The textile sector is currently in shock at the arrival of the coronavirus. It has impacted textile companies around the world. However, the most affected areas have been Europe and Asia. Together, they fight against the economic repercussion of COVID-19.
According to ABC News, this situation has given a strong kick to the textile sector. It affirms that after the crash of 2009 the date has not yet seen a recovery. Therefore, this pandemic represents a threat to employment. It is expected that when everything normalizes, at least 65,000 companies will have been destroyed, according to a BCG study.
The most affected in textile companies
So, several reports indicate that the worst affected countries have been Bangladesh, Myanmar and Cambodia. For example, Rubana Hub, president of the BGMEA, (a Bangladesh manufacturing and exporting association) has given his opinion. He says that every day that passes there are more cancellations of orders to textile companies.
After China, Bangladesh is the second largest textile producer in the world. Thus this affects several countries that depend on their production. For example, European and American companies suffer serious consequences. This is due to the businesses depend on these imports.
The consecuences on textile companies go beyond the countries directly affected
Therefore, companies like Zara, H&M, Gap, among others, cancel all their orders. Since they will not be able to sell while they are closed.
Rubana affirms that this would cause, in the short and medium term, millions of people in the world to become unemployed. And even more, if this current pandemic situation continues.
European decisions due to the pandemic on textile companies
Furthermore, the Spanish Intertextile Council has communicated that the impact of the coronavirus in the world could not yet be quantified. However, they dont expected the best scenarios. It also states that the consequences have been dramatic, both in human losses and in the economy.
Besides, it expresses that it is necessary to start manufacturing in Europe. Hence, it is that the current COVID-19 showed that depending on the remote producers id very catastrophic. It even communicates that the countries that are currently best defended are those that do not depend on others to provide themselves.
Scenarios and losses
According to the BCG consulting agency, we will see the real impact of COVID-19 on the textile company once the quarantine ends. Many companies have had a drop in their turnover above 5 billion euros. Therefore, they stimate al least a quarter-closings of the value in sales of the textile sector.
Made calculations reflect losses of more than 280 million euros for each week that passes. Additionally, BCG says the new consumer and safety measures will reflect sales below 20%. Not counting the biggest crisis scenario in 2021.
Finally, in the middle of COVID-19, the Spanish Intertextile Council indicates that this is a great moment for the agreements. All in favor of the textile industry and its future where a clearly given plan, dates, resources and commitment will move this sector forward. In any case, the textile sector will continue to be essential and very strategic.
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