Image: Denim Expert Limited. Taken during an awareness programme about the virus and measures that can be taken to prevent its spread, arranged by the factory for all members of the Denim Expert Limited family.
As fashion retailers feel the consequences of the Covid-19 pandemic, many buyers have cancelled orders from their suppliers in Bangladesh. But what are the knock-on effects for garment workers and factory owners? Sustainable fashion journalist Sophie Benson speaks to Mostafiz Uddin, the founder of ethical-focused factory Denim Expert Ltd, to better understand how his industry is coping amid the current crisis.
Mostafiz Uddin founded Denim Expert Ltd in 2009 to further his dream of pushing the Bangladesh Ready Made Garment industry forward into a fairer, safer, more sustainable future. With a fully-integrated production line and building safety standards that far surpass the local benchmark, Uddin is dedicated to pioneering in his sector; the first contributor from Bangladesh to the Zero Discharge of Hazardous Chemicals Foundation and the first denim manufacturer in the country to join the UNFCCC for Climate Action.
But now, Uddin’s future is uncertain as the brands he supplies cancel orders and refuse to pay for products which have already been manufactured, tightening their belts in light of the Coronavirus outbreak.
To place an order, a brand’s buyers give a Letter of Credit (LC) to a manufacturer, and against this order, a factory buys and imports fabrics and raw materials out of their own budget. Once the goods have been made, they’re shipped, and the brand releases the money to the manufacturer upon receipt. But brands are now pulling the brakes on this last crucial step in the chain, leaving manufacturers in Bangladesh such as Uddin out of pocket and in a precarious financial position.
“Against the backdrop of Covid-19, brands and retailers are postponing the delivery of completed garments,” says Uddin. “Brands and retailers are telling manufacturers not to cut fabrics and process other materials which [we’ve] already imported for current orders, and some brands and retailers are delaying the release of their payments for goods which have already been shipped.”