The cluster will be located within the state-sponsored Shreehatta Economic Zone of Bangladesh

The cluster will be located within the state-sponsored Shreehatta Economic Zone of Bangladesh

Bangladesh textiles and apparels major DBL Group is pressing ahead with a plan to build a dedicated industrial zone in Moulvibazar, within the north-east of the country, sinking as much as US$1.2bn into the project by 2021.

This DBL Economic Zone, spanning more than 170 acres of land, will house 19 factories, mostly making textiles and clothing, the company has confirmed. This cluster will be located within the state-sponsored Shreehatta Economic Zone, which has good energy, telecommunications and transport connections.

"The zone will make our exports grow 25% year-on-year over the next four years. We used to have 15% in the past five years," Mohammed Abdul Jabbar, managing director of the company, told just-style at the group's corporate office in Dhaka.

The zone will accommodate a spinning mill with 80,000 spindles and an integrated lingerie and sportswear-making facility, as well as some non-clothing plants, such as a ceramic tiles factory and a light engineering facility - all equipped with western European machinery.

The company zone is expected to be operational by March 2019. "Spinning will be there by then," said Jabbar. "We'll have gas and power [supplies] in one place. A customs bonded facility will be there as well," he said.

DBL now employs 30,000 people, but Jabbar said this expansion would create over 38,000 new jobs, bringing the total to 68,000.

Jabbar said the new factories will supply to international brands such as Hennes & Mauritz (H&M), Marks and Spencer (M&S), Esprit, Puma, Decathlon, Victoria's Secret and C&A, with orders having been confirmed.

As new buyers of DBL output, Victoria's Secret will buy lingerie items, while Decathlon will purchase sportswear.  

To bankroll the project, the company is exploring offshore loans and domestic financing.

But the DBL Group's effort to attract direct funding from international investors for the project has so far been held back by double-taxation on its holding company, even though it is also based in Bangladesh (in Gazipur, north Dhaka).

If this taxation were waived, Jabbar said the company could easily have raised money from outside sources already.

Meanwhile, industry groups have welcomed this major investment plan.

"I think this is very positive," said Fazlul Hoque, a former president of trade group the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). "DBL is one of the top groups of the [Bangladesh] garment industry. This is a solid step towards moving ahead," he told just-style.

He said the investments will help enhance the image of the country's clothing sector.  

"It's pretty important," Mohammad Hatem, a former vice president of the BKMEA, told just-style about the DBL investment plan. "We welcome any kind of investment and we want more entrepreneurs to come forward investing in the country," he said. The initiative will generate employment, while boosting exports and foreign currency income." 

DBL shipped apparel worth US$375m in the fiscal year ending in June, up from $365m a year ago.  

The company's export performance reflects the Bangladesh industry's current overall growth. The national shipment of readymade garments was worth $7.14bn in this July-September, up from $6.66bn in the same period of 2016, up 7.17% year-on-year, according to the latest data released by the government's Export Promotion Bureau.   

The Shreehatta zone being developed by the state-run Bangladesh Economic Zones Authority (BEZA) is one of 100 special economic zones Bangladesh plans to build across the country by 2030.