Apex Spinning & Knitting Mills has declared an indefinite shutdown of its Gazipur factory and laid off around 5,000 workers amid labour unrest over service benefits, raising concerns over the company's export commitments and future business operations.
The listed export-oriented knitwear manufacturer disclosed the development through the Dhaka Stock Exchange (DSE) on Wednesday, saying its board of directors had decided to enforce the layoff under Section 13(1) of the Bangladesh Labour Act, 2006.
The closure marks a major operational setback for the company, as the suspension of factory activities could affect production schedules, order execution and overall business performance if the dispute is prolonged.
According to company officials, a section of workers had been demanding service benefits beyond the provisions of existing labour laws. The workers reportedly sought a benefit package equivalent to seven months' basic wages after five years of service and 15 months' basic wages after 10 years of service.
Efforts to resolve the dispute failed despite discussions involving representatives of the Department of Labour, worker groups and company management. A tripartite meeting held on June 15 ended without any agreement, prompting the company to take the decision to suspend operations.
In a disclosure to investors, Apex Spinning said the layoff was necessitated by labour unrest that had made normal factory operations impossible.
Company secretary Md Delour Hossen attributed the situation to labour unrest stemming from what he described as "unlawful demands" by workers.
Under Section 13 of the Bangladesh Labour Act, employers are permitted to declare a layoff under certain circumstances when regular operations cannot be maintained due to factors beyond management's control. Workers affected by a layoff are entitled to compensation and other benefits in accordance with labour laws.
The company, however, did not disclose the potential financial impact of the shutdown or indicate when negotiations with workers might resume.
The development comes at a time when the textile manufacturer has already been facing business challenges.
The company reported a 9 per cent year-on-year decline in export earnings to Tk 3.83 billion during the nine months through March this year. Profit also fell 15 per cent to Tk 21.5 million during the period.
Apex Spinning posted an annual profit of Tk 30.24 million in FY25, almost unchanged from the previous year. The company has also maintained a consistent dividend record, distributing 20 per cent cash dividends in each of the past five years.
Investors appeared largely unfazed by the announcement. The company's share price rose nearly 2 per cent to Tk 365.8 on the Dhaka bourse on Wednesday, suggesting that the market may be expecting the labour dispute to be resolved without long-term damage to the company's operations.
Market insiders, however, warned that a prolonged shutdown could disrupt production planning and export shipments, particularly at a time when Bangladesh's textile and garment sector is facing increasing pressure from rising costs and intense global competition.
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