RMG sees new investments with strong global demand

Entrepreneurs are now stepping up with fresh investments in the apparel sector that is currently on a roll with an excellent flow of work orders – even though there is uncertainty over uninterrupted power and energy supplies.

To cash in on this hot streak, a few big names, such as Team Group, Urmi Group, Chattogram-based RDM Group and the real estate giant Sheltech, are now setting up new facilities to boost their production capacity and have a bigger stake in the global RMG export market.

There is no exact data on how much new investment the sector has received. The minimum cost of setting up a 10-line readymade garment factory in a rented building amounts to at least Tk5 crore.

If this calculation is taken into account, 160 big and small factories, which have obtained BGMEA and BKMEA memberships for setting up new facilities, invested approximately Tk4,000 crore in constructing knit, woven and denim factories, industry insiders say.

The current investments in garment and textile industries stand at Tk18,000-Tk20,000 crore.

Team Group has invested Tk720 crore to develop an industrial village where there will be a denim factory with 32 production lines, a washing plant, a sweater factory, and a blouse manufacturing unit.

"We have invested in this project to cash in on the growing apparel market worldwide. Bangladesh has a good stake in it and also has every potential to further increase it with so many work orders pouring in," Abdulla Hil Rakib, managing director at Team Group, tells The Business Standard.

These new units are now under construction and hopefully will go into production by 2023, he says.

But he is also concerned over getting uninterrupted gas supply, saying, "We have no right direction over it."

Rakib hopes that the new facilities will create jobs for 5,000 people, apart from adding another $90 million to this group's annual export turnover.

Currently, Team Group has employed about 18,000 workers and its annual turnover stands at about $660 million from apparel manufacturing, a garment buying house, a pharmaceutical company and a real estate development firm.

In FY21, its garment buying house's exports amounted to $315 million, Rakib notes.

Thanks to its new ventures, the group has also set a target to export goods worth $1 billion by 2026 when Bangladesh is scheduled to graduate to a developing country.

Sheltech Group, a pioneer of the real estate sector in Bangladesh, is also planning to invest in denim garment and knit composite factories, says its Chairman Engr Kutubuddin Ahmed, who is also chairman of Envoy Textiles Limited.

The units will come into production by the end of 2023, he points out.

The denim garment will be an eco-friendly factory to produce high-end apparel items, Kutubuddin Ahmed tells TBS.

The knit composite factory will be set up in a joint venture with "a well-known foreign apparel maker" to produce high-value garment products and both units will be equipped with the latest technologies for high-end buyers, he says.

Sheltech Group has investments in various sectors, such as textile, ceramics, meat, hospitality and brokerage sectors.

Urmi Group has also gone for expansion to set up a new garment factory.

Asif Ashraf, managing director at Urmi Group, says, "We have invested Tk120 crore in a new garment factory with 40 production lines and it will create about 3,000 job opportunities."

Some 1,400 workers have already joined the Tejgaon unit, which is relocated to a new project; the rest of the workers will be employed by 2023, according to him.

In FY21, its export turnover amounted to $160 million, he says, hoping that this year their turnover will reach $200 million.

Chattogram-based RDM Group is planning to establish a 12-line capacity garment factory by this year.

Its Chairman Rakibul Alam Chowdhury says the group, which currently owns seven production units, exported about $60 million worth of goods in the last fiscal year.

BGMEA, BKMEA memberships grow

This year another 14 groups obtained provisional membership of the BGMEA Chattogram office, to set up new units, says Rakibul Alam Chowdhury, also vice-president at BGMEA (Chattogram).

BGMEA Vice-President Shahidullah Azim says this year about 110 factories have obtained memberships for setting up new factories and there are many applications submitted to them.

BKMEA Vice-President Fazlee Shamim Ehsan tells TBS that in the past six months, about 50 factories took approval from them to import machinery. Most of them are expanding capacities of their existing production units.

Besides, there are some new entrepreneurs who are making fresh investments in setting up new facilities, he says.

All are going for new investments despite the ongoing energy crisis, hoping that they will be able to handle it if they negotiate with buyers.

"Energy crisis is not a local problem at this moment, buyers must pay additional prices if we can negotiate with them," Fazlee Shamim adds.

He also hopes that the country will enjoy a huge pressure of work orders in the next two-three years.