RMG owners hesitate to set up factories in Bangladesh’s largest estate
Some have even cancelled their leases, citing slow progress in constructing vital infrastructures such as access roads and essential utilities for investment.
Bangladesh’s largest industrial zone located in Mirsarai, Chattogram, has not taken off as planned. While some factories have started production, many investors interested in setting up apparel units have delayed their investments due to the lack of necessary facilities.
The garment village, spanning 500 acres, was initiated in 2018. So far, only 41 garment factories have leased 239 acre of land. The Bangladesh Garments Manufacturers and Exporters Association (BGMEA) collaborated in establishing this special zone. However, these factories have shown little interest in setting up their units there. Some have even cancelled their leases, citing slow progress in constructing vital infrastructures such as access roads and essential utilities for investment.
A similar agreement was made with the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) four years ago, but practically no factories have been established. An official complained that promised facilities, such as access roads, gas, electricity, and accommodation for workers, have not been provided.
One of the entrepreneurs in the economic zone stated that global uncertainties, including the Covid-19 pandemic and the war in Ukraine, have shaken confidence. Consequently, many are reconsidering whether to establish factories or invest in the zone.
Out of 800 active members, only 10 applications have been received so far due to slow infrastructure development and uncertainties about worker availability. Industry insiders fear that the decline in clothing exports due to the global economic slowdown and political unrest might further delay the establishment of garment factories in the economic zone.
Several industries, apart from apparel, have already started production in the zone. He emphasised that if the zone was not ready, these industries would not have been operational. Beza plans to provide planned accommodation for workers outside the economic zones.
Some garment factory owners have withdrawn their leased money due to soaring construction material prices. An official of BGMEA mentioned that these owners lack enthusiasm. The Beza executive chief explained that they have a master plan for the land and built roads accordingly, but some garment industry owners are raising concerns about the soil level. The garment village was expected to attract a $ 2 billion investment and create 500,000 jobs. Initially, apparel owners were optimistic about the initiative, hoping for a world-standard industrial zone with necessary logistics and a centralised effluent treatment plan