Old factories closing, green ones emerging
Bd Rmg Sector In Rapid Evolution
The garment sector is going through rapid transformation. According to data compiled by Bangladesh Garments Manufacturers and Exporters Association (BGMEA) entrepreneurs have set up 58 new garment units since January to October this year while 60 units were shutdown during this period because they inefficient and failing.
Data said the new factories were set up with all safety compliance and modern technologies, they are environmentally green factories while small and non-compliant factories which were inefficient and had failed to sustain highly competitive market had shut down.
Of the new units, 43 percent have been set up by new entrepreneurs and the rest were set up by ones already in the business for a long time. Another BGMEA estimate said 374 new garments units were set up in last four years in one hand and on the other 332 were closed.
From January to October period over 29,594 workers have lost their jobs due to closure of the 60 units but 51,359 jobs were created in new units during this period. Industry figure shows around 29,999 units of machines for knit, woven and sweater manufacturing were imported and installed in new units during this period.
"All new units have not however gone for full production," BGMEA president Dr Rubana Huq said. She said 33 new factories were set up by existing entrepreneurs and the rest were owned by the new entrepreneurs, not in readymade garment (RMG) business previously.
New factories from January to October period include 13 knitwear units, 14 woven units, sweater eight and mixed items 23. They have added a cumulative production capacity of 354.45 million dozens pieces per year.
Highlighting how the garment industry is rapidly transforming S M Khaled, Managing Director of Snowtex Ltd said, "Our long experience and knowledge is our strength to start new green ventures now departing from traditional factories. The company has three more garment units, he said.
It has invested US$ 50 million in setting up the new factory, now producing value added sportswear and outerwear along with bottoms from last month. The 80-line factory has created employment for some 8,000 people with annual export target of US$ 100 million, he said. The four units would reach US $ 250 million together with a total workforce of 18,000 people with 180 lines production capacity, he noted.
He said in 20 years back one can start garment business only with few machines. "Now new venture needs more investments, modern technology, enhanced efficiency, productivity, compliance and environment-friendly measures to stay in the global supply chain."
Responding to a question about the closed units, Ms. Huq blamed financial insolvency of many owners for shutting down their units. "Most of them were small and medium enterprises and they failed to maintain compliance strictly and pay their workers. She apprehended many more factories might face closure in future.
Dr Khondaker Golam Moazzem, CPD's additional research director however termed closure of factories and opening of new ones as the natural business trend. He has stressed the need for government policy supports like providing incentive to encourage fresh investments in value added and diversified products considering the overall global trend.
The BGMEA presently has around 4,500 member factories, which earned a total of $ 34.13 billion from overall garment exports.