37 apparel makers investing $650m in Bangabandhu Shilpa Nagar
Some 37 local textile and garment manufacturers have started investing in Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) to establish high-end apparel factories.
Together they plan to invest $650 million.
However, the investors expect to begin constructing their factories from next year, opting for a go-slow policy amid the ongoing coronavirus pandemic as fresh lockdowns at major export destinations caused a significant fall in demand.
So some of the manufacturers decided to not go for construction in the current year.
A few have already availed industrial plots at the park, which was built on reclaimed land in the Bay of Bengal, signing a 50-year lease.
The factories would produce fabrics, formal shirts, t-shirts,
trousers, yarn, sweaters, polo shirts, manmade fibres,
blazers and sportswear.
Bangladesh Economic Zones Authority (Beza) has been developing the allocated plots by providing them with access to gas, power, water, sewage lines and other utilities.
Beza has also been enhancing connectivity building roads both in and around the zone.
"I bought an industrial plot at the BSMSN and plan to initially invest $100 million, mainly to produce high-end textile and garment items," said AK Aazd, managing director of Ha-Meem Group, a leading exporter.
"However, I will not make this investment in the current year amidst the Covid-19 fallouts. Instead, I will start working on the new project from 2022.
The employment figure is low, considering high-end garments require less of a human touch compared to its conventional counterparts.
"I hope that by the end of the year, the development of industrial plots would be completed, like connections of electricity, gas and other utilities," he added.
Md M Mohiuddin Chowdhury, chairman of the industrial zone's standing committee of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said so far some 48 local garment manufacturers have applied for plots at a section inside the BSMSN designated for the sector.
Out of 48 applicants, 37 have so far received confirmation of getting an allotment, he said.
Besides, some development activities like installation of power, gas connections, preparation of the plots and construction of internal roads and boundary walls need to be completed.
"I hope by this year, all of those activities would be completed for the handover of the plots to the investors as the development activities of Beza are going on," he said.
Beza may hand over the plots at this year's end, said Chowdhury, who is also an investor at the BSMSN and chief executive officer and director of Clifton Group, another leading garment supplier.
Once the investors receive the plots, they will start construction of their mills and factories. "So expect that in the next two and a half years, the actual production will start," he said.
"Most of the mills and factories have been planning to construct factories of global standard to produce high-end apparel items as conventional garment business has become very competitive," said Chowdhury.
Around $1,400 million worth of garment items could be exported from the proposed factories, which would employ about one lakh workers.
So far, 37 of 48 investors have either made full or partial payments for their industrial plots, he added.
Syed Nazrul Islam, director of Well Fashion, said he received his one-acre industrial plot on Wednesday as he was done making the payment.
"I am waiting for another plot on two acres of land to be handed over soon to build modern factory buildings," Islam added.
Initially, he will invest Tk 100 crore to build a woven composite garment factory for manufacturing high-end products but it will take another year to begin construction due to the Covid-19's fallouts.
"I have a plan to construct a global standard garment factory to produce high-valued garment items," Islam said.
Md Junaid Abu Salay Musa, director of Epyllion Group, another leading garment exporter, said he has a plan to set up a factory at the BSMSN to produce high-end woven and knitwear items for upscale customers in the western world.
Echoing the views of his fellow investors, Musa said it would take more than one year to go for construction as Beza was still developing the zone.
However, Beza Executive Chairman Paban Chowdhury said development activities on Beza's part have already been completed and now other government agencies were completing their parts to prepare the plots.
The government has been developing the country's largest industrial park, the BSMSN, on 30,000 acres of land, of which more than 80 per cent was reclaimed from the Bay of Bengal at Chattogram.
Some 37 garment entrepreneurs have received their industrial plots so far as they have already paid 50 per cent or 100 per cent of the price, Chowdhury said.
Many of them can start constructing their industrial units as Beza has already developed the plots providing connections to power and gas.
"Beza has already confirmed investment of $20 billion in the BSMSN," Chowdhury said, adding that some 500 acres of land has been allocated for the garment section.
"I hope Beza can complete all the development activities by the end of the current year for investors. The BSMSN also offers options for all other industries," he said.