Bangladesh faces challenges

According to a manufacturing company in Bangladesh, the international fashion giant is shifting orders from the world's second largest clothing exporter due to political instability in the country.

Factories were closed for several days after the riots. Many factories, including suppliers to global brands such as H&M and Zara, were set on fire in the chaos.

Weeks of unrest have disrupted deliveries of clothing and shoes for the winter retail season in Europe and North America and killed hundreds of people.

Factories have been forced to work overtime and ship products by air to quickly clear months-long backlogs. However, air transport is extremely expensive, thus eating into the factory's profits.

Bangladeshi exporters say some major brands have shifted orders for next season to rival suppliers in Southeast Asia. That would threaten the economic foundations of the country of 170 million people.

According to Mamun Rashid, a consultant to Bangladeshi garment manufacturers, Spanish and German customers say they are moving 40 per cent of their orders to Cambodia or Indonesia. They don't know how long this chaos will last.

Syed Nasim Manzur, chief executive of Apex Footwear, a supplier to Decathlon (France) and Fast Retailing (parent company of Japan's Uniqlo), said the volatility had "shaken the confidence of international brands to enter Bangladesh".

Bangladesh faces challenges

"Big companies have said they will reduce orders from Bangladesh by 30 per cent next season," said Manzoor, who is also president of the Bangladesh Leather Goods and Footwear Exporters Association.

Many global brands rely on Bangladesh. H&M, for example, sources from more than 1,000 factories in Bangladesh. With $47 billion in apparel exports by 2023, the country is one of the world's largest manufacturers of footwear and leather goods.

Apex's Manzoor said political stability was a "prerequisite for economic growth". "The economy has lost a lot of momentum and needs to regain it once it gets the chance."

However, some business owners say that even if orders are temporarily lost to other countries, Bangladesh's abundant labor pool and low costs will make the country difficult to replace in the long term.

"We are all working hard to recover," said Nowshin Islam, director of sportswear manufacturing at Apex. She admitted the situation was still uncertain, but added: "I think we'll get through it soon." I'm very optimistic about the future."