Noman Group spending Tk 1,300cr on expansion

Noman Group, the first Bangladeshi textile and garment manufacturing company to cross the $1 billion mark in exports, is set for massive expansion to meet the growing demand from Western buyers.

“Expansion is in our DNA,” said Md Shahidullah Chowdhury, executive director of Noman Group, which counts retail giants like IKEA, H&M, Kmart, Walmart and Carrefour as its major customers.

For now, the group is investing Tk 1,300 crore to establish a state-of-the-art spinning mill named Nice Spun Mills on 110 bighas of land at Maona in Gazipur. It will meet the demand for yarns and fabrics of its garment manufacturing units.

The mill is targeting to produce 124 tonnes of yarn for both knitwear and fabrics in a day.

The funds have already been arranged from the banking system, Chowdhury said.

The structure has already been built and now the machinery needs to be installed for the plant.

Production at the new site, which will create 2,500 new jobs, is expected to commence within the next one and a half years.

The new mill comes mainly to meet the daily requirements from Noman’s different units, he said, adding that the group has a total of 27 textile and garment units that mainly produce yarns, fabrics, home textile, bed covers, curtain, comforters, quilt covers and towels.

From the onset the group trained its focus on the European Union and the US markets, but recently it has been looking at emerging Asian and Latin American markets like Japan, Russia, China, India, Brazil and Chile.

“Among the Asian markets, our shipment to Japan is getting the highest response.”

The company’s towels are particularly doing well at the market, which is primed to be the next big destination for the country’s garment products.

The group, which achieved the milestone of $1 billion export receipts in fiscal 2012-13, has the target to establish seven new units over next five years to take the value of its exports to $1.8 billion during the time.

At least 15 other textile and garment manufacturers are on their way to hitting $1 billion in exports within next few years, but they are slowed down by the long lead time.

“A long lead time is a major challenge for Bangladesh’s textile and garment — many companies cannot ship the goods timely or depend on expensive air shipments due to meet shipping deadlines.”

For instance, the group sometimes has to import fabrics from China, for which it has to wait about 40 days. If it had the textile mill that produced fabrics as good as the ones from China, it would have been able to ship the garment products quicker.

To address the problem, the group is expanding its capacity to a large extent. A microfab unit and synthetic yarn mill will be established and its textile mill Zaber and Zubair Fabrics will undergo massive expansion over the next five years. There will be expansion at Noman Terry Towel too.

In December last year, it inaugurated Nice Denim, customers are the local denim garment manufacturers. “Denim is the next big business for Bangladesh.”

The factory at Gazipur produces a total of 3 million yards of denim fabrics in a month. Once full-fledged operations start, Nice Denim’s output will increase by another million yards.

“If the raw materials are ready at the factory level, it will not be difficult to manufacture the goods timely and to ship those on time.”

Currently, different units under the group consume 325 tonnes of yarns a day. Of the quantity, the group source 50 tonnes from other local companies and in some cases import them due to specific request of buyers, he said.

The group employs 70,000 and within the next five years the number will reach 1 lakh workers.

Bangladesh is the second largest garment exporter in the world. Garment exports raked in $25.62 billion in the first eleven months of the fiscal year, up 2.16 percent from a year earlier, according to data from the Export Promotion Bureau.

Source: The Daily Star