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Li & Fung Ltd in the Bangladesh RMG sector

Bangladesh is second only to China in the supply chain of billionaire brothers Victor and William Fung's global sourcing giant Li & Fung Ltd,[47] a Hong Kong-based company. Bangladesh has been part of the producing network of Li & Fung Ltd since 1995, following Li & Fung Ltd's acquisition and subsequent expansion of an established British trading company, Inchcape Buying Services.[48] Li & Fung supplies dozens of major retailers, including Wal-Mart Stores, Inc., branded as Walmart.

In his chapter entitled Li & Fung, Ltd.: An agent of global production (2001), Cheng used Li & Fung Ltd as a case study in the international production fragmentation trade theory through which producers in different countries are allocated a specialized slice or segment of the value chain of the global production. Allocations are determined based on "technical feasibility" and the ability to keep the lowest final price possible for each product.[48]

Major Western brands and retailers met in Germany in April for talks regarding Bangladesh building and fire safety setting a May 15, 2013 deadline for a joint agreement. By May 14, 2013 European companies which Europe account for about 60 percent of Bangladesh's clothing exports: United Colors of Benetton, Britain's Marks & Spencer, Sweden's H & M Hennes, Mauritz AB, Inditex SA, and one American company, PVH, which owns brands including Calvin Klein, had endorsed an accord.[47] but Wal-Mart Stores Inc and other companies affiliated with Li & Fung did not sign the endorsement. Following the April 2013 tragedy, Walmart's Rajan Kamalanathan, vice president of ethical sourcing for Walmart spoke with the press. Walmart hired "Bureau Veritas to inspect factories for structural, fire and electrical safety, including checking building designs and permits as part of an expanded inspection process" and is pressuring Bangladesh to close factories.[47]

Bruce Rockowitz, Li & Fung's group president and chief executive spoke to Li & Fung's group shareholders in Hong Kong on May 13, 2013 arguing Li & Fung Ltd should stay in Bangladesh, and "invest more and try to make safety better and work with the government on doing a better job on monitoring buildings.'[47]

In January 2010 Li & Fung (Trading) Limited formed a new subsidiary company called WSG group, a dedicated sourcing stream servicing Wal-Mart globally, selling up to $2 billion worth of goods including WSG, home furnishings, apparel and other items, during the first year of the partnership. Li & Fung President Bruce Rockowitz, explained that direct sourcing is a huge, volume-driven, lower-margin business resulting in the lowest prices which is an advantage to Walmart. Li & Fung Ltd, a Hong Kong-based company, funnels clothes, toys and sporting goods to brand-name retailers including Kohl's, Target, Marks and Spencer and Talbots. Since 2006 Li & Fung control extended deeper into the supply chain to include logistics, production and product design effectively replacing and consolidated the role of middlemen.[49]
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