Unabated: The Investment of Hong Kong Garment Manufacturers in Bangladesh

As of June 2012, the total value of clothing exported from Bangladesh in the fiscal year report was US$19 billion.

Hong Kong garment manufacturers have also increased their investment in Bangladesh. Hong Kong companies such as Li & Fung and Must Garment Corp are the pioneers in the garment industry in Bangladesh. Their participation has enabled the country's garment industry to take off quickly.

Esprit in Hong Kong and H&M in Sweden are well-known international brands. Their products are increasingly coming from factories in Bangladesh. At present, there are as many as 79 factories operated by manufacturers in Hong Kong and Mainland China in eight export processing zones in Bangladesh.

LF Sourcing, a subsidiary of Li & Fung Group, handles procurement, logistics and distribution for well-known retailers and brands around the world. It is reported that LF Sourcing’s investment in Bangladesh continues to increase.

Industry analysts pointed out that Li & Fung Group is a key player in the garment industry in Bangladesh and has helped the macro development of the garment industry in the country. In September of this year, Li & Fung told investors that Bangladesh is still the group's second largest procurement base, second only to mainland China.

LF Sourcing introduced environmental protection measures to Bangladesh and the Dhaka office was the first office in the country to receive LEED Gold certification.

Hong Kong company Must Garment’s investment in Bangladesh has also increased. Recently, the company opened a third factory in the name of Kwun Tong Apparels Ltd. The factory is located in the Adamjee Export Processing Zone. With advanced equipment, the company manufactures its own branded shirts, short-sleeved jackets and knitted garments for European and American customers, accounting for 65% of the company's annual production in Bangladesh.

Kiran Nagaraj, a director, said that in the past five years, their business in Bangladesh grew by an average of 25% to 30% each year, and it is expected that this growth rate will be maintained in the next five years.

According to the Bangladesh Export Processing Zone Authority (BEPZA), companies in Hong Kong and Mainland China are the most active investors in the export processing zones, and the average annual investment increase is about 35%.

An official of the bureau said that this year, Hong Kong investors opened seven new factories in the Uttara export processing zone in northern Bangladesh to manufacture clothing and leather goods.

The official also stated that there are currently 36 factories directly opened by Hong Kong businessmen in Bangladesh and 43 by mainland companies. Eighth Chengdu is producing clothing and textiles.

The official added that as of October 2012, Hong Kong’s real investment in Bangladesh totaled US$238 million, and it is expected that an additional capital injection of US$504 million will be made in the future; real investment from the Chinese mainland is US$95 million, and the proposed investment The program involved 585 million U.S. dollars. At present, Hong Kong and the Mainland are the second largest sources of foreign investment in Bangladesh, second only to South Korea.

The Mainland is also Bangladesh’s largest supplier of raw materials, including cotton, man-made fibers, knitted fabrics and accessories. In the fiscal year ending in June 2012, the total value reached US$2 billion. India is the second largest supplier, with a total value of 1.5 billion U.S. dollars.