Terry towel: A soft start later to grow into a billion dollar industry

Industry requires a few Ms at the beginning: manpower, money, method, and one other thing – an entrepreneur with a vision. The inception of Sonar Cotton Mills BD Ltd and its subsequent journey prove it again.  

Rais Khan, a Pakistani-born US citizen, had the business foresight to grasp the towel-making potentials in Bangladesh in the 1980s. He left a top executive position in the global textile giant Franco Ferri Corporation to establish Sonar Cotton Mills in Chattogram Export Processing Zone (EPZ) in 1984.

This is the first towel factory not only in the EPZ but also in Bangladesh, as annual export of towels and home textiles by local manufacturers has now reached $1.2 billion.   

Sonar produces 30,000 kg of terry towels per month, as the company's export in FY2021-22 was more than $1.62 million. Sonar's products are now being sold at multinational shops such as Amazon.  

Rais Khan's son Shariq Khan now runs the factory his father established 38 years ago. After completing his medical studies, Shariq joined the production unit in 2002 at his father's request.    

In an interview with The Business Standard, Shariq – who is now the managing director of Sonar Cotton – shared the eventful story of the company and an expansion plan in the next two years.  

Shariq said many workers from Feni, Mirsarai, Chattogram, Sitakunda and adjacent areas used to work at towel factories in Karachi in Pakistan before independence. Bangladeshis had a good reputation as skilled workers.

In 1984, many of these workers joined Rais Khan's venture in the Chattogram EPZ.  

"My father used to travel to Bangladesh regularly before 1971 as we had relatives here. He loved the country and saw the future potential of business after Bangladesh's independence," Shariq said.

Rais Khan had been in the textile sector since the 1960s. He was a senior official of the textile giant Franco Ferri Corporation. Shariq said his father's experience in textiles led him to invest in Bangladesh.

"My father consulted with MrFerri, the head of the Franco Ferri Corporation, about investing in Bangladesh. MrFerri supported him as he was our first client," said the Sonar MD.  

He attributed the success of the local towel-making sector to the fashion quota system for least developed countries under which the USA used to source 1.2 million kg of towels from Bangladesh.

But there were challenges and vulnerabilities, within the country and outside of it. Shariq said the first hit onthe factory was the 1991 cyclone, which inundated and eventually damaged the machinery. It took Rais Khan seven years to resume production in 1998.  

Shariq said the business suffered severely during the 2007-08 global recession, forcing them to allow a local investor to pump money into the company.     

According to the Bangladesh Terry Towel & Linen Manufacturers & Exporters Association, 110 companies are producing home textile and terry towel items in the country. The factories employ nearly 65,000 workers and have investments totalling around $1.20 billion.

The international market size of the textile segment is around $26 billion.

According to the Bangladesh Export Processing Zones Authority (Bepza), Sonar Cotton has exported products worth $19.73 million since 2003.

In 2002, Shariqflew from the US to join Sonar as his father became ill and died subsequently.  

"Father told me, "I paid for your education from this factory. Now you should take charge."

"The first time I came here, my father told me to go to the production lines first to understand the factory. He used to say that once you understand the work of the production unit, you will understand the business. Before sitting behind the desk, I worked at the production unit for six months," he recalled.

Shariq said the firm is now sitting on new orders despite using its full manufacturing capacity.

"We need to expand now. There are plans to set up a new factory in Mymensingh as our aim is to double production in the next two years," he said.