Friday’s terrorist attack in Dhaka has dampened work prospects for many Japanese firms, which in recent years have grown more dependent on Bangladesh as a manufacturing base as well as a market.
Some of the 240 Japanese companies with offices or factories in Bangladesh said Monday they have suspended employee trips from Japan to the country and grounded local employees in the wake of the attack by Islamic militants in which a total of 28 people, including six attackers, lost their lives. Among the dead were seven Japanese.
Fast Retailing Co., which runs the Uniqlo clothing brand, said its employees are restricted from entering Bangladesh on business trips until the end of July.
It has 40 employees, including six Japanese, overseeing manufacturing of clothing by local factories there. The global apparel chain also runs nine shops in Bangladesh, employing 100 clerks, including four Japanese.
All of the employees have been confirmed safe, a spokeswoman said.
“Bangladesh is an important base for us, both in manufacturing and sales,” she said. “We are not considering making big changes to our business plan, but our priority is the safety of our employees and customers.”
The spokeswoman said that although the shops are still open, all workers in charge of production management are being told to stand by at home until the Eid al-Fitr holiday, a religious occasion that marks the end of Ramadan, finishes on July 10.
“Some of the Japanese staff may fly back during the holidays,” she said, adding that each employee can decide whether they want to return to Bangladesh afterward.
Bangladesh had recently emerged as a “China Plus One” destination — a major factory base to replace or supplement China, where wage levels have surged and manpower has grown scarce, the state-backed Japan External Trade Organization said.
“Many companies have set up factories there on the back of cheap manpower costs, especially in such labor-intensive industries as sewing,” a JETRO official said. “In addition, Bangladesh, with its population of 160 million, is attractive as a consumer market, leading to many consumer companies setting up bases there.”
Manufacturer Toshiba Corp., which opened an office in Bangladesh in June last year, has moved to restrict all employees from visiting the country until July 10.
“There are only a couple of employees assigned to Bangladesh,” said Toshiba spokesman Yukihito Uchida, adding that at this stage the company had no plan to bring them back to Japan.
Marubeni Corp., a leading trading company that has thermal power plant construction projects in Bangladesh, said it was able to confirm the safety of all of its nine employees soon after the weekend attack as its Japanese workers are required to report their plans, both work-related and private, to their supervisors. Under current circumstances, it also provides advice on holiday destinations for its employees, said spokesman Kazuo Hanada.
“There are many incidents occurring not only in Bangladesh but worldwide, so we are constantly taking all measures we can think of to ensure the safety of our employees,” Hanada said.
“The worst case is not being able to contact them.”
Meanwhile, Motherhouse, which sells bags in Tokyo that are mostly produced at a Dhaka factory run entirely by local employees, said it has confirmed the safety of all workers.”We received a call from the factory director that all staff were safe, and that the production line is operating as usual,” Motherhouse spokesman Junki Inaba said.
The firm produces 80 to 90 percent of its products in Bangladesh, which it then sells in Japan, Taiwan and Hong Kong.
Inaba said the company had been warning its employees of terrorist attacks since October last year, when Japanese national Kunio Hoshi was murdered by Islamic militants in northern Bangladesh.
Long considered the poorest Asian country and prone to natural disasters, Bangladesh has shown significant economic growth in recent years, with its gross domestic product logging an annual growth of 6 percent for six consecutive years through 2015.
Last month, the New York-based advertising giant Ogilvy & Mathers named Bangladesh one of the 12 “velocity” markets with prospects for enormous consumer growth over the next decade, along with India, Pakistan, Myanmar, Indonesia and the Philippines.
In 2015, Japan exported products including steel, cars and machinery, worth $1.37 billion to Bangladesh, up from $1.16 billion the year before.
It also imported goods worth $1.08 billion from the country, the majority of which was clothing and footwear.
A total of 986 Japanese were living in Bangladesh as of last year, according to the Foreign Ministry in Tokyo.
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