The Coronavirus pandemic has been really devastating on businesses! As far as the Bangladesh readymade garment industry is concerned, various reports suggest thousands of workers, if not lakhs, have been laid off as businesses hit rock bottom on account of the pandemic even as scores of small and medium-sized businesses had to bow out unable to deal with the severe fallouts of the pandemic.
Of late though things are slowly and steadily improving. However, it now appears that COVID-19 was not harsh only on small businesses, but even bigger players did not escape unscathed as many were said to be thinking about selling off their enterprises and making an exit even as some were forced to take perhaps the hardest of the decision to shut, if not all, part of business to try to remain afloat and wait for good times to return!
If one may remember, it was earlier this year that the news first appeared that with production suspended amid the fallouts of the pandemic, the management of Hong Kong-based woven garments maker Kwun Tong Apparels, was trying to sell off the unit inside the Adamjee Export Processing Zone.
“I am looking for potential investors who can buy my factory,” reportedly maintained the Chairman of Kwun’s sister concern Must Garment Corporation, Sanjeev Tikam Mahtani, interacting with the media then, adding, “I have been doing business over the last 40 years in Bangladesh. I have never faced such a big crisis in my life that I faced last year… I sold the goods on a big discount and faced a big quantity of work order cancellations from my long-time business partners, retailers and brands.”
Now if reports are to be believed, one of the company’s US-based retailer reportedly cancelled work orders worth US $ 20 million and another retailer had to be provided a discount of around US $ 25 million even as accumulation of such losses became too much for Sanjeev Mahtani. He said he invested US $ 50 million in the Kwun factory, which employed over 6,000 workers who were offered various facilities, such as mid-day meals, since its inception in 2006.
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According to reports, when the pandemic surfaced, Sanjeev had kept the Kwun factory shut for one month and faced a lot of losses stemming from work order cancellations and discount demands even as later on the factory authorities reportedly went for lay-offs, paying Taka 13.60 crore to workers as compensation as per the rules of the Bangladesh Export Processing Zones Authority or BEPZA, which is the regulatory body of export processing zones (EPZ) even as Sanjeev reportedly maintained that by the time the Government changed the rules, making companies inside EPZs also eligible for its stimulus package, it was too late for the Kwun factory.
“I have a lot of reputation in garment business in Bangladesh as I am one of the pioneering garment entrepreneurs in the country,” reportedly stated Sanjeev then while interacting with the media before going on to add that he never faced any labour issues or unrest as he always stood by the workers whenever they raised any demand.
“The buyers have demanded such long deferments in making payments that no one can survive as the banks will not spare the loan repayment. Nobody can survive as the retailers do not pay and the profit margin is so low,” reportedly rued the Chairman of Kwun’s sister concern Must Garment Corporation then while underlining that his annual exports were worth nearly US $ 100 million even as Chairman of the Envoy Group (a leading garment makers) and former President of the BGMEA, Kutubuddin Ahmed, while speaking to the media had reportedly maintained that Kwun employs nearly 7,000 workers, who need to be paid and if the factory gets sold, Sanjeev will be able to pay the compensation even as he underlined that the interests of foreign direct investments should also be protected as these were from very important entrepreneurs creating jobs and turning the wheels of the economy through their businesses inside the country.
Now if one thought it all ended with Kwun Tong Apparels, one is mistaken! Very recently, there was news of one of Asia’s largest garment and textile makers, Opex & Sinha Textile Group, deciding to close big operations at Kanchpur, Narayanganj following a reduction of work orders and financial losses.
According to media reports which cited Baniz Ali, Acting Director (Admin) of the group, who in a notice issued on 18 October stated that the group’s Chairman, Anisur Rahman Sinha, decided to bring the decision into effect from 19 October even as Anisur Rahman Sinha had reportedly been trying to run the factories even after incurring losses since 2012 and had even sold land and other properties to pay workers’ salaries so that production continued smoothly, underlined the notice.
Anisur Rahman Sinha reportedly gave up due to financial losses, a reduction of work orders due the severe fallout of the COVID-19, workers’ indiscipline and lower efficiency, read the notice, which reportedly maintained that all arrears would be paid following the country’s labour laws and the factory management was preparing to pay workers’ dues in consultation with the Labour Ministry and the Department of Inspection for Factories and Establishments (DIFE) even as the copies of the notice have reportedly been sent to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) as well.
It may be mentioned here that Opex & Sinha Textile Group once employed more than 40,000 workers in its Kanchpur factories and had an annual turnover of around US $ 500 million, of which US $ 300 million came from direct exports even as when it was established in the 1990s, the Kanchpur apparel unit of Opex Group was the largest garment factory in the country and subsequently the company began to see one success after another even as the organisation continued to grow day by day and turned into a huge hub in the early 2000s.
Although Opex Group has garment factories in Adamjee EPZ, Mirpur and another area of Narayanganj, the unit adjacent to the Kanchpur Bridge had the highest number of workers with Anisur Rahman Sinha reportedly continuing to pour money into spinning and weaving in the very place, with an intention to produce yarn, fabrics and readymade clothes in one place after importing cotton only while at its peak, the Kanchpur garment unit of Opex Group reportedly employed around 45,000 workers.
Meanwhile, speaking to the media, Executive President of the BKMEA Mohammad Hatem reportedly claimed that Anisur Rahman Sinha had contacted him a month ago seeking a solution while adding that there had been labour unrest in the factories for many years and the fallout of the Coronavirus pandemic ushered the closure as the management was struggling to make any profit even as the group had reportedly been paying workers some additional benefits like attendance and performance bonuses and light meal allowance but could not continue providing all during the pandemic as it was incurring losses.
This closure by such a big group is very painful for our garment industry, reportedly stated the Executive President of the BKMEA even as BGMEA President Faruque Hassan on his part underlined it was very painful to witness one of the leading and pioneer companies in the country’s garment sector shut down factories.
“The company had a huge capacity, but work orders were scanty. On the other hand, it had to spend Taka 20 crore to Taka 25 crore per month on workers’ salaries and other expenses. As a result, its liabilities to banks started to mount,” claimed another garment maker speaking to the media on condition of anonymity.
Meanwhile, even as the news related to Opex & Sinha Group appeared in the media, the BGMEA on its part reportedly started the process of cancelling the membership of around 1,100 factories that have not been in production for a long time even as the current membership of the BGMEA is said to be about 4,700, of which almost half are said to be out of production. It is to be noted that in the BGMEA election held earlier in April this year, 1,853 factory owners of Dhaka and 461 owners of Chittagong cast their votes while industry insiders are expressing apprehensions that several ailing factories may very well end up with the same fate as that of Opex!
Bharat Tex Special Report 2026 
