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Subcontracting opportunities on the decline in Bangladesh

Subcontracting opportunities in the Bangladesh garment industry have nearly evaporated following the nation’s deadliest back-to-back industrial disasters, the 2012 Tazreen Fashions fire and 2013 Rana Plaza building collapse. These days, subcontracting is rarely allowed in garment factories owing to the poor compliance records of the small units. Anybody seeking to set up even a small factory and wanting to become a member of the BGMEA now needs to pass the association’s rigorous audit and inspection, something which had been lax in the past..

Nearly1,200 small and medium-sized factories were shut after the Rana Plaza collapse due to their failure to either achieve factory remediation or meet strong compliance requirements of buyers. According to the association’s estimate, the number of active garment factories affiliated with the BGMEA stood at 5,150 in the fiscal year of 2010-11and it reached 5,876 in 2012-13. But the number of factories, especially subcontracting ones, has begun to decline after the collapse, following which two foreign bodies, the Accord and the Alliance, started inspection and remediation. In just a span of one year, the number of BGMEA members declined to 4,222. Subcontracting still occurs in Bangladesh but on a very limited scale. As a result, factory owners are planning to subcontract work orders to some Sri Lankan factories.

 

 
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