Asian Development Bank and Modern Syntex Limited sign $50 mln loan agreement to finance Modern Energy-Efficient Polyester Chips Manufacturing Project in Bangladesh. The agreement, which was signed on September 29, will allow the company to raise its capacity for making polyester chips to 407 tonnes a day, almost four times the current output of 107 tonnes. Some of the funding will also be used to refinance MSL’s short-term local working capital loans.
Why the investment is important
Bangladesh’s textile and ready-made garment sector is one of the most important economic sectors of the country. However, it still depends heavily on imported synthetic inputs. “The long-term financing will support MSL’s expansion of its efficient domestic production, strengthening of backward linkages, supply chains and higher value textile manufacturing,” said ADB Country Director for Bangladesh Qingfeng Zhang. The project is also expected to help build the Mirsarai Economic Zone and support Bangladesh’s broader push to draw investment and boost its economic competitiveness.
Energy efficiency and environmental issues
The expansion focuses on energy-efficient equipment projected to save approximately 4,840 megawatt-hours of electricity and reduce about 2,222 tonnes of carbon dioxide equivalent emissions annually. As part of the project, Modern Syntex will also seek LEED Platinum certification for its building and factory, further solidifying the facility’s sustainability credentials.
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What Modern Syntex Is Doing
Modern Syntex Limited is a member of the TK Group and is home to the first continuous polymerisation facility in Bangladesh, located in the Mirsarai Economic Zone in Chattogram, close to major port and logistics infrastructure. The company produces polyester chips, PET chips, synthetic yarn and polyester filament and mainly supplies them to local textile manufacturers. “ADB support will enable the company to significantly ramp up production, develop local supply chains and cut dependence on imported inputs,” said MSL Managing Director Abu Sufian Chowdhury.
Potential impacts on jobs and supply chains
The expansion will make polyester chips with high intrinsic viscosity to be used in higher-value textile and apparel products. The project is expected to increase the domestic supply of polyester chips, reduce dependency on imports, reduce lead times and improve efficiency along the textile manufacturing value chain, ADB said. The project is to create 100 new jobs with a stated promise to adopt inclusive recruitment practices to support more women to join the workforce.
Broader Context
The funding comes as Bangladesh continues to work on strengthening its man-made fibre backward linkage and cutting its dependence on imported synthetic materials that supply its garment export industry. The deal is part of a broader effort to enable Bangladeshi manufacturers to move up the value chain and not rely on basic imported inputs, which ADB officials say will be key to the industry’s long-term competitiveness as global demand for higher value textile products grows.
