Promise of the PPE Market: A Glimmer of Hope

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THE PANDEMIC
The coronavirus or Covid-19 has the whole world on its toes. From the day it was termed a global health emergency, or even before that, the virus has had governments scurrying to lock their doors, secure their health sector and protect their population from the deadly pandemic. Even before it was known how deadly it could be, it managed to slow down businesses, crash the stock market and crush startups beneath its ominous spikes.

THE GLOOM
Readymade garments have always been the pride and joy of this country. Bangladesh is the second-largest garment supplier in the world, second to China, and employs more than 4 million people, most of them women. RMG exports make up about 80% of overall exports of the country. Being a third world country that is heavily reliant on its readymade garments exports, Bangladesh was facing order cuts and cancellations ever since Covid-19 proved its disastrous effect on the Chinese and Italian markets. It was as if the world suddenly realized that fashionable clothes would have to take a backseat and budgets must be allocated more and more to the health and food sector if the world wanted to survive this deadly foe. The damage the readymade garments sector was looking at was so severe that as shops shut across the United States and Europe, orders worth $3 billion were cancelled in Bangladesh, some of which had even passed the production stage. 72.1% of the buyers refused to pay the raw material suppliers and 91.3% of the buyers refused to pay the production cost of the supplier. It was no surprise then, that close to 60% of the factories that were surveyed were looking at shutting down all or most of their operations. Even with a government stimulus package worth $588 million, it was enough to cover workers’ wages for about a month. Workers after that would have no social safety net to fall back on. Nearly 400 factories had shut down, about one-third of them have gone out of business. As high-end fashion stores in first world countries shut their doors, around 2 million garments workers in Bangladesh were looking at job cuts and destitution. The RMG exports that had been seeing a 5.71% negative growth in the current fiscal year, until February, we’re set to fall even further down. Bangladesh’s position as the second-largest RMG exporter was now in danger. By April, the country’s textile shipments had tanked 14%, down to $24.48 billion, the lowest recorded in the last 5 years. The Bangladeshi government had to take an unusual but proactive stance where it urged the European Parliament to coax fashion brands to not cancel orders and to restore orders that are already cut. However, those retailers who then agreed to accept 26% of what they ordered started to demand discounts and delay payments.

THE FOGGY FUTURE
With imported, unused goods piling up in the warehouses, and global consumption of clothes estimated to fall by 65%, Bangladesh was looking at a slump in work orders by as much as 30%. Factories were running at 55% of their capacities which means that it was only a matter of time before factories started laying off workers and thinking of a plausible exit. During such dire times, the rise of the PPE market would come to Bangladesh as a boon.

THE SILVER LINING
The business world, however, very well knows that what can crush, can also construct. It quickly saw an opportunity to get back up on its feet through rigorous marketing of now essential products like sanitizers, immunity-boosting supplements, medicine and other pharmaceutical supplies and most of all- personal protective equipment. The garment markets of Bangladesh were not too slow to sniff out their chances either, for the vast market for personal protective equipment that was as yet untapped. The early risers started preparing for the production and export of PPEs as early as February of this year. They already had demand notes from the United States of America, Sri Lanka, Nepal and Kuwait. The garments market of Bangladesh then was struggling with procuring the raw materials for export quality PPEs and the right infrastructure in their factories like a dust-free and medical-grade environment that would ensure quality and precision of the manufactured goods. They lacked the training and expertise. Bangladesh, however, is known for its resilience and resourcefulness in the face of crisis. Proving their grit yet again, by May 2020, Beximco Bangladesh had exported 6.5 million PPE gowns to the United States of America and were hopeful to produce medical wear worth of $250 million by the end of the year.

In less than two months, Bangladesh had joined the club of a very select group of countries that were supplying world-class, large scale PPEs to the US brand, Hanes. Beximco went all out to produce these PPEs by getting their top design talent to switch over to making PPEs and help increase the supply locally and around the world. The quick response was appreciated by US Ambassador Earl Miller and US Secretary of State, Mike Pompeo, who called it a significant milestone. The CEO of Beximco believes that this will help 4.1 million Bangladeshis who are working in the readymade garments sector to earn a livelihood and support themselves and their families during this difficult time. Beximco has gone one step further and invested in a PPE Industrial Park, or a facility fully dedicated to produce all levels of PPEs including masks, gowns, coveralls, etc. 60% of their 40,000 workers had moved from making fashion wear to medical wear.

THE NEW FUTURE
At a time when the world was fighting a seemingly losing battle, fashion was far from people’s minds and order cancellations were at an all-time high, the production of personal protective equipment had come to the workers as nothing short of a lifeline. Those who were set to face layoffs were now called into work eight-hour shifts, six days a week, to produce PPE, the world demand for which seemed to be climbing by the minute. More and more manufacturers started to pivot towards the PPE market. At least 33 companies had started to make personal protective gear from the start of the pandemic and the number was only growing. Companies that were already producing medical wear started to receive more and more orders, with orders up to 20 million at a time. Some garment owners now claimed that their factories were booked to make PPEs for the full year. Fakir Apparels, for instance, turned five of its factories into PPE plants and hired hundreds of additional workers to meet the production demand.

While testing until level three PPE can be done in the country, testing for higher levels is still being done in China. Some companies had already started making the special material that is required for PPE production, although the bulk of it is still being imported. Garments like Zaber and Zubair and APS Group even claim to have made antiviral and anti-bacterial fabric that can kill the virus upon contact. Garments owners and experts are hopeful that if the government and existing labs in the country come forward to help them with the latest testing facilities, they can further capitalize on the situation. Experts also feel that due to the low cost of converting idle garments production capacity into PPE plants and low costs of training workers, Bangladesh could become the new hub for medical wear as the demand for these products are going to remain strong. Whatever that says about the pandemic situation and world health in general, it means nothing but good news for the Bangladesh garments industry.

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