Bangladesh’s textile industry, driven by an export-focused approach and abundant labour, especially in the ready-made garment (RMG) sector, has significantly boosted the country’s economy. Despite challenges like safety issues, there has been improved compliance in recent years, making the RMG sector a significant contributor to GDP and export earnings.
DBL Group, a leading apparel exporter in the country, plans to commence commercial production at its greenfield cotton yarn spinning mill in the Srihatta Economic Zone in Moulvibazar by November.
As part of its investment plans, the group has constructed a world-class textile mill named “Jinnat Textile Mills Ltd”. It is designed to produce fine cotton yarn and rotor yarn, catering to the diverse needs of the textile industry, with a daily capacity of 43.5 tonnes.
Investment is estimated to be around $83.35 million, with an expected annual revenue of $70 million.
According to the top management, the business conglomerate will initiate operations in its nine other units, spanning various sectors in the economic zone, within the next two years.
The group is investing approximately $650 million to establish the factories at DBL Industrial Park, which is currently being developed within the economic zone.
Shaikh Yusuf Harun, Executive Chairman, Bangladesh Economic Zones Authority (Beza), told The Business Standard that one of the DBL units is ready to go into production.
According to the company, the industrial park, which is being established on 167.6 acres of land, is expected to generate employment for 5,630 people.
The factories featuring the latest technology will manufacture diversified DBL products such as textiles, ceramics and sanitary wares from intermediate materials to finished goods, catering to other industries and consumers. This industrial park is expected to generate a yearly revenue of $500 million, it added.
DBL Group Managing Director MA Jabbar said Jinnat Textile Mills will come into production in November this year at DBL Industrial Park.
“We are setting up a second unit of ceramics in that economic zone, where we will manufacture sanitary ware alongside tiles,” he told TBS.
The managing director said the group is conducting some research and development (R&D) work for the production of advanced ceramic products.
“It is very challenging to continue making investments during such a global economic situation. Nevertheless, we are investing to produce environment-friendly raw materials to ensure sustainable and diversified business in the coming days,” he added.
The products to be manufactured in the industrial park span various industries, including textiles, spinning, recycled polyester, ceramic tiles, sanitary ware, ceramic frit, floral glass, glass processing, dry mortar, and faucet units.
The recycled polyester unit will produce 18 tonnes of staple fibre per day as raw material for the spinning factory.
In the industrial park, DBL aims to produce over 40,000 square metres of ceramic tiles per day in its ceramic factory unit.
In another ceramic facility, it will produce 90-99 tonnes of ceramic frit per day, which is a major ingredient of ceramic glaze widely used in the ceramic industry.
The dry mortar facility at the industrial park is expected to generate $8.8 million in revenue per year.
DBL’s most significant initiative at the industrial park is Jinnat Textile Mills Limited, which houses two spinning factories that will play a crucial role in DBL’s vertically integrated textile composite.
These manufacturing units will cater to existing renowned buyers, notably H&M, George, Puma, Esprit, G-Star, Decathlon, Tom Tailor, MQ Retail, NEXT, M&S, Bench, Gymboree, LIDL, C&A and Target.
The cotton yarn spinning units will cater to existing DBL buyers, including H&M, George, Puma, Esprit, G-Star, Decathlon, Tom Tailor, MQ Retail, NEXT, M&S, Bench, and Gymboree.
According to DBL Group officials, the industrial park is expected to create about 10,000 jobs and generate $500 million in revenue annually.
DBL Group has a total of 30 companies, ranging from textiles to ceramics and packaging. Now it is one of the largest conglomerates in the country, employing some 44,500 people with an $870 million annual turnover.
The group expects its annual turnover to reach more than $1 billion at the end of the current fiscal year, up 15% year-on-year.
Around 23% of export-oriented garment factories in the country still remain out of any form of safety monitoring system, according to the Centre for Policy Dialogue (CPD).
On Wednesday, in a media briefing titled “Challenges to Maintain Workplace Safety in the Garment Industry”, CPD highlighted that these factories pose a significant safety risk as they operate outside monitoring frameworks.
Presenting the summary of a paper titled “Monitoring Workplace Safety in the RMG Sector: Is Bangladesh a Pioneer or Still a Learner?”, Dr Khondaker Golam Moazzem, research director at CPD, said 2,896 factories are currently being monitored.
“Among these, 659 fall under the purview of the National Initiative’s Remediation Coordination Council (RCC), 1,887 are overseen by the RMG Sustainability Council (RSC), and 350 are under the oversight of Nirapon, a non-governmental initiative supported by the international buyers’ community,” he said.
However, with 3,752 factories in operation according to Mapped in Bangladesh, a non-governmental initiative for digital mapping of export-oriented RMG enterprises, it is noteworthy that 856 factories remain without any form of monitoring, he added.
Khondokar Moazzem further said these factories are exporting more to non-traditional markets, including countries like Brazil, Russia, and Dubai.
He highlighted that inspections related to Occupational Safety and Health (OSH) within the RMG industry have witnessed a decline in recent years. Although the occurrence of accidents in the RMG sector had initially decreased after the tragic Rana Plaza incident, CPD reports indicate that over the past two years, accidents have been resurging.
As revealed by CPD’s findings, the number of fire incidents stood at 177 and 180 in 2020 and 2021 respectively. However, this number escalated to 241 in 2022. Alongside this, the count of fatalities in factories due to accidents has also surpassed the figures of the preceding two years.
The research conducted by CPD indicates that 659 factories under the National Initiative have undergone remediation focusing on improving fire, electrical, and building structural safety.
Among these, only a single factory has achieved full completion of the remediation process.
In contrast, the count of factories that have achieved full remediation under the RSC is more than 1,300.
“Factories that do not have 100% remediation are more or less prone to accidents,” Dr Moazzem said, adding, “Analysing the trend of accidents, it can be seen that it has started to increase again.”
Dr Fahmida Khatun, executive director of CPD, said, “In the aftermath of the Rana Plaza disaster, numerous measures were implemented to enhance worker and building safety. Significant progress has been made through both domestic and international efforts. Yet, even a decade later, can we confidently claim that the safety of this sector is guaranteed?”
Helen Keller, a leading global organisation dedicated to preventing blindness and promoting eye health, has partnered with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) to address vision problems among garment workers in Bangladesh.
The joint initiative aims to integrate comprehensive eye care services within health facilities managed by BGMEA, ultimately enhancing workers’ productivity and well-being, reads a press release.
Faruque Hassan, president of BGMEA, and Hasina Akhter, country director of Helen Keller International, Bangladesh signed the MoU on behalf of their respective sides at BGMEA complex on Wednesday (30 August).
BGMEA Vice President Miran Ali and Director Neela Hosna Ara were also present at the MoU signing ceremony.
With an estimated 27 million people suffering from moderate to severe visual impairment in Bangladesh, the partnership between Helen Keller and BGMEA seeks to address this issue head-on.
The initiative will focus on the provision of primary eye care services, including basic eye examinations, prescription glasses, and referrals for more complex eye disorders.
The project will involve training clinicians at five BGMEA-affiliated health facilities, equipping them with the necessary tools to provide effective eye care services. A key aspect of this collaboration is assessing the impact of improved eye health on workers’ productivity.
BGMEA President Faruque Hassan said, “We are delighted to partner with Helen Keller International in providing eye care services to garment workers in Bangladesh. The initiative will improve the eye health of workers, which in turn will also boost their productivity.”
Hasina Akhter, country director of Helen Keller International, Bangladesh, said, “Carrying forward the legacy of Helen Keller, through this partnership between BGMEA and Helen Keller International, we will be able to support the garment workers in eye health care and improve the quality of their life.”
Institutional safety monitoring in the country’s ready-made garment (RMG) industry slowed down in recent years, especially after the departure of Accord and Alliance initiatives, which caused rise in the number of workplace accidents.
A latest report of the Centre for Policy Dialogue (CPD) also found that the number of fire accidents in the export-oriented RMG industry increased to 241 in 2022, which was 180 in 2021, and 177 in 2020.
The number of workers’ death in workplace accidents in the RMG industry, however, decreased to four in 2022 from 13 in 2021, it showed.
Uncertainties over maintaining the progress in terms of factory remediation – made by the two western buyers’ platforms Accord and Alliance – have arisen after their departure, the CPD said in a media briefing at its office in the city on Wednesday.
CPD Research Director Dr Khondaker Golam Moazzem and Senior Research Associate Tanim Ahmed jointly presented findings of the report – ‘Monitoring Workplace Safety in the RMG Sector: Is Bangladesh a Pioneer or Still a Learner?’
Citing statistics of the Bangladesh Fire Service and Civil Defence, the report showed workplace accidents in the RMG industry continue to take place in 2023 as well.
A garment worker in an export-oriented garment factory died when a wall of the building collapsed on February 19. Besides, fire broke out in a factory on May 1, in which at least 18 employees suffered burn injuries.
The CPD report also showed that accidents occurred in at least three export-oriented RMG factories, where the RMG Sustainability Council (RSC) conducted workplace safety inspections.
The CPD, however, said the biggest success of the Bangladesh RMG industry in the area of workplace safety was to be able to ensure no repetition of Rana Plaza-like incidents in the past 10 years.
It also said the number of accidents decreased during safety inspections conducted by the European Union-based buyers’ platform Accord on Fire and Building Safety in Bangladesh and the United States-based buyers’ platform Alliance for Bangladesh Workers Safety.
Since the two initiatives are no longer active here, the Department of Inspection for Factories and Establishments (DIFE) along with RSC and Nirapon, the successors of Accord and Alliance, must continue the safety standard set by the global initiatives.
“In fact, in view of a few recent incidents in the garment industry, it has become crucial to review whether the existing safety monitoring entities are in the right direction or not.”
The CPD report showed that despite increasing technical and institutional capacity, the DIFE’s number of safety inspections in RMG factories decreased to 3,560 in 2022, from 6,227 in 2021.
“It is unclear what caused the decrease in inspections for the RMG industry, particularly when the scopes of inspections remain higher with introduction of the digital Labour Inspection Management Application (LIMA).”
Expressing concern over the DIFE’s increasing tendency to keep the disclosure of information at a minimum level, the CPD said it was an impediment for making the government agencies concerned accountable.
Following the Rana Plaza collapse in 2013, safety inspections were conducted in 1,549 factories under the government-led national initiative. The number of factories under the initiative dropped to 659 as of October 2022, as a number of units had to shut their operation due to non-compliance and financial crisis following the Covid-19.
The government, in association with the International Labour Organisation (ILO), formed the Remediation Coordination Cell (RCC) to oversee safety progress in the factories inspected under the initiative.
After the RCC’s operation had ceased, the responsibility of overseeing remediation of the factories was shifted to the Industrial Safety Unit (ISU) under the DIFE.
The ISU is yet to start its operation, and remediation progress for the factories under the national initiative remained stagnant at 54 per cent over the years, according to the CPD report.
In June 2020, the RSC was set up to act as the national initiative that would implement programme of the former Bangladesh Accord, now the International Accord.
The report showed that the RSC already covered 1,887 factories as of June 2023, and remediation progress in the units stood at 91.32 per cent.
It also observed a sharp decline in follow-up and other inspections in the RSC-covered factories in this April.
“The decline in these specific types of inspections may not necessarily indicate an overall reduction in the RSC’s inspection activities. Nevertheless, an over 50 per cent decline in follow-up and other inspections compared to the previous months raises concerns.”
Citing the data of Mapped in Bangladesh, a digital database of the RMG factories and workers, the CPD said of the country’s 3,752 active garment factories, some 1,887 factories are covered by RSC, 350 by Nirapon, and 659 by RCC.
“There are at least 856 RMG factories, which are not under the purview of any inspection mechanism at present,” Dr Moazzem said.
The government should develop safety standards for all the export-oriented RMG factories, and compliance should not be the US and the EU market-based.
He suggested gradually bringing those units under the membership of either BGMEA or BKMEA by offering associate membership initially – as an interim mechanism to bring those under regulation.
CPD Executive Director Fahmida Khatun said ensuring compliance in the RMG sector is important for Bangladesh, as the country’s export earnings largely depend on the sector.
After graduation from the least developed country to a developing one, labour-related compliance would be crucial for Bangladesh to gain the GSP plus facility in the EU market, she noted.
Munni_fe@yahoo.com
Seven workers of readymade garment factory were killed in an accident in Narshingdi while four others died in separate road accidents in Dhaka, Madaripur and Pabna.
The RMG workers were killed in a head-on collision between a stone-laden truck and a microbus in Narsingdi’s Shibpur upazila, early Friday, police said.
The accident occurred at Itakhola area of the upazila around 2:00am, leaving seven people dead and four others injured, said Itakhola highway police outpost in-charge inspector Md Kabir Hossain.
The deceased of Narsingdi accident were identified as Al-Amin Hawlader, 37, of Rajapur in Jhalakathi; Sabuj Mia, 32, of Deldowar in Tangail; Al Amin, 27, of Mirzapur in the same district; Abdul Awal, 40, of Kalkini in Madaripur; Aryan Raihan, 25, of Muladi in Barishal; Raju Mia, 37, of Sharishabari in Jamalpur, and the microbus driver Nasir Uddin, 28.
Four other injured in the incident were sent to Dhaka medical college hospital, police said.
Shibpur police station officer-in-charge Firoz Talukdar said that the microbus passengers were employees of SB knitting factory at Savar in Dhaka.
He said that the Sylhet-bound microbus collided head-on with the stone-laden truck coming from the opposite direction on the Dhaka-Sylhet highway.
Five people were killed on the spot as a result of the clashes. Later, one person died while being taken to Narsingdi sadar hospital and another died to his injuries after being admitted to the same hospital, OC Firoz said.
The injured were initially taken to Narsingdi sadar hospital and later transferred to Dhaka medical college hospital for better treatment, said inspector Kabir.
He said that the truck was seized and its driver was also arrested.
Quoting witnesses, the police officer said that the high speedy microbus tried to overtake a vehicle during rain and ended up crashing with the truck.
Meanwhile, four people were killed in separate road accidents in Dhaka, Madaripur and Pabna. Of them, two were killed in separate road accident in the capital on Friday at Banani and Mayor Hanif Flyover, Jatrabari.
A truck driver was killed as the rod-laden truck crashed into a covered van in the capital’s Banani area Friday morning.
The deceased was Md Shahjahan, 30, hailed from Mymensingh’s Gouripur. He used to driving truck on Hazaribagh-Tongi route. The accident took place early morning in front of Maasranga TV building, said Banani police sub-inspector Ejaz Haque.
Police seized both the vehicles but the covered van driver fled the scene, said the SI.
In another incident, a motorbike rider was killed after being hit by another motorbike on Mayor Hanif Flyover at Jatrabari in the afternoon.
The victim was identified as Zaber Hossain, 35.
A witness Imran Hossain said that the accident took place around 3:00pm when a motorbike hit another while overtaking on their way to Dholaipar.
New Age correspondent in Pabna reported that a schoolboy was killed when a battery-run vehicle overturned at Ishwardi in Pabna Friday morning.
The deceased was identified as Abei Hossain, 15, a 10th grader student of Bakhtarpur high school in the upazila.
Ishwardi police station inspector (investigation) Hasan Basir said that several passengers were injured in the accident at Sahapur. Among them, schoolboy Abir was killed on the spot.
In Madaripur, a motorcycle rider was killed and nine others were injured in a road accident when a Dhaka-bound bus crashed on the highway in Munsi Bazar area under Shibchar upazila of the district in the afternoon.
The deceased was identified as Akash, 24, from Kumarkhali upazila in Kushtia, BSS reported.
The accident occurred around 2:30pm, when 10 people were going to Dhaka from Kushtia on five motorcycles.
On their way, they stopped to take rest on the road adjacent to the expressway at Munshi Bazar near Pacchar, parking their motorbikes on the roadside.
At that time, the driver of a Dhaka-bound passenger bus lost control over the steering and rammed into the parked motorcycles, leaving Akash dead on the spot, said Abdullah Hel Baki, SI of Shibchar Highway police station.
A total of 260 industrial units under the jurisdiction of eight zones of Industrial Police were closed, leaving about 35,000 workers unemployed in January-August, 2023, while 114 new factories created jobs for 12,445 workers in the period.
According to IP data, 320 factories under the jurisdiction of the Industrial Police were closed from January 1 to August 20, 2023, leaving 44,559 workers unemployed.
Out of the 320 factories, 60 are members of the Bangladesh Garment Manufacturers and Exporters Association, 16 are members of the Bangladesh Knitwear Manufactures and Exporters Association, nine are members of the Bangladesh Textile Mills Association, five are under the Bangladesh Export Processing Zones Authority and the rest 223 are non-RMG units.
Of the closed factories, 60 units reopened in the period and 9, 611 workers got back their jobs, the data showed.
At the same time, the Industrial Police found that 114 new factories were set up in the period with the employment of 12,445 workers.
Although 22,056 workers got back their jobs in the new factories and in the reopened units, more than 22,500 workers remained unemployed in January 1- August 20 period, the data showed.
Industry people said that many small-scale export-oriented factories were closed due to lack of work orders and a good number of local small and cottage industries went shut due to lack of raw materials.
They said that some readymade garment factories who were engaged in subcontracting have gone out of operations in recent months due to lack of work orders.
‘The actual number of closed factories will be higher than the statistics released by the Industrial Police as some units suspended their operations in secret,’ Bangladesh Knitwear Manufacturers and Exporters Association vice-president Fazlee Shamim Ehsan told New Age.
He said that some of the RMG factories had lost their working capital due to lack of required work orders and suspended operations.
Ehsan also said that many import-substitute small and cottage industries were closed in the country due to lack of raw materials as the government imposed restrictions on imports to mitigate the dollar crisis it was facing now.
About $1.5 billion in export earnings remained stuck abroad as of May against the backdrop of a dollar crisis in the country, according to Bangladesh Bank data.
The central bank data showed that out of the $1.5 billion that was unrealised, about $255 million remained outstanding due to short-shipment issues, $68 million was unpaid owing to bankruptcy, $251 million was stuck in litigation, $125 million was withheld due to fraudulent activities or fake exports and $700 million was unpaid for unspecified reasons.
According to the central bank rules, exporters are required to repatriate funds within 120 days from the date of goods shipment.
However, when the funds remained overdue, the government found itself grappling with an ongoing dollar crisis and currency depreciation, bankers said.
They said that they were still facing difficulties in settling import payments and opening letters of credit due to the prevailing dollar crisis on the market.
The central bank has consistently urged financial institutions to expedite the retrieval of overdue export proceeds to stabilise foreign exchange market.
The overdue export proceeds were $1.28 billion at the end of June 2022 and $1.42 billion at the end of December 2022.
Bangladesh Bank executive director and spokesperson Md Mezbaul Haque said the accumulated overdue amount stood at $1.5 billion.
About $281 million was recovered in the past one year, and efforts are underway to recover the remaining sum, he said.
Mezbaul observed that the outstanding amount accounted for only 1 per cent of the total exports, which, in the context of business, was not an uncommon occurrence.
The interbank exchange rate in Bangladesh has surged to Tk 109.5 a dollar amid the ongoing dollar crisis, causing a significant depreciation of the taka — by about 30 per cent — over the past two years.
The current exchange rate climbed from Tk 94.7 in July 2022 and Tk 84.8 in July 2021.
BB officials expressed concerns that certain business entities were bringing export proceeds to the country at their convenience to exploit the situation.
The exporters are bringing the proceeds to the country when they have to meet their own import liabilities since banks are reluctant to open new LCs amid the dollar crisis, they said.
The depletion of foreign exchange reserves, poor inflow of remittances and export earnings are contributing to the imbalance in the foreign exchange market.
The dominance of the illegal ‘hundi’ market, where unofficial currency trading occurs, also plays a role in exacerbating the crisis.
To stabilise the foreign exchange market, the Bangladesh Bank sold about $22 billion in the past 25 months, including $13.5 billion to banks in financial year 2022-23 and $7.62 billion in FY22.
The foreign currency reserve in Bangladesh dropped to $29.31 billion on August 23 from $41.82 billion in June 2022.
The gross international reserve of Bangladesh, according to the International Monetary Fund guidelines, dropped to $23.16 billion on August 23.
