Bangladesh’s ready-made garment (RMG) industry has experienced a significant challenge during the first 10 months of fiscal year 2023. Data from the Bangladesh Bank (BB) reveals a substantial decline of nearly 21 percent in capital machinery imports for the RMG sector during this period. This decline is mirrored by broader economic challenges both domestically and globally, including decreasing import and export volumes. As a result, many factories are operating at 30%-40% below capacity due to high inflation and reduced demand in key export markets such as Europe and America.
Figure: Investment initiatives transforming Bangladesh’s RMG industry in FY2023.
However, amidst these economic hardships, certain textile companies in Bangladesh have chosen to embrace the difficulties and invest significantly in diversification and new technologies. Collectively, these companies plan to invest a substantial Tk12,000 crore over the next two years, with a focus on cutting-edge machinery for man-made fibers, recycled fibers, automated equipment, and robotic technology for garments and accessories production.
These investments are expected to not only reshape the industry landscape but also expedite production processes and diversify the sector’s offerings. In total, these initiatives are projected to create employment opportunities for approximately 50,000 individuals across apparel, textile, and accessories units.
Ha-Meem Group
One of the leading exporters in the garment industry, Ha-Meem Group, currently commands an impressive 80% of the market orders. Traditionally specializing in woven bottom products, the company has recently embarked on a diversification journey. Their foray into diversification began with the establishment of a jacket manufacturing facility just three months ago. This strategic move is aimed at capturing the attention of three major clientele: Hugo Boss, Ralph Lauren, and Tommy Hilfiger.
Notably, this garment industry segment is relatively new in Bangladesh, prompting Ha-Meem Group to seek technical expertise from an Indonesian partner. The brands have already conducted their primary inspections, with the second inspection scheduled for September.
Ha-Meem Group’s commitment to this endeavor is underscored by a substantial investment of 400 crore taka. Furthermore, the group has taken a step towards sustainability with the inauguration of a recycling plant six months ago, primarily focused on producing recycled yarn.
They are now poised to expand into fabric production, capitalizing on the growing trend among international brands to transition to recycling methods by 2027-2030. It’s worth noting that fabrics derived from recycled yarn typically command a higher cost, approximately 3-4 times than that of conventional materials, and Ha-Meem Group is strategically leveraging this opportunity.
| Hammem Group | · Substantial investment of 400 crore taka.· Committed to sustainability with a recycling plant.· Expanding into fabric production with recycled materials. |
| DBL Group | · Invested 650 million dollars in Srihatta Economic Zone.· Largest investor in the economic zone.· Focus on textile production and recycling.· Secured financial support from British sources.· Received a boost of 52 million dollars from foreign sources. |
| Windy Group | · Invested 400 crore taka.· Self-financing expansion.· Aiming to double annual exports.· Doubling investment for ambitious growth by 2026. |
| Team Group | · Expanding operational capacity with multiple projects.· Focus on knit composite capacity and accessories.· Aiming for platinum-grade green factory status.· Establishing yarn dyeing facilities and working on backward integration. |
| Pacific Jeans | · Investing 35 million dollars with a focus on sustainability.· Ambitious plans for further expansion.· Targeting a billion-dollar status by 2027. |
| Nipa Group | · Ambitious project worth 400 crore taka.· Production of cloth from man-made fibers.· Four different shades and administrative building.· Targeting revenue of 190 million and export turnover of 250 million dollars by 2024. |
| Shasha Denim | · Active in garment and washing production with a sustainable approach.· Investment commitment of 200 crore taka.· Expanding capacity in denim mill and knit composite sector. |
| Renaissance Group | · Establishing a new manufacturing facility in Gazipur.· Anticipating the need for 4,000 additional workers.· Focused on meeting buyer demands with the new factory. |
DBL Group
DBL Group has made a significant investment of 650 million dollars in the expansive Srihatta Economic Zone, which stands as the largest economic zone in the country. Notably, DBL Group holds the distinction of being the foremost investor in this economic zone, where they are poised to establish a total of 10 operational units.
The initial focus is on textile production, with a strong emphasis on recycling practices. Furthermore, their strategic plans encompass the production of tableware and glassware. Interestingly, DBL Group has opted for financial support from British sources, a choice influenced by the relatively high-interest rates offered by domestic banks. Their funding has received a significant boost with an infusion of 52 million dollars from foreign sources.
Windy Group: Windy Group has provided employment to a workforce of 4,000 individuals and has made an investment of 400 crore taka. They have a consistent track record of self-financing their expansion endeavors. Currently, their annual export stands at 190 million dollars, and they have set an ambitious goal to double this figure. In the upcoming year, Windy Group is embarking on a substantial project, doubling their investment compared to previous initiatives, with the intention of achieving a twofold increase in exports by 2026.
Team Group: Team Group is strategically expanding its operational capacity, with two ongoing projects and the addition of two new ones. One of these projects is dedicated to backward linkage, a concept they planned in the previous year. The ongoing project focuses on enhancing their knit composite capacity, accompanied by the opening of letters of credit (LCs) and the arrival of new machinery. They are optimistic about achieving full commercial operation by either the end of the current year or the beginning of the following year.
Simultaneously, they are initiating a project related to accessories, situated at Tongi Industrial Area. The construction of this structure, spanning G+10 floors, has already reached an advanced stage. This project will also encompass denim production, featuring a zero-discharge washing plant, aligning with environmentally sustainable practices. Team Group’s commitment to environmental consciousness is further demonstrated by their aim to achieve platinum-grade green factory status for both of these initiatives.
As part of their plans, they intend to establish yarn dyeing facilities within one floor of their outerwear factory. To facilitate this endeavor, they are working towards backward integration, importing man-made fiber-based fabric and processing it on-site. Although this represents the third phase of their expansion, construction is actively progressing. Additionally, they are in discussions with a Taiwanese company to provide technical support, a collaboration that will not involve a joint venture.
Pacific Jeans Ltd: Pacific Jeans Ltd. stands as one of the largest companies specializing in single-item production and holds a notable position as a top exporter in this category. Within the Bangladesh EPZ, they are classified as a C category industry and have earned numerous accolades, including Gold, Silver, and Bronze awards, within this category on multiple occasions. Their primary focus lies in the production of outerwear and formal attire. Notably, construction work in Chittagong EPZ has been completed, and they are anticipating the commencement of production by September.
Pacific Jeans has allocated an investment of 35 million dollars for this endeavor, and in line with sustainability principles, they are concurrently establishing a recycling factory. This facility aims to address the imperative of managing cutting waste responsibly, given the limitations of disposal.
As part of their broader expansion plans, they have displayed a remarkable appetite for investment, notably demonstrated during the challenging COVID-19 period when they initiated the establishment of two new factories. Their future aspirations include a move towards Dhaka, with a substantial investment of 500 million dollars earmarked for this year. They have set their sights on reaching a remarkable milestone, with a target to achieve a billion-dollar status by 2027.
Nipa Group: Nipa Group is embarking on an ambitious project valued at 400 crore taka. This initiative centers on the production of cloth derived from man-made fibers through spinning and dyeing processes, with a projected output of 2 lakh yards.
The project includes the creation of four different shades and the construction of an administrative building. Key preparations, such as the readiness of the shades, are already in place, and they are looking to initiate the process of opening letters of credit in September.
Their timeline includes plans for commercialization starting from June of the following year, with full-scale operations targeted for December. Nipa Group has set a revenue target of 190 million, with a goal to further elevate their export turnover to 250 million dollars by 2024.
Shasha Denim: Shasha Denim is actively engaged in the production of garments and washing, all while embracing a sustainable approach. They possess a denim mill and also operate within the knit composite sector.
As part of their expansion strategy, they are diligently working to enhance their capacity in both of these domains, including the augmentation of their existing denim mill. Their investment commitment includes 200 crore taka, and a subsequent phase will see an additional investment of the same magnitude.
Renaissance Group: Renaissance Group, which currently operates a factory in Kaliyakoir, is in the process of establishing another manufacturing facility in Gazipur. To meet the demands of their buyers, they anticipate the need to employ an additional 4,000 workers. As a strategic response to this requirement, they are taking steps to inaugurate a new factory this year.
In the face of economic challenges, Bangladesh’s garment industry is displaying resilience and determination to not only survive but thrive. These investments in diversification, sustainable practices, and advanced technologies signify a commitment to a brighter future. While uncertainties persist in the global market, these strategic moves position Bangladesh’s textile sector for long-term success and contribute to economic growth and job creation in the country.
news source : textiletoday
