Firms agree to higher Bangladesh garment prices
NDTV.com, India
August 23, 2014
DHAKA (Reuters) – Most large foreign companies have agreed to higher prices for ready-made garments imported from Bangladesh in a bid to help the industry pay better wages to its restive workforce, business officials said on Wednesday.
Factory owners agreed in June to raise salaries to 1,300 taka ($18.60) within three months after angry workers forced dozens of factories to shut for weeks, they said. Garment workers earn a minimum monthly wage of 950 taka – a third of a farm labourer.
Disgruntled workers demanding higher wages and benefits had burned factories, battled police and attacked vehicles. One worker was killed and more than 150 injured.
Garment industry leaders had said they could pay higher wages only if importers paid more for their products.
“Most of the big firms are willing to raise prices but the bottom line is whether the factories are ensuring social compliances or not,” said Qayum Reza Chowdhury, president of Bangladesh Garments Buying Association (BGBA).
U.S. retailers Wal-Mart Stores Inc. and JC Penny have agreed to raise prices on this condition, Chowdhury said.
Garments are Bangladesh’s biggest export, bringing in more than $7.9 billion in the year to June 2014. The country has about 4,000 garment factories, employing about two million workers, many of whom toil in dismal and dangerous conditions.
Most of the country’s textile factories are poorly built and maintained, many with no emergency exits. Over 100 garment workers were killed in a series of factory accidents last year.
Qayum said the International Labour Organisation had also asked that workers’ wages be raised.
The BGBA represents more than 70 liaison offices of foreign firms and some 2,000 local buying houses, which together account for up to 80 per cent of ready-made exports from Bangladesh.
The deal struck in June between the government, factory owners and textile workers provides for higher wages, better job security, trade union membership, weekly holiday, payment for extra work and paid maternity leave.
The workers, however, are asking for a minimum monthly wage of 4,300 taka due to higher cost of essential commodities.
“We have requested the buyers to increase our products’ price, without which we cannot raise wages,” said S.M. Fazlul Hoque, president of Bangladesh Garment Manufacturers and Exporters Association. “But in a free market we cannot force them. If we try to, they may shift to China or elsewhere.”
“We have proposed to our principals (to raise prices) and they have agreed,” said Mahboob Kawsar, a director of Ottoconnection Limited.
Complices Sports and Jeans, a French firm that buys up to $12 million worth of textiles yearly through Ottoconnection has agreed to increase prices by up to 10 percent, Mahboob said.
(US$1 = 69.7 taka)
