No RMG factory closed yet over gas crisis: BGMEA

No readymade garment (RMG) factory has so far been closed due to the recent gas supply disruption, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Mahmud Hasan Khan said on Thursday.
He, however, said the full impact of the energy crisis on the apparel sector would become clearer over the next three months.
Mahmud also called for simultaneous measures to increase gas supply, expand LNG storage capacity and upgrade the distribution network to ensure adequate energy for the apparel industry.
He made the remarks while responding to questions from journalists at a press conference at the BGMEA Complex.
Mahmud said the gas supply situation had “definitely improved compared to seven days ago”, as both Floating Storage and Regasification Units (FSRUs) were now operating at full capacity and the disruption to LNG supply had eased.
“The gas supply situation today has definitely improved compared to seven days ago,” he said, adding that it would improve further if the two regasification units continued to operate normally.
The garment sector had not yet seen any factory closures directly attributable to the recent gas crisis, he said, noting that shutting down a factory requires advance preparations to complete pending orders, settle workers’ legal compensation and address other liabilities.
The actual impact of the recent energy crisis could become clearer over the next three months, particularly if the supply constraints persist, he added.
The BGMEA president called for greater use of fuel-based power plants to reduce pressure on gas-fired electricity generation and make more gas available to industries.
He also urged the authorities to facilitate merchant power purchase agreements, saying BGMEA had discussed the issue at several meetings with relevant authorities.
Mahmud said the garment sector was also pursuing rooftop solar power as an alternative source of electricity.
BGMEA had collected data from around 14 factories that could potentially generate about 168 MW of solar power, he said. However, the sector needed access to low-cost financing because solar projects generally take longer to generate a return on investment.
“The biggest issue with solar is that its return on investment takes a relatively long time, so the interest rate also needs to be lower,” he said.
Mahmud added that BGMEA had discussed the issue with the Bangladesh Bank governor and sought green-finance support for its members.
Turning to the use of artificial intelligence (AI) in the RMG sector, he said the industry was already using AI and automation in several areas and that the technology should not be viewed solely as a means of replacing workers.
“AI is already being used in our industry for preparing shipping documents, marketing, merchandising, design development and improving efficiency,” he said.
Mahmud said BGMEA’s membership had once exceeded 7,000 but currently stood at around 3,000, reflecting changes in the industry over the past four decades.
On allegations of harassment and additional costs at customs, he said the situation had not yet improved to the desired level, although reforms and digitisation were underway.
He cited the digital submission of utilisation-permission applications by deemed exporters as an example of the ongoing changes.
Asked why international buyers would continue to source from Bangladesh despite the challenges facing the RMG industry, Mahmud said the country’s biggest strength was its production capacity.