Learn from Vietnam to offset export shocks

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Bangladesh should have Vietnam's lead on how to handle challenges in export brought about by the coronavirus fallout while attracting even more foreign direct expenditure (FDI), according to Kihak Sung, chairman Youngone Company.

"Vietnam didn't lose much business actually amid the peak pandemic time but alternatively, Bangladesh's economy endured a considerable impact," Sung, as well CEO of the leading garment exporter based in South Korea, explained yesterday.

Sung made these comments even while speaking on the impacts of the Covid-19 pandemic on Bangladesh's garment sector in a debate jointly organised by the France Bangladesh Chamber of Commerce and Sector (CCIFB) and Policy Exploration Institute (PRI).

"I've never lost organization. But this season, I lost 25 % of business due to Covid-19," stated Sung, adding that almost all of his losses were incurred by the business's Bangladesh units.

On the other hand, the losses incurred simply by Youngone's Vietnam unit weren't that high simply because cancellations of work orders and later payments from international potential buyers was not just as frequent for the country since it was for Bangladesh, where these concerns are currently a significant challenge, he said.

Vietnam managed the coronavirus fallout and its creation, export and logistics sectors quite well compared to other parts of the world.

Therefore, Bangladesh should evaluate the advantages and disadvantages of Vietnam's approach to ensure that it may develop its own plan of action to deal with the situation and attract FDI.

Besides, another important fact is that Vietnam does not discriminate against any foreign investor, said the South Korean multi-billionaire.

Youngone exports nearly $850 million in garment and footwear products created at its factories in Bangladesh, where 70,000 persons are employed by the organization across 28 professional units.

Sung suggested that local producers develop more man-made fibre garment items as the demand for such goods is increasing worldwide.

The South Korean also said his company exports a lot more than $100 million in garment and footwear items, almost all of which comprise man-made fibres, to France every year.

It will get a tough job for businesses to produce a full restoration as the global demand for garment goods decreased by 30 % following the Covid-19 outbreak, he added.

Productivity levels in Youngone's Vietnam factory happens to be 20 per cent higher than that of its Bangladesh counterpart due to the former's logistics and insurance plan support are comparatively superior to that of the latter.

Moderated simply by PRI Executive Director Ahsan H Mansur, the getting together with featured various market experts, exporters, diplomats and trade body representatives.

Bangladesh's overdependence on cotton fibres for garment production is a significant impediment to the country's programs to diversify its export basket, said Mansur.

More than 74 % of the country's garment shipments are constructed of cotton.

Besides, another challenge for export diversification may be the fact that the vast majority of the Bangladeshi apparels will be shipped mainly to the US and EU markets.

Of the country's total garment exports every year, about 83 per cent are destined for these markets, he added.

Rubana Huq, president of the Bangladesh Garment Suppliers and Exporters Association (BGMEA), said the problem may not return to normal until halfway through next time.

On the other hand, amid the ongoing pandemic, the application of online retail platforms provides soared worldwide.

"We have to quickly adopt plans in this regard so that you can hold a larger market occurrence in the global on the web retail sector," Huq explained.

France is market with huge potential for Bangladesh but local garment manufacturers already are far behind on shipments of several key export items that have high demand in the European country.

So far as foreign clients go though, French corporations are comparatively a cut above as only two little firms cancelled their do the job orders amid the pandemic situation, Huq added.

The government is taking out all of the stops to connect using its counterparts worldwide in order that business eventually returns on track based on the global economy, said Masud bin Momen, secretary to the Ministry of Foreign Affairs.

Momen also suggested that suppliers maintain business etiquette and be held in charge of upholding their end of any discount.

Dilara Begum, commercial counsellor to the Bangladesh Embassy found in Paris, said Covid-19 was not the only reason behind low exports from Bangladesh to France.

"Exports from Bangladesh to France had been low prior to the pandemic began," explained Begum, adding that garment shipments to the European nation from Myanmar and Vietnam had been on the rise.

France is the fifth largest export vacation spot for Bangladeshi products after the US, Germany, UK and Spain.

"We will be hopeful that France's economy will go back to its pre-pandemic state by the end of the year as the united states is opening up nowadays," explained Kazi Imtiaz Hossain, Bangladesh's ambassador to France.

Mahbubul Anam, the preceding president of Bangladesh Freight Forwarders Association, said a lot more than 70 per cent of Bangladesh's logistics sector was linked to the garment industry.

Solely in the transfer sector, where a lot more than 35 lakh people are used, around five lakh jobs have already been lost already while a further five lakh are precariously positioned due to the ongoing coronavirus crisis.

The logistics organization is currently 30 per cent less than organization in normal times, Anam said.

Bangladesh's rank in the global logistics index may be the lowest among other South Parts of asia while the price tag on logistics in the united states is 20 per cent more than its South Asian peers.

Added with Covid-19, the cost of logistics has increased by between 25 % and 40 % compared to the before-pandemic era, this individual added.

Deepak Dsouza, CEO of Decathlon Bangladesh, said his France-based firm has purchased garment and footwear items from Bangladesh for within the last 15 years. His business didn't cancel any do the job orders amid the pandemic.

Dsouza also suggested that making synthetic items to reduce dependence on imported recycleables for garment products.

About 40 % of all materials used in manufacturing garment items are imported and as a result, value retention from Bangladesh's export receipts is low, he said.

Andalib Elias, director standard of the West Europe and EU Wing at the Ministry of Foreign Affairs of Bangladesh, said the federal government features been contacting the heads of varied countries found in Europe to inspire foreign retailers and makes to pay local suppliers for cancelled function orders.
Source: https://www.thedailystar.net

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