German company partners with Yunus over textile

Dr Michael Otto, right, chairman of German company Otto Group, signs an agreement with Nobel laureate Muhammad Yunus, left, in Hamburg to create a joint venture social business for textiles in Bangladesh. Yunus Centre Star Business Desk

Germany's Otto Group has signed a deal with Grameen Trust to start a joint venture in textiles in Bangladesh, Yunus Centre said in a statement yesterday.

Under the deal, Grameen and Otto will jointly set up Grameen Otto Trust and Grameen Otto Textile Company.

Grameen Otto Textile Company will establish a factory in Bangladesh to produce readymade garments for the international market under "socially and ecologically sustainable conditions".

Otto Chairman Dr Michael Otto and Nobel laureate Muhammad Yunus signed the deal at the headquarters of the German company in Hamburg.

Otto Group is a leading family-owned international trading and services corporation with 123 major companies and 50,000 employees in 20 countries.

Otto is the largest mail order company in the world and second only to Amazon to have the largest online marketing.

The signing ceremony was held at the end of Yunus' visit to several German cities to attend the 20th anniversary celebrations of the Fall of Berlin Wall, Nobel Peace Laureates' Summit, Vision Summit and Social Business Summit.

"Under the principles of social business, as developed by Prof Yunus, investors cannot receive any profit beyond recouping the actual investment," the statement said.

"All profits from the joint venture will be used exclusively for reinvestment in the factory to provide modern technologies and humane working conditions," it said.

It is the first social business partnership in the textile business that aims to apply the highest ecological standards in production.

"Otto Group has committed to establishing more factories in Bangladesh, based on the success of the first factory, and also promote this new social business model to the countries in Africa," the statement added.