Bangladeshi Industries Scale Back Production

Industry news

Bangladeshi Industries Scale Back Production

Exporters have expressed fear that if the supplies of gas and power do not improve quickly, it will not take long to have a negative impact on the country’s export earnings. Power shortages amid a severe crisis of fuel, mainly gas, have started hurting industries with power guzzling steel, fertiliser, and ceramic factories being the worst sufferers. Other industries that are also bearing the brunt of the power supply crunch include ship breaking, and apparel. Recurring power outages and low gas pressure have hurt production of most factories, while a few are trying to deal with the crisis using alternative energy sources. Exporters have expressed fear that if the supplies of gas and power do not improve quickly, it will not take long to have a negative impact on the country's export earnings. Fineness Apparels at the Karnaphuli EPZ had a target to export formal wear worth US$ 17 million. However, due to load shedding, the garment production of the company is disrupted. According to company officials, "Due to load shedding, we have to keep the generator running for a maximum of three to four hours. This results in a minimum of 3% to a maximum of 5% production disruption. Besides, while keeping the production going by alternative means, our production cost is increasing by about 11%. Rakibul Alam Chowdhury, vice-president of BGMEA and chairman of RDM Group, said, "Intensive load shedding is disrupting production in garment factories. If the situation persists, businesses along with the whole economy will suffer. We have already written to PDB about this problem." Officials of Nortex Textile Mills said that production at its units have come down to half the capacity because of low gas pressure. Every day, gas pressure remains as low as almost zero from 5.00pm to 3.00am, they said. Another leading spinning mill owner said that his factories need gas pressure at 15 PSI (pounds per square inch), but that the pressure has been between 1.8 PSI and 3.2 PSI since the Eid vacation was over, with the result that production had to be halted. Electricity supply also is not stable, making it difficult to run textile and spinning units, said BTMA officials. It is also affecting on-time shipments. While the industry is trying to continue production by running diesel generators, this is pushing up production costs.