Beximco Group, one of Bangladesh’s largest conglomerates, is poised to announce significant layoffs across its 16 apparel factories located in Gazipur Industrial Park, impacting approximately 40,000 workers. The decision comes as the group grapples with a severe lack of orders and dwindling banking support following the ousting of Sheikh Hasina’s government in August.
Osman Kaiser Chowdhury, a director of Beximco Group and managing director of Beximco Limited, described the current situation as unsustainable. “We were initially assured by the interim government that our businesses would receive support. Based on these assurances, we kept our factories operational for four months. However, no support materialised,” he explained, highlighting the dire financial pressures the company faces.
Over the past four months, Beximco has spent Taka 300 crore primarily on worker wages, with Taka 100 crore financed through bank loans. The group requires Taka 60 crore monthly to cover salaries, in addition to Taka 15 crore for other staff members who have not been paid for four months. Despite generating Taka 5-6 crore monthly from subcontracting with other factories, this income falls drastically short of the Taka 250-300 crore previously earned by the textile division.
The absence of new orders since August has exacerbated the company’s challenges. Chowdhury noted that major global buyers have expressed a willingness to resume business, contingent upon Beximco securing Letters of Credit (LCs) from banks. However, the banking sector remains hesitant to support Beximco due to its precarious financial state. “Some banks could open LCs, but only with a 100 per cent margin and positive signals from the government. We lack the necessary cash reserves to meet such stringent terms,” he remarked.
The layoffs are expected to last for an initial 45 days, with a potential 15-day extension if conditions do not improve. Osman cautioned that permanent factory closures may follow if the situation does not stabilize. While the textile division’s layoffs are not yet final, as Beximco Limited is a publicly listed company and must adhere to certain protocols, the urgency of the situation is clear.
A recent report from the Bangladesh Bank indicated that the group’s loans exceeded Taka 50,000 crore as of November 30, 2024, with over 50 per cent—approximately Taka 25,524 crore—classified as defaulted. Out of the 188 companies within the group, 78 have borrowed from 16 banks and seven financial institutions.
In November, the Bangladesh Bank appointed Executive Director Ruhul Amin as the group’s receiver following a court order. Amin acknowledged the challenges faced by Beximco’s apparel units. He expressed willingness to assist if approached, while also criticizing the group for failing to service its debts on time.
The crisis at Beximco has broader political implications, particularly given the ties of Salman F Rahman, vice-chairman of the group, to the ousted government. Rahman, who served as an adviser to Sheikh Hasina on private industry and investment, was arrested in August and is currently in jail.
