Keya Cosmetics has announced the permanent closure of four factories within its textile division, effective 1 May 2025, due to severe financial struggles that have left the company on the brink of collapse. The closure will result in the loss of approximately 8,000 jobs, including 1,000 positions held by individuals with disabilities, a devastating blow to the workforce.
The affected divisions include Keya Group’s Knit Composite Garments Division, Spinning Division, Cotton Division, and Keya Yarn Mills Limited. Additionally, the company’s dyeing and utility division will shut down operations on 25 May 2025. This decision was disclosed in a recent filing to the stock exchange.
Keya Group cited several critical factors behind the closures, including market instability, inconsistencies in its banking accounts, shortages of raw materials, and insufficient production activities within the factories. These closures reflect the company’s ongoing struggle with financial instability and operational challenges.
The company’s financial woes have been significant. With debts nearing Tk 3,000 crore and classified as a loan defaulter by three banks, Keya Cosmetics has found it increasingly difficult to maintain operations. Chairman Abdul Khaleque Pathan has estimated that around Tk 60 crore will be needed to compensate all affected workers. Currently, the company spends approximately Tk 7-8 crore each month on worker salaries, a figure that has become unsustainable given the company’s dire financial position.
Despite the shutdown of its textile operations, Keya’s cosmetics and detergent division, which generates around Tk 25-26 crore in monthly revenue, will continue to operate. This part of the business has been a cornerstone of the company’s success, even as its textile sector faltered.
Keya Group, founded in 1996 by self-made entrepreneur Abdul Khaleque Pathan, initially gained recognition for its popular Keya soaps, which became a household name, particularly in rural Bangladesh, thanks to strategic sponsorships of the popular TV magazine show Ityadi. The company also earned accolades and export trophies during its peak years between 2001 and 2005.
However, the company’s aggressive expansion into the textile sector during the 2000s proved to be a significant misstep. Over-reliance on loans, poor debt servicing, stock market irregularities, and mismanagement eroded the company’s financial stability. Analysts have pointed to the amalgamation of its textile units with the listed company as a major factor that drastically reduced profits.
In late December 2024, thousands of workers, facing unpaid salaries for November, staged protests, blocking a nearby highway. The protests were mediated by local law enforcement, leading the company to postpone the factory closures to 30 April 2025.
As of 31 December 2024, the company’s sponsors and directors held 46.275% of Keya Cosmetics’ shares, while institutional and general shareholders held 8.54% and 45.19%, respectively.
The closure of Keya’s textile units serves as a poignant reminder of how rapid growth, coupled with financial missteps and overreach, can lead to a company’s downfall. The future of the company remains uncertain, with many eyes now on its remaining cosmetics and detergent division as the last remaining pillar of its business.
