Global retailers and brands are demanding up to 5 percent discount from Bangladesh’s apparel exporters, adding to the latter’s woes. Bangladesh Knitwear Manufacturers and Exporters Association executive president Mohammad Hatem said suppliers are being compelled to accept the lower prices fearing retailers may discontinue placing orders. At times, the prices demanded are lower than the production cost, he lamented.
Domestic manufacturers need a profit margin of 20-25 percent instead of the current 10-15 percent to pay a living wage to workers, he said.
But the net profit goes down to 2 percent if the gross profit stands at 10-15 percent.
He urged global retailers and brands to follow ethical and responsible business practices as domestic suppliers have spent billions to strengthen workplace safety in line with the recommendations of the Accord and the Alliance, the two factory inspection agencies backed by the former, according to media reports from the country.
Hatem was addressing a dialogue organised by the HerNet Foundation in Dhaka on the occasion of International Labour Day.
Bangladesh Textile Mills Association vice president Abdullah Al Mamun lamented that despite paying a higher tariff for gas and power and spending heavily to establish safe factories, suppliers are getting the lowest price from buyers.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan also expressed similar views, saying buyers are demanding discounts due to a slowdown in sales in their respective markets and of the unsold inventories that have piled up.
