The International Finance Corporation has invested $22.7 million in Bangladesh's Hamza Textile Limited to help the local company to build a modern, green factory.
The new factory is set to create more than 900 direct new jobs. The expanded operation is also expected to contribute $8 million to Bangladesh's economy directly and indirectly through local supply chains by 2028.
Furthermore, around $15 million will also be injected in economic activities generated by the additional income of employees, and boost opportunities for micro-, small-, and medium-enterprises in the supply chain.
MA Jabbar, DBL Group's managing director, earlier told The Business Standard, "The group has decided to expand its capacity to meet the growing demand of our apparel manufacturing units."
The new investment marks IFC's first Covid-19 support in the RMG sector and includes financing from the International Development Association's Private Sector Window (IDA-PSW), set up to catalyse investment in low-income and fragile countries.
"The new factory will allow Hamza to work with new fabrics to meet increasing buyer requirements, widen its manufacturing base and highlight the effectiveness of advanced technologies to cut production costs and deliver climate benefits," said MA Jabbar, DBL Group's managing director.
Hamza Textiles provides dyeing and finishing services for fabrics that are used by its sister companies, owned by the DBL Group, which is one of Bangladesh's largest integrated knitted apparel manufacturers and exporters.
The investment by IFC will help expand HTL's finishing capacity by 80 tonnes per day to reach a total capacity of 103 tonnes per day at its new factory, which will also be a Leadership in Energy and Environmental Design (LEED) certified green building.
Hector Gomez Ang, IFC's regional director for South Asia, said, "Bangladesh's ready-made garment industry is vital for the country's economy and delivering on its ambitions to transform into an upper-middle-income country. To remain competitive, the industry needs to evolve to higher value-added products and adopt modern technologies, which are even more critical given the impact of Covid-19.
"Even prior to the pandemic, the industry was beginning to stagnate in terms of innovation and value addition. We hope this investment will serve as a demonstration model for others to move upmarket and remain competitive," he added.
Hamza Textile Ltd was established in 2004 as a fabric dyeing and finishing company of Dulal Brothers Ltd (DBL) Group located at the Mymun Industrial Complex in Kashimpur, Gazipur.
The family-run DBL Group, comprising 28 companies, started operations in the RMG sector in 1991 and has interests in other industries, including ceramic tiles manufacturing, dredging, telecommunications, and the manufacturing of semiconductors.
The annual turnover of the company in 2018-19 was $600 million. The company started its first offshore business in Ethiopia for apparels and textiles creating employment opportunities for 4,500 people.
The group's main buying partners are H&M, C&A, Puma and Asda. The facilities of DBL are also a part of Better Work Bangladesh and undergo regular audits.
The shareholders of the Hamza textile ltd are Abdul Wahed (16.12%), Mohammed Abdul Jabbar (25%), Mohammed Abdur Rahim (19.44%), Mohammed Abdul Quader (21.11%) and immediate family members (18.33%). They are also the owners of the DBL Group.
To date, IFC has invested in five RMG manufacturers in Bangladesh and has provided more than $90 million, largely in the form of debt financing. The latest investment marks IFC's second engagement with DBL Group.
In 2013, IFC also provided $10.5 million to Color City Limited, another of the Group's dyeing and finishing companies.