Several Bangladeshi apparel maker have claimed to being scammed by United States-based VF-Kontoor (Kontoor Brands), an official jeans-wear spin-off of apparel giant VF Corporation.
Bangladesh is the world's second-largest ready-made garments (RMG) exporter behind China.
However, the apparel manufacturers in Bangladesh claim that VF-Kontoor has scammed 11 factories, rendering one of the owners bankrupt.
According to NASSA Group, one of the largest RMG conglomerates, the US-based apparel company owes them nearly $1 million for products shipped from two of their divisions — NASSA Apparels and MNC Apparels.
In addition to NASSA, they reportedly returned products of Envoy, Simtex, DMC, Tarashima, Cotton Clun, Kenpark, Medlar and Fountain.
Apparels worth $2.6 million shipped in December is now on the way to Bangladesh. The rules dictate that the payments are to be cleared within 120 days, but VF-Kontoor reportedly didn’t clear the payments.
According to the garments owners, the shipment was scheduled to reach the US on Jan 6. However, an emergency was announced at the ship carrying the products due to a fire when it reached the eastern coast of Canada.
Manufacturers said that they sent the products in the ship selected by VF-Kontoor who was supposed to bear the expenses as per the contract but the products were being returned even though everyone concerned was informed of the delay.
“VF-Kantoor has cheated us. We shipped the order in keeping with all the rules,” NASSA Group Chairman Nazrul Islam Mazumder told Bangla Tribune.
“Even though we suffered losses due to the fire on the ship, we agreed to all their conditions but they are sending the products back,” he added.
Exporters Association of Bangladesh (EAB) Senior Vice President Mohammad Hatem told Bangla Tribune, “Amongst all the markets that we do business with, the US is the worst.”
He claimed that US buyers are known to create unnecessary issues and dilly-dally with the payments as well.
“They’re getting the products on time but are not paying the money in line with the conditions of the orders,” he said.
Hatem claimed that there have been instances where buyers received the shipment but didn’t make any payments at all. “They are able to do this as they join hands with the shipping lines. There are times when they leave the product at the port and avail discounts.”
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) chief Rubana Huq says that return of export products is not a good sign.
“This sector is already plagued with various issues. Amidst all this the buyer is sending back products of 11 factories in violation of the contract,” she said.
She added that they were looking into the matter and giving it utmost importance.
The RMG sector has contributed greatly to the development of the South Asian country accounting for nearly 80 percent of the export earning and 20 percent of the gross domestic product (GDP).