Labour unrests disrupt CEPZ operations as financial crisis hits factories

Chattogram Export Processing Zone (CEPZ), one of the country's oldest and most stable industrial hubs, is facing escalating labour unrest as financial crises have gripped several factories, disrupting production and tarnishing the zone's reputation.

On 26 June, nearly 700 workers of Thianis Apparels Ltd staged a daylong protest, demanding their overdue wages for May 2025. The demonstration began with a sit-in inside the factory and later extended to blocking the main gate of the EPZ, halting vehicular movement – including trucks carrying export-import goods – until 8pm. 

The blockade disrupted scheduled shipments to Inland Container Depots, putting timely exports at risk.

Just three days prior, on 23 June, around 1,700 workers of Modiste (CEPZ) Limited, a unit of JMS Group, continued a sit-in for the fourth straight day over similar wage issues. Initially confined within factory premises, the protest later intensified as workers attempted to block the CEPZ gate.

According to Industrial Police data, CEPZ has experienced at least 10 incidents of labour unrest in the past two months, with over 40 such incidents recorded in the last 11 months since August 2024. Once known for its labour compliance and stability, CEPZ is now witnessing unrest at an unprecedented level following the political shift triggered by last year's mass uprising.

Officials from the Bangladesh Export Processing Zones Authority (Bepza) and Industrial Police attribute the recurring unrest to severe financial, political, and leadership crises in at least five factories: MNC Apparels Limited, Modiste (CEPZ) Limited, JMS Garments Limited, Thianis Apparels Limited, and Bond Shoe (BD) Limited.

Political crisis grips MNC Apparels

MNC Apparels, a concern of NASA Group, is reportedly suffering from political fallout. Its owner, Nazrul Islam Mazumder – a key Awami League ally and former chairman of Exim Bank and Bangladesh Association of Banks – was arrested on 2 October 2024 in connection with the killing of a youth in Jatrabari during the uprising. Following his arrest, the Bangladesh Financial Intelligence Unit froze all the bank accounts of Mazumder and his wife.

As a result, MNC Apparels has been unable to disburse export payments or import raw materials, leading to a severe cash crunch. 

"They're trying to survive by taking subcontract orders, but delayed payments from those jobs are causing repeated wage delays," said CEPZ Executive Director Abdus Sobhan.

Kamal Hosen, managing director of MNC Apparels, said, since the arrest of the chairman, many   factories were forced to shut down as export-import and financial transactions came to a halt due to account freeze.

"One factory in the CEPZ has been laid-off. We are trying to save the other one. But it may not be possible if the government does not cooperate", Kamal added.

Leadership vacuum in JMS Group

JMS Group, once a thriving industrial conglomerate led by its founder Mahmud Ali, now faces a leadership crisis. After Ali's death during the Covid-19 pandemic, his 26-year-old son Mostafa Mahmud assumed control of the company with limited experience.

The company, which operates JMS Garments and Modiste (CEPZ) Limited with over 3,000 workers combined, was further destabilised when Exim Bank failed to open letters of credit for four months. This led to the loss of key buyers and large orders, pushing the group into a financial spiral.

"Internal power struggles among factions in the management are worsening the situation," said Abdullah Al Mahmud, Superintendent of Chattogram Industrial Police. "The young managing director is unable to manage the company, resulting in frequent unrest, almost twice a month."

Mustafa Mahmud, the managing director of JMS Group, could not be contacted for a comment on this issue, as he did not answer phone calls from The Business Standard.

Thianis Apparels faces legal and financial troubles

Thianis Apparels, a medium-sized garment factory employing around 700 workers, has created its own financial woes. In 2017, the company challenged Bepza's utility and service charges through a High Court writ and stopped paying its dues. By June 2025, Thianis owed $2.6 million to Bepza and another $5 million to Customs.

In March, the court ordered the company to pay $55,000 monthly until the writ is resolved. "They failed to comply," said Abdus Sobhan. "We have since suspended their licenses and permits as there is no visible sign of recovery."

The factory has also struggled to secure steady work orders, resulting in recurring wage delays and worker unrest.

Anisur Rahman, managing director of the company could not be contacted for clarification as he did not answer phone calls from The Business Standard.

Impact on CEPZ's reputation

Bepza officials admit that these repeated incidents are disrupting the CEPZ's operations and damaging its long-standing reputation as a hub for compliant and stable industrial practices. "The unrest is not just hurting production but also creating dissatisfaction among foreign investors and local operators," said Sobhan.

As the labour unrest continues to escalate, stakeholders warn that urgent financial restructuring, leadership reform, and political resolution are needed to restore normalcy in CEPZ and protect its future as a major export hub.

Established in 1983, the 453-acre specialised export processing zone located in the South Halishahar area in Chattogram has 501 industrial plots where 165 local and foreign factories operate.