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Buyers blame mistrust, rude behaviour for RMG unrest It will be complicated to increase apparel prices, say importers

Edit Date:8/4/2010 12:00:00 AM

Buyers blame mistrust, rude behaviour for RMG unrest It will be complicated to increase apparel prices, say importers Kazi Azizul Islam Mistrust of workers in their employers, rude behaviour of floor managers and failure to hold effective communications regarding the minimum wage increase with workers have caused protests in the apparel sector, said representatives of global importers and factory auditors, who, however, think the rate of increase in the minimum wage was fairly good. Buyers’ representatives said the increase in garment prices in response to increased wages was rational but such an increase would follow the rules of the business, including competition of suppliers in Bangladesh and aboard. A high official at the Dhaka sourcing office of a leading European retailer said persistent mistrust of workers in their employers and want of sense of belongingness on part of the workers helped to spread rumours. ‘Such an unpleasant incident took place in the week once again after the announcement of the new wage structure which led to widespread to unrest in the apparel sector.’ ‘The problem is chronic in Bangladesh’s apparel industries. It cannot be solved in a short span of time,’ the official said. ‘Industries and the government need to work seriously to develop the relation between the workers and the owners.’ A senior compliance auditor of a US-based retailer told New Age she had found workers much desperate during the recent unrest. ‘Their [workers’] behaviour is totally different now than what it had been five years ago.’ She told New Age her team had found that the recent workers’ protests against poor pay had in effect been protests against rude behaviour of supervisors and mid-level managers on the factory floors, as put by some workers who took to the streets. ‘Bangladesh’s industries need to seriously work out this chronic problem.’ A procurement official of a Spanish retailer said failure of the government and the industries in communicating with workers regarding the modes of wage increase and the process of its implementation caused the trouble. ‘On an average, about 80 per cent wage increase at one go should be fair enough for workers,’ the official said. ‘If the owners and government labour welfare officials had held meetings with workers on factory floors and discussed the wage negotiation process and its rationale, protests after the announcement of wage increase could have been averted.’ As for increase in garment prices to offset increased wages, a top Bangladeshi executive at a US retailer said, ‘Increasing prices will face some critical market dimensions.’ He said because cost of production in China and labour problems in other countries such as Pakistan and Cambodia, buyers might be obliged to increase garment prices but the buyers will not lose their dominance. ‘Sourcing apparels is still a buyers’ proposition. So, any swelling increase in apparel prices is highly unlikely.’ He, however, said in a post-recession market, retailers’ capacity to pay higher prices had become somewhat uncertain. On-time delivery will be a crucial issue in asking for increased prices, he said. ‘If an importer increases cutting and making charges by 30 per cent and seeks discount and air shipment cost from the exporter because of missed delivery deadline, increased price will bring no benefit for suppliers.’ Local garment manufacturers need to stop wastage in the production process, especially inefficiencies in the ways of work, he said. ‘Before asking for increased prices, suppliers will need to convince the buyers that there is no room for minimising production cost.’ http://www.newagebd.com/2010/aug/04/busi.html#1

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