cdn-ads.beroelive.ai Open in urlscan Pro
2600:9000:21b3:e00:19:cdb7:8d00:93a1  Public Scan

Form analysis
0 forms found in the DOM

Text Content

 * Slide 1: Advisory on Political Crisis in Bangladesh and Its Impact on the
   Garment Industry
 * Slide 2: Political Crisis and Its Impact on Garment Industry
 * Slide 3

123 /3 100% Actual Size Fit Width Fit Height Fit Page Automatic
PresentationMagazineContinuous


© Copyright 2024 Beroe Inc. All rights reserved.
1
© Copyright 2024 Beroe Inc. All rights reserved.
Advisory on Political Crisis in
Bangladesh and Its Impact on
the Garment Industry
August 2024


© Copyright 2024 Beroe Inc. All rights reserved.
2
Political Crisis and Its Impact on Garment Industry
Sources: Secondary Sources, Beroe Estimates, Business Standard, Economic Times,
Textile Today, Fibre2Fashion
Background/Overview :
Bangladesh has emerged as a global powerhouse in the textile and garment
industry, contributing significantly to its economy. The nation's strategic
location and
cost-effective labor force have propelled it to become the world's
second-largest garment exporter. With exports exceeding $47 billion annually,
the sector accounts
for a substantial portion of Bangladesh's GDP and employment. Major export
destinations include the EU, the US, Canada, Australia, and Japan.
The recent political unrest and subsequent curfew in Bangladesh have had a
devastating impact on the textile and garment industry. Factory closures, raw
material
shortages, and transportation disruptions have brought production to a
standstill. Consequently, international buyers have been forced to cancel orders
or demand
significant price reductions. The internet blackout has further compounded the
crisis, hindering communication regarding production and shipping details. As a
result, the industry is facing substantial financial losses, estimated to exceed
$500 million per day during peak season.
Impact Advisory
•
The crisis in Bangladesh is creating a ripple
effect throughout the global supply chain.
•
Due to production disruptions and shipment
delays, Buyers may experience increased lead
times, affecting inventory management and
retail cycles. Hence, buyers may actively look
for alternative sourcing locations.
•
Countries like India, Vietnam, and Egypt with
their well-developed textile industry and
infrastructure, stand to gain from this shift.
Impact on Global Supply Chain
•
The European Union's decision to postpone a
partnership agreement with Bangladesh highlights the
seriousness of the situation and its potential
consequences for future trade relations.
•
As the crisis progresses, the global textile industry
must adjust to new sourcing dynamics and navigate
increased uncertainty.
•
Despite being a major economic contributor, faces
numerous Environmental, Social, and Governance
(ESG) issues and labor-related issues in terms of fair
wages. These risks are conducive for the industry as
well as for global brands that source products from
Bangladesh.
Impact on Trade
•
The anticipated 15-20% drop in Bangladesh's RMG
exports for the next summer season highlights the
significant economic impact on the country.
•
This crisis reveals the risks associated with heavy
dependence on a single sourcing location and
emphasizes the importance of diverse sourcing
destinations.
•
It is challenging to determine if the impact will be
short-term or medium-term. However, Buyers need to
be proactive in terms of managing shorter lead times
and communicating with other low-cost destinations to
compensate for larger volumes.
What Buyers Should Do?
LOW
MEDIUM
HIGH
Impact Level


© Copyright 2024 Beroe Inc. All rights reserved.
3