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Bangladesh factory closures threaten stock deliveries

Marks & Spencer, H&M and Zara are facing the threat of delays to stock deliveries following the closure of 300 garment factories in Bangladesh.

Factory owners today shut every production unit at Ashulia, a major textile manufacturing zone on the outskirts of Dhaka, to curtail violent protests by workers over pay. They said the factories would remain closed until the dispute was resolved.

The factories produce goods for all three high street multiples, as well as a raft of global brands including JC Penney, Kohl’s, Wal-Mart and Carrefour.

The closure is expected to have a severe impact on production and shipments.

“Certainly our exports will be hit, buyers will become jittery, shipments will be delayed and investors will shy away,” Abdus Salam Murshedy, president the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Reuters.

BGMEA, which represents 4,500 garment factories employing 3.5m workers, is currently negotiating the salaries of garment workers with the government.

Workers currently earn around 1,660 taka (£16.20) a month and have called for a threefold increase to 5,000 taka. However, BGMEA said it could not afford to push salaries above 3,000 taka.

The dispute has sparked violent protests by thousands of workers, who clashed with security men, attacked vehicles and barricaded the highways at Ashulia, police said. At least 100 people have been injured since Monday, police and witnesses said.

M&S played down the impact of the closures. “As of today, only three of the 39 factories we source from in Bangladesh are affected. It is too soon to assess the impact of the strikes on our supply. However we continue to monitor the situation closely,” said a spokesman.

He added that the chain has been “actively working” to increase wages in its supply chain in Bangladesh and that it is “at the forefront of the debate on wages” in the country.

Neither Zara nor H&M commented by the time of publication.

 

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