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Kmart Ceased Production at Bangladesh Factory After Cracks Found

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May 24 (Bloomberg) -- Kmart, the Australian discount department-store unit of Wesfarmers Ltd., said it ceased production earlier this month at a Bangladesh clothing factory and evacuated workers after the plant was designated unsafe.

Employees of the Ratul Fabrics Ltd. factory in Dhaka were asked to leave the premises within 70 minutes of the company being informed of the results of an inspection by industrial police, Tracie Walker, general manager of Kmart Corporate Affairs and Sustainability, said in an e-mail today.

A civil engineer sent in by Ratul Fabrics found that cracks in the building walls were non-structural, Walker said. Checks made for Kmart by Intertek Group Plc had the same findings, while two separate reports based on inspections by engineers found that the factory is safe and production has resumed, she also said.

Ratul Fabrics was informed earlier this year that Kmart wouldn’t place any further orders with the company because of its location above a market place, Walker said. The supplier is finishing up its final order for Kmart, she said by phone.

Kmart’s response follows a Bloomberg News report that a government inspection found cracks in the walls of the Ratul Fabrics building, along with potential fire hazards.

More than 1,100 people were killed a month ago when the Rana Plaza factory building in Dhaka collapsed.

To contact the reporters on this story: Sarah Shannon in London at sshannon4@bloomberg.net; Mehul Srivastava in New Delhi at msrivastava6@bloomberg.net.

To contact the editor responsible for this story: Heather Harris at hharris5@bloomberg.net

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