Bank Moves to Auction Beximco Factories, Throwing Textile Giant’s Future Into Doubt

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The future of one of Bangladesh’s largest vertically integrated textile and garment manufacturers looks bleak.

State-owned Janata Bank has moved to auction several Beximco Limited factories, despite the Ministry of Labour and Employment in Bangladesh’s efforts to reopen the factories through a tripartite international lease agreement.

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The auction notices were issued a day after the bank’s Nov. 20 board meeting, which was supposed to focus on approving the draft for a $20 million lease agreement between Beximco, Janata Bank and Revival Project, a Japanese firm that expressed interest in the factories this summer.

The auction notices are for International Knitwear & Apparel Limited’s Unit-1 and Unit-2, Urban Fashions Limited, and Apollo Apparels Limited., all located in the Beximco Industrial Park in Kashimpur, Gazipur. The auction is scheduled for Dec. 7. The Business Standard (TBS) reports that more notices are coming soon.

The bank’s pivot surprised the former Target and PVH Group supplier. Khalid Shahrior, head of HR and compliance for Beximco’s textile and garment division, told The Daily Star that the company’s legal team was reviewing the decision. “We are talking about new investments and trying to move everything forward positively, yet the bank issued this notice at such a time,” he told the news outlet.

In August, Sourcing Journal reported that Janata Bank planned to reschedule defaulted loans totaling roughly 35,000 crore taka, or $2.9 billion, to help with Beximco’s reopening. Under the lease agreement, the Revival Project would carve out a commission from export earnings, with the rest going to repay outstanding debts.

TBS reported that Revival planned an initial working capital investment of $20 million, with a long-term goal of up to $100 million. U.S.-based Ecomillie was expected to finance the project. Production was supposed to begin next month.

Beximco’s 16 factories, including Beximco Fashions, Crescent Fashion and Design, Shinepukur Garments and Yellow Apparels, were previously owned by Salman F. Rahman, one of former prime minister Sheikh Hasina advisors, who remains in prison on charges of murder, fraud, money laundering and graft. He’s also been accused of using his political influence to stall the repayment of his company’s bank loans and liabilities, estimated at 50,098 crore Bangladeshi taka, or around $4.1 billion.

Beximco started laying off its 40,000 textile and apparel division workers in December. In January, former Beximco employees protested their dismissal by allegedly setting part of a factory, a truck and three buses on fire.

At its height, Beximco’s textile and apparel division produced 100,000 yards of finished fabric every day and more than 9 million knit and woven garments—from dress shirts to denim jeans—per month. It employed some 40,000 people and had an annual turnover of $500 million.