Swedish fashion retailer Hennes & Mauritz AB (HM-B.SK), the world’s second-largest clothing retailer wants to source more products from the country to take advantage of cheap labour… “We want to grow more in Bangladesh… a stable market will benefit buyers, suppliers and workers, but it is the often-recurring strikes and demonstrations for the last few weeks that have disrupted production and caused delays,” said Helena Helmersson, H&M’s head of sustainability.
The situation is highly fragmented since apparel workers have no real collective force though to say there are about 56 garment and textile workers’ unions. We have been holding talks with Government representatives, added Helmersson. She added that H&M wants suppliers to setup democratic labour committees that can negotiate wages and working conditions with factory owners and a program would be rolled out this year.
“We are big buyers in Bangladesh and we want to take greater responsibility for working conditions there,” Chief Executive Karl-Johan Persson said. In 2011, H&M was a major buyer of readymade garments in Bangladesh.
About 25% of H&M’s products are made in Bangladesh and the company aims to increase this figure, but it isn’t the only big retailer looking to expand there. The industry already accounts for about 80% of Bangladesh’s exports and employs about 3 million people, and research company McKinsey expects apparel exports to double by 2015 and triple in 10 years, as big buyers move from China as capacity constraints and wage inflation erode profit margins.