What the Bangladesh Protests Mean for the Apparel Supply Chain

The protests in Bangladesh over the quota system for government jobs have grown to historic sizes. Prime Minister Sheikh Hasina has fled to India, the AP estimates that 11,000 people have been arrested, and more than 200 people have died as protestors and police clashed, and authorities implemented a “shoot-on-site” curfew. This past Sunday alone, CNN reported that at least 91 people were killed during the protests, including 13 police officers. It was the highest single-day death toll from any protest in the country’s recent history, per CNN.

As the political unrest spreads from the capital of Dhaka and into areas such as Barisal, Rajshahi and Chittagong, there is the question over how the protests and subsequent crackdowns could hinder global supply chains, especially in the apparel sector, where Bangladesh has emerged as an alternative to other Asian countries such as China.

On the retail side, companies like H&M, Zara and VF Corp. (parent company of brands like Vans, Supreme, The North Face and more) have manufacturing facilities in Bangladesh. One anonymous source cited by the Financial Times as a “global industry executive” said that the protests would likely put a strain on the manufacturing sector, resulting in delays at best, or harsh conditions for workers in the factories at worst.

“It will either mean late delivery for brands or dramatic overtime in the next week or two, which given the poor unionization of workers, who knows what’s going to be forced upon them?” the source told the Financial Times.

It could be enough for companies to consider shifting their manufacturing elsewhere.

Within the promotional products industry, apparel suppliers like alphabroder, SanMar and Gildan have all worked with at least one factory in Bangladesh within the last year.

Just in April of this year, Gildan announced that it would move some of the manufacturing of its basic apparel pieces from Honduras to Bangladesh.

Genevieve Gosselin, director of global communications and corporate marketing for Gildan, says that the company is committed to its expansion to Bangladesh to further its sales growth and expand its supply chain across the globe. Its facilities in Bangladesh include two textile facilities and “related sewing operations.” So far, the first textile and sewing complex is “substantially completed,” and the company will continue a “progressive ramp-up of operations” through the rest of 2024.

And, in the meantime, while some operations are placed on hold, Gosselin says that Gildan’s plans in Bangladesh haven’t changed.

“As the situation unfolds in Bangladesh, our priority is to continue to ensure that our employees are safe,” Gosselin tells Print & Promo Marketing. “Our operations have been closed to ensure our employees’ safety and respect the three-day government-imposed curfew and declared general holiday. We expect the situation will stabilize over the upcoming days, which would allow us to resume our operations. Gildan has significant experience navigating various geopolitical conditions globally, and the current situation in Bangladesh does not affect Gildan’s expansion plans.”

However, the Financial Times’ industry source believes that even if the unrest settles down, some level of damage is done, so to speak, and that some  companies doing business in Bangladesh could lose confidence in the country as a reliable hub.

However, the Financial Times’ industry source believes that even if the unrest settles down, the damage is done, so to speak, and that companies doing business in Bangladesh could lose confidence in the country as a reliable hub.

“People looking for stability will be looking for more stable states,” the source said. “If there was an order that couldn’t be placed last week, it would have been placed in India or Vietnam … once an order goes, it’s going to be very difficult to get it back.”

The other issue is that apparel suppliers don’t know how long it could be until things level out, and can’t sit idly by while demand for their products continues to come in.

“Manufacturers can’t control how long the situation would last before it gets under control,” Felix Chung, honorary chair of the Hong Kong apparel Society, told FT. “If the situation drags on, buyers may cancel orders.”

As the protests continue and the curfew remains intact, Bangladesh’s economy will take a hit as well, with the Bangladesh Garment Manufacturers and Exporters Association estimating that the industry would take a $150 million hit per day of the curfew.

Right now, Bangladesh exports about $21.65 billion worth of apparel to the European Union, $7.45 billion to the U.S., $5.16 billion to the U.K., $1.39 billion to Canada, and $1.48 billion to Japan, per Reuters. Aside from the U.S. and Canada, those numbers are all increases over the July-May financial year 2022-23.

While Bangladesh was previously seen as one of the most promising countries for apparel sourcing, especially as the international market moves away from Chinese cotton produced in the Xinjiang region, this political unrest could be enough to do major damage to the country’s apparel export business, its own economy, and the global apparel supply chain.