Group Assignment

Course – HRM360
Section - 02
Course Instructor – DR. A.N.M. Shibly Noman Khan
Associate Professor, Human Resource Management (Head of the Department),
School of Business Studies and Entrepreneurship,
Independent University, Bangladesh (IUB)

Submission Date – May 8, 2021

 Group Members:

1. Shak Mohammad Rakibul Hasan – 1630563

2. Onanna Mahbub – 1830982

3. Shanjana Islam – 1830601

 Letter of transmittal
Date: 8th May, 2020
Dr. A. N. M. Shibly Noman Khan
Associate Professor,
Independent University, Bangladesh (IUB)
Bashundhara R/A, Dhaka- 1229.

Subject: Impact of Covid-19 into Akij Textile Mills Ltd. in Bangladesh

Dear Sir,
With due respect, it is our pleasure and honor to be your students and have this opportunity to
present the report. While preparing the report, we have given our best effort. We have provided
all relevant information regarding this report and we believe and hope that our plan will provide
a clear conception about our findings.

We all gave our best to accumulate required information and we will be more than happy to
answer any question and clarify it fully to your understanding. Thank you for all your help and
support which helped us significantly in preparing the report.

Regards,
Shanjana Islam
 Acknowledgement
We would like to show our gratitude Independent University, Bangladesh, for giving us a solid
guideline for the assignment throughout numerous consultations. We would also like to expand
our deepest gratitude to all those who have directly and indirectly guided us in preparing this
assignment. Many people especially our team members themselves; have made valuable
comments and suggestions on this topic which gave us an inspiration to improve our assignment
by a large margin. We would like to give special thanks to our honorable faculty, “Dr. A. N. M.
Shibly Noman Khan” sir for your supervision while selecting, analyzing, and formulating the
report. Without your inspiration, this assignment would have been an incomplete one. We once
again thank all the people who tried to help us to complete this assignment.
Table of Contents:
Company Description......................................................................................................................5

Introduction:....................................................................................................................................5

Economic Condition of Covid-19:...............................................................................................6-7

Impact of Covid-19 into RMG Sector:.........................................................................................7-8

Impact of Covid-19 in Akij Textile Mills Ltd:................................................................................8

A. Production Capacity:.......................................................................................................9-11

Financial Statement of Akij Textile Mills for the Year Ended 2019 & 2020:.......................11

B. Progression of Akij Textile Mills Ltd:..........................................................................11-12

C. Wage Rate Decrease & Production Loss:.....................................................................12-13

D. Impact of Govt Stimulates Package on Employment Opportunity:..............................13-14

Conclusion:....................................................................................................................................15

References:....................................................................................................................................16
 Company Description

Akij Textile Mills Ltd. is a sister concern of Akij Group, which has preserved it's heritage &
culture for more than 60 years with diversified products and is always in continuous pursuit of
development and progress of Bangladesh by rendering top quality products & services. With
more than 15 years of experience in Spinning, gradually the group came up with innovative ideas
and moved to the upstream process of Yarn Dyeing, Weaving and Fabric Dyeing & Finishing.
Thus Akij Textile is the single source supplier from Yarn to Finished Woven Fabric for the
export oriented RMG industry.

The textile sector plays a very important role in many developed/developing countries. The
textile sector includes spinning, knit and woven sectors, which are called Primary Textile Sector
PTS). Over the years notable development has been made in the PTS particularly in the field of
spinning sector. Based on the Annual Report-2018 of Bangladesh Textile Mills Association
(BTMA) mechanized capacity of spinning industry in 1987-1988, 1997-1998, 2007-2008 and
2017-2018 are (as 853,000, 1,108,000, 2,388,000 and 4,360,000 spindles respectively. In
Bangladesh, spinning sector has contributed and continuing to contribute towards the
development of the socio-economic condition. At present 325 million people are working in the
spinning sector. Ninety percent of the domestic fabrics and yarn requirements are met by our
PTS. Akij Textile Mills Ltd is one of the members of BTMA. It has installed total capacity
51,328 spindles to produce yarn. Akij Textile has used modern technology and machinery to
compete at the competitive market with the good quality.
 Economic Impact of Covid-19:
The phenomenal Covid-19 pandemic has caused disturbances to worldwide trade, trade, and
instruction. Bangladesh is similarly influenced by this virus. The financial results of the Covid-
19 outbreak are extreme to handle as the whole of the worldwide supply chain has been
interrupted due to around the world transportation shutdown. Till now, the Bangladesh
readymade garments (RMG) industry has gotten work arrange cancellations of about $3 billion.
Around 2 million workers within the businesses will be affected by this. Around 4 million
individuals are specifically locked in with the RMG sector. The import and export-oriented
companies are also at risk. The foreign settlement will come down and in this way it'll greatly
affect the outside saves of the nation. Bangladesh has already dropped into an extremely difficult
circumstance on the off chance that the nation remains locked down for a longer period.

After lockdown, garment workers are coming back to Dhaka due to disparity in wealth
dispersion these individuals are incapable to remain at homes without work for their survival, in
this way, they are concerned much more about their work instead of Covid-19. The higher
development and expanded per capita salary have benefitted a little group of rich individuals
much more than the much greater number of poor individuals. Now it’s the time for the
government to think around this vital issue and chalk out a long-term plan to limit the inequality
between the rich and the poor.

The banking industry is in back adapted due to mounting non-performing advances (NPLs). If
the RMG industry and its backward linkage industries fall flat, at that point the entire banking
system will collapse. Nowadays, 61 commercial banks and common protections companies are
intensely depending on garments and related industries for their commerce and to run their
operations. If we are not expand our trade basket, in this way making a huge risk in our trade
portfolios. For sustainable financial growth, Bangladesh should have expanded its export
markets and reduce the only dependency on the RMG industry. Due to uncertainties over the
development of vaccination to avoid the fatal, it is completely unpredictable to create a to-do list
as lockdown or isolation isn't the ultimate solution. On a bigger scale, we may have to confront a
financial slowdown within the short term while there may be a recession within the long term.
On April 5, Prime Minister Sheikh Hasina unveiled a Tk 72,750 crore stimulus package,
including previously announced Tk 5,000 crore package, to address the economic impacts of the
coronavirus outbreak. The sum is about 2.52% of the country’s GDP. The government may take
both financial and financial measures to combat the novel coronavirus. As per the prime
ministers bailout arrange, fiscal activities included stimulus bundles, for example direct financial
support for the affected sectors, extending social security net coverage for poor individuals, food
distribution at a lower cost among the poor individuals, as well as increasing money related
supply.

Impact of Covid-19 into RMG Sector

The ready-made clothing (RMG) industry in Bangladesh faces a significant obstacle because of
Covid-19, with a global ban on new business and the mass withdrawal of existing orders.
According to research released by the Centre for Global Workers' Rights and the Worker Rights
Consortium (WRC) of Penn State University, almost one million RMG employees in Bangladesh
have already been terminated or furloughed as a consequence of order cancellations and
customers' refusal to settle for those cancellations.

Bangladesh's economy is highly dependent on jobs in manufacturing, foreign reserves, and

women's empowerment in the ready-made clothing industry. The sector makes an 11.2%
contribution to the country's gross domestic product. More than 4,600 RMG factories comprise
the country's largest industrial sector and account for 36% of manufacturing jobs, attracting 4.1
million employees. The backbone of this sector is industrious, disciplined, and low-cost women
workers. The RMG industry has played a key role in women's empowerment and gender
equality, with 61% female jobs. The market share of Bangladesh in global RMG trade is about
6.5%, and after the People's Republic of China, the country has steadily maintained the second-
largest exporter.

The RMG industry is on the verge of an unparalleled humanitarian and business catastrophe.
Many foreign buyers withdraw or delay reported purchasing orders as their retail outlets in
Europe, North America, and Asia and elsewhere are significantly shut. Foreign customers were
either cancelled or suspended, according to (BGMEA), as of 18 April 2020, $3.16 billion worth
of shipments involving 1,142 factories impacting 2.26 million employees. Millions of workers
are looking at unemployment as new orders dry up. The global market for clothing has crashed. 1
million employees have officially been terminated or furloughed already. According to a report
conducted by the University of BRAC, 47% of RMG workers stated that they did not earn their
salaries and felt unsure with their current employer about their current job position. Thousands of
RMG employees have protested on the streets throughout the country demanding payment in
spite of the government lockout. The effect on the RMG industry would not be confined to itself
and will have a significant impact on other sectors, consumers, and facilities.

The effect of COVID-19 extends well past the RMG industry to other financial divisions. The
government & also the big companies and the investors should help and contribute to the RMG
industry, which is the biggest contributor to urban poverty reduction, may help other associated
divisions within the supply chain and normalize the economy significantly and quicker.

To conclude, the effect of COVID-19 has fair started to unfold and will advance quickly. The
complete impact will be more visible within the few months or past. In order to moderate the
approaching financial and potential social emergency, it is required to remain ahead of the bend
and get ready with suitable crisis help and post-crisis help in numerous shapes as suitable.
Clearly, the effect of COVID-19 extends well past the RMG industry to other financial divisions.
Help to the RMG industry, which is the biggest contributor to urban poverty reduction, may help
other associated divisions within the supply chain and normalize the economy significantly and
quicker.

Impact of Covid-19 in Akij Textile Mills Ltd

The phenomenal Covid-19 pandemic has caused disturbances to worldwide trade, trade, and
instruction. Bangladesh is similarly influenced by this virus. Till now, the Bangladesh
readymade garments (RMG) industry has gotten work arrange cancellations of about $3 billion.
Around 2 million workers within the businesses will be affected by this. Around 4 million
individuals are specifically locked in with the RMG sector. Chairman of Akij Textile Sheik Nasir
Uddin said the spread of coronavirus across China will create some opportunities for
Bangladeshi exporters if the current situation extends further. He added "We are already
receiving requests from western buyers to create some space for additional orders”. However,
Mr. Sheik Nasir Uddin is suspicious about the benefit because manufacturers depend too much
on China for raw material such as fabrics, yarn, accessories and some basic chemicals for the
garment and textile industry.

A. Production Capacity:
ATML spinning division is well prepared with the state of the craftsmanship
machineries. Their spinning process has 51,328 spindles and is one of the
most modern turning plants in Bangladesh. The mail is well fitted with the
Spinning leading machines accessible. All the machineries are from reputed brand
machines manufacturers. Their office moreover incorporates a research
facility complete with Japanese and Chinese machines and gear.

They are one of the finest knitting industries in Bangladesh and as it were
make the most excellent quality dress for the clients. The quality items and
validity have shaped a solid trade relationship with world-renowned
Knitting international attire brands such as Levis, Dolce&Gabbana, H&M, Armani,
Luis Vutton and numerous more over the a long time. In arrange to offer the
most noteworthy quality to the clients, we utilize the most recent
innovations, vitality productive gear and an ecologically feasible fabricating
handle.

They are one of Bangladesh’s biggest makers and exporters of knitwear.

Their major markets incorporate Europe, USA and Canada and they are the
Apparels Platinum Provider of H&M for weave pieces of clothing. Among their major
buyers are Levis, Dolce&Gabbana, H&M, Armani, Luis Vutton etc.
 Financial Statement of Akij Textile Mills for the Year Ended 2019 & 2020:

Narration Year 2019 (Taka) Year 2020 (Taka)

Revenue 8,950,000,000 8,432,000,000
Cost of Sales 3,540,000,000 3,424,000,000
Gross Profit 5,410,000,000 5,008,000,000
Other Expenses    
Administrative Expense 79,000,000 75,000,000
Selling Expense 167,080,000 155,780,000
Distribution Expense 29,000,000 31,000,000
Warehouse 92,000,000 81,000,000
Electricity 255,000,000 311,000,000
Gas 6,100,000 5,500,000
Salaries 75,000,000 72,000,000
Depreciation Expense 152,000,000 147,256,000
Interest Expense 64,000,000 62,530,000
Total Expense 919,180,000 941,066,000
Operation Profit Before Tax 4,490,820,000 4,066,934,000
Tax Rate 15%  15% 
Income Tax 673623000 610040100
Net Profit After Tax 3,817,197,000 3,456,893,900
EPS 1.10 0.95

Gross Profit
5,500,000,000

5,400,000,000

5,300,000,000

5,200,000,000

5,100,000,000

5,000,000,000

4,900,000,000

4,800,000,000
2019 2020
 Total Expense
945,000,000
940,000,000
935,000,000
930,000,000
925,000,000
920,000,000
915,000,000
910,000,000
905,000,000
2019 2020

Net Profit After Tax

3,900,000,000

3,800,000,000

3,700,000,000

3,600,000,000

3,500,000,000

3,400,000,000

3,300,000,000

3,200,000,000
2019 2020

B.Progression of Akij Textile Mills Ltd:

The coronavirus pandemic is taking a heavy tax on Bangladesh, which is the world's second
biggest garment exporter. The industry is quickly losing orders, and millions of employments are
at stake. Bangladesh's ready-made garments segment accounts for around 80% of the country's
fabricating pay, with at slightest 4 million specialists depending on it. In spite of the fact that the
number of Covid-19 cases isn't too tall within the South Asian nation, the widespread postures an
awesome chance to this division and the business of article of clothing specialists. The country's
piece of clothing division depends hugely on send out orders, which have definitely diminished
due to the rise of the novel coronavirus cases around the world, counting Europe and the US.
Since the increment of Covid-19 cases in Europe and the US, Bangladeshi manufacturing plants
are losing around $100 million (€92 million) per day. So far, Bangladesh has misplaced around
$1.5 billion (€1.4 billion), which has affected a few 1.2 million specialists, agreeing to Rubana
Huq, president of Bangladesh's Article of clothing Exporters and Producers Affiliation
(BGMEA). Agreeing to BGMEA figures, orders worth $3.18 billion (€2.8 billion) have so
distant been cancelled since the starting of the Covid-19 flare-up prior this year. "More than 50%
of this $3.18 billion worth of arrange cancellations are from the European buyers," Huq told
DW, including this was "exceptionally disastrous" given the long history of exchange ties with
the EU that have made the alliance Bangladesh's greatest attire trade advertise.

C.Wage rate Decrease & Production loss:

Readymade garment (RMG), the country’s biggest outside cash worker that brings more than
83% of the full export profit, has taken a lead both in work and wage cut. Bangladesh's garment
labourers misplaced an evaluated of US$501million or 29.5% of their added up to month
compensation amid the period from Walk to May, agreeing to a report of Clean Dress Campaign
(CCC), a worldwide rights gather.
In April, RMG workers received 65% of their monthly wages while many small and medium-
sized enterprises that worked as subcontractors for big factories and factories that announced
layoffs have been unable to qualify for funding due to the conditions. Not only workers, staff and
other employees of different sectors including corporate houses saw cuts in their salaries with
their work from home activities or physical presence at offices by rotation. Many of them did not
get Eid bonus while some of them got partial payments. Some banks terminated their contractual
employees, cut salaries of their officials and employees and did not pay any incentive to
employees who were present physically risking covid-19 infection.

D.Impact of Government Stimulates package on Employment Opportunity:

The Covid-19 pandemic has constrained the financial exercises of the world to come at an end.
To spare the world from a obliterating subsidence, distinctive nations are declaring jolt bundles
for different segments. As of April 15th, the Government of Bangladesh has presented jolt
bundles of add up to of BDT 1,000 billion which is 3.3% of the overall GDP. The major
packages have been discussed in the table below-
Separated from these there has a declaration of insurance schemes for healthcare workers and
proportion cards for helpless families. The government of Bangladesh also declared about
apparently liberal Tk.73000 crore financial jolt bundles with a few components focusing on
distinctive parts of the private division. Right now, the bundle does not incorporate any back for
such bunch. A few financial boost bundles around the globe are advertising such back e.g. USA
providing deferral of social security tax, Singapore giving up to S$9,000 over nine months to
each such self-employed people. Cash and non-cash financial bolster for self-employed merits
solid attention in arrange for the bundle to back this critical bunch within the workforce.
 Conclusion:

The approach producers ought to consider creating fitting observing component to continually
evaluate and on the off chance that essential, alter the plan and usage mechanics of the jolt
bundle. Usually imperative as the widespread situation is still advancing and so will the financial
impact.

Many alterations ought to be made as and when we get a clearer sense of the financial stuns.
Consideration of private segment and other pertinent partners from exterior the government in
such regulation instrument will offer assistance arrangement creators get convenient input and
practical counsel to reinforce viability of the much-coveted boost bundle.
 References:

The report has been analysed from the secondary sources. The sources are down below-

https://www.akij.net/companyprofile/akij-textile-mills-ltd/

https://www.lightcastlebd.com/insights/2020/03/29/the-effect-of-covid-19-on-bangladeshs-
apparel-industry

https://bd.apparelresources.com/business-news/trade/economic-recession-market-slowdown-
biggest-concerns-ma-jabbar-dbl-group/

https://thefinancialexpress.com.bd/economy/bangladesh/pandemic-wreaks-havoc-on-jobs-pay-
1598068924

https://tbsnews.net/thoughts/corona-stimulus-package-bangladesh-getting-bigger-bang-buck-
71140

https://www.dw.com/en/coronavirus-economy-down-poverty-up-in-bangladesh/a-53759686

https://www.dnb.com/business-directory/company-information.textile-manufacturing.bd.html