compliance officer of Gap International Sourcing Pte Ltd.

A buyer, however, agreed to the BKMEA plea to raise the purchasing rate.

"If the local garments sector implement the compliance issues and increase the labour wage, the buyers should also increase purchasing rate," A Bornemann, manager, Bangladesh Operations, KarstadtQuelle (Far East) and Co, told reporters after the session.

Delivering his written speech at the session, MA Baset, a BKMEA director, said that they had agreed on the proposed 11-point demand placed by the RMG workers.

However, he said many apparel units have already met the demands, some made an assurance to meet them while some are going on an implementation process.

When a buyer raise a question about any involvement of a third party in the RMG sector debacle, Fazlul Haque did not rule out the possibility of such an involvement, but he said, " It's a duty of the government to find out any group who is behind the scene."

Mir Shahabuddin Mohammad, vice chairman of Export Promotion Bureau, Prasanta Bhushan Barua, member(Investment Promotion) of BEPZA, Mohammad Nurun Nabi, joint secretary, Ministry of Labour and Employment, David W Renz, first secretary, US Embassy in Dhaka, were present at the briefing session, among others.