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IFC, a member of the World Bank Group that focuses on the private sector in emerging markets, is investing $22.7 million in Hamza Textiles Ltd, a dyeing and finishing company of DBL Group.
The funds will help build a factory ‘with advanced and resource-efficient technologies to respond to evolving demands of consumers’ and create 900 new jobs, IFC said in a statement on Tuesday.
It is the first COVID support the IFC has offered in the RMG sector and is partially financed by the International Development Association’s Private Sector Window, which was set up to encourage 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, the managing director of the DBL Group.
The investment is expected to raise Hamza Textiles’ finishing capacity by 80 tonnes per day to 103 tonnes per day at the new factory.
The expansion is also expected to contribute $8 million directly and indirectly to Bangladesh’s economy by 2028 and generate another $15 million through the income of employees and boosting opportunities for other enterprises on the supply chain.
“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,” said Hector Gomez Ang, the IFC’s regional director for South Asia.
“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.”
IFC has provided over $90 million to five RMG manufacturers in Bangladesh, largely as debt financing. In 2013, IFC also provided $10.5 million to Color City Limited, another DBL Group dyeing and finishing company, reports bdnews24.com.