Epyllion Knit

completed

Established in 1993 as a standalone knitted garment factory, the Epyllion Group (http://www.epylliongroup.com) is a vertically integrated knit garment (T-shirt products) manufacturing and exporting group, comprising of nine readymade garment (RMG) companies. The Group’s operations cover the major value chain of the knit garment manufacturing process from knitting, dyeing to sewing and packaging. The four frontline RMG entities of the Group (involved in cutting, making and stitching operations) are Epyllion Knitwear Limited (“EKWL”) Epyllion Styles Limited (“ESL”),  Dekko Knitwears Limited (“DKL) and Dazzling Dresses Ltd (“DDL”). Epyllion Knitex Limited (EKL) and Epyllion Fabrics Limited (EFL), are fabric knitting and dyeing companies. Current cutting and sewing production capacity of the Group equates to 42 million pieces per year, while knitting and dyeing capacity is around 15,000 tons per year, all of which is consumed internally by the Group operations. The Group’s main buyers include C&A, Celio, G star, Marks & Spencer, Verner Group, S’oliver, Original Marine, Tomy Hilfigur, Target Australia, Express, Carrhart and H&M. .  EKWL (“the company” or the “Borrower”) is a major frontline entity of Group focusing on cutting and sewing and manufactures knit garments which are exported solely to the European Union market from its facilities in Mirpur in Dhaka. IFC had committed a loan to EKWL in 2015 (project#35437, disclosed on 15th May 2015, https://disclosures.ifc.org/#/projectDetail/ESRS/35437) which was not disbursed and had to be cancelled in 2017 due to project implementation delay because of regulatory issues, which have now been resolved. Epyllion is also an IFC advisory services partner and has been involved in IFC’s Cleaner Production (CP) and Dutch funded Partnership for Clean Textile (PACT) program focusing on water efficiency for their wet operations. The existing EKWL facilities are in Mirpur, within Dhaka City. One of the facilities (spread over six stories and three joined blocks) is cutting, stitching and packing facility whereas the other (recently transferred to EKWL from Mirabella dresses) is an embroidery and screen printing facility (only one floor). EKWL is expanding its garments knitting, sewing and packaging operations capacity by setting up a greenfield facility (with 50 sewing lines and a capacity of 20 million pieces per year) adjacent to the Dhaka-Chittagong highway, in Madanpur, in Naryanganj, 25 km south of Dhaka (“the facility” or “project”). The new facility will bring the total capacity of EKWL up to 41 million pieces per year (a 95% increase) by 2020. The IFC is proposing a senior loan for up to US$14.44 million to be structured as a corporate finance facility. As the investment is for a defined use of proceeds i.e. establishment of the facility, IFC’s environmental and social (E&S) appraisal as described in the following sections focuses on proposed operations of the facility within the context of the broader approach to E&S management within the Group.    The proposed facility will be divided into three blocks with about 425,000 ft2 – (i) production administration, warehouse and main production block (six floors), (ii) central administration (HR and administration, child care and medical center) (3 floors) and (iii) utilities. The main operations at the facility will include knitting, cutting, sewing, finishing and packaging along with limited automatic screen printing and embroidery. The facility will be developed as a LEED (Gold) certified Green building. A sewage treatment plant (STP) and an effluent treatment plant (ETP) will be provided. Additionally, a dormitory will be constructed (with six floors) near the site of the proposed facility which will be used to provide accommodation to production management staff (~40 to 50 people). The construction of the facility is already ongoing since last two years and is expected to be completed by January 2020. The commercial production is expected to start by March 2020.