Beximco Textiles Secures $20 Million Japanese Deal to Reopen Factories

What's Happening?

Beximco Textiles Limited is set to reopen its factories under a lease agreement with Japanese firm Revival Project Limited, Janata Bank, and Beximco Group. The deal involves a $20 million investment to fulfill orders from global apparel giant Inditex. This initiative aims to revive Beximco's textile operations, which have been inactive since February due to worker protests over unpaid wages. The reopening is expected to generate employment for nearly 25,000 workers. Janata Bank will reschedule defaulted loans totaling approximately Tk35,000 crore, facilitating the reopening. The Bangladesh Bank will relax export-related policies and extend credit facilities to support the initiative.

Why It's Important?

The reopening of Beximco Textiles is crucial for Bangladesh's textile industry, providing employment opportunities and boosting export income. The involvement of Japanese firm Revival Project Limited signifies international confidence in Bangladesh's textile sector. The deal also highlights the government's commitment to supporting economic recovery through policy-level support. By rescheduling loans and easing export policies, Bangladesh aims to stabilize its textile industry, which is vital for the country's economy. The initiative reflects a strategic move to attract foreign investment and enhance production capabilities, positioning Bangladesh as a competitive player in the global apparel market.

What's Next?

Revival Project Limited plans to invest $20 million initially, with potential to scale up to $100 million. The company has until August 15 to negotiate new working capital with banks. If successful, the deal could be finalized within the month. The Bangladesh Bank will require a 100% LC margin to open back-to-back LCs against master LCs. The government will not provide new loans but will offer policy and regulatory support. The reopening is driven by economic priorities, aiming to rebuild buyer confidence and ensure sustainable production. The initiative is expected to take 2-3 years to fully stabilize and expand operations.