How some factories helping workers out of price shocks

Lipi Akter, a junior operator in Attires Manufacturing Company Limited – a sister concern of Urmi Group, bought products worth Tk827 from the "fair price shop" inside their factory at Tejgaon, Dhaka in the first week of this Ramadan.

Her list included a 5-litre bottle of soybean oil. The current market price of the item is Tk795, but she could buy it for Tk720 from the fair price shop.

Besides soybean oil, almost all everyday essentials including sugar, salt, and pulses are sold at the shop – set up well ahead of this Ramadan – at prices below the market rates.

Like Lipi, around 14,000 workers in four factories of Urmi Group can now buy these commodities from fair price shops inside their factories at cheap rates and, that too, on credit. The factory authorities will deduct this money from their salary at the end of the month.

"This is the first time in my 13 years of working life that I have got such a facility. Commodity prices are rising in the market, but here I can buy them at cheaper rates and, also, have the opportunity to pay the prices later," Lipi told The Business Standard.

She expressed hope that this welfare initiative will continue permanently.

Urmi Group authorities told TBS that they previously had a fair price shop in one of their factories, Fakhruddin Textiles Limited, but they have now introduced this facility at five points, including four factories and the head office in Dhaka, with a view to giving some relief to their workers amid the current volatility in commodity market.

Shamarukh Fakhruddin, director of Urmi Group, said, "We are supplying products to workers at prices 10% to 20% less than the market prices. Workers can buy products from here with a certain amount of their wages, which will be deducted from their salary at the end of the month."

Speaking to a number of factory owners and leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), TBS has learned that several firms have set up shops to supply daily necessities to their workers at fair prices, while some have taken up initiatives to open new fair price shops or provide essentials free of cost to their workers.

Team Group is one such company. Abdullah Hil Rakib, managing director of Team Group, said, "Usually, we provide free food items to all workers before Eid vacations, but now we are planning to give each of them a bag of essential commodities during Ramadan."

"I hope we will be able to distribute the free food items by this week," he said, adding that generally, all their employees have the opportunity to buy a number of commodities from the factory's fair price shop at 7% to 20% cheaper rates compared to the market prices.

Snowtex Group is going to open a new fair price shop within the next couple of months, said SM Khaled, managing director of the company. The number of total workers in the four factories of this group is about 17,000.

Industry insiders said 30 apparel-manufacturing companies including DBL Group, Fakir Fashion, Mohammadi Group, Ananta Group, Epyllion Group, Cute Dress, Square Group, Meghna Group, Akij Group, SQ Celsius, and Northern Apparel have been providing daily necessities to their workers at fair prices. They have continued this activity even in the face of rising commodity prices.

MA Jabbar, managing director of DBL Group, told TBS that they are currently supplying 40 types of products, including daily necessities, to their employees. They are going to add some more items including electronics goods to the list, he said, adding that their workers are currently getting products at prices 15% to 20% less than the market prices.

The BGMEA, however, does not have specific information on how many factories have freshly started offering such benefits to their workers, the organisation's vice-president Shahidullah Azim told TBS.

But the BGMEA president said many factories are offering some benefits to their workers on their own arrangements, which they do not disclose. Many may be supporting their workers by providing Iftar items or in any other ways, he added.

He also urged all factory owners to come forward with initiatives like setting up fair price shops like that of Urmi Group or others if they are capable of doing so.

Apart from factory owners, buyers and brands also are coming forward with initiatives to provide some relief to the workers amid soaring commodity prices.

Recently, Belgian fashion brand Stanley Stella has reached out to Interstoff garment workers distributing a bag of essentials to each of 5,000 workers. The food basket package includes 10 kg of rice, 1 kg of lentil, 1 kg of chickpeas, and 1 litre of soyabean oil. The brand had previously implemented similar initiatives thrice before, as part of its corporate social responsibilities (CSR).

Outside of the garment sector, Pran-RFL Group has also been providing its own products (including rice, pulses, oil, and other daily necessities) to about 80,000 workers at subsidised rates, sources at the company told TBS.

Asked if supplying essentials to their workers at cheap rates puts extra cost burdens on the factory authorities, businesspeople involved in the implementation of such programmes said they do not incur any cost except for the extra manpower needed to manage them.

"We are getting a discount from the vendors from whom we are buying these products, and we are providing those products to our workers at discounted prices. Therefore, we do not need to bear additional subsidies for this," said Asif Ashraf, managing director of Urmi Group.

Md Towhidur Rahman, president of the Bangladesh Apparel Workers Federation, told TBS that other factory owners should also come forward with such initiatives. He, however, noted that implementing such initiatives concertedly by factories in a specific region would yield a better outcome than implementing it by individual companies.

Economists also see such initiatives by factory owners in a positive light.

Workers can purchase essentials at cheaper rates from fair price shops in their factories and it also saves their time, mentioned Economist Nazneen Ahmed, adding that more firms should take up such initiatives.

She also emphasised the need for introducing a ration card system for the next three to five years, not only for the workers in the RMG sector but also for workers and low wage earners in other sectors.

Workers leader Nazma Akter, president of the Sommilito Garments Sramik Federation, however, said providing workers with essential commodities at fair prices is not enough for workers in the current situation when the prices of almost all products have skyrocketed.

It has become difficult for workers to bear their family expenses with the salaries they currently get, she pointed out, asking for either forming a new wage board and increasing workers' wages or providing dearness allowances and introducing ration cards.

Garment industry owners also have been demanding the government to provide daily necessities to their workers by introducing ration cards.

On 15 March this year, the BGMEA urged the Trading Corporation of Bangladesh (TCB) to arrange 40 trucks to sell the subsidised goods in areas where most garment industries are located.

In this regard, BGMEA president Faruque Hassan also met with the TCB chairman and also sent a letter to the commerce ministry.

Faruque Hassan told TBS that when TCB trucks sell goods, workers stay in the factory. Therefore, in the interest of the workers, the sale time needs to be extended, he added.

But, BGMEA sources said no progress has yet been made in this respect.

People concerned said the prices of some products have gone up by more than 50% over the past two years.

According to the state-run TCB, prices of coarse pulses have risen by 41%, edible oil by 17%, sugar by 13%, and flour by 17% over the past 12 months.

Traders are blaming the rise in prices of some import-dependent products in the international market for this. However, many are blaming it on lax monitoring by the government agencies concerned and traders' syndicates for this.

According to Mapped in Bangladesh, the number of workers in the country's 3,805 export-oriented factories is a little over 28 lakh. But, entrepreneurs in the garment sector claim that the number of workers in the garment sector alone is over 40 lakh.