Keya Cosmetics has announced the permanent closure of four factories under its textile division, effective 1 May 2025, due to severe financial struggles. This decision will lead to the loss of jobs for approximately 8,000 workers, including 1,000 individuals with disabilities, marking a significant blow to the workforce reportedly.
The shutdown will impact Keya Group’s Knit Composite Garments Division, Spinning Division, Cotton Division, and Keya Yarn Mills Limited. Additionally, the dyeing and utility division will cease operations from 25 May 2025, as stated in a disclosure to the stock exchange.
The company cited several reasons for the closures, including:
- Market instability.
- Inconsistencies in accounts with banks.
- Shortages of raw materials.
- Insufficient production activities in the factories.
The closures highlight the challenges faced by Keya Cosmetics in navigating financial instability and operational hurdles.
Keya Group’s financial troubles are daunting. With debts totaling around Tk 3,000 crore and classified as a loan defaulter by its three banks, the company has struggled to stay afloat.
Read more: Bangladesh’s RMG Exports Surge to $38.48 Billion in 2024
Chairman Abdul Khaleque Pathan estimated that Tk 60 crore would be needed to compensate all affected workers. Currently, the company spends Tk 7-8 crore monthly on worker salaries, a figure that has become unsustainable.
Despite the shutdown of its textile units, the group’s cosmetics and detergent division, which generates Tk 25-26 crore in monthly revenue, will continue operations.
Founded in 1996 by self-made entrepreneur Abdul Khaleque Pathan, Keya Group quickly rose to prominence, fueled by its successful cosmetics and detergent businesses under the Keya brand. Its aggressive expansion into the textile sector in the 2000s, however, proved to be its downfall.
Keya soaps gained immense popularity across rural Bangladesh, thanks to strategic sponsorships of the TV magazine show Ityadi. The group also earned export trophies during its golden years (2001–2005).
However, excessive reliance on loans, mismanagement, stock market irregularities, and poor debt servicing eroded the company’s stability. Analysts also attribute the group’s downfall to the amalgamation of textile units with the listed company, which drastically reduced profits.
Amid unpaid November salaries, thousands of workers staged protests on 29 December 2024, blocking a nearby highway. Mediated by local law enforcement, the company postponed the shutdown to 30 April 2025.
As of 31 December 2024, sponsors and directors held 46.275% of the company’s shares, while institutional and general shareholders held 8.54% and 45.19%, respectively.
Keya Cosmetics’ trajectory serves as a stark reminder of how rapid growth, coupled with financial missteps and operational overreach, can lead to a company’s dramatic decline.
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