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Gas crisis hits garment backward linkage industry

  • Published at 12:54 am October 11th, 2016
  • Last updated at 12:56 am October 11th, 2016
Gas crisis hits garment backward linkage industry
Gas crisis in the garment backward linkage industry has hit hard the production in factories, which is likely to affect the apparel export of Bangladesh, said people involved with the sector. According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA), there are about 150 backward linkage factories of washing, dying and knitting in the country. They are located in Gazipur, Savar, Ashulia and Manikganj. BGMEA officials said as the government has increased gas supply to the fertiliser factories, the flow of the energy declined in the RMG backward linkage industry. Authorities of a sweater factory located in Chandra, Gazipur informed the BGMEA that it was suffering three to four hours of gas supply disruption every day. They said the situation was responsible for hampering production of at least 12,500 pieces a day. The factory has 5,000 workers. Another dying factory of the same area told the BGMEA that it cannot run the factory the most part of the day due to to the crisis. BGMEA President Siddiqur Rahman said if the government failed give gas, there would be a shortage of raw materials in garment industry, Bangladesh’s largest export sector. He urged the government to divert gas flow to the industry from fertiliser factories until the crisis is eased. BGMEA Vice President Mahmud Hasan Khan Babu said the crisis has continued for last one and half months with a number of backward linkage factories of the garment sector located in Gazipur, Savar, Ashulia and Manikganj facing severe gas supply shortage. He said: “The production in factories fell by at least 40% because of gas shortage.” BGMEA said the crisis was getting intensified every day. “The garment sector will bear the brunt of the crisis as the situation might delay the shipment of products ready for export,” said Mahmud Hasan Khan Babu. While talking to the Dhaka Tribune, many industry insiders also believed the shipment of garment products might delay as production is hampered. Economist ABM Mirza Azizul Islam, however, rebuked the logic of shifting gas supply from fertiliser factories to the industrial sector as such decision “could hurt the agricultural sector.” He rather stressed the need to extract gas from wells and explore more gas to resolve the present crisis. Meanwhile, the manufacturers claimed that the gas crisis in factories has pushed up the production cost since they have to make more new investment in setting up diesel generators for power. Requesting not to be named, a BGMEA leader said he has imported a diesel generator at a cost of Tk1.5 crore to continue production in his factories. “But the cost of diesel-generated power will be seven times higher than gas-generated power,” he added. BGMEA communicated matter with managing director of Titas Gas Transmission Limited and Petrobangla, said a high official of BGMEA. He said: “If we do not get remedy (to the gas crisis), we will soon go to prime minister’s office with the demand.” Dhaka Tribune failed to contact MD of Titas Gas, Mir Moshiur Rahman for his comment on the issue despite making repeated attempts over phone. He was not available on his mobile phone.