Oct. 10 (Bloomberg) -- A fire at a clothing factory on the outskirts of Bangladesh’s capital Dhaka killed at least seven people, renewing concern that working conditions are unsafe in the country’s $19 billion garment industry.
The death toll at Aswad Composite Mills Ltd. in Gazipur was lowered from nine as reported earlier, Police Inspector Amir Hossain told reporters last night, quoting rescuers who retrieved seven bodies from the site of the Oct. 8 fire.
Aswad has supplied two Canadian companies, Loblaws Inc., owner of the Joe Fresh brand, and Hudson’s Bay Co., according to shipping data provider ImportGenius.com. The fire comes after an April collapse of a factory complex killed more than 1,100 people, the worst industrial disaster in the world’s second-largest garment-exporting country, which supplies retailers from Wal-Mart Stores Inc. to Hennes & Mauritz AB.
“It’s a very sad day,” Abdus Salam Murshedy, president of the Exporters Association of Bangladesh, said by phone. “It will be very difficult to do business with global retailers after all these troubles coming one after another.”
The Aswad factory also makes fabric for some Wal-Mart suppliers, Megan Murphy, a spokeswoman for the company, said in a statement.
Nafis Sikder, managing director of Aswad, said the fire was an industrial accident that originated in the chimney of a heating machine at the factory. He declined to name his company’s customers.
The company will pay 500,000 taka ($6,400) in compensation for each of the dead, and another 200,000 taka for each will come from an insurance plan, he said at a media briefing.
In the last two years, Aswad, using an address in Gazipur, shipped dozens of containers to customers including Hudson’s Bay and Loblaws, according to ImportGenius.com.
Loblaws has seen documents that suggest some suppliers may have outsourced production against company policy, spokeswoman Julija Hunter said in an e-mailed statement. The retailer has a “no-tolerance policy” over unauthorized outsourcing and is investigating, Hunter said, adding that Loblaws is confident it hasn’t placed any orders from Aswad.
Loblaws in May announced its commitment to sign the Accord on Fire and Building Safety in Bangladesh and said at the time it would stay in Bangladesh.
Hudson’s Bay said its last order was placed with Aswad in October 2012 for delivery in April 2013.
“We had determined at that time that we would not be placing subsequent orders with Aswad,” Tiffany Bourre, a spokeswoman for the Toronto-based company, said in an e-mailed statement.
H&M doesn’t have any direct business relationship with Aswad, though the plant delivers fabric to a factory used by the Swedish retailer, it said in a statement. A supplier of Next Plc obtained fabric from the Aswad mill, though the U.K. retailer had no direct contact with the factory, it said by e-mail.
Primark, the budget fashion chain owned by Associated British Foods Plc, said it placed its last order with the factory in March and indicated it would place no more following the identification of violations of its code of conduct and management’s unwillingness to resolve these. A small amount of outstanding orders was stored in the warehouse at the affected factory awaiting shipment, a Primark spokeswoman said by e-mail.
Aswad used to dye, knit and finish fabrics at the unit where the fire started, Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, said by phone after visiting the site.
“It seems the fire was sparked by heating machines and flames leapt upward and spread to the top floor,” Akter said. The top floor was badly burned and machines were damaged, she said. Workers at the unit were unable to douse the fire as the presence of highly flammable material caused it to spread fast, Akter said, citing a stores officer.
Bangladesh’s garment industry expansion has been marred by factories operated in buildings with poor electrical wiring, an insufficient number of exits and little firefighting equipment. That has put pressure on international retailers to improve work conditions.
Last month, thousands of garment factory workers staged violent protests, seeking to more than double their monthly pay to $104 and forcing about 400 of the country’s 5,000 garment factories to close.
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