Businesses will think twice before building such large factory units
Saddam Hossain
Publish : 28 Oct 2021, 09:15 PMUpdate : 28 Oct 2021, 10:08 PM
Closure of the Kanchpur factories under Opex Group, that too at a time when the industry had finally begun recovering from the Covid-19 pandemic, has come as a shock to leaders of the apparel sector.
And the demise of the prominent brand also contains lessons on resolving problems such as overcapacity, mismanagement, and imprudence, according to industry insiders.
“From now on, other entrepreneurs will think twice about building such a large factory unit,” said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
He also said that the factory had been in loss for a long time due to the buyers having canceled orders. The crisis deepened for its failure to pay wages to the workers.
“What we have learned from this is that we need to pay more attention to strong management. We also need to think more about setting up such large factory units with so many workers,” Hassan added.
He also said that stakeholders need to be more aware as any buyer can cancel the order or can go bankrupt, but factories need to be kept operational despite such hindrances.
Mohiuddin Rubel, director of Denim Expert Limited and also a director of the BGMEA, told Dhaka Tribune: “We talk about Opex a lot because they were one of the pioneers in our industry. They showed us the way and thus where our RMG industry is today.”
Azhar Khan, owner of Mithela Textile Limited, said that it was not desirable to see such a large unit get shut down — it was a loss for the country and for the sector.
“However, the factory did not close overnight, it was the end of gradually mounting struggles. In fact, establishing such a large facility in the same place was one of the weaknesses,” he added.
He also said that entrepreneurs have a lot to learn from this, adding that they should prevent over-capacity and ensure strong management at the mid and high levels.
“Instead of building such a large unit in one place, the factories should have been small and spread around different areas under different management. This would have also increased employment through decentralization, and the organization could have run more smoothly,” Khan further said.
The chairman of one of the country's top conglomerates, requesting anonymity, said that strong management is needed to control a 50,000-strong workforce.
“But there must also be a guarantee that their relationship with the workers is smooth. In this day and age, the relationship between the management and the workers must be friendly,” he added.
He added that entrepreneurs also need to be aware of the construction of large factories, they must refrain from bringing all investments together into one unit, and also refrain from providing benefits outside those outlined in the labour law.
Rise and fall of the Sinha empire
Anisur Rahman Sinha, one of the prominent entrepreneurs of the apparel sector, set up the garment factory in 1984.
His Opex and Sinha Textile Group built a large textile and garment production complex at Kanchpur on the Dhaka-Sylhet Highway, 20 km away from the capital.
The unit produced shirts, sweaters, denim, knitwear and exported to famous brands of the US and Europe.
Built on 43 acres of land, the complex is also recognized as one of the largest textile and garment complexes in Asia, which employed nearly 45,000 of workers.
However, the factory started to shrink gradually and suffered from various crises, including lack of capital, debt liability, and labour agitation. The crisis intensified after the start of the pandemic.
In the continuation of this, a notice signed by Banij Ali, acting director (administration) of Opex and Sinha Textile Group, on October 18 said that the owner of the group has suffered financial losses in all its factories in Kanchpur since 2012.
The notice also said that the owner continued to run the factories by selling lands and loans to pay wages, allowances, and other expenses.
But the factory was severely hit by the Covid-19 pandemic as well as recent chaos among workers, workers' reluctance to work, and frequent stoppage of operations.
This greatly hampered its ability to continue operation, the notice said, adding that now Opex's Kanchpur factory does not have the financial capacity to continue operations.
“In this situation, for the safety of the factory and all those associated with it, according to section 28 (ka) of the Bangladesh Labor Act, all the garment units of Kanchpur branch, including the garment and wash plant, are declared permanently closed,” it said.
There is no specific information about the due wages, outstanding service benefits and other liabilities of the factory, although a source from the BGMEA said the amount could be close to Tk90 crore.
The company is trying to pay these dues by selling lands and other establishments. However, the company has not shut the garment factories in Adamjee EPZ, Mirpur and another area of Narayanganj yet.
End or start?
Earlier, the BGMEA had started the process of cancelling the membership of 1,100 factories that have not been in production for a long time.
The current membership of the BGMEA is about 4,700, but almost half are not in production. In the BGMEA election held in April this year, 1,853 factory owners of Dhaka and 461 owners of Chittagong cast their votes.
Industry insiders fear that these ailing factories may end up with the same fate as that of Opex.
However, Mohiuddin Rubel said that the issue of ailing factories under the BGMEA and Opex is completely different.
“Opex has been struggling for the last few years and as a good business entity they have decided to close operations officially, which is appreciated,” he added.
But the BGMEA has started the process of taking action against the non-manufacturing ailing factories, the trade body said.
OPEX SINHA CLOSUREPowered by Froala Editor
Businesses will think twice before building such large factory units
Closure of the Kanchpur factories under Opex Group, that too at a time when the industry had finally begun recovering from the Covid-19 pandemic, has come as a shock to leaders of the apparel sector.
And the demise of the prominent brand also contains lessons on resolving problems such as overcapacity, mismanagement, and imprudence, according to industry insiders.
“From now on, other entrepreneurs will think twice about building such a large factory unit,” said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
He also said that the factory had been in loss for a long time due to the buyers having canceled orders. The crisis deepened for its failure to pay wages to the workers.
“What we have learned from this is that we need to pay more attention to strong management. We also need to think more about setting up such large factory units with so many workers,” Hassan added.
He also said that stakeholders need to be more aware as any buyer can cancel the order or can go bankrupt, but factories need to be kept operational despite such hindrances.
Mohiuddin Rubel, director of Denim Expert Limited and also a director of the BGMEA, told Dhaka Tribune: “We talk about Opex a lot because they were one of the pioneers in our industry. They showed us the way and thus where our RMG industry is today.”
Azhar Khan, owner of Mithela Textile Limited, said that it was not desirable to see such a large unit get shut down — it was a loss for the country and for the sector.
“However, the factory did not close overnight, it was the end of gradually mounting struggles. In fact, establishing such a large facility in the same place was one of the weaknesses,” he added.
He also said that entrepreneurs have a lot to learn from this, adding that they should prevent over-capacity and ensure strong management at the mid and high levels.
“Instead of building such a large unit in one place, the factories should have been small and spread around different areas under different management. This would have also increased employment through decentralization, and the organization could have run more smoothly,” Khan further said.
The chairman of one of the country's top conglomerates, requesting anonymity, said that strong management is needed to control a 50,000-strong workforce.
“But there must also be a guarantee that their relationship with the workers is smooth. In this day and age, the relationship between the management and the workers must be friendly,” he added.
He added that entrepreneurs also need to be aware of the construction of large factories, they must refrain from bringing all investments together into one unit, and also refrain from providing benefits outside those outlined in the labour law.
Rise and fall of the Sinha empire
Anisur Rahman Sinha, one of the prominent entrepreneurs of the apparel sector, set up the garment factory in 1984.
His Opex and Sinha Textile Group built a large textile and garment production complex at Kanchpur on the Dhaka-Sylhet Highway, 20 km away from the capital.
The unit produced shirts, sweaters, denim, knitwear and exported to famous brands of the US and Europe.
Built on 43 acres of land, the complex is also recognized as one of the largest textile and garment complexes in Asia, which employed nearly 45,000 of workers.
However, the factory started to shrink gradually and suffered from various crises, including lack of capital, debt liability, and labour agitation. The crisis intensified after the start of the pandemic.
In the continuation of this, a notice signed by Banij Ali, acting director (administration) of Opex and Sinha Textile Group, on October 18 said that the owner of the group has suffered financial losses in all its factories in Kanchpur since 2012.
The notice also said that the owner continued to run the factories by selling lands and loans to pay wages, allowances, and other expenses.
But the factory was severely hit by the Covid-19 pandemic as well as recent chaos among workers, workers' reluctance to work, and frequent stoppage of operations.
This greatly hampered its ability to continue operation, the notice said, adding that now Opex's Kanchpur factory does not have the financial capacity to continue operations.
“In this situation, for the safety of the factory and all those associated with it, according to section 28 (ka) of the Bangladesh Labor Act, all the garment units of Kanchpur branch, including the garment and wash plant, are declared permanently closed,” it said.
There is no specific information about the due wages, outstanding service benefits and other liabilities of the factory, although a source from the BGMEA said the amount could be close to Tk90 crore.
The company is trying to pay these dues by selling lands and other establishments. However, the company has not shut the garment factories in Adamjee EPZ, Mirpur and another area of Narayanganj yet.
End or start?
Earlier, the BGMEA had started the process of cancelling the membership of 1,100 factories that have not been in production for a long time.
The current membership of the BGMEA is about 4,700, but almost half are not in production. In the BGMEA election held in April this year, 1,853 factory owners of Dhaka and 461 owners of Chittagong cast their votes.
Industry insiders fear that these ailing factories may end up with the same fate as that of Opex.
However, Mohiuddin Rubel said that the issue of ailing factories under the BGMEA and Opex is completely different.
“Opex has been struggling for the last few years and as a good business entity they have decided to close operations officially, which is appreciated,” he added.
But the BGMEA has started the process of taking action against the non-manufacturing ailing factories, the trade body said.
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