SL businesses in Bangladesh will not pull out
Local businesses in Bangladesh, particularly by MAS Holdings and Brandix –Sri Lanka’s largest apparel manufacturers -, were largely unscathed by the violence that swept the country of 171 million people, and unseated the prime minister. It might however disrupt manufacturing and shipment schedules.
In scenes reminiscent of the Sri Lankan crisis when President Gotabaya Rajapaksa fled the country in 2022, Prime Minister Sheikh Hasina got onto a military aircraft and fled to New Delhi. On Thursday, Nobel laureate and respected economist Muhammad Yunus, 84 years, was appointed to head an interim government ahead of elections in 2-3 years.
The director of a buying office in Dhaka told The Sunday Times Business by phone that Sri Lankan businesses which included two chemical factories weren’t harmed by the violence. MAS has two factories and a design office while Brandix also has two factories, all located at the Comilla investment zone, 100 km away from the capital city of Dhaka.
Senior officials for both companies told The Sunday Times Business in Colombo that operations had resumed at these factories after several curfew days.
Meanwhile these Sri Lankan businesses will not immediately, shift production back home or elsewhere despite the political turmoil.
Delayed shipments and fulfilling overseas orders are taking centre stage at this moment especially for apparel firms operating in Bangladesh, said apparel manufacturers that The Sunday Times Business spoke to.
Bangladesh is the world’s number two garment exporter.
The manufacturers further said that anywhere else cannot match the capacity of Bangladesh as an immediate option. “The apparel industry has to be somehow running since many jobs in Bangladesh depend on it.” One said like his business, most other apparel companies had shut operations for over a week requesting the staff to stay at home. “We reopened the factory on Wednesday.” He added that during the past two weeks, most companies’ priority was to protect the staff members.
The JAT Group and Commercial Bank also have most exposure in Bangladesh.
A manufacturing company CEO, with operations in Bangladesh, noted that they are awaiting policy direction in Bangladesh. “It all depends on how soon the country gets back into the democratic process. However, we do not see much change in the coming months as the country has a lot of domestic demand.” A company director said that Bangladeshis are used to absorbing such political shocks and situations in the past. “Therefore, we do not foresee much change in the economic situation and will not be pulling back,” he said.
A senior banker noted that foreign banks such as Commercial Bank and the financial institutions from Sri Lanka operating there will now have more credibility than homegrown institutions. He also noted that if the current interim government is good and will see economic development, then the situation will improve further than before.
However, some multinational companies operating in the South Asian region, including countries such as Bangladesh and Sri Lanka, said that further investments in Bangladesh will be halted. “We will think many times before investing in Bangladesh now. More than 100 million people in Bangladesh are using our products and we cannot immediately be pulling out. “We had plans to invest more and expand, which we will not be doing in the immediate future,” he added.
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