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Bangladesh fears for garment industry

Monday, July 04, 2016 - 01:42

Japan's Fast Retailing Co, owner of Uniqlo, will suspend all but critical travel to Banglasdesh. As Hayley Platt reports, other companies are also wondering whether to pull out of the country where security concerns have escalated after an attack in the capital Dhaka.

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A restaurant was the target - but the fallout from an attack in Dhaka is spreading to Bangladesh's vital garment industry. Seven of the 20 victims were Japanese, prompting Japan's Fast Retailing Co - the owner of Uniqlo - to suspend non critical travel to the country. Bangladesh is Uniqlo's largest production hub outside of China. And scores of other Japanese firms operate there. (SOUNDBITE) (Japanese) CHAIRMAN OF JAPAN ASSOCIATION OF CORPORATE EXECUTIVES, YOSHIMITSU KOBAYASHI, SAYING: "We may have to halt all business travel to Bangladesh but we would also be afraid of sending our employees to Europe, which is more dangerous than Israel these days." Bangladesh is one of the world's poorest countries and relies on garments for around 80 percent of its exports. The garment industry is worth $26 billion and employs 4 million people. Some fear the attack could lead retailers, including Gap and Marks and Spencers, to rethink their investment, although relocating won't be easy. (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "If retailers do migrate away from Bangladesh there is a cost to doing that. Ultimately I think the best course of action at the moment is to wait and see whether or not the Bangladeshi government actually suddenly start to realise what a significant problem they have on their hands and to take actions to address it." The world's second largest fashion retailer H & M has no plans to change its sourcing but says it is "following developments closely." Home-grown militants are thought to be the behind the attact - the latest in a wave of killings against minority groups in the last 18 months. Other low-wage countries like Vietnam, Cambodia and Myanmar may be considered safer locations.

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Bangladesh fears for garment industry

Monday, July 04, 2016 - 01:42