* Owners ignored crack spotted on Tuesday, say police
* Fireman says 2,000 in building when it crumbled
* Bangladesh's cheap labor benefits global garment trade
By Serajul Quadir and Ruma Paul
DHAKA, April 24 (Reuters) - An eight-story building that housed garment factories and shops collapsed in Bangladesh on Wednesday, killing nearly 100 people and injuring more than a thousand, officials said.
One fireman told Reuters about 2,000 people were in the Rana Plaza building in Savar, 30 km (20 miles) outside Dhaka, when its upper floors slammed onto those below. An official at a control room set up to provide information said 96 people were confirmed dead and more than 1,000 injured. The Daily Star, a leading Bangladeshi newspaper, put that number at 106.
At the site of the collapsed Rana Plaza building, a frantic effort was underway to find and rescue victims. Television reports showed young women workers, some apparently semi-conscious, being pulled out by firefighters and troops.
Doctors at local hospitals said they were unable to cope with the number of victims brought in.
The building collapse, which follows a November fire at the Tazreen Fashion factory on the outskirts of Dhaka that killed 112 people, has compounded concerns about worker safety and low wages in Bangladesh.
The two major incidents, and a third in January that killed seven people, could taint Bangladesh's reputation as a source of low-cost products and services and call attention to Western retailers and other companies that obtain products from the country. But industry people and worker's groups in the United States say the lure of cheap manufacturing costs will keep retailers and buyers turning to Bangladesh.
Edward Hertzman, a sourcing agent based in New York who also publishes the trade magazine Sourcing Journal says pressure from U.S. retailers to keep a lid on costs continues to foster unsafe conditions. Hertzaman's clients include clothing manufacturers and retailers like PacSun, Oxford Industries Lucky, Buffalo.
Following the Tazreen fire, giant U.S. retailer Wal-Mart Stores Inc. said it would take measures to alleviate safety concerns, while Gap Inc. announced a four-step fire-safety program.
"It is going to take much more than retailers issuing press releases or paying compensation to victims," Hertzman said. "They're going to have to stop beating up the factories and start paying higher prices."
Entry level wages in these factories start at 14 cents an hour, said Charles Kernaghan, with the The Institute for Global Labour and Human Rights. The non-profit works with factory workers in Bangladesh and other parts of the world to help better working standards.
"The companies will stay in Bangladesh despite all the problems...In China, a comparable wage would be at least $1 an hour," Kernaghan said.
Hertzman, whose trade publication has offices in Bangladesh, said New Wave Bottoms Limited occupied the second floor, Phantom Apparels Ltd on the third floor, Phantom Tack Ltd on the fourth floor and Ethar Textile Ltd on the fifth.
U.S. children's clothing retailer Children's Place said that while New Wave had manufactured clothes for the company in the past, it hadn't at the time of the accident.
The New Wave website listed 27 main buyers, including firms from Britain, Denmark, France, Germany, Spain, Ireland, Canada and the United States.
CRACKS IN BUILDING
"I was at work on the third floor, and then suddenly I heard a deafening sound, but couldn't understand what was happening. I ran and was hit by something on my head," said factory worker Zohra Begum.
Mohammad Asaduzzaman, who was in charge of the area's police station, said factory owners appeared to have ignored a warning not to allow their workers into the building after a crack was detected in the block on Tuesday. Kernaghan, of the The Institute for Global Labour and Human Rights said the owner "sweet talked them into working, and assured them there was no danger."
Bangladesh, which employs about 3.6 million people in the garment industry, is the second-largest apparel exporting country in the world. But it has also gained a reputation for political red tape, worker strikes and poor working standards in its many garment factories, where factory owners have been accused by non-profits and unions of exploiting workers.
Annisul Huq, former president of the Bangladesh Garment Manufacturers and Exporters Association, told Reuters that the BGMEA noticed the cracks on the Rana Plaza Tuesday and asked the owner to take corrective steps.
"The owner should not have used the factory while the cracks had developed, but it was a day of 'hartal' yesterday and he probably got no engineers to look at it," Huq said.
Hartals, or strikes, have been a persistent problem in the country, creating uncertainties in the supply chain and bottlenecks for business operations.
In March, The American Federation Of Labor & Congress Of Industrial Organizations filed a petition before the United States Trade Representative to remove Bangladesh from the list of eligible beneficiary developing countries. "The government of Bangladesh continues to fail to take steps to afford internationally recognized worker rights," the AFL-CIO said.
GHOSTS OF TAZREEN
In November, the Tazreen accident raised questions about how much control Western brands have over their supply chains for clothes sourced from Bangladesh.
A Wal-Mart supplier had subcontracted work to the Tazreen factory without authorisation. Since then, Wal-Mart has said it is trying to get a better handle on its supply chain and to monitor safety at factories that produce its goods.
The Bangladeshi government subsequently confirmed workers' complaints about unsafe conditions, and also said the factory owner and supervisors prevented staff from leaving the premises after a fire alarm sounded.
Wal-Mart said Wednesday it still could not determine whether a factory in the building that collapsed was producing goods for the company.
Hertzman, the textiles broker, said the Tazreen fire has prompted his clients to pressure agents in the factories to be more accountable for safety.
"I've had two clients in the past two months who have said they need to go and inspect the factories in Bangladesh before placing orders for private label goods made for major usa retailers," said Hertzman.
He did not want to name the clients, but said one of them supplies apparel to Costco and the other supplies young men's clothes for retailers like Ross Stores, Sears and Macy's
"Bangladesh is the longest lead-time country and a difficult country to work in, so the only way it becomes competitive is by offering the lowest (cost). That's the Catch-22," he said.
"If the factories want to raise prices to make up for rising wages and costs, the buyers say, 'Oh why do we want to go to Bangladesh if I could go to China, Vietnam, Latin America etc for a similar price?"