Sunman sets up country’s largest home textile plant

http://www.thefinancialexpress-bd.com/more.php?news_id=122352&date=2011-01-09

Sunman sets up country’s largest home textile plant
Tk. 8.0b plant to cash in on EU relaxed import rules.

Jasim Uddin Haroon

Sunman Group said Saturday it is setting up the country’s largest home textile plant to grab new-found opportunities in the European Union’s four billion dollars bed-sheet and curtain market.

The clothing-to-beverage maker is investing more than eight billion taka in a state-of-the-art plant at Iswardi export processing zone, which will go into operation mid-2012, its CEO said.

“We have bought 57 plots covering a third of the Ishwardi EPZ. Some 70 per cent of the civil work has been completed,” said Shafiqur Rahman, the Chief Executive Officer of the group.

The plant will have a capacity to produce 100,000 yards of bed sheet and curtains a day, making it the country’s largest home textile manufacturers.

The investment has been fast-tracked after the EU last month relaxed its import rules, allowing products with 30 per cent value addition to get duty-free access in the world’s second largest clothing market.

Earlier a manufacturer had to add at least 60 per cent value in Bangladesh to get free market access to the highly-lucrative market.

Rahman said the $4 billion EU market is their prime target but products of the new facility will also be shipped to the US, Japan and Australia.

The factory will manufacture all kinds of home textile under one roof. It will make yarn from imported raw cotton and then weave it into fabrics such as bed sheet, cushion cover, decorative pillow and curtain.

Sunman’s CEO said the nearly $200 million group went ahead with the investment despite acute shortages of gas and energy in the country.

“The EPZ authority has assured us of supplying power and gas once we go into production in mid-2012,” he said.

General Manager of the EPZ, situated 220 kilometre north-west from Dhaka, said the massive Sunman plant has changed the once-staid atmosphere at the industrial park.

Launched in 2000-1, the country’s eighth EPZ had to wait five years to see its first investment. Since then it has wooed a few top names including Rahmafrooz’s 25 million dollars automotive battery plant.

Experts said the latest investment in home textile would make Bangladesh one of the top players in global bed sheets and cover markets.

Presently, Pakistan is the largest home textile exporter, both in the key US and the EU. Islamabad exported 685 million euro worth of home textile in EU in 2009, followed by Turkey worth 600 million euro.

Bangladesh with an annual shipment of 185 million dollar is also a top-five exporter in the EU. “We shall be in the race for top position once our plant goes into production,” said Rahman.

Textile millers said political and security problems in Pakistan have forced many buyers to search new import destinations with Bangladesh drawing most attention because of its low-cost labour.

“We’ve abundant cheap labour and our workers also learn quickly — the ideal conditions for home textile growth,” former Bangladesh Textile Mills Association president Abdul Hye Sircar said.

Mr Hye said: “This is an area where profit is guaranteed as China is becoming costly and Pakistan has been in troubles for some time.”

Sunman’s project, named Sunman Industrial Corporation, is being funded by a consortium of local financial institutions led by One Bank.

The banks are financing 60 per cent of project outlay while the company is investing the rest from its own coffer.

Zillul Hye Razi, trade adviser of European Commission’s trade delegation in Dhaka, said the EU’s relaxed import rules would boost Dhaka’s home textile export to the 27-nation economic block.

According to new EU rules of origin (ROO), Bangladeshi companies can be able to export homes textiles by sourcing fabrics from a third country.

“All an exporter needs is to dye and complete the products here under the new ROO, which became effective from first day of the new-year,” Razi said.

“I think this is the right time for Bangladeshi entrepreneurs to invest in the sector,” he added. “There is also huge export potentials in the US market.”

Nurul Islam, chairman of Noman Group — the country’s largest home textile maker — said arrival of a new player will enhance competitiveness and raise Dhaka’s global market share.

“It will create new challenges and opportunities for us,” Islam said, adding in the short-term the country may face shortage of skilled labour.

At present, Bangladesh has only eight export-oriented home textile mills: seven in the greater Dhaka district and one in the port city of Chittagong.

Noman Group exports around 20 million US dollars worth of home textile each month. Other producers include Alltex, ACS Textile, Sad Musa, Regent, JK Group and Classical Home.

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