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Bangladesh Recovering From Labor Unrest

Layoffs in Bangaladesh spurred unrest and a major apparel factory, Ha-Meem, was set on fire.

Bangladeshi firefighters extinguish a blaze at a garment factory in the Ashulia industrial zone.

DHAKA, Bangladesh — The apparel manufacturing industry here has started to heal after labor unrest, arson attacks and vandalism last month that left two workers dead and hundreds of people injured.

A major apparel factory, Ha-Meem, was destroyed by fire in the suburb of Ashulia. Ha-Meem’s customer portfolio includes major U.S. firms such as American Eagle Outfitters Inc., Gap Inc., J.C. Penney Co. Inc., Kohl’s Corp., Sears Holdings Corp., VF Asia, Target Corp., Charming Shoppes Inc. and Wal-Mart Stores Inc.

Bangladesh still bears the impact of layoffs, wage cuts and the resulting violence, but production has resumed and exports are getting back to normal, manufacturers said.

“We are trying to keep supplies to our buyers abroad unaffected in spite of destruction of 90 percent of our production facilities that was burned down,” said Nazrul Islam, executive director of Ha-Meem Group.

Ha-Meem, with annual exports of $80 million, is one of Bangladesh’s 10 major socially compliant woven and knit apparel manufacturers. Its dozen factories have a combined production capacity of 22 million pieces of woven garments and 3 million pieces of sweaters per year.

Ha-Meem’s 8,000 production machines were destroyed, but it has assured its U.S. and European Union buyers of uninterrupted supplies.

“We have resumed production in alternative facilities and have already engaged 1,500 of the total 3,500 employed workers and are looking for more facilities to bring the remaining workers into production soon,” Islam said.

Bangladesh has about 5,000 apparel factories for export manufacturing. The factories employ almost 3 million workers — more than 1 million in knitwear units.

About 70 percent of all workers are women, mostly from poor rural families. Most of the factories are located in the country’s largest industrial center of Dhaka and its outskirts. The other major manufacturing center is the port city of Chittagong and its suburbs. Dhaka’s Ashulia is most attractive to the factory owners and workers both for its communication links and suitable landscape.

Abdus Salam Murshedy, president of the Bangladesh Garment Manufacturers & Exporters Association, and Fazlul Hoque, president of the Bangladesh Knitwear Manufacturers & Exporters Association, both said a level of normalcy has returned to the factories and more foreign buyers are arriving with orders.

“Importers from Japan, China and Hong Kong are planning sourcing from Bangladesh in larger volume,” Hoque said.

Commerce Minister Faruk Khan said the government is going to form a temporary labor court for Ashulia, Tongi and a part of the Gazipur industrial area to settle disputes between garment industry owners and workers.

Bangladesh apparel exports have showed continuous growth in the last two decades, with the U.S. taking a third of the market share and becoming the largest importing country of Bangladeshi products.

For the year ending June 30, Bangladesh exported about $12 billion worth of apparel, a 20 percent annual increase.

The nation’s apparel industry accounted for about 75 percent of the country’s exports during 2007-’08 fiscal year, and 79 percent for the 10 months through April 30. Industry sources said the remaining two months of the year have maintained identical performance in exports.

“If the current improvement in the global financial crisis continues, it will be a boon for Bangladesh’s apparel makers,” said Nazrul Islam Swapan, managing director of Nassa Group, which has three dozen export-oriented apparel factories.

“Bangladesh is going to be the second-largest apparel exporter followed by China within next two-and-a-half years, topping Turkey as the export volume is increasing rapidly,” said BKMEA president Fazul Hoque.