457 industries in the country have closed permanently in the last two years due to lack of mandates, financial crisis of owners, labor discontent and chronic energy crisis. Thousands of workers have lost their jobs.
Industrialists say that the decrease in global demand, geopolitical instability and various internal crises of the country have put the industrial sector under great pressure. According to related sources, 398 of the 457 factories closed are located in the industrial areas of Gazipur, Ashulia and Chittagong. Last Tuesday, Gazipur’s Unique Designers Limited and Unique Washing and Dyeing Limited were declared permanently closed. After temporarily shutting down from June 16 citing financial crisis, the two companies stopped production operations permanently. According to the information of law enforcement agencies, about 1 thousand 800 workers have lost their jobs due to the closure of these two factories.
According to the data, 287 of the closed establishments are outside the ready-made garment sector. Among the remaining factories, there are 108 members of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), 35 members of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), eight members of Bangladesh Textile Mills Association (BTMA) and 19 establishments under Bangladesh Export Processing Zones Authority (BEPZA). In the five months to May 31 this year, 79 factories laid off a total of 7,784 workers due to reduced production and work orders. Earlier, major apparel exporter Al-Muslim Group laid off around 1,900 workers from its knitwear and denim factories. Industry experts say that the decline in demand for garments in the global market, bankruptcy of international buyers, banking complications, shortage of raw materials, political unrest, war and geopolitical situation are having a negative impact on the industry.
However, as an initiative to restart closed factories, Bangladesh Bank has launched a pre-finance scheme of Tk 20,000 crore for large industrial and service sectors. Apart from this, a separate fund of Rs 5,000 crore has been created for the cottage, micro, small and medium enterprises (CMSME) sector.
Bangladesh Bank has already sought information on closed and partially closed factories from garment sector organizations. In this regard, in a meeting held with BGMEA member factories on June 14, the entrepreneurs complained that due to the strict conditions of the financial assistance package announced by the central bank, especially the small and medium entrepreneurs are not able to take these benefits.
BGMEA President Mahmud Hasan Khan said that it is not possible to reopen all the closed factories. Many institutions do not have the capacity, and the CIB report of many is not satisfactory. He said that the decrease in global demand, decrease in work orders, inefficiency of some factories, bankruptcy of the buyer organization and inability to export products on time due to political and natural calamities are also among the reasons for the closure of factories.
BGMEA Vice President Shihab Uddoja Chowdhury said that about 200 closed and 123 partially closed factories have expressed interest in accepting the financial support package announced by the government. Factories that are not producing at full capacity should be given priority. It is possible to increase employment and export earnings very quickly if effective capital is available. He further said that most of the small and medium entrepreneurs are being deprived of financial support due to collateral conditions. Therefore, he urged to provide loan rescheduling opportunity for CMSME sector at 7 percent interest and minimum down payment. BGMEA said two audit firms will be appointed to inspect the interested factories. Based on the report of these institutions, the organization will make necessary recommendations to Bangladesh Bank.
