In the past year, Bangladesh’s key industrial zones including Savar, Gazipur, Chattogram, Narayanganj, and Narsingdi have witnessed the closure of 353 factories, resulting in the unemployment of at least 119,842 workers. The majority of these facilities belonged to the country’s crucial ready-made garment (RMG), knitwear, and textile sectors.
Many displaced workers have returned to their rural hometowns after failing to secure alternative employment in the urban industrial hubs. Factory owners and relevant authorities cite high interest rates, utility shortages, and disrupted raw material supply chains as key factors behind the widespread shutdowns.
The primary reason behind the shutdown of factories is the ongoing political instability in Bangladesh. During the interim government period, law and order have significantly deteriorated. Analysts have criticized Chief Advisor Dr. Muhammad Yunus, stating that he lacks the authority and administrative capacity to govern a country as complex as Bangladesh.
Mounting Challenges for the Industrial Sector
According to the Department of Inspection for Factories and Establishments (DIFE) and Industrial Police, the closures are symptomatic of deeper systemic challenges. Factory owners point to several contributing issues: Escalating bank interest rates, Chronic labor unrest, Difficulties in opening Letters of Credit (LCs) for raw material imports, Persistent gas shortages and price hikes, Unreliable electricity supply, and Rising labor wages, rendering production uncompetitive.
Savar: Epicenter of Closures
The highest number of closures occurred in Savar, where 214 factories ceased operations; 122 permanently and 92 temporarily leading to approximately 31,000 job losses.
According to Ashulia Industrial Police, major temporarily closed factories include ODC Craft PDP Ltd, Mascot Group, Fashion Knit Garments Ltd (Pride Group), Goldstar Garments Ltd, and Singer Electronics. Permanently closed units include The Dresses and The Ideas Ltd, Generation Next Fashions Ltd, Safwan Outerwear Ltd, and Chain Apparels Ltd.
Chain Apparels Ltd, located on the Bishmail-Jirabo Road in Savar, was shuttered in February due to its inability to pay wages, sparking ongoing labor unrest. The factory’s 1,765 employees were laid off as a result.
“I had been working there since 2010,” said Jesmin Akter, a former worker. “After the closure, I applied to other factories, but due to biometric lock restrictions, I couldn’t get hired. Even after the company removed the lock, no one is recruiting. I’ve had to pawn household items and am now returning to my village.”
Legal proceedings are underway to recover unpaid wages, confirmed Labor Inspector Md. Anwarul Islam.
Gazipur: Job Losses Mounting
In Gazipur, 72 factories have closed over the past year, leaving nearly 73,000 workers unemployed. Among the affected factories are Mahmud Jeans, Dard Composite, Policon Ltd, Textile Fashion, Classic Fashion, and La-Muni Apparels.
Notably, in February, 13 factories under Beximco Group — a major export-oriented manufacturer — ceased operations permanently due to severe financial constraints.
According to DIFE’s Gazipur office, 43 factories closed in January alone, primarily due to canceled orders, lack of work, and unsustainable financial burdens. “Ownership changes, loan restructuring failures, and liquidity crises are forcing these closures,” said Gazipur Industrial Police Superintendent Al Mamun Shikder.
Chattogram: Crisis in Garments and Shipbreaking
Chattogram has seen the shutdown of 21 factories over the past year, affecting an estimated 10,000 workers in the garments and shipbreaking sectors. According to the BGMEA, only 350 of the 699 factories registered in 2005 remain operational today.
The situation is more dire in the shipbreaking industry. Of the 180 shipyards once active along Sitakunda’s 20-kilometer coastal belt, only 24 are currently operating — with over 200,000 workers already rendered jobless over the years.
Industry insiders cite high VAT, volatile international steel prices, and rigid LC obligations as major hurdles. “Even though operations have halted, banks are demanding LC repayments, pushing many owners into insolvency,” said Kamal Uddin Ahmed, an advisor to the Ship Breakers Association.
Narayanganj: 26 Factories Close
In Narayanganj, 26 garment factories have shut down in the last year, affecting 5,342 workers. While DIFE reports only nine closures based on registered data, labor groups claim the number is significantly higher. Prominent closed factories include Knit Garden, AK Fashion Ltd, La Maison Kochur Ltd, and Molla Knit Fashion.
“The factory had 400 workers and produced garments worth over $20,000 daily,” said Knit Garden’s HR officer Kamrul Hossain Rony. “Loan defaults forced us to shut down, though all dues have been cleared.”
Many laid-off workers have taken up informal work, including driving autorickshaws or returning to village life, according to labor union leader MA Shaheen.
BKMEA Vice President Morshed Sarwar Sohel attributed the closures to long-standing structural weaknesses exacerbated by the Russia-Ukraine war, a drop in global orders, and soaring interest rates.
Narsingdi: Looming Shutdowns
In Narsingdi, 20 small factories have closed, displacing roughly 500 workers. The district has 2,251 factories in total, including 40 large, 71 medium, and over 2,100 small units.
Hamid Fabrics Ltd, employing 1,400 people, was temporarily closed a month and a half ago due to gas shortages and unpaid wages. Under pressure from authorities and labor unrest, the company is currently paying salaries despite halted production — though this may not continue for more than two weeks.
Outlook: More Closures on the Horizon?
Industry leaders warn that without urgent policy reforms, access to affordable financing, and improvements in energy infrastructure, further factory closures are likely.
“The sector’s survival depends on restoring investor confidence, stabilizing utility supply, and facilitating smoother banking operations,” said a senior BKMEA representative. “Otherwise, we may see even more closures in the months to come.”
