Despite efforts by Bangladesh’s Ministry of Labour to preserve thousands of jobs and maintain export earnings, state-owned Janata Bank has moved forward with the auction of six factories belonging to the Beximco Group.
The auction follows notices issued by Janata Bank after a board meeting. According to The Business Standard, the bank announced the public sale of 193 decimals of land and all associated structures at Beximco Industrial Park, which had been mortgaged as collateral for loans on three of the factories. Beximco reportedly has outstanding loans totalling around $2.9 billion.
The bank plans to auction three additional factories, with notices expected to be published soon, according to sources within the bank.
Beximco did not respond to a request for comment when contacted by Just Style.
Impact of Factory Closures
Earlier this year, in February, the Government of Bangladesh announced plans to find alternative employment for the 40,000 workers affected by the closures of Beximco’s factories. This move came after Beximco Group, a conglomerate with a significant presence in the textile and garment industry, revealed it would terminate over 40,000 employees by the end of 2024 due to a decline in orders from international clothing retailers and brands.
With a workforce of around 70,000, the layoffs represented a reduction of more than 57% of the company’s personnel. The affected factories included well-known units such as Shinepukur Garments, Urban Fashions, Yellow Apparels, and Beximco Fashions, among others.
To oversee the sale and management of Beximco’s factory units, an independent board was established by the Bangladesh Securities and Exchange Commission (BSEC) earlier this year.
The Way Forward
Beximco’s financial troubles have raised concerns about the future of Bangladesh’s textile sector, which is a major contributor to the country’s export earnings. As the bank proceeds with the factory auctions, the government’s priority will likely be ensuring the protection of jobs and stabilising the sector.