Study from Vietnam to offset export shocks
Bangladesh should have Vietnam's lead how to handle challenges in export as a result of the coronavirus fallout even while attracting more foreign direct investment (FDI), according to Kihak Sung, chairman Youngone Corporation.
"Vietnam did not lose much business possibly amid the peak pandemic period but alternatively, Bangladesh's market endured a significant impact," Sung, as well CEO of the leading garment exporter located in South Korea, said yesterday.
Sung made these comments even though speaking on the impacts of the Covid-19 pandemic on Bangladesh's garment sector in a discussion jointly organised by the France Bangladesh Chamber of Commerce and Sector (CCIFB) and Policy Exploration Institute (PRI).
"I've never lost business. But this season, I lost 25 % of business because of Covid-19," stated Sung, adding that the majority of his losses had been incurred by the business's Bangladesh units.
Even so, the losses incurred simply by Youngone's Vietnam unit were not that high just as cancellations of function orders and late obligations from international buyers was not simply because frequent for the country as it was for Bangladesh, where these issues are currently a major challenge, he said.
Vietnam managed the coronavirus fallout and its development, export and logistics sectors quite nicely compared to other areas of the world.
Therefore, Bangladesh should measure the advantages and disadvantages of Vietnam's approach to ensure that it may develop its own course of action to tackle the problem and attract FDI.
Besides, another important fact is that Vietnam does not discriminate against any foreign investor, said the South Korean multi-billionaire.
Youngone exports practically $850 million in garment and footwear products manufactured at its factories in Bangladesh, where 70,000 persons are utilized by the organization across 28 commercial units.
Sung suggested that local producers develop more man-made fibre garment items as the demand for such goods is usually increasing worldwide.
The South Korean also said his company exports a lot more than $100 million in garment and footwear items, almost all of which comprise man-made fibres, to France every year.
It will come to be a tough process for businesses to generate a whole recovery as the global demand for garment products decreased by 30 % following the Covid-19 outbreak, he added.
Productivity levels at Youngone's Vietnam factory happens to be 20 per cent higher than that of its Bangladesh counterpart seeing that the former's logistics and policy support are comparatively more advanced than that of the latter.
Moderated simply by PRI Executive Director Ahsan H Mansur, the interacting with featured various market experts, exporters, diplomats and trade body system representatives.
Bangladesh's overdependence on cotton fibres for garment development is a major impediment to the country's plans to diversify its export basket, said Mansur.
More than 74 per cent of the country's garment shipments are constructed with cotton.
Besides, another challenge for export diversification may be the fact that the vast majority of the Bangladeshi apparels happen to be shipped mainly to the united states and EU markets.
Of the country's total garment exports every year, about 83 per cent are destined for these markets, he added.
Rubana Huq, president of the Bangladesh Garment Companies and Exporters Association (BGMEA), said the problem may not go back to normal until halfway through next time.
On the other hand, amid the ongoing pandemic, the usage of online retail platforms possesses soared worldwide.
"We need to quickly adopt policies in this regard so that you can hold a larger market occurrence in the global on line retail sector," Huq stated.
France is market with huge prospect of Bangladesh but local garment manufacturers already are far behind on shipments of several major export items that contain popular in the European country.
As far as foreign buyers go even though, French companies are comparatively a cut over as only two tiny firms cancelled their do the job orders amid the pandemic situation, Huq added.
The government is taking out all the stops to connect using its counterparts worldwide in order that business eventually returns on track based on the global economy, said Masud bin Momen, secretary to the Ministry of Foreign Affairs.
Momen as well suggested that suppliers maintain organization etiquette and be held accountable for upholding their end of any bargain.
Dilara Begum, professional counsellor to the Bangladesh Embassy found in Paris, said Covid-19 had not been the only cause of low exports from Bangladesh to France.
"Exports from Bangladesh to France had been low well before the pandemic began," stated Begum, adding that garment shipments to the European nation from Myanmar and Vietnam had been on the rise.
France may be the fifth greatest export destination for Bangladeshi products after the US, Germany, UK and Spain.
"We happen to be hopeful that France's economy will go back to its pre-pandemic condition by the end of the year as the united states is opening up nowadays," explained Kazi Imtiaz Hossain, Bangladesh's ambassador to France.
Mahbubul Anam, the preceding president of Bangladesh Freight Forwarders Association, said more than 70 % of Bangladesh's logistics sector was linked to the garment industry.
Solely in the transfer sector, where more than 35 lakh people are used, round five lakh jobs have already been lost already while an additional five lakh are precariously positioned due to the ongoing coronavirus crisis.
The logistics organization is currently 30 per cent lower than business in normal times, Anam said.
Bangladesh's rank found in the global logistics index may be the lowest among different South Asian countries while the price tag on logistics in the united states is 20 % more than it has the South Asian peers.
Added with Covid-19, the price of logistics has increased simply by between 25 % and 40 % compared to the before-pandemic era, this individual added.
Deepak Dsouza, CEO of Decathlon Bangladesh, said his France-based business has purchased garment and sneakers items from Bangladesh for over the past 15 years. His firm didn't cancel any function orders amid the pandemic.
Dsouza also suggested that making synthetic what to reduce dependence on imported recycleables for garment products.
About 40 per cent of all materials found in manufacturing garment items are imported and for that reason, value retention from Bangladesh's export receipts is low, he said.
Andalib Elias, director basic of the West Europe and EU Wing in the Ministry of Foreign Affairs of Bangladesh, said the government features been contacting the heads of various countries in Europe to motivate foreign retailers and brands to pay local producers for cancelled do the job orders.
