All factories under Beximco Textiles have been shut down and all workers terminated from 28 February.

The dues of workers from these factories will be paid in phases starting 9 March. The ministries of finance and labour will provide the funds, with the labour ministry directly responsible for disbursing the payments, according to a Beximco notice.

The decision was made at a meeting of the Advisory Council Committee on Reviewing the Labour and Business Situation of Industrial Establishments in Beximco Industrial Park, chaired by Labour and Employment Adviser Brig Gen (retd) M Sakhawat Hossain yesterday (26 February).  

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When asked about the matter last night, M Sakhawat Hossain declined to comment, saying the meeting’s decision would be announced at a press conference today (27 February).  

However, a Beximco Group official, speaking on condition of anonymity, told The Business Standard that Beximco Textiles Managing Director Osman Kaiser Chowdhury attended the Advisory Council committee meeting, where he signed the factory closure notice. TBS has obtained a copy of the notice.

The notice states that all officers, employees, and workers at 14 establishments, including Beximco Limited (excluding Yarn Unit-1) in Beximco Industrial Park, Kashimpur, Gazipur, were laid off under the Labour Act citing a lack of work, effective from 16 December and 5 February.  

The notice further states that due to the absence of work resources, all factory workers have been laid off from 28 February, with the company’s operations fully shut down. Laid-off workers will receive their dues in phases from 9 March in accordance with laws and regulations.  

A copy of the notice, signed on Wednesday, has been sent to the secretaries of the ministries of finance, labour, and industries, along with senior officials of relevant government and private agencies.  

According to Beximco Textiles, the company needs Tk550-600 crore to pay workers’ due wages in compliance with labour laws. Beximco had requested Tk400 crore in assistance to keep the factories running, but neither the government nor Janata Bank responded to the request.

Salman F Rahman, owner of the Beximco Group and former private industry and investment advisor to Prime Minister Sheikh Hasina, has been in jail since 13 August last year, a few days after the fall of the Hasina-led Awami League government. 

On 29 August, the Bangladesh Financial Intelligence Unit (BFIU) froze the bank accounts of Salman F Rahman, his son Ahmed Shayan Fazlur Rahman, and his daughter-in-law Shazreh Rahman.

On 18 September, the Criminal Investigation Department (CID) of Police filed 17 cases against 28 individuals from Beximco, including Salman F Rahman, on charges of laundering approximately Tk1,000 crore abroad under the guise of export trade.

A committee of the interim government had initially decided to sell shares of certain Beximco Group companies to pay off the workers’ dues. However, due to complications in the share sale, it was decided to pay the dues from government funds.

Following the fall of the Hasina government, 16 out of the 31 companies under the Beximco Industrial Park have been fully shut down. These companies have accumulated loans of Tk28,000 crore. Beximco Group announced factory layoffs due to a funding crisis and the inability to open letters of credit for importing raw materials.

Beximco Group claims that its Textiles and Apparel Division has been the highest exporter through Janata Bank for many years, with an average monthly export of $32 million over the past six years. In 2022, the average monthly export reached $59 million.

Ready-made garment (RMG) exports have apparently rebounded with a notable surge in shipments to all major markets in the first six months of the 2024-25 fiscal year. 

Exports to the European Union (EU), the United States, the United Kingdom, Canada, and other emerging markets have all increased. Except for the UK and emerging ones, all the markets registered growth over 10 per cent. 

The RMG exports totaled USD 19.89 billion during the July-December period of the fiscal year, which is up by 13.28 per cent from USD 17.56 billion of exports recorded in the same period previous year. 

Citing data from the Export Promotion Bureau (EPB), the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) noted that around 50 per cent of the total exports went to the European Union (EU) nations during the first six months of the current fiscal year. Exports to the EU reached USD 9.87 billion, which is 15.22 per cent higher than the previous year’s same period. 

Among EU countries, Germany, Spain, the Netherlands, France, Poland, Italy, and Denmark imported more than USD 500 million worth of Bangladeshi garments. Except for Spain and Italy, exports to all these countries grew by over 10 per cent.

Germany remained the top European market during the period, importing USD 2.47 billion worth of garments. The figure is 14 per cent higher than its imports in the previous year’s same period.

Meanwhile, exports to Spain reached USD 1.7 billion, France USD 1.09 billion, the Netherlands USD 1.06 billion, Poland USD 790 million, Italy USD 770 million, and Denmark USD 560 million. Among them, Poland saw the highest growth rate at 28 per cent, while Spain recorded the lowest at just under 3 per cent.

The US continued to be the largest market for Bangladesh as it accounted for 19-20 per cent of total RMG exports. The US imported RMG products worth USD 3.84 billion in the first half of the current fiscal year, which is 17.55 per cent higher than the previous year’s corresponding period. 

Apparel exporters are seeing increased export opportunities in the US market as president Donald Trump imposed tariffs on imports from Canada, Mexico and China.

According to them, an additional 10 per cent tariff has been placed on Chinese products, which is expected to prompt US buyers to shift their purchase orders away from China, and create opportunities for the Bangladesh exporters to receive more orders. 

Multiple traders told Prothom Alo that many US buyers had already started placing additional purchase orders even before the tariffs were imposed. The buyers are engaging in negotiations with factories and visiting Bangladesh to explore sourcing options.

Beyond the European Union and the United States, exports to the UK reached $2.16 billion in the first half of the current fiscal year, marking a 6.70 per cent rise compared to the same period last year. Exports to Canada totaled $640 million in the first half of the fiscal year, which is up by 14 per cent from the previous year’s corresponding period. 

Bangladesh is also performing well in emerging markets as it exported $3.37 billion worth of RMG products to these markets in the first half, compared to $3.13 billion in the same period last year.

Among the new markets, Japan was the largest importer of Bangladeshi RMG products during the July–December period, with imports totaling $600 million. Exports to the Asian country rose by 5.7 per cent compared to the same period in the previous year. 

Besides, exports to Australia reached $430 million, India $370 million, Korea $230 million, and Turkey $220 million. Growth rate was 7.5 per cent for exports to Australia, while 18 per cent for India, 2.84 percent for Korea, and 43 per cent for Turkey.

Mohammad Hatem, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told Prothom Alo that despite a rise in purchase orders, the key challenge is now the low price. Workers’ wages and other costs went up, but foreign buyers are offering lower prices than before. Hence,  many purchase orders are not being accepted.

In response to another query, the BKMEA president said the textile mills are struggling to operate due to gas and electricity shortages. Hence, many RMG industry owners are importing yarn from India, which is eventually weakening the local textile mills. 

He cited challenges over banking activities and law and order situations and feared that the positive trend in exports might not be retained had these internal issues not been addressed quickly. 

Reforms in South Asian countries like Bangladesh, particularly in its garment industry, have largely been driven by pressure from the global supply chain, according to macro-economist and public policy analyst Debapriya Bhattacharya.

All the reforms that have taken place in the garment industry – in the post-quota phase, in addressing child labour and in ensuring workplace safety after the Rana Plaza tragedy – have been the result of supply chain pressure, he said.

Debapriya, a distinguished fellow of the Centre for Policy Dialogue (CPD), made the remarks speaking at the 8th Sanem Annual Economists’ Conference (SAEC) 2025 virtually today.

Debapriya emphasised that Bangladesh’s response to global market incentives has also shaped reforms in remittances.

However, he stressed that reforms should be balanced and tailored to sectoral needs, ensuring the development of supply-side capacity. He further said if liberalisation results in Bangladesh merely becoming an import-dependent country, then it has failed to achieve its purpose.

The economist stressed that sustainable reforms should lead to economic diversification, productivity growth, poverty alleviation, and reduced inequality.

“The paper stated that if the South Asian countries do not make the reforms or open up the economy, they will miss the new advantage that will come in the future. 

“I am not against reforms, however, if we look into other studies that have been done, under no circumstances countries like Bangladesh or other lower middle income countries will be able to take advantage of so-called new opportunities,” the economist added.

Mentioning that some countries are doing good in some cases, Debapriya said, “Even if we do many of the things that have been suggested, are we really ready to do that in a situation when there is such fluidity and flux in the system? The paper talked about economic fragmentation in the global scale, but totally ignored the global frame.

“Sub-regional cooperation could be a solution for low trade problems. This form has been practiced in Bangladesh and elsewhere in the recent past. This is also in line with political alignment. We have gone to Nepal, Bhutan, India and established some form of connectivity.”

The keynote session was presented by Dr Franziska Ohnsorge, chief economist for South Asia, World Bank, and delivered a presentation on “Implications of Geoeconomic Fragmentation for South Asia”.

While presenting, she said, “Geopolitical differences reduce bilateral trade and investment – but, for now, [there is] mixed evidence on the degree of fragmentation. Geopolitical vulnerability and connectedness is higher for emerging markets and developing economies (EMDEs), lower for trade than finance.”

Ohnsorge stated that geopolitical differences are reducing global trade and investment, with emerging markets and developing economies (EMDEs) being the most vulnerable. 

However, evidence on the degree of fragmentation remains mixed. EMDEs have responded to fragmentation through diversification and de-risking, she explained.

While South Asia has diverse export and foreign direct investment (FDI) sources, Ohnsorge noted that aggregate inflows remain too low for the region to benefit significantly from shifts in global supply chains.

As a discussant, Dr Shanta Devarajan, professor of International Development at Georgetown University, said the paper’s policy conclusions reinforced long standing calls for South Asian countries to be more open.

“We have got one more justification to the idea that South Asian countries should be more open. They should remove the barriers of the cross border transactions.

“The geopolitics within South Asia is a reason why the trade between them is so small. Especially the politics between two large countries of this region, India and pakistan. The trade could be even 10 times more if the tension could be reduced. The reasons for low trade volume are not economy but politics,” he said.

Dr Deepak Mishra, director and chief executive, Indian Council for Research on International Economic Relations (ICRIER), said most of the east asian countries have geopolitical issues with China, however this couldn’t be the obstacle to see trade growth with this country. In the same kind of situation, the trade among South Asian countries is opposite. 

Selim Raihan, professor of Economics at University of Dhaka and executive director of Sanem, moderated the keynote session.