Dhaka, Sep 28 (IANS) Arvind, Indian textile maker and the world's largest manufacturer of denim, will set up a denim manufacturing plant in Bangladesh with an investment of $66 million over three years, officials in Bangladesh said.

The Indian company signed an agreement with the local Nitol Group here last Sunday to invest in Comilla Export Processing Zone (CEPZ) in the south-eastern region for producing exportable denim fabrics and denim trousers, said Nitol chairman Abdul Matlub Ahmad.

He said the investment would be made in three phases in three years.

"Nitol Group will hold 20 percent of the stakes and Arvind the rest. I am hopeful that the formal operations of the company will begin within a year," Ahmad said.

He said more than 3,000 workers would be employed in the factory.

"We demanded 40,000 square metres of land in the CEPZ from the government. We, however, need more land for setting up the factory," Ahmad added.

He said this was the first investment in textiles by the local industrial conglomerate. "Nitol Group is in talks with more Indian companies," he said.

Ahmad, also the president of India-Bangladesh Chamber of Commerce and Industry, said the present venture is expected to produce 13 million metres of fabric a month with a growth of 12 percent.

Cheap labour, lower production cost and a burgeoning fabric market are among the factors why India wants to invest in Bangladesh, he said.

"Since we are already exporting 36 million metres of denim to Bangladesh annually, we have a ready market available and hence the proposed plant shall be profitable from day one," Arvind's chief financial officer Jayesh Shah said.

Moyzuddin Ahmed, a member of Bangladesh Export Processing Zones Authority, and Aamir Akhtar, chief executive officer of Denim Fabrics of Arvind Textile Mills Ltd, signed a memorandum of understanding in Dhaka.