In the backdrop of the coronavirus epidemic in China, manufacturers and exporters in Bangladesh are having difficulty in finding alternative places to source their raw material, chemicals and machinery.
The spread of coronavirus in China since January has forced businesses to look for other countries from where to import raw material, but they realised that it is not an easy task.
Price is also a factor when it comes to finding alternative import sources, industry insiders said.
"We are already sourcing some raw material from new markets as we have some deliveries next month. However, finding a new source is not easy," said Abdullah Al Maher, chief executive officer and head of business of Fakir Fashion Ltd.
He also expressed concern that sourcing from other destinations might compromise product quality.
"Because you have to meet demand at the end of the day," Maher said.
Siddiqur Rahman, former president of the Bangladesh Garment Manufacturers and Exporters Association, told The Business Standard that it is not easy to shift sourcing countries at short notice, but manufacturers are trying.
He said China is a big hub of quality raw material that can be bought at competitive prices.
"If we source from other countries like Pakistan and India, it may put pressure on our competitiveness," Siddiqur explained.
"Sourcing chemicals from others countries instead of China will increase costs by 30 to 40 percent," said FM Rafiqul Islam, director (technical operation) of Dhaka Hides and Skins, one of the largest tanneries at the Savar tannery estate.
The ceramics sector is fully dependent on China for raw material and chemicals, said MA Jabbar, managing director of DBL Group.
"If we want to import from other sources, those will be European counties and that will not be a cost-effective solution," he said.
He also mentioned that about 20 percent of the apparel raw material for his company comes from China.
"We have already placed some orders to buy raw material from other countries to cut our dependency on China, but we have to pay more for that," added Jabbar.
Mohammad Hatem, managing director of MB Knit Fashion Ltd, said India is an alternative source for the apparel sector, but the country itself is also dependent on China for core chemicals.
"Indians are now demanding higher prices for raw material," he added.
Moreover, the mobile phone and electronics industries are fully dependent on China for raw material, chemicals and technology.
But it is not cost-effective to source those items from countries other than China, industry insiders said.
Uday Hakim, executive director of the Walton Group, said his company imports raw material from several countries, including India, South Korea, Japan and Germany, in addition to China.
"We can do it because we are a big company. Also, we already have enough stock of raw material," he added.