Attempting to recover after an costly act of arson, the Standard Group has secured $50 million in loans to rebuild its factory complex.
Approximately half that amount will be disbursed at the London InterBank Offer Rate plus an additional 1.5% through the Bangladesh Bank. The remainder will come from Standard Chartered Bank, HSBC and Citibank.
One of the largest and most reputable factories in Bangladesh, the Standard Group owned complex in Gazipur was engulfed by flames on November 29. The fire quickly spread to four adjacent buildings, frustrating attempts by firefighters to contain it. Four other buildings in the same complex were severely damaged and twenty-two trucks freighted with apparel were destroyed.
No casualties have been reported, astonishing since the factory is among the ten largest in the country, employing more than 18,000 workers. And while there has been no official confirmation of which retailers contract with the factory, there is allegedly some photographic evidence that Li and Fung Ltd., Marks and Spencer Group PLC, Sears Canada Inc., Uniqlo, Zara, Wal-Mart, Gap Inc. and American Eagle Outfitters all sourced their apparel at the factory.
Evidence suggests that the fire was started deliberately by worked furious in response to a rumor that police had shot and killed two factory workes, unprovoked. Police officials have vehemently denied that a worker was killed by them and have been attempting to uncover the full extent of the motivations for what appears to be a collaborative act of arson between factory workers and local sympathizers. Mohammed Kamruzzaman, a police officer who patrols the area, said, “We are investigating to find out the reason for this heinous act.”
Gazipur has been center stage for the persistent political violence that has plagued Bangladesh, the result of a contentious dispute between factory workers and owners over raising the minimum wage. Even after the Bangladesh Ministry of Labor officially signed off on the new minimum wage recommendations from the ad hoc Wage Board, simmering tensions have failed to subside. More than 2,000 garment factory workers took to the streets in Gazipur, violently demanding that recently shuttered factories reopen and that wage increases take immediate effect.
The Standard Group currently carries $31.84 million in outstanding loans. Of that, $27.39 million were borrowed for those facilities that have been decimated by the recent fire.