Handicraft sector facing order cuts, big financial losses
Published : Friday, 27 March, 2020 at 12:00 AM Count : 129
Foreign buyers of local handicraft products are canceling orders on daily basis like massive cancellation of orders for readymade garment (RMG) as the spread of the deadly coronavirus has caused severe downturn in the global markets.
Exporters and local entrepreneurs are facing huge problems with existing orders and the possible financial losses already hitting them hard. They may face difficulty soon in paying workers salary and other pay bills and bank loans.
Golam Ahsan, President of Bangladesh Handicraft Manufacturers and Exporters Association (BHMEA) said, many buyers have already cancelled orders. Export is almost closed.
He said ready products in factories can't be processed for shipment, stocks are only spilling up. "We are worried about the future. We are worried about what we will do in next 6 months," he said.
He said, around 70 lakh worker are engaged in this sector. We are worried about their jobs and livelihood. we are worried if the factories were to be closed," he said. How we will pay workers is the big question, he said.
Industry sources said export orders worth around USD $ 30 million were so far cancelled. The amount will increase if the situation turns further worse. Karuponno, a big handicrafts making company of Bangladesh alone has lost export orders worth around $ 5.2 million.
At stake is the existence of 5,000 workers and employees. Another handicraft producer Sun Trade Limited has so far lost export order worth about $ 1 million while its raw material stock of over $10 million in causing concerns.
The impact of coronavirus may be even worse for business and other manufacturing sectors. If low-income handicraft workers lose their jobs, their families will face starvation.
The BHMEA president calls for government support to industry to help it sustain the impact. He hopes the government will make special financial allocations to save the industry.
The country earns $23 million last year from handicraft exports. Ashrafur Rahman Faruque, former president of MHMEA said investment in this labor intensive sector is not too big.
It does not need big investment and huge machine. But the industry made robust growth producing high value-addition products using skilled labour force and government support.
Sources said around Tk 10,000 to Tk 12,000 crore was the size of the local handicraft market and 60 to 70 lakh people were directly or indirectly employed in this sector
Sources said Japan, Denmark, Italy, Spain, the Netherlands, Finland and Sweden and many other Europe countries and the USA are export destinations of Bangladesh's handicraft products. Almost all of them are now struggling with the outbreak.
Bangladesh exports mostly two types of handicrafts-home furnishings and different types and forms of baskets made of bamboo. It also produces items from yarn, jute, cane, plastic, pillow covers, jute bags, executive bags, laptop bags etc. Bangladesh also produces and exports traditional handicrafts like pottery, tant artifacts, muslin and jamdani sari.