International Classic Composite Ltd (ICCL) has been facing troubles to invest Tk 250 crore, as the Dhaka’s development authority is not allowing the Bangladesh-Netherlands joint venture knitwear company to use its own land for factory expansion. The company has an export-oriented factory occupying half of the area of its 12-bigha land at Naojur in Gazipur. It has been trying to set up another knitwear factory using the rest of the land. In 2015, the company sought approval from the Rajdhani Unnayan Kartripakkha (Rajuk) to use the land for industrial purposes. The city’s development authority said the proposed land is an arable land under its Detailed Area Plan (DAP). As per Rajuk’s recommendation, the company then submitted an application to change the status of the land from farmland to an industrial one, said MA Muttaleeb (Khokan), managing director of ICCL. “But the Rajuk has been delaying to give approval. Now our Dutch investor is threatening to withdraw the investment from Bangladesh due to the delay in implementation of the project.” On November 27 this year, the commerce ministry came up to rescue the company and sent a letter to Rajuk with a request to allow ICCL to use the land. The Daily Star obtained a copy of the letter. “This is my own land and I want to expand my operations. Rajuk should assist me, but it has not been doing it,” said Khokan who has been exporting knitwear items worth more than $35 million a year employing nearly 5,000 workers. He also said if the proposed factory is set up, another some 5,000 workers could be employed and the export value will also increase. “I have a lot of work orders from the international buyers, so I want to expand my operations,” said Khokan who has been catering work orders for European brands Zara, Next and Bestseller. Earlier, the factory owners in Gazipur areas used to collect permissions to establish factory from local municipalities or Gazipur City Corporation. After the Rana Plaza building collapse in April 2013, it has been made mandatory to seek Rajuk’s approval for new factories in an effort to avoid such industrial disasters. Since then, the garment factory owners, especially in Gazipur, Ashulia, Savar and Tongi areas, have been complaining that they are facing troubles in obtaining permissions from Rajuk to setup new units. “Bangladesh Garment Manufacturers and Exporters Association received no written complaint in this regard so far, but verbally some owners have discussed about the issue. Thus, no meeting with Rajuk was held in this regard,” said Rubana Huq, president of BGMEA. “Our suggestion is the revised DAP must be approved as soon as possible to avoid confusion.” On the other hand, Sultan Ahmed, chairman of Rajuk, said if any factory owner submits the documents following the revised strategies of land use, mapping and design, they will get it easily.  “We will take action if there is such specific complaint with the Rajuk,” Ahmed told The Daily Star by phone. But, nobody needs to go through the backdoor or paying bribes to any official of the Rajuk, he said adding, “Anybody can come to the me if he wants. I will solve his problem. I will suggest please come to me I can solve the problems.” Of the total number of garment and textile factories in Bangladesh, nearly 60 percent are located at Gazipur, Ashulia, Maona, Bhaluka, Savar, Tongi and Mirpur areas. The factory owners chose the high land of these areas when almost all units had gone under water due to massive flood in 1988.  So, these areas have turned into metropolis as the owners built factories and houses for millions of workers.

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.