The entrepreneurs have made fresh investment to set up 58 new garment factories since January to October this year while 60 units faced shutdown, according to BGMEA information. Industry insiders said the new ones are coming up with safety compliance and modern, green technology while the small and non-compliant ones are failing to sustain in the highly competitive market. Of the new units, 43 per cent have been set up by fresh entrepreneurs and the rest by the ones who are already in the business for a long period of time, according to Bangladesh Garment Manufacturers and Exporters Association (BGMEA). According to BGMEA, the entrepreneurs set up 374 new units in last four years (at an average of 93 units per year) while 332 units faced closure (at an average of 83 units per year). Some 29,594 workers have lost their jobs due to the closure of the 60 units while the new units created employment for 51,359 people. According to the trade body, factories having 5-100 machines are categorized as small, 101-200 medium and factories having more than 200 machines are large ones. Some 29,999 units of machines for manufacturing knit, woven and sweater items have been imported and installed in the new units, BGMEA data showed. “All the new units have not gone for full production,” said BGMEA president Dr Rubana Huq. She said 33 new factories are owned by the existing entrepreneurs and the rest are owned by the new entrepreneurs who were not in the readymade garment (RMG) business previously. Out of these new factories, knitwear are 13, woven 14, sweater eight and mixed items 23. The new units have added a cumulative production capacity of 354.45 million dozens of pieces per year. “We are in the garment business for last 18 years. Our experience and knowledge is our strength to start a new green venture namely Snowtex Sportswear Ltd,” said SM Khaled, managing director of the company that has three more garment units. They have invested US$ 50 million in setting up the new factory, which started last month production of value added sportswear and outerwear along with bottoms, he added. The 80-line factory created employment for some 8,000 people with the annual export target of US$ 100 million, he said. Total export of the four units would reach US$ 250 million with a total workforce of 18,000 people and 180 lines production capacity, he noted. It was easy 20 years back to start garment business only with few machines which is not possible now, he said. “New venture needs more investments, modern technology, enhanced efficiency, productivity, compliance and environment-friendly measures to be sustainable and competitive in the global supply chain,” he noted. Nasir Uddin, a fresh entrepreneur in the RMG trade and chairman of Yakub Fashion Ltd., said he has taken the risk of setting up a small unit with 85 machines that created employment for more than 200 workers. The factory started production since July and mostly does sub-contracting, he added. Another owner of a new sweater factory located at Savar, however, partially differ with Mr. Khaled, saying that there are buyers who do not require compliance. The factory, which is yet to go for full production, has invested Tk 120 million in the sweater unit and is getting work orders through buying houses, the owner said. Responding to a question about the closed units, Ms. Huq attributed financial insolvency of the 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 under the new wage structure,” she said, apprehending that many more factories might face closure in future. When asked, Dr Khondaker Golam Moazzem, additional research director of Center for Policy Dialogue, termed the closure of factories and opening the new ones as the natural trend of business. He, however, suggested identifying the reasons behind the closure and taking necessary measures in this regard. He also stressed the need for government policy supports like providing incentive to encourage fresh investments in value added and diversified products manufacturing, considering the overall global scenario that included requirement of compliance standards, decline in global demand for apparel items and apparel prices. The BGMEA presently has around 4,500 member factories. Around 40 per cent of BGMEA member factories are knitwear and sweater manufacturers, and the rest 60 per cent are woven garment manufacturers, according to the trade body. Its member factories account for 100 per cent woven garment exports of the country and more than 95 per cent of sweater exports, while around half of the light knitwear exports are made by them. The country earned $ 34.13 billion from exports of knit and woven items in the last fiscal year, according to official data. RMG exports, however, witnessed a negative growth of 6.67 per cent to $ 10.57 billion during the July-October period of the current fiscal year (FY 2019-20). Bangladesh fetched $ 11.33 billion during the first four months of FY 2018-19 through exporting apparel items, according to data.
