The Asian Development Bank (ADB) and Modern Synt Limited (MSL) signed a $50 million loan agreement on Tuesday to finance an energy-efficient polyester chips manufacturing project in Bangladesh.

The financing will expand MSL's polyester chips production capacity from 107 tonnes to 407 tonnes per day — nearly a fourfold increase — and refinance short-term local working capital loans, according to an ADB press release.

The expanded facility will produce high-intrinsic-viscosity polyester chips, an input for higher-value textile and apparel products. For Bangladesh's ready-made garment (RMG) sector, which relies heavily on imported synthetic inputs, the investment targets a persistent gap in the domestic backward-linkage chain.

"Bangladesh's textile and ready-made garment industry is a key driver of the economy, but it continues to rely heavily on imported synthetic inputs," said ADB Country Director for Bangladesh Qingfeng Zhang. He said ADB's long-term financing would help MSL expand efficient domestic production, deepen backward linkages, strengthen supply chains and support higher-value textile manufacturing.

The project sits in the Mirsarai Economic Zone in Chattogram, where MSL — a concern of T.K. Group — operates Bangladesh's first continuous polymerisation facility, close to major port and logistics infrastructure. Zhang said the project will also contribute to the development of the economic zone and support Bangladesh's efforts to attract investment, create jobs and enhance economic competitiveness.

Energy and compliance commitments

MSL will introduce energy-efficient machinery under the project. ADB expects the equipment to save around 4,840 megawatt-hours of electricity and cut roughly 2,222 tonnes of CO2-equivalent emissions annually.

The company will also pursue LEED Platinum certification for its building and factory under the US Green Building Council's Leadership in Energy and Environmental Design standard — a compliance benchmark already widely adopted by Bangladeshi garment factories serving international buyers.

The expansion is expected to create around 100 new jobs and promote greater participation of women through inclusive recruitment practices.

"We greatly value ADB's support as it enables MSL to significantly expand polyester chips production, strengthen local supply chains, and reduce dependence on imported inputs," said MSL Managing Director Abu Sufian Chowdhury. "By investing in advanced energy-efficient technology, we are improving our competitiveness while supporting a more sustainable textile industry. We believe this project will create long-term value for our customers, the manufacturing sector, and the broader economy."

MSL currently manufactures polyester chips, synthetic yarn and fibre, primarily for domestic textile manufacturers.

What it means for sourcing decisions

The capacity jump matters for textile mills and apparel suppliers evaluating synthetic input sourcing in South Asia. Greater domestic supply of polyester chips should reduce dependence on imports, shorten lead times and improve efficiency for Bangladeshi textile manufacturers, according to ADB. Buyers weighing Bangladesh against competing origins for synthetic-based apparel may find a strengthened local value chain improves the case for consolidated sourcing from the country.

The financing also signals continued multilateral support for upgrading Bangladesh's textile midstream — the polymerisation and chip-production tier that sits between petrochemical feedstock and spinning — at a time when RMG exporters face pressure on both cost competitiveness and verifiable sustainability credentials.

For sourcing managers, the question the deal raises is practical: as domestic high-IV polyester chip supply comes on stream at Mirsarai, will local yarn and fibre suppliers be able to displace imported inputs in existing orders, and at what price advantage?

ADB, founded in 1966 and owned by 69 members — 50 of them from the region — supports sustainable, inclusive and resilient growth across Asia and the Pacific.