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Tuesday, July 23, 2024

50 Bangladesh garment factories face closures due to lack of power and gas

Bangladesh reports 22 garment factory closures in the past month and warned another 27 were about to follow due to the lack of power and gas. The disclosure was made at a business conference in Dhaka on Oct 23.

Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, warned recently that apparel exports may drop 20% in the next two months due to the energy problems plus reduced demand in Europe.

Data available from Petrobangla, the state-run oil, gas, and mineral resources company, shows that can be supplied per day less than half of the gas demand can be supplied per day.

Last month, the government’s energy adviser said there was no money to import more fuel oil for electricity generation. “It’s all about foreign exchange,” he said. Businesses says they are not getting electricity for hours a day, sometimes as many as 12, though outage times vary widely. Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, said that in the city of Narayanganj it was “now a matter of time” before industrial units are forced to shut down.

He explained that most workers in the knitwear industry get paid based on “piece rates”, meaning they are paid for what they produce. Since the power crisis has cut into production, many are not earning enough to cope with inflation that has been over 9%.

“It’s a big crisis,” Hatem said. He also said there was a shortage of the gas needed to run steam boilers for dying fabrics.

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