DSE Tannery, Textile Sectors in Profit

During the pandemic, factories were closed and demand for clothes tumbled at both home and abroad, said Anwar-ul Alam Chowdhury, former chairman of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

“So, the companies’ profits plunged,” he said.

Overall export earnings dropped 16.93 per cent to $33.67 billion in the financial year 2019-20. It was around 26 per cent lower than that of the target, according to data of Export Promotion Bureau (EPB).

Garment export fell by 18 per cent to $27.94 billion.

The sales of the garment sector in the local market were hit as the main selling period coincided with lockdowns that continued for around two months to contain the pandemic, he said.

The government announced a general leave from March 26 of 2020 till April 4 of the same year.

In the local market, two Eids and Pahela Baishakh were the main selling periods for local producers, which were mostly battered by the pandemic, said Chowdhury, also chairman of Evince Textiles.

Almost all the companies in the sector were impacted, he said.

Due to the pandemic, Bangladeshi workers in the garments sector suffered a 35 per cent pay cut during the lockdown for the ongoing pandemic last year, according to a study report “The Weakest Link in the Global Supply Chain: How the Pandemic is Affecting Bangladesh’s Garment Workers”.

“While the industry suffered from the closure of markets, suspended shipments, delayed payments and a liquidity crisis, Bangladeshi workers suffered what was in effect a 35 per cent pay cut during the lockdown month,” the study said.

However, the business situation has changed and the market bounced back strongly after the first blow of the pandemic, added Chowdhury.

In order to bag the higher demand and orders from abroad, the apparel sector is now investing its funds.

Investments worth over Tk 4,200 crore are being used to expand and modernise production facilities of the apparel sector, according to industry insiders.

In the tannery industry, earnings of Bata took a drastic fall due to the loss of retail business during 2020’s major festivals — Eid-ul-Fitr, Eid-ul-Azha, Puja and Pahela Baishakh — due to the countrywide lockdown for the Covid-19 pandemic.

The festival sales cover 25 to 30 per cent of the company’s yearly business.

An estimated 77 per cent of rural business leaders like dealers and/or wholesalers have been particularly impacted due to Covid-19, which led to them losing their business, it said.

The company’s business went down by 41 per cent in 2020, the disclosure added.

Another giant tannery company Apex Footwear also went through the same losses in the year.

Apart from the tannery and textile sectors, ceramics, engineering, food & allied, fuel and power and miscellaneous sectors also witnessed a drop in their profits in the year of crisis.

Profits of the ceramic sector plunged 60.9 per cent, followed by engineering (60.5 per cent), food & allied (40.5 per cent), miscellaneous (19.4 per cent) and fuel and power (6.9 per cent), the data shows.

The pharmaceuticals sector was, however, in a better position among all the sectors in 2020 and its profits more than doubled.

A top official of a leading pharmaceutical company, preferring anonymity, said the average profit growth was high as some companies’ profits rose by manifold.

But most of the companies saw double-digit profit growth from 15 per cent to 20 per cent, he said, adding that their sales were also impacted as prescription-based medicine sales dropped during the pandemic.