Owners shut all knitting factories demanding increase in production rates

The Bangladesh Knitting Owners' Association (BKOA) has announced an indefinite closure of all knitting factories across the country from tomorrow (15 July) in demand for an increase in production rates.

The leaders of the association announced the decision in a statement issued today (14 July).

Selim Sarwar, president of Bangladesh Knitting Owners' Association, confirmed The Business Standard about the decision. 

According to the statement, a 40% increase in the dollar's value over the past four years has led to soaring costs for imported raw materials like needles, sinkers, and needle oil. Coupled with rising labour costs, transportation expenses, factory rents, and electricity prices, the knitting industry is facing significant losses.

Therefore, all knitting and collar factories across the country will be indefinitely closed until a new production rate is implemented, added the statement.

To overcome the crisis, the association proposes increase in prices of manufacturing per kg single jersey fabric from existing Tk15-Tk17 to Tk20-Tk22, per kg rib from Tk18-Tk20 to Tk25-Tk27, and per kg plain interlock from Tk20-Tk22 to Tk30-Tk32.

BKOA President Salim Sarwar has expressed concerns over the rising costs of production due to the depreciation of the taka against the US dollar.

"The dollar rate has surged from Tk84 to Tk118 in the past four years, significantly increasing the cost of imported raw materials. This, coupled with other rising expenses, has forced knitting factories to demand a wage increase to sustain operations.

Sarwar emphasised that the proposed wage increase is directly linked to the 40% increase in dollar value and not influenced by other factors like worker wages, electricity, or rent.

"A modest Tk5 increase per piece of product is deemed necessary to prevent factory closures," he said.

He claimed that 30% of the knitting factories under the organisation were already closed. 

He also criticised the garment owners' negotiation tactics on their demand, stating that it creates uncertainty and hinders the industry's stability.

"It is not possible to benefit garment owners by selling our properties. We seek a reasonable adjustment in wages,"

According to Bangladesh Knitting Owners Association, with over 1,500 registered knit factories and an additional 800 unregistered ones, the industry is facing severe challenges. In the past year and a half, Narayanganj's BSCIC Industrial Estate alone has witnessed the permanent closure of more than 10 knit factories. The association estimates that 85% of Bscic knit traders are operating at a loss.

Meanwhile, talking to TBS, BKMEA Executive President Mohammad Hatem said the knitting owners association has shared a price list with BKMEA to revise their service prices. 

However, the owners called the strike without any further consultation with the BKMEA.

The BKOA supports about 50% of the BKMEA knitwear export by knitting their fabrics, he said.

"They are facing challenges due to electricity price hike and workers wage hike after RMG new wage board," 

The BKOA has about 450 active member factories, of them 300 are based in Narayanganj, added Hatem, who also was the BKOA Election Board chairman.