“If our workers don’t die from the new crown virus, they will die from starvation.” Vijay Mahtaney, the owner of an Indian garment factory, described the impact of the new crown virus on the apparel industry.
Vijay is the chairman of Ambattur Fashion, an Indian apparel manufacturing company. Vijay and his partners Amit Mahtaney and Shawn Islam employ 18,000 workers in Bangladesh, India and Jordan. However, the outbreak of the new crown epidemic caused them to stop most of their operations, and only a factory in Dhaka, Bangladesh was partially operated.
The lockdown measures against the new coronavirus is not the only factor affecting their payment of workers’ wages. They said that the main problem was some unreasonable requests from major customers after the outbreak, most of them came from the United States and the United Kingdom.
Amit is also the CEO of Tusker Apparel, a Jordanian clothing company. He told the BBC that some brands have shown a genuine sense of cooperation and ethics in their efforts to ensure payment of their employees.
However, he said that some companies have asked to cancel orders that have been prepared or are being followed up, or ask for discounts on unpaid and in-transit goods. They also requested an extension of 30 to 120 days in accordance with the previously agreed payment terms.
An email obtained by the BBC showed that an American retailer asked its manufacturer to give a 30% discount on all payments due. Their reason is: “To survive this unusual period.”
Vijay believes that these companies only protect the interests of shareholders and ignore the garment workers. He pointed out that these companies can apply for the US government’s economic relief program subsidies, but also ask them to provide help.
This coincided with the two severe blows to clothing manufacturers due to the new crown virus epidemic.
In February, many factories were unable to obtain raw materials from China. China is the world’s largest exporter of textiles, with an export value of approximately US$118 billion in 2018.
Chinese textile mills have reopened in recent weeks, and garment manufacturers had hoped that operations could get back on track. However, governments around the world have implemented blockade policies, retailers have been forced to close their doors, and demand has fallen rapidly.
China may have always been called the “world factory”, but Bangladesh, Indonesia, Cambodia, Vietnam and Myanmar are playing an increasing role in clothing.
Stanley Szeto, executive chairman of clothing manufacturer Lever Style, said that due to rising costs in China, the clothing manufacturing industry has moved from China to other regions in the past decade or so. Lever Style supplies many high-end brands, including Hugo Boss, Coach, etc.
This means that apparel manufacturing is a vital industry for many developing countries in Asia. According to data from the World Trade Organization, Bangladesh and Vietnam are among the world’s four largest garment exporters. Bangladesh currently accounts for 6.7% of the market, followed by Vietnam with 5.7%.
Bangladesh has more than 4 million garment workers, and textile and garment products accounted for more than 90% of the country’s exports last year.
Lu Sheng, an associate professor in the Department of Fashion and Apparel Studies at Telanhua University, said that more than 60% of exports from Cambodia and Sri Lanka also come from the apparel manufacturing industry.
This industry accounts for more than half of all manufacturing jobs in Bangladesh and 60% in Cambodia.
Lu Sheng believes that the spread of the new coronavirus epidemic may lead to a 4% to 9% reduction in jobs in the apparel industry in countries such as Bangladesh, Vietnam, Cambodia and India.
This is one of the reasons why Bangladesh is trying to help the industry.
“It provides a generous stimulus package: subsidize wages, convert loans into long-term debt, and provide very reasonable interest rates,” said Islam, the general manager of Sparrow Apparel, a Bangladeshi garment manufacturer. It helps.”
The Cambodian government also announced the implementation of a tax holiday for garment factories and proposed a wage subsidy program for workers.
Lu Sheng pointed out that the government’s move is because the epidemic may cause some long-term effects, such as labor shortages, rising raw material prices and insufficient production capacity.
After receiving more and more criticism and pressure, some companies, including H&M and Zara’s parent company Inditex, have promised to pay the full amount of the clothing manufacturers’ existing orders.
Dominique Muller, Policy Director, Labour Behind the Label: “For many years, brands have been producing profits in low-wage countries, which have no social security system. They have established this business model. A huge business empire. Now it is necessary to repay decades of exploitation costs to take care of their workers.” The labor union behind the trademark is concerned about labor rights in the apparel industry.
Amit also agrees with this view. “Retailers must help, and the emergency assistance of the wealthy government to the industry is also very important,” he said.
He said that without these, the industry could be completely destroyed.