Apparel manufacturers have urged the government to ensure stable prices of power and gas to help boost their businesses along with long-term policy support to remain competitive in the global market.
At a roundtable at a Dhaka hotel on Wednesday, the participants discussed the readymade garments sector’s (RMG) present situation and possible moves to improve while some of them also called for efficient functioning of all of the country’s ports.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) organised the roundtable attended by several ministers, officials from different ministries, exporters and manufacturers.
“The prices of gas and electricity are very important for us when we make business plans. That’s why we want the price predictability for a certain period for starting a new business,” said Tapan Chowdhury, president of Bangladesh Textile Mills Association.
The frequent price hikes were hampering their businesses, he said.
Tapan also added that more incentives in the primary textile sector would help to supply more raw materials for the RMG sector. The primary textile contributes about 85% in knitwear and 45% in woven sectors.
Former adviser to the caretaker government M Tamim said: “Price predictability of gas and electricity is very import when it comes to investment. Businessmen become sceptical when it remains unpredictable.
“The government must ensure this predictability, even if it has to subsidise, for a certain period.”
He also urged the government to make a final decision on whether the businesses would continue with their private captive power projects to run their factories when power cuts occur.
Newage Group Vice Chairman Asif Ibrahim suggested promoting the improvement and remediation in the apparel sector safety the country has achieved after the Rana Plaza disaster, adding that the government should provide fiscal and non-fiscal incentives for further development.
However, Mohammad Hossain, director general of Power Cell, a technical arm of Power Division, Ministry of Power, Energy and Mineral Resources, urged the manufacturers to install latest technology and increase power use efficiency.
Regarding the present situation of the apparel sector, Centre for Policy Dialogue’s fellow Mustafizur Rahman said: “I agree that this has been passing through a critical time for different reasons. But I want to see this challenge as an opportunity.”
He called for more efficient functioning of the seaport and airport in Chittagong, and Mongla and Payra ports. “Global export rate has been recovering quickly and Bangladesh is still the top choice for garment retailers and international brands.”
Former BGMEA president Anisur Rahman Sinha, also chairman of Opex Group, said the country’s garment business has not declined. “But profitability has fallen along with confidence of international brands and buyers due to a bad image created by the Rana Plaza disaster.”
Addressing the roundtable, Commerce Minister Tofail Ahmed asked the Accord and Alliance, two foreign garment factory inspection agencies, to leave Bangladesh after their tenures end by June next year.
He said these agencies were not needed any more. But the government may extend their stay by six more months to complete their unfinished works.
The Accord and Alliance want to extend their tenure for three more years from June next year up to 2021, but the government is yet to respond officially.
State Minister for Power Nasrul Hamid said the country’s gas crisis will end by April next year as the government will begin import liquefied natural gas (LNG). “In the next three years, the government will ensure uninterrupted power supply to the industrial units. So you can plan in line with this.”
“However, industries built outside the designated economic zones will not be given any power connections. We have already announced the power policy for until 2041. But we cannot say anything now about the power prices,” he added.
Hamid said the government start giving gas connections to the industrial units from April next year and asked the manufacturers to make business plans from now.
“The government’s investment in the power sector is $21 billion and this amount needs to be increased to $30 billion to ensure uninterrupted power supply to the industrial units.”
But, the government has been receiving only $200 million every year as revenue from the garment sector, he added. “While paying such low revenue, the garment manufacturers are demanding infrastructures worth of $3 trillion. Where will the rest of the money come from?”
The state minister asked the manufacturers to increase contribution to the government exchequer while adding more value to their products.
Wednesday’s roundtable was moderated by BGMEA President Siddiqur Rahman. The other participants included Shahriar Alam, state minister for foreign affairs, Shafiul Islam Mohiuddin, president of FBCCI, and National Board of Revenue Chairman Nojibur Rahman.