Keraniganj garment village bustles with business
Keraniganj garment village, as it has come to be known, is now the most sought-after place for apparel business in the country, accounting for about 90% share of the readymade garments in the local market.
It is now a bustling business hub, with loans pouring into the area and 8,000 apparel manufacturing units of 4,000 small and medium entrepreneurs employing around 200,000 people.
In 2016, with eight years’ work experience in the readymade garments industry as a swing machine operator, a young man established a small garments manufacturing unit in Keraniganj with five swing machines at a cost of Tk1 lakh.
From the start, with cloths and other material collected from various sources, he has been manufacturing different types of garment products such as pants, jackets, blazers, among others, of his own design in his garment factory and supplying them to the local markets.
After three years, his capital has now swelled to Tk50 lakh and number of swing machines to 25.
This is the story of a successful entrepreneur, Md Rubel Islam, who now owns two small garment factories and two outlets for selling the manufactured products in Awal Tower, which houses one of the numerous markets in Keraniganj garment village.
“My business is expanding day by day, and I am happy with the progress,” says Rubel Islam. “I am happy that I have been able to create employment opportunity for 25 people who now work in my factories,” he further says, while adding that he pays his workers a handsome amount for their work.
But his journey to his present state was not so easy for Rubel. He says the skills he acquired in apparel manufacturing process during the eight years of working in apparel sector helped him to grow.
Same as those two of Rubel’s, Keraniganj garment village now has 8,000 apparel manufacturing units of 4,000 small and medium entrepreneurs, according to Keraniganj Garments Traders and Shop Owners' Cooperative Association.
The Association’s Treasurer Sheikh Kawsar says that with the expansion of business in the hub, the number of entrepreneurs in apparel manufacturing has been on the rise over a considerable period of time.
With 10-20% annual growth on an average, some are making more than the others with their innovative ideas and quality products, he mentions.
“Once, the garment hub was popular only for wholesale. Traders used to sell, import, or collect the readymade garment products from different sources,” he recalls, adding that after 2000, a number of traders, realizing the rising demand for the readymade garment products, started to manufacture readymade garment themselves.
On the other hand, entrepreneurs with no selling outlets also came forward to become readymade garment manufacturers rather than sellers.
Kawsar goes to add that the production of readymade garments (for selling in the domestic markets) in ‘Keraniganj garment village’ thrived after 2008 and presently about 90% of readymade garments in the local markets are being supplied from markets in Keraniganj.
“Retailers from across the country are their customers,” he says.
The hub is getting more and more popular among the garment manufacturers with each passing day, as the garment manufacturers can make quality apparels at a cost that allows them to sell their products at competitive prices, he concludes.
According to the association, the garment hub has now about 250 markets that house around 8,000 small readymade garments manufacturing units and 6,000 outlets for selling the manufactured readymade garment product. Some 200,000 people are working in these factories and outlets.
Visiting the area, Dhaka Tribune has found the hub quite different from other wholesale markets in the country. Each of the 250 markets in this garment hub is a five or six-storey building. Ground and first floors of each of these markets are outlets for wholesale of readymade garments, while the remaining (upper) floors are factories.
Various readymade garment items including shirts, pants, t-shirts, panjabees, tops, frocks, gowns, three-pieces, trousers, blazers and winter clothing are being sold at the outlets; of these, about 85% are made in factories located inside the garment village, while some 15% are imported products, especially from India, Thailand and China.
Garment manufacturers have said about how they collect cloth and other materials such as yarns, fabrics, chains, stickers, and buttons from importers or local suppliers; and manufacture the readymade garments, either with their brand name or client’s brand name on the product. Majority of the garment accessories they use come from China, India, Korea, and Taiwan.
Sirajul Islam, owner of two garment factories with 15 sewing machines, says that he produces pants and winter clothing, his target customers being people from the middle and lower-middle income group.
“We make products with a 40% value addition, and our profit range is 10-15%,” he adds.
Some 100 pieces of pants and 100 pieces of sweaters are being manufactured in Sirajul’s two factories on a daily basis.
Daily sales worth Tk50 crore on average
Though collective data of daily turnover at the garment hub is not available, traders and bankers stationed at the hub report that readymade garments worth Tk50 crore are being sold from the wholesale markets every day on an average.
According to the Keraniganj Garments Traders and Shop Owners' Cooperative Association, the sales usually shoot up before Eid and winter.
The association mentions that the garment hub sells apparel products worth about Tk5,000 crore during Eid season and products worth Tk1, 000 crore during winter season; in winter season, the daily turnover crosses about Tk60 crore, and before Eid-ul-Fitr, it crosses TK200 crore on a daily basis.
Tk500 crore SME loan into the hub
Realizing the future potentials of the garments hub, 30 banks and other non-banking financial institutions including Brac, Dutch Bangla, AB, City, Uttara, and IDLC have opened branches in the area.
“Banks are setting up their branches in the hub, as there are huge business potentials in this area, especially in SME sector,” Abdul Wahed, Uttara branch manager inside the hub, has said.
His bank set up the branch two years ago, the branch’s annual disbursements of loan in the area being to the tune of Tk7-8 crore.
The average annual disbursements of SME loans to the businesses inside the hub by the 30 banks and non-banking financial institutions have already reached Tk500 crore, Wahed informs.
Mahfuzul Islam, credit manager at the City bank’s SME unit in Keraniganj, says that the rate of loan recovery has, so far, been spectacular and the loans were rarely defaulted.