Summary:
- Over 40,000 workers from Beximco Group’s textile and garment units were laid off in December 2024 due to declining international orders and financial instability.
- The government is working to relocate these workers to factories under BEPZA and BEZA while providing partial salaries through Janata Bank until March 2025.
- Beximco faces nearly Tk 50,000 crore in debt, with its Vice-Chairman Salman F Rahman under arrest for alleged financial misconduct and misuse of political influence.
- Efforts are underway to sell Beximco’s textile and garment units, though legal disputes may delay the process, while its pharmaceutical and ceramics divisions remain profitable.
The Bangladeshi government is actively working to address the fallout from the recent mass layoffs at Beximco Group, one of the country’s largest conglomerates. Over 40,000 workers were laid off from 16 textile and garment factories in December 2024, a move attributed to a sharp decline in international work orders and financial instability within the company. The layoffs, which represent more than 57% of Beximco’s workforce, have raised significant concerns about worker welfare and the broader implications for Bangladesh’s economy.
Beximco’s troubles stem from mounting financial challenges, including a staggering debt of nearly Tk 50,000 crore, with over half classified as non-performing loans. The group’s Vice-Chairman, Salman F Rahman, is currently in custody following allegations of leveraging political influence for personal business gains. His arrest and the subsequent exposure of financial irregularities have further complicated the conglomerate’s operations. The company reported a Tk 36 crore loss for the fiscal year ending June 2024, a stark contrast to its Tk 710 crore profit the previous year.
The government has stepped in to mitigate the crisis by seeking alternative employment opportunities for the displaced workers. Efforts are underway to place them in factories within the Bangladesh Export Processing Zone Authority (BEPZA) and Bangladesh Export Zones Authority (BEZA). According to AHM Shafiquzzaman, Secretary of the Ministry of Labour and Employment, workers will receive partial salaries funded by Janata Bank until March 2025. Additionally, an independent board formed by the Bangladesh Securities and Exchange Commission (BSEC) is overseeing the sale and operation of Beximco’s textile and garment units.
Despite these measures, challenges persist. Osman Kaiser Chowdhury, Director of Beximco Group’s Finance Division, has opposed government plans to sell the company’s assets without legal recourse. He emphasized that Beximco could resume operations if allowed to open letters of credit (LCs) for importing raw materials. However, banks remain hesitant due to Beximco’s precarious financial position.
The layoffs have also sparked protests among workers, who are demanding immediate solutions. On January 15, 2025, thousands formed an 11-kilometer-long human chain near Gazipur to call for factory reopenings and job security. Labor unions have urged both Beximco and global brands to support worker rehabilitation efforts.
While Beximco’s pharmaceutical and ceramics divisions remain profitable and operational, its textile and garment units face an uncertain future. The Bangladesh Investment Development Authority (BIDA) is actively seeking foreign buyers for these units but anticipates a lengthy process due to potential legal disputes.
The crisis highlights broader vulnerabilities in Bangladesh’s export-driven economy, particularly in its vital ready-made garment sector. As global demand fluctuates and financial mismanagement comes under scrutiny, stakeholders are calling for sustainable reforms to prevent similar disruptions in the future.
Source: The Daily Star
