BGMEA advised the member factories to increase the price of the product and collect the additional cost of increased labor wages from the buyers. At least under no circumstances should export orders be taken below the cost of production. These things have been said in the letter sent to the media by BGMEA on 26 December.
BGMEA has sent a letter to garment owners to implement the new wages in the ready-made garments sector on time. In the letter signed by BGMEA President Faruque Hassan said to the garment owners that wages should be paid according to the new minimum wage from the beginning of 2024. It is quite challenging for us but it has to be fully implemented in due course.
In the latter Faruque Hassan said, I have already told you that the global inflation and the measures taken by the developed economies to control inflation have created a situation where the price line is pushed down and on the other hand our cost of production is increasing at an exorbitant rate. Rapid increase in electricity, gas, diesel, transportation costs and other cost factors are having a significant impact on production costs. Wages should be implemented on time even after such an increase in expenditure.
“Please negotiate with the buyers, ask them to fix the price to cover the cost increase due to the increase in wages. It is suggested to show the letters issued by BGMEA to the buyers as reference,” Faruque Hassan requested in the letter.
He said that in the larger interest of the industry and to sustain the industry, I humbly request you, please ensure that no orders are accepted below break-even.
He mentioned in the letter, in the last few months BGMEA has requested through letters to the brand-buyers to increase the price of clothes considering the new wages. In a meeting with BGMEA, brand representatives have been assured of increasing the price of garments. Apart from this, some other buyer companies have separately informed about the increase in wages.
Faruque Hasan further said, “You may have noticed that in the last few months I have written several letters separately from BGMEA to brands, retailers and their representatives informing them of the same update and also asking them to adjust the prices in line with the new wages.”
“It is quite encouraging that we have received formal letters from a few brands, where the brands have given assurances that they will adjust prices for their Bangladeshi suppliers in line with the new wages. Again, in the meeting with the buyer representatives at the BGMEA office on November 15, we got an assurance from all of them to cooperate with the factories in implementing the new wages.”
Faruque Hassan said that the increase in wages cannot be separated from future business plans. Rather be innovative and value addition should be increased. Future investment and expansion plans should be seriously evaluated.
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