School of Business

Independent University, Bangladesh

“Analysis on the Impact of Covid- 19 into RMG/Textile/Spinning
Mills employment opportunity in Bangladesh.
Analysis on PARAMOUNT TEXTILES LTD.
Course- HRM 360
Section: 02
Semester: Summer 2020
Submitted to: Submitted by:

Dr. A.N.M. Shibly Noman Khan Quazi Ishmum Mahmud (1710849)

Associate Professor Mushfika Rahman Hridita (1831056)

Dept. of Human Resource & Management
School of business Itmam Chowdhury (1731405)

Date of Submission: 30th September, 2020

 Contents
Introduction................................................................................................................................ 3
Economic Impact of Covid 19 in Bangladesh......................................................................... 4
In depth analysis on the economic Challenges due to Covid 19........................................... 5
Impact of Covid 19 on the RMG Industry................................................................................. 6
Paramount textile limited.......................................................................................................... 7
Company’s vision...................................................................................................................... 7
Company’s mission................................................................................................................... 7
Organogram............................................................................................................................... 8
Paramount Textile at a glance.................................................................................................. 9
Production Capacity.................................................................................................................... 9
Impact of covid-19 on paramount textile limited......................................................................... 10
Impact of Coronavirus on Paramount Textiles........................................................................... 11
Impact on Growth Rate.............................................................................................................. 12
Health safety Measures taken by Paramount Textile during the Pandemic................................ 13
Impact of Govt. Stimulus Package on Employment Opportunity................................................ 14
Conclusion................................................................................................................................. 15
References................................................................................................................................ 16
http://www.eblsecurities.com/AM_Resources/AM_ResearchReports/EquityReport/Equity%20Valuation
%20Update%20Report%20on%20Paramount%20Textiles%20Ltd.%20(PTL).pdf.....................16
 Introduction
The economy of Bangladesh is fundamentally reliant on agriculture. Yet, it’s an incredible
news for the nation that, articles of clothing area (RMG) segment of Bangladesh has raised
as the greatest worker of unfamiliar money. This part makes about 4.2 million work
openings and contributes altogether to the GDP. Readymade pieces of clothing (RMG) of
Bangladesh is fueled by youthful, urbanizing, laborers, where the greater part of them are
ladies. In RMG part of Bangladesh, there are in excess of 5000 piece of clothing
processing plants (private measurements) at the current time, utilizing in excess of 12 need
works, where 85% of the work power is female. In any case, as per BGMEA the quantity of
piece of clothing production lines in Bangladesh around 4000. Presently, RMG industry is
the nation’s biggest fare worker with the estimation of over $24.49bn of fares in the last
money related year. It’s an incredible news for us that, Bangladesh is plainly ahead from
other South Asian providers regarding limit of the instant pieces of clothing industry.
There are different kinds of pieces of clothing are made in Bangladesh, yet all the instant pieces
of clothing are ordered into two general classifications, where one is woven items and another
is sewn items. Woven items incorporate Shirts, Pants and Trousers. Then again, the weaved
item incorporates T-Shirts, Polo Shirts, Undergarments, Socks, Stockings and Sweaters.
Woven pieces of clothing despite everything rule the fare profit of the nation. From BGMEA site
its seen that step by step weaved things creation is expanding in impressive rate and now about
40% fare income have accomplished from sewn items.
The nation's piece of clothing division relies immensely upon trade orders, which
have definitely diminished because of the rise of Coronavirus cases over the world.
 Economic Impact of Covid 19 in Bangladesh
Like in most countries, the sudden rise of COVID-19 pandemic is an exceptional
stun to the Bangladesh economy.
In mid-June, the IMF in a nation center report around Bangladesh said that the
financial effect of Covid-19 has most remarkably been felt in three primary regions:
a fall in remittances
a decrease in RMG export;
a drop in domestic economic activities.
The government has already declared a Tk5,000 crore incentive package to mitigate
the losses in the RMG sector. However, prolonged outbreak prolongs made it difficult
for the government to handle the situation and the result is catastrophic as more than
85 per cent of the country's export earnings come through the RMG sector. Garment
exports fell 18.12 percent year-on-year to USD 27.94 billion in FY2019-20. General
fares likewise fell 25.99 percent shy of its yearly objective of USD 45.50 billion.
A Decline in Capital Inflow: the decrease in capital inflows for 2020-21: FDI
will ease back slowly and the capacity to actualize foundation activities of the
administration will decrease. Private area obtaining from abroad will decrease
Significant investments by driving private area groups declined Capital products and
development materials imports were declining during 2019-20 preceding the full power of the
pandemic hit; so private speculation fell strongly in 2019-20. It won't recover in 2020-21.
Labor Employment hit hard: When Covid-19 hit Bangladesh the greater part of the
laborers in the little foundations lost their positions or found that the endeavor where they
worked experienced issues working. Critical to the recuperation of the economy is what
number of these organizations survived during the pandemic. These organizations are
generally too little to even think about coming under the SME programs; they once in a
while have associations with banks. It'll set aside significantly more effort for these requests
to develop and make the interest to take these laborers back to work. This is another
reason behind why the economy got hit seriously because of this pandemic.

Drop in Remittances & Foreign exchange: Remittance from Bangladeshi workers

represented $15.5 billion to the national economy in 2018. Presently nations in Europe and
the Middle-East are themselves confronting monetary losses causing huge layoffs of
migrant laborer. The greater part of them are presently getting back to Bangladesh and on
return heading towards their nation homes intensifying the health crisis. Bangladesh has a
more noteworthy dependence on trading comparative with different nations the district,
making the nation more visible to changes in the worldwide economic condition
because of the current pandemic. The effect on the Bangladesh economy
because of the fall in trade profit from RMG and different fares and furthermore
fall in remittances is probably going to be extremely huge. Critically, unfamiliar
trade income of the nation is expected to drop by around 25 percent which in
money related terms is assessed at more than $4 billion.

In depth analysis on the economic Challenges due to

Covid 19
Monetary improvement worth BDT 1,029.6bn and different non-financial boost
has been reported to handle the monetary aftermath of the Covid pandemic.
However, effective usage of the financial boost will be a key test.

The Banking division was battling before the COVID-19 circumstance from soaring
Non-Performing loans, declining edges in a topped financing cost system,
weakening in different effectiveness markers, government coordinated rebuilding of
credits, declining interest for loanable assets, and so on. Presently, the pandemic
has placed the segment into further pressure. The funds from the stimulus bundle
will be circulated through the financial channel; while both credit and assortment
danger will lie with the banks. The area being overburdened with nonperforming
resources need to relieve credit hazard before dispensing any new guides.

The income stream of the insurance business is suffering seriously due to

COVID-19 pandemic. Due to COVID-19 fire and marine protection are relied
upon to endure the greatest shot. These two segments comprise of around
77% of non-life coverage organizations all out premium pay.

The Covid-19 pandemic has totally crashed the textile business from its
development direction. From Mar 2020 to May 2020, During this time, 1,150
processing plants detailed request undoing/suspension of USD 3.18bn which
affected around 2.28mn laborers in the business.
The past structural shortcomings combined with pandemic stun has driven the textile
business into a corner and has made a "sink or swim" circumstance. The
administration boost gives the business admittance to modest financing which isn't
sufficient to address the interest and flexibly chain disturbances as time goes on.

The drug business is among the least influenced by the pandemic disturbance however the
business' gracefully chain has been extended hazardously. The business imports over 97%
of its raw materials; however, exchange with bringing in nations has been seriously
 limited since the beginning of the pandemic. On the off chance that this
perseveres, drug makers may need to move to costly import objections
which will eat into their overall revenues.

Concrete and Steel makers in Bangladesh made forceful development in the course
of recent years with the point of providing to the administration for its megaprojects,
satisfying the rising customer need and sending out to neighboring nations.
Presently, with the coming of the Covid-19 pandemic all exercises in the
development business has stopped with the possibility a delayed interest, broken
money cycle from high credit deals and high obligation trouble industry players are
probably going to think that it’s difficult to make do without government help.

The post-COVID-19 world won't be the equivalent once more. The new ordinary may
concoct a changed way of life, buying conduct and method of working together through
new interfaces. The post-pandemic arrangements of remarkable issues that we are
looking through this pandemic may establish the framework for some business thoughts
and can shape the fate of our internet business industry in the coming years. As of right
now there are 4 ways to accelerate the economic downturn in Bangladesh. They are
Transferring cash to the general mass.
Financial sectors rising from the pandemic.
Promotion of the Export Industry.

Impact of Covid 19 on the RMG Industry

To flatten the Covid spread curve, the GOVT. declared nationwide lockdown up to 25 April
2020 and business and modern exercises have gone to a crushing stop aside from crisis
administrations. Numerous global purchasers are dropping or delaying affirmed
acquirement orders as their retail outlets are generously shut. As per Bangladesh Garment
Producers and Exporters Association (BGMEA), worldwide purchasers have either dropped
or on the other hand suspended $3.16 billion worth of shipments including 1,142 industrial
facilities influencing 2.26 million laborers starting at 18 April 2020.7 Millions of laborers
gaze at joblessness as new requests evaporated given the breakdown in worldwide
interest for clothes. Allegedly, 1 million workers have just been terminated or furloughed.8
According to an overview directed by the BRAC University, 47% RMG laborers detailed not
getting their wages and felt dubious about their present place of employment status with
their individual managers. 9 Defying government lockdown, a great many RMG laborers
have exhibited in the city all through the nation requesting arrear compensation.
With a month to month the lowest pay permitted by law of Tk 8,000 ($95)– one of most reduced
wages in the worldwide articles of garments supply chain–the part requires $470 million, at any
rate, to pay compensation consistently to the laborers. The BGMEA President has
engaged the global purchasers to take conveyance of the merchandise previously
delivered and pay only the wages for the merchandise under creation. The laborers
need critical money uphold for means vocation and the business requires medium-term
liquidity uphold for resulting recovery.

Paramount textile limited

Paramount group of organizations which was built up in 1986 has been constantly
praised for their demonstrable skill, set of accepted rules and quality items. the possibility
of the material was grasped in 2004 and its initiation was conceivable in 2006.
The journey began from the year 2006 and inside 2 years, business creation was going all out.
presently, paramount textile has delivered and traded in excess of billion yards of fabrics
everywhere on the world .additionally, limit has developed quickly from that point forward and
fundamental material has now risen as one of the main textures producers in Bangladesh with
the assistance of most recent sorts of machinery and equipment's, effective workforce and over
30 years of broad experience .simply a year ago paramount textile sent out nearly USD 67
million worth of product around the world. It has been reviewed as an ecotax standard 100 fare
arranged Bangladesh producer. Paramount makes an expanded scope of yarn, strong colored
and printed woven textures. just in these 11 years has gotten one of the main organizations of
Bangladesh of which the global customer base can depend upon. as acknowledgment of
execution, central material has been granted the public fare prize for quite a long while since its
commencement and for guaranteeing administration inside the organization.

Company’s vision
To turn into the main and most confided in yarn, strong colored and printed textures producer
accomplishing economic improvement through serious evaluating, advancing groundbreaking
thoughts and plans and giving on time conveyance through proficient way.

Company’s mission
Paramount Material is focused on flawlessness in item quality, setting up best in
class innovation, zeroing in on cost viability through capable workforce for holding
workforce for holding clients’ fulfillment and guaranteeing eco-accommodating
condition to accomplish industry strength.
 Organogram

chairman
deputy managing director

executive director executive director (finance and

(operation) accounts)
G.M DGM(A/F)

manager (admin/hr) manager (compliance) manager (purchase)

executive executive executive

jr. officier jr. executive jr. executive

officer-1 officer-1 officer-1

peon peon peon

 Paramount Textile at a glance

Production Capacity

https://www.paramounttextilebd.com/what-we-do/
Particular Year: 2018-19
Employees 4,014
Net Profit (Increased) 411.55 Million
Revenue 411.95 Million
Net Profit Ratio 7.25
Production (Increased) 34.96M (Yards)
Sales Volume (Increased) 35.27 Million
Sales Revenue (Increased) 5673.85 Million
Earnings Per share (Increased) 3.04 TK
Machineries Chart
YARN DYENING MACHINERIES
Preparatory & Weaving Machineries
Machine Unit Machine Unit
Soft winding 2376 spindles Sectional Warping 5 sets
Testing Lab
Dyeing Vessels 59 sets Direct Warping 1 sets
Machine
Hydro-Extractor 6 sets Sizing 2 sets
Tensile Strength & Yarn Tensile Strength
RF Dryer 3 sets Air-Jet Loom 272+ sets
Elma Tear
Hard Winding 3132 spindles Sample Warping 2 sets
Washing
Doubling 1 set Warping for Desk Loom 2 sets
Color Fastness to Wash & Light
Twisting 4 set Single Yarn Sizing 1 sets
Abrasion Tester & Pilling Tester Desk Loom 4 sets
Lab Padder & Lab Dryer 1 set
Spectrometer (650) 1 set

Impact of covid-19 on paramount textile limited

Paramount is one of the best organization quickly extending public and global trade.
fundamental material creates and conveys top notch woven textures.
The ongoing life -threating coronavirus has already caused massive losses of life and economic
damage throughout the globe, and Bangladesh has no exception with over 112306 confirmed
cases and over 1600 deaths. Coronavirus has brought unprecedented disaster of
Bangladesh’s readymade garment industry. this blow comes as the garment’s
exporters are waiting nervously for their immediate future in the face of mounting order
cancellations and unethical behavior by the brands and retailers in terms of holding
payments, demanding unreasonable discount and the poor purchasing practices.
The new corona -virus is potentially disastrous for paramount textile. Factory owners
face financial ruin while the livelihood of hundreds of thousands of garments workers
hang in the balance. The company has already faced losses and now many buyers
are canceling orders that had been produced, delaying payments and asking for
discount because of covid-19. The company faces pressure from the international
buyers who have warned that if the company can’t meet their demand, they would
move others factories. As a result, Paramount’s growth has been disrupted.
The company’s net profit after tax was taka 41 core in fiscal year 2018-2019 up from taka 27 crore a
year earlier, according to the company’s financial statement. A listed company paramount textile
gave 7 percent cash and 9 percent stock dividend to its shareholders last year.

Workers get wages and salaries even before the end of the month – a rare case in
Bangladesh’s garments and textile companies but due to coronavirus many orders
have been cancelled. As a result, workers aren’t getting their payments in due time.
This lead to an unrest amongst the workers.
To reduce & control cost Paramount Textiles have laid off some of their
employees in this pandemic
Set up five acres of land, it manufactures a range of yarn and solid dyed woven fabrics. The
plant has to run over the clock and there is no chance to switch off the plant.so the company
ran it during the holidays on a limited scale. Financial ratio has decreased because of covid-19.
This pandemic creates a huge loss for the company as sales are going also down rapidly.

Impact of Coronavirus on Paramount Textiles

(Graphical Representation)
Impact on Employment
 Employees
2020(August)
4,050 4,014
4,000
3,950
3,900
3,850
3,800
3,750 3714
3,700
3,650
3,600
3,550 1

2018-19 2020(August)

Since many buyers cancelled their orders Due to this pandemic Paramount textile are
having a hard time paying off their employees. As a result, they decided to laid off
their employees to control & reduce their cost. Presently, we can see the number of
employees decreased as shown in the chart. (HYPOTHETICAL ANALYSIS)
Impact on Production Capacity

Production Capacity
Figures are in Million (YARDS)
35.5
35 34.96
34.5
34
33.5
33
32.5
32.37
32
31.5

31 2020 (August)
2018-19

Due to employment laying off, lockdown & order cancellation their production capacity
has dropped from 34.96M (YARDS) to 32.37M (Yards). (HYPOTHETICAL ANALYSIS)

Impact on Growth Rate

2018-19 2019-20
GROWTH
Sales 40% 3.80%
Gross Profit 37.40% 3.80%
Operating Profit 30.30% 3.80%
Net Profit 110.80 87.20%
%

Growth Rate
2018-19 & 2019-20
120% 110.80%

100% 87.20%

80%
60%

40% 40.00% 37.40% 30.30%

20% 3.80% 3.80% 3.80%

0%
Sales Gross Profit Operating Profit Net Profit

2018-19 2019-20

As we can see from the chart their growth rate has been hit hard due to this pandemic.
They had a very stable growth rate during the period of 2018-19 but since the pandemic
started the buyers started cancelling orders and Paramount Textiles had to pay the price
for it. They lost a great amount of profit due to cancelling orders & sudden lockdown.

For all of these reason we can see every aspect of their growth rate has been decreased.
Health safety Measures taken by Paramount Textile during the Pandemic
Laborers of Paramount Textile in Gazipur experience severe health safety procedures before
they enter the plant and they need to keep up it when inside. Because of the improved
wellbeing measures, the organization set a model for others in the midst of charges that plants
are being returned defying government-fixed cleanliness prerequisites. The steps they have
taken for health & safety measures for the pandemic are given below:
When laborers enter Paramount Textile's plant in Sreepur, Gazipur, they would
need to experience a temperature testing methodology utilizing a thermal
scanner, wash hands appropriately and clean their shoes.

Numerous workers who left Gazipur on March 26 after the GOVT. announced a
countrywide general holiday, needed to remain in 14 days’ isolation after he came
back to the industrial facility. The facilities were too given by the production line
owners. Workers got masks, 3 pieces of soap and hand sanitizers from the factory
to keep themselves safe and clean from the Coronavirus

Six doctors used to go to the workers/employees even before the corona virus hit
the shores of Bangladesh and the medical facilities have been improved currently
to guarantee extra care. Doctors gave advice about hygiene, how to ensure
social distancing in work and improving immunity to be safe from this virus. Free
medical check-up to worker family members & provided free medicines.

Factory has set up a total plan of Covid 19 testing packs, medical offices and
gear and clinical support containing oxygen.

The plant has set up 40 makeshift basins and set up huge water holders after
the Covid circumstance declined across the nation.

Paramount Textile didn't stop there. It acquires vegetables from Kurigram, which
is in any event 300km away from the plant and sells them among the laborers at
a value a lot of lower than the rates in the kitchen markets in the area. "We are
getting vegetables just at half costs than the neighborhood market," said Haque,
who hails from Rajshahi. Rice is sold at Tk 30 to Tk 40 a kilogram relying upon
the variety. Different basics are additionally accessible inside the plant and
laborers can get them inexpensively. The essentials are being sold at subsidized
rates since the first Covid cases were accounted for in Bangladesh on March 8.
 Impact of Govt. Stimulus Package on Employment
Opportunity
The Covid-19 pandemic has constrained the monetary exercises of the world to come at an
end. To spare the world from a staggering downturn, various nations are declaring stimulus
bundles for different segments. As of April 15th, the Government of Bangladesh has
presented stimulus bundles of a sum of BDT 1,000 billion which is 3.3% of the total GDP.
Package Number Amount (In BDT Beneficiary Fund Sourcing Cost of fund
crores)
1 30,000 Industries & As loans from 4.5% by the
administration commercial banks beneficiary and
segments as 4.5% by the govt.
working capital as sponsorship
loans.
2 20,000 Cottage, micro, As loans from 4% by the
little and medium commercial banks beneficiary and
ventures as 5% by the govt. as
working capital sponsorship
loans.
3 12,750 To encourage Bangladesh Bank 2%
crude material Export
imports under Development
consecutive LCs Fund
4 5,000 Pre-Shipment Bangladesh Bank 7&
Credit Refinance
Scheme for local
items close by the
export area
In Bangladesh, the Prime Minister declared a TK 50.0 billion boost bundle for send out
export businesses. This cash is designed to utilized distinctly for giving compensations
and remittances of laborers and workers of those ventures. This stimulus bundle relies
upon the utilization of appropriate financing alternatives, appropriate administration so
parts who are influenced will get the help. There's also appropriate checking and
responsibility to guarantee that the cash is spent on the laborers.
However, the administration must uphold joblessness protection for most people. They should
discover approaches to work with business people and ventures to ensure the activity of powerless
and unprotected specialists. Setting or extending frameworks to select laborers into joblessness
protection plans with changing degrees of commitments. Joblessness will make a sudden income
stun. Tragically, private protection for joblessness is uncommon in dread of the adverse choice
issue. Consumption decrease emerging out of joblessness diminishes the government assistance
of the person as well as lessens the total interest of the economy. In this
manner, the govt. could give short term pay uphold for a large scope to make sure
the jobseekers through joblessness protection that may fill in as open protection.

Conclusion
(RMG) segment of Bangladesh has raised as the greatest worker of unfamiliar money.
This part makes about 4.2 million work openings and contributes altogether to the GDP.
This segment got hit hard by the Pandemic. In May 2019 the fare income from the clothing
division were $2.81 billion, which is $1.07 billion in 2020. Likewise, RMG trade receipts over
85% tumble to $374.67 million in April 2020 from $2.53 billion in April 2019, as indicated by the
Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The fare declined by 30.19% in March 2020 when Covid was first identified in the nation to
$1.97 billion from $2.82 billion in the exact month of a year ago.
Company’s like Paramount textile is really having a tough time coping with this situation. The govt. had
reported an improvement salvage bundle worth $588 million for the RMG plants, which is expected to
enable the industrial facilities to cover the wages and recompenses of roughly 4.1 million laborers.

If implemented perfectly this stimulus package will be able to compensate the losses of RMG
sector and help to run effectively & efficiently during the Post COVID climate.
 References

http://www.eblsecurities.com/AM_Resources/AM_ResearchReports/EquityReport/Equity%20Valuation
%20Update%20Report%20on%20Paramount%20Textiles%20Ltd.%20(PTL).pdf

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https://tbsnews.net/thoughts/covid-19-govt-stimulus-rmg-exporters-enough-81184