"Why garment owners desperate to lease out factories"

It's now a battle for survival for garment and textile factories as they are finding it hard to stay afloat with the harsh reality of diminishing orders, high energy price and mounting bank liabilities amid a challenging economic climate and ongoing war. In the face of impending losses, owners are now considering an alternative solution: leasing out these factories.

Insiders have said this strategic move to survive the declining demand in Western markets is turning into frustration as the owners are struggling to find anyone willing to lease or purchase these factories.

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Some owners have even been forced to close their factories and lay off workers ...

Take, for instance, the case of Dird Group, a global conglomerate of garment, textile, engineering, software, and agriculture companies. In recent months, they have shut down three factories, with the most recent closure occurring just a few days before Eid-ul-Azha, resulting in over 8,000 workers losing their jobs.

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"Renting out factories is often the first step before closure. Even factories in export processing zones are reducing production lines and laying off workers. It's an alarming situation," [Syed M] Tanvir, [managing director of Pacific Jeans Group], told The Business Standard.

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Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), pointed out that the declining orders have severely impacted the sector with no new job creation over the past few months.

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High inflation in Western markets amid the growing geopolitical tensions and the Russia-Ukraine war are major reasons behind the decline in orders, according to exporters.

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Also, the screw was further tightened by the government's decision to significantly increase gas prices earlier this year...

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On top of this, buyers are insisting on discounts, taking advantage of the difficulties faced by manufacturers and exporters, he added.

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