The Korean Export Processing Zone (KEPZ) is expected to begin its journey in a few months by starting to set up its first industrial unit, claimed to be the world's largest shoe manufacturing factory.
Kihak Sung, chairman of Korean company Youngone Corporation that owns the KEPZ, in an interview said depending on the market situation his company will pump in $70-100 million to set up the factory in phases from May.
The factory with 72 assembly lines will employ 15,000 people when completed. It will produce more than 100,000 pairs of shoes every day--30 million pairs a year--for exporting.
According to Sung, this will be the world's biggest shoe factory.
"This will be a test case for the KEPZ. We have to see the glitches and problems that any new investor might face. We will correct them accordingly before opening the KEPZ for others," Sung said at his Dhaka residence late last week.
"Why begin with a shoe factory? Because it involves many people," he said, emphasising that the success of the KEPZ depends on cooperation of the government and the locals.
Given licence to operate in May last year after an unusual delay of seven years, the KEPZ stands out from all other EPZs in the country. It plans to install 500 industrial units with an investment of $1 billion. It would directly employ about 100,000 people.
Sung said a lot of infrastructure work needs to be done to launch the exclusive zone completely. Immediately, it needs a workable bridge connection and smooth supply of electricity and gas, he added.
The Chittagong region has been experiencing acute power and gas shortage for the last few years.
"This is another reason for picking up a shoe factory which does not demand huge electricity. I need 10 megawatts of good quality electricity," Sung said, adding that if there is not enough electricity, the KEPZ will have to take extra initiatives.
The Youngone Group had recently set up a shoe factory in Chittagong EPZ successfully.
Between 1999 and 2003, Youngone invested about Tk 100 crore to procure 2,500 acres of land for the EPZ and develop it under the private EPZ law.
However, it could not open the zone as the BNP-led four-party alliance government declined to give it operating licence without any explicit reasons.
Youngone started its operation in Bangladesh back in 1978 and grew into a massive company with exports standing close to $300 million a year.