The textile entrepreneurs in Bangladesh are looking for ways to reduce costs after hefty increases in gas prices. Besides, they are asking the government to compensate them through other measures to make their products competitive.
Their problem is that the export orders are declining and many factories are operating at lower capacities. They are operating on sharp margins. They know that in view of the recession in the West, they would not be able to get higher prices from the buyers.
The spinners through their association have urged the government to increase alternate cash incentive facilities from 4 percent to 7 percent. A request has been made by them through the Ministry of Commerce to introduce a 15 percent cash incentive against the exports executed using man-made fiber.
The textile players have also suggested withdrawing one percent advance income tax on industries or alternately increasing cash incentives for apparel exporters. Apparel exporters have pointed out that before the hike in gas rates, their utility expenses were 3-4 percent of the total cost but have now been increased to 4 percent. This will wipe out their profit margins. Al Shahriar Ahmed Managing Director Adzi Trims Ltd explained the impact of gas price increase on his group. He said before the gas price increase his group was paying Tk30 crore as a utility bill which would now shoot up to Tk60 crore. All exporters agree that Bangladesh will lose competitiveness in fast fashion due to this additional cost.
If the foreign buyers agreed to increase the buying price then they would have to increase their retail price by $1-2 per piece. This would not be possible for them in view of the high inflation and recession in their countries.
