Thursday, 8 December, 2022

Textile industry is in a shambles for gas crisis

Production drops to 40pc

  • Staff Correspondent
  • 23 October, 2022 12:00 AM
  • Print news

The output of textile mills has dropped to 40 percent due to shortage of gas supply for almost 12 hours a day, according to Bangladesh Textile Mills Association (BTMA).  

“We are not getting gas supply to our factories for 12 hours from 5:00 pm to 5:00 am. The textiles mills can utilise only 40 percent of their capacity,” BTMA President Mohammad Ali Khokon told a press conference at a city hotel on Saturday.

Factories can operate only for nine hours for lack of gas supply, he said.

A total of 1700 textile mills supply 7 billion meters of fabric to the local apparel industry, allowing them to save around $8 billion in FY 2021-22, the BTMA chief said. 

He said over 1,000 textile mills are at risk of closure amid gas crisis.

“The retention of $21 billion export income is at risks due to the significant drop in production due to energy crisis, putting the livelihoods of one million people at risk,” he said.

The BTMA member companies have already canceled orders worth $1 billion due to the gas crisis since March this year.

“If the factories do not get gas supply, the situation will worsen in November and days to come. The factories are unable to make plans for 2023 due to uncertainty in the energy supply situation,” the BTMA president added.

The factory owners have invested $16 billion in the textile sector, which is expected to reach $19 billion by 2025, according to the trade body leader.

“Around 70 percent of the investment comes from bank loans. The factory owners failed to pay installment in time due to fall in production. Many investors are now at risk of being defaulters,” the BTMA president said.

Around 84 percent of the country’s export income comes from apparel and textile products while the primary textile sector meets the demand for 90 percent yarns for knit and 45 percent fabric for woven garments, according to the trade body.

The textile mills generate around 1700 megawatts of captive power while the producers contribute around Tk 5 billion to the national exchequer.

BTMA president called upon the government to ensure a minimum supply of 3000 million cubic feet per day (mmcfd) gas to the textile mills.

“Now, Petrobangla supplies 2300 mmcfd and 360 mmcfd come from liquefied natural gas under long-term contract. There is a gap of 340 mmcfd against the demand for 3000 mmcfd. I think the government can meet the demand by importing LNG from open market,” he said.

The small fabric mills are facing a a major setback due to disrupted power supply.

“The mills located in Sirajganj, Pabna, Araihazar, Rupganj, Palash, Kalibari and Madhabdi areas are operated by electric machineries. In the recent times, the small factories and dyeing mills have been affected by severe power crisis. The loss cannot be addressed with money only. Many important raw materials for colour and chemical are getting damaged due load shedding,” the BTMA president added.

The government has already introduced area-based load-shedding after suspending 250mmcfd LNG import due to heated international market of the Russia-Ukraine war.

Gas shortfall is also affecting households and other sectors also.