Coronavirus outbreak: Localization of material-components should have mid-long term focus

Over 50% of Bangladesh’s textile and textile-related goods including garment accessories are imported from China. In addition, about 40% of capital machinery and spare parts for the textile and garment industry come from the country. For the outbreak of ongoing Coronavirus, the supply chain of raw materials for the sector is being disrupted, which ultimately will affect apparel production and its exports.

Considering this reality Bangladesh should set strategies to mitigate the adverse consequence. Ziaur Rahman, Country Manager of H&M for Bangladesh, Pakistan and Ethiopia has shared his views regarding this that you will get below.

The outburst situation of Nobel Coronavirus has gone really worse! From a humanitarian perspective, we all should work together and fight this deadly virus.

I really hope and pray that it will not travel all the way to Bangladesh because our preparation to prevent/face the virus is really poor!

Even for China’s situation, it will have an economic impact for us which can be short to mid-long-term level. It indicates our dependencies upon China or the other hands, the supremacy of China for the supply chain.

It indicates where we need to invest! Having another garment sewing units doesn’t make us strong rather invest in product development connected to product diversification and localization of material-components should have long term focus.

ZIAUR RAHMAN, COUNTRY MANAGER, H&M FOR BANGLADESH, PAKISTAN AND ETHIOPIA

Short term, it will create a lack of material for running production and eventually many factories will have empty lines even though they have orders. The supply chain’s cash flow will be a big issue due to a lack of shipment. An on-time salary for works might get affected!

In mid-long-term, supply chain cost might go high because eventually, it will create lots of demand than supply. Priority will cost extra cents per unit! It will have an impact on the total prices of the commodities.

Moreover, Vietnam and Cambodia have a shorter lead-time for sourcing material from China due to geographical position. Bangladesh as a preferred sourcing destination might face challenges for both price and lead time!

In many ways, we are behind/heavily import driven for backward linkage specially cotton mixed and man-made fiber, even trims, accessories, etc.

It indicates where we need to invest! Having another garment sewing units doesn’t make us strong rather invest in product development connected to product diversification and localization of material-components should have mid-long term focus.