Textile sector sees Tk 715cr investment in six months

The country's textile sector witnessed around Tk 715 crore investments in the first six months of this year, industry sources said.

An increase in demand for local fabrics after the expiry of multi-fibre arrangement in January this year may have attracted the huge investments, they observed.


More than a dozen composite textile mills, mostly spinning units based in Dhaka, are the recipients of the fresh investments during January and June period this year.


"The demand has increased dramatically and we need to implement the latest and suitable technology to produce quality products at low prices," an official at the Ministry of Textile and Jute said.


However, ministry sources said the scenario contradicts the Bangladesh Textile Mills Association's (BTMA) demand that gross annual production of the sector is decreasing due to glut of fabrics stemming from leakage from bonded warehouses.


The country's primary textile mills meet 50 percent demand of local factories and 40 percent demand of the export-oriented units, said a BTMA official.


But the growth is severely hindered due to leakage from bonded warehouses, he alleged.


More than 200 spinning and 300 weaving plants are in operation now, involving investment of around Tk 160 billion, BTMA sources said.


The ministry sources said existing weaving and spinning mills can only meet 40 percent demand for fabrics.


Another BTMA member said high prices of raw cotton inspire smuggling of primary fabrics into the country.


Moreover, Bangladeshi spinning mills pay 6 to 7 percent for handling, freight, and commission charges for cotton import, which puts them in an inconvenient state. Besides, tax for new infrastructure development on all imports adds another 2.5 percent to the price of imported raw cotton.