Local Fashion Industry 75pc small entrepreneurs risk going out of business
The local fashion industry anticipates yet another huge business loss during the Eid festival following no sale at Pahela Baishakh for prolonged coronavirus outbreak.
The COVID-19 pandemic now threatens the demise of 75 per cent business units, according to the affected entrepreneurs.
Fashion Entrepreneurs Association of Bangladesh leaders said that an estimated 5,000 small and medium fashion houses operating in the country were in for the biggest backlash as no shopping spree was visible in the run up to Eid, which might fall on May 24, 25, or 26, after incurring around Tk 2,000 crore losses for cancellation of the Pahela Baishakh celebrations in April.
Earnings from Eid-ul-Fitr sales constitute about 40 per cent of the total annual profits of the local fashion industry but most of the outlets remained closed and very few people came to the outlets that opened on Sunday, FEAB president Shaheen Ahammed said.
‘We expected an estimated Tk 4,000 crore sale during Eid-ul-Fitr and have been taking preparations accordingly since January,’ he said, adding that 65 per cent of the production was ready before declaring holiday in March.
Shaheen, managing owner of Anjan’s, said that the online sale that began in March also had very low turnover as people did not have much cash in hand.
He claimed that the entire investment of Tk 2,000 crore for Pahela Baishakh was lost in April since people usually do not use such attires, bangles and ornaments on any occasion other than Pahela Baishakh while materials used in those would rot in warehouses as they were not sold.
The big fashion houses might overcome the losses capitalising the government announced Tk 20,000 crore soft loan packages for the SME sector in the next couple of years but over 3,500 small entrepreneurs who survived doing outsourcing for the big ones were facing threats of going out of business as this group did not have transactions through formal banking channel, said former FEAB president Azharul Hoque Azad.
‘It is not just business losses of some entrepreneurs but it is a question of existence of an estimated five lakh skilled workers and artisans,’ said Azad, managing director of Sada-Kalo.
The home-grown fashion industry that developed through hard work and creativity in the past three decades had never faced such a challenge before, he said.
An embroidery artisan Habibur Rahman from Madartek, who used to earn an average of Tk 20,000 per month before March, said that the survival of his four-member family completely became dependent on aid of the neighbours and relatives following shut down of the embroidery factory that used to supply products to big outlets.
‘Now, I am ready to pull rickshaw or try out any other odd job,’ said the artisan.
Khalid Mahmud Khan, owner of KKraft demanded government intervention for saving hundreds of skilled artisans, most of them women, who are now becoming jobless as the pandemic has dealt a nasty blow to the sector, affecting the overall economic wellbeing of the country.
SME Foundation managing director Md Shafiqul Islam said that the fashion houses were not the only victims, but the entrepreneurs and workers of the flower industry, beauty parlours, craft items producers and others were in serious jeopardy.
The cottage industry and small businesses, mostly located in remote areas, were in real trouble for not having access to formal banking channel, he said.
Government formed informal sector industry skills council chairman Mirza Nurul Ghani Shovon said the government was working for proper utilisation of Tk 20,000 crore incentive packages to extend support to all entrepreneurs in the informal sector.
The industries ministry additional secretary Md Helal Uddin said that the ministry on April 30 sought Tk 1,100 crore seed money from the finance division for providing loan assistance to the micro and small entrepreneurs outside the banking system, which would be distributed through Bangladesh Small and Cottage Industries Corporation and SME foundation.
News Courtesy: www.newagebd.net
