Ctg’s first suit factory faces collapse amid rent dispute with Bepza

Thianis Apparels Limited, Chattogram's first and only suit-manufacturing factory, is on the verge of collapse amid a prolonged financial crisis and unresolved legal battles with the Bangladesh Export Processing Zones Authority (Bepza) over rent-related disputes.

The Bangladesh-UK joint venture, located in Chattogram's Export Processing Zone (CEPZ), was once a promising export-oriented enterprise with an annual export volume of $10 million.

Now, it remains sealed and shuttered, leaving 700 workers without pay and over $2 lakh worth of ready-to-ship garments locked inside.

On 16 June, Bepza officially shut down the factory, citing outstanding dues of Tk28 crore in unpaid rent and utility bills.

The closure included cancellation of Thianis Apparels' lease and suspension of its export permissions, effectively halting all operations and putting its $2 million investment and global buyer relationships at risk.

The shutdown has drawn concern from international buyers, who warn that the disruption could damage the credibility of Bangladesh's ready-made garment (RMG) sector – the country's largest export earner.

Internal documents show that as of November 2023, Thianisowed $1,000,480 in actual rent. Bepza later imposed $343,013 in interest – equivalent to 34.3% of the principal, pushing the total dues to $1,343,854. Company officials say the effective interest rate surged to an average of 38% by April 2025.

Thianis Apparels Managing Director Anisur Rahman Khan alleges that Bepza repeatedly ignored requests for arbitration and instead escalated financial pressure.

"We tried to resolve the matter through negotiation and legal mediation, but Bepza kept increasing the interest without any willingness to talk," he told TBS.

CEPZ Executive Director Abdus Sobhan dismissed the allegations, stating, "Rent and utility calculations are generated by a uniform software-based system. With the company's current financial condition, recovery seems impossible."

"We've taken control of the premises and will auction off its machinery and goods to pay worker wages."

Advocate Raghib Rouf Chowdhury, representing ThianisApparels in court, said, "Bepza has no legal authority to shut down any factory over unpaid dues. They should have gone to court for eviction. What they did is a clear abuse of power."

In mid-July, the High Court issued a stay order on Bepza'stermination of the factory's lease and suspension of its export permissions.

However, yesterday, the Chamber Judge of the Supreme Court, after hearing Bepza's appeal, suspended the High Court's stay order until 4 August, confirmed Abdus Sobhan.

From growth to grief

Founded in 2007 on a 30,000-square-foot plot, Thianis Apparels quickly earned a reputation for producing 70,000 trousers per month. But in 2017, a devastating fire – caused by an electrical short circuit – destroyed the factory and its machinery.

To recover, the company moved to a larger 100,000-square-foot facility and reinvested in new machinery. Anisur Rahman claims he had to spend over $400,000 on renovations – despite Bepzabeing the building's owner – to meet buyer requirements. However, the increased operational costs and limited capital left the factory in financial distress.

Then came the Covid-19 pandemic, which forced the factory to remain shut for nearly two years. With mounting dues and no orders, the financial situation worsened. When operations resumed in 2022, Anisur requested Bepza to waive part of the rent accrued during the pandemic. Instead, Bepza imposed 30%-38% interest on the arrears.

"Those interest rates pushed the factory toward collapse," Anisur said.

Struggling with irregular orders and the loss of key buyers, the company could no longer meet wage or rent demands, resulting in repeated worker protests and production halts.

Legal standstill, arbitration delayed

In October 2024, Anisur Rahman sought legal redress through the High Court, which ordered him to pay $55,000 monthly – $40,000 as current rent and $15,000 toward arrears – and directed Bepza to begin arbitration.

Anisur Rahman claims he made payments until March 2025, but declining orders and cash flow shortages forced him to pause. Despite the court's order, Bepza allegedly never initiated arbitration and eventually sealed the factory.

"We were complying with the court's order, but Bepza refused to negotiate," Anisur said.

CEPZ Executive Director Abdus Sobhan, however, insists the closure was due to non-compliance with the court's directives.

Factory closure sparks worker unrest

The factory's closure has triggered unrest among workers. With exports halted and wages unpaid, tensions reached a boiling point on 23 July, when agitated workers staged a protest outside the CEPZ office and briefly detained Bepza officials while demanding their overdue salaries.

"If Bepza had allowed us to ship the finished goods, I could have paid my workers," said Anisur Rahman.

He added that more than $300,000 worth of buyer-supplied fabrics remain locked inside the factory. The continued export suspension, he warned, could result in cancelled orders, financial penalties, and severe reputational damage – not just for Thianis Apparels, but for Bangladesh's entire RMG sector.

Buyers sound alarm

Norway-based Nordic Textile, one of Thianis Apparels' key clients, has written to the Bepza chairman, urging immediate intervention over the issue.

"We've built a close strategic partnership with Thianis due to their ability to deliver high-end tailoring, especially in structured jackets and formalwear," the letter reads.

Nordic says it has around 3,300 metres of fabric – fully paid for – inside the factory, along with development samples and SMS items essential for upcoming fashion cycles.

"These are not factory-owned stocks – they are our property," the company emphasised. "This situation is severely disrupting timelines and causing financial losses in the hundreds of thousands of dollars."

The company warns that continued disruption could damage Bangladesh's image as a reliable sourcing hub.

Groupe Trium Inc, a Canadian fashion brand, also expressed concern. Thianis reportedly holds over 15,000 metres of their proprietary fabric, valued at $250,000.

In a letter dated 3 July, Alain Gauthier, vice president of Groupe Trium, wrote to Bepza, "Given the urgency and significance of the pending production, we respectfully request the reinstatement of permissions. Continued restrictions may expose our organisation to legal and financial liabilities."