A Hong Kong, Sri Lanka and Switzerland-owned company is investing $25.6 million in a new Bangladesh garment manufacturing facility.
Gava Private Limited will establish ready-made apparel manufacturing operations in Dhaka’s Export Processing Zone (EPZ), according to the Bangladesh Prime Minister’s Office. The planned factory aims to produce 4.4 million garments each year, including jackets, T-shirts, polo shirts, sweaters, trousers, coveralls, stretch pants, jeans, shorts, sweats and vests, and employ more than 3,000 workers.
The company purchased a knitting and textile factory that closed during the ongoing business downturn impacting much of Bangladesh’s garment industry, the government said. The Bangladesh Export Processing Zones Authority (BEPZA) auctioned off the business and its assets to Gava Private Limited with the goal of putting those who had been laid off back to work.
The inflation gripping Western economies has had a trickle-down effect on the Bangladesh garment sector. Bangladesh Garment Manufacturers and Exporters Association president Faruque Hassan said in July that orders had slowed because consumers were focusing on paying for food, transportation and housing instead of fashion. U.S. retailers are working to clear an inventory hangover from the first half of the year, and deeply discounting stock to make room for end-of-year assortments. Hassan expects these conditions will “hamper” Bangladesh’s exports for the foreseeable future.
Despite the uncertainty, the world’s second-largest garment exporter continues to attract investments. Last month, Canada-China-owned Big Dipper Textile Mills Ltd. announced a $91.1 million investment in a factory in Bangladesh’s Ishwardi Export Processing Zone (IEPZ), with plans to produce yarns and employ more than 1,000. Meanwhile, Bangladesh-based Trendy Textiles Limited said in late August that it would invest $38.9 million in a knit composite textile factory in Dhaka’s EPZ employing roughly 3,000 and producing 15 million garments annually, including T-shirts, fleece jackets, athletic apparel and more.
While 80 percent of the country’s export value comes from ready-made garments, Bangladesh is looking to diversify and develop expertise in other categories like bags and footwear. China’s KPST Shoes (BD) Co. Limited in recent weeks said it intends to invest $8 million in manufacturing capabilities in the country to produce shoes and accessories.
It also plans to produce 30 million pairs of insoles, outsoles and midsoles along with 0.3 million cubic meters of EVA and PU foam commonly used in athletic footwear—components long produced in China. The Bangladeshi Prime Minister’s Office said the factory would enable local producers to reduce the need to source inputs from China.