Fazlur Rahman

The World's second largest sports goods maker Adidas will invest US$100 million to set up a footwear manufacturing plant in Bangladesh, exclusively targeting fast-growing local market, officials said Wednesday.

The plant will be the largest footwear manufacturing unit in Bangladesh and the single biggest foreign investment by a German company, said a top official of Bangladesh-German Chamber of Commerce and Industry (BGCCI).

"The company plans to start constructing the factory in January 2010. I know that Adidas will invest $100 million in the state-of-the-art plant. But the location for the project has not been decided yet," he said, preferring anonymity.

"Adidas and its partners in Bangladesh are still finalising the details of the joint venture," he said.

The move by Adidas is the latest in a series of investment in the country's footwear sector, which is quickly emerging as one of the leading export earners and job creators.

In the last three years, more than a dozen Taiwanese investors have bought plots in the country's export processing zones (EPZs) to set up footwear plants, mainly for exports.

Pouchen, world's leading footwear maker, is investing over 25 million dollars in its plant at Karnaphuli EPZ.

The company is now looking for a 200-acre land to build one of the world's largest footwear units that can employ more than 40,000 people.

South Korean Youngone Corporation has also said it would invest more than $100 million in phases to build a footwear plant in its Korean EPZ situated on the other side of the Karnaphuli river.

Experts have said Bangladesh is poised to become a leading nation in global footwear thanks to its cheap labour force and nimble fingers -- a crucial component to hand-stitch shoes -- of its army of female workers.

In the 2008-9 financial year Bangladeshi companies exported footwear worth $187 million, recording a decent growth of 10 per cent despite the global recession.

The BGCCI official said the global footwear maker would initially make low-cost footwear products exclusively for local Bangladeshi consumers.

"The German brand will think of diversifying their products later," the official said.

He said the size of Bangladesh's footwear market is around Tk 30 billion, which is a big market for such a large investment and has been expanding at a double-digit rate.

Adidas is the largest sportswear manufacturer in Europe and the second biggest sportswear manufacturer in the world after its American rival Nike.

The company also produces bags, shirts, watches, eyewear and other sports and clothing related goods.

It reported 10.799 billion euro revenue last year, up from €10.299 billion, or about $15.6 billion, in 2007.