Bangladesh’s largest textile industrial park, operated by the Beximco Group, faces a significant crisis as approximately 170 leading textile factories, including 23 owned by Beximco itself, have been forced to shut down. A severe liquidity crisis and difficulties in securing letters of credit (LCs) for raw material imports have been key contributors to this downturn, exacerbated by recent political changes.
The crisis has led to widespread job losses, with over 40,000 workers affected, sparking protests over unpaid wages. In response, the Bangladeshi government has announced an emergency loan package to stabilize the industry and encourage workers to return to their posts. However, the long-term sustainability of Beximco’s operations remains uncertain, raising questions about Bangladesh’s role in the global textile market.
Adding to the challenges, Beximco Vice-Chairman Salman F. Rahman, a former advisor to ex-Prime Minister Sheikh Hasina, was recently arrested, further complicating the company’s ability to meet payroll obligations. Labour and Employment Secretary AHM Shafiquzzaman confirmed that authorities, including the Bangladesh Investment Development Authority (BIDA) and the Bangladesh Securities and Exchange Commission (BSEC), are exploring solutions to address the crisis.
The Beximco Group, comprising 169 companies and employing over 70,000 individuals, is heavily burdened by debt, including Taka 23,000 crore owed to Janata Bank. Among its entities, Beximco Pharmaceuticals remains profitable, though the potential transfer of its shares faces legal hurdles. Meanwhile, companies classified under Category B, primarily in the textile and garment sector, may be sold to international operators to pay off loans, while Category C companies face potential shutdowns.
The government has stepped in with a financial intervention to mitigate the immediate impact on workers. Janata Bank will provide three months of salaries for employees in Beximco Industrial Park, supplemented by Taka 60 crore from the national budget to cover October wages.
Amid this disruption, Indian textile manufacturers see an opportunity to expand their market share as international buyers seek alternative sourcing options. With established manufacturing capabilities and a reputation for quality and reliability, Indian companies could position themselves to fill the gap left by Bangladeshi producers. By maintaining competitive pricing and ensuring timely deliveries, Indian firms stand to capture a larger share of the global textile market, particularly in segments previously dominated by Bangladesh.
While the crisis in Bangladesh poses significant challenges for its economy, it also opens avenues for regional competitors, underscoring the shifting dynamics in the global textile supply chain.
