Businesses count $1.0b losses in burnt goods, harmed exports

Trade bodies have initially estimated a loss of over $1.0 billion or Tk 120 billion inflicted on Bangladesh's export sector by the devastating fire in the cargo village of Dhaka's Hazrat Shahjalal International Airport (HSIA).
The Exporters Association of Bangladesh (EAB) came up with the loss assessment at a press conference Monday in a city hotel, where exporters demanded unassailable safety and security at all trade gateways.
Speaking at the press meet, EAB President Mohammad Hatem said the government should ensure great security in key areas like cargo villages and export-import ports for the sake of assuring global buyers of shipment of goods in time.
Raw materials of some 32 pharmaceutical companies worth about Tk 2.0 billion were burnt in the fire, which may cause disruption to production and distribution of finished goods worth between Tk 30 billion and Tk 50 billion in next two to six months.
Leaders of the country's export-oriented sectors believe there had been failure of the authorities concerned in ensuring effective fire-detection and-protection system at the cargo village.
They sought greater safety measures at the import cargo zone of HSIA and put forward a six-point demand, including immediate government support to compensate affected small and medium enterprises (SMEs) whose imported raw materials got gutted in the blaze.
The EAB president, Mohammad Hatem, noted with deep concern that the fire incident not only caused financial losses but also severely tarnished image of the country.
"It is still difficult to accurately determine the total loss of exporters caused by the blaze. But initially we've assume that the fire has caused losses worth of Tk 120 billion or US$1.0 billion," Mr Hatem said, demanding a transparent and full investigation into the overall loss.
The direct loss is the damage or the burning of goods but the issue is not only the damage, he said, explaining the raw materials destroyed in the blaze would affect production of exportable goods and their timely shipments which might result in losing market, confidence of global buyers and related international agreements.
He said they asked their members for information of possible losses which they are yet to get.
One after another fire incident at Ashulia, Mirpur, Chattogram EPZ and lastly at Incepta Pharmaceuticals created deep concern and insecurity among the entrepreneurs, he said, adding that the fire at Dhaka airport created uncertainty among foreign buyers which might affect future work orders.
Mr Hatem, also president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), reminds that the cargo village of HSIA is one of the country's most vital infrastructures and the fire clearly shows the loopholes in its security-and-safety system.
The EAB proposed forming a comprehensive investigation team with representatives from government and business community that would not only determine the cause of such incidents but also come up with effective safety measures to prevent any recurrence.
Bangladesh Association of Pharmaceutical Industries (BAPI) secretary- general Zakir Hossain said some 32 pharma companies out of 305 informed that raw materials worth around Tk2. 0 billion had been burnt in the cargo-zone fire.
Some 250 pharma companies are in operation, he said, adding that they are waiting for the feedback from the rest.
Responding to a question, he said 10 to 53 components are needed to produce a medicine and the damage of raw materials worth of Tk 2.0 billion could cause production disruption of medicine ranging from Tk 30 billion to Tk 50 billion in next two to three months.
He, however, said there would be no immediate effect in the supply chain.
Mr Hossain, however, expressed concern over the quality of raw materials shifted to Chattogram Airport on Saturday, saying that temperature is an important issue to preserve pharma raw materials and Chattogram airport doesn't have the system.
He criticised the Customs House for keeping their activities closed from 5.0 pm to 9.0 am each day and through the weekend holidays and demanded 24-hour operation even on a small scale. They are ready to pay.
Citing the damage to his own company, he said one of his narcotic items had been burnt and it would take four to six months to import again after getting fresh permission and obtaining clearance.
Md Nazmul Hassan, senior vice president of Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh, said raw materials like accessories and chemical worth of US$1.0 million were burnt which might result in loss of billion dollars.
Md Shahriar, president of Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), said initially they received statistics of losses in the accessories sector at around Tk 230 million.
Industry leaders at the conference called on the government to swiftly implement the EAB's six-point demand after a full investigation and damage assessment.
The EAB demands include prompt settlement of insurance claims for goods damaged in the fire, the formation of a special government fund to compensate exporters who didn't have insurance , modernisation and expansion of the Cargo Village to ensure future safety, and setting up a separate and air-conditioned warehouse for the pharmaceutical sector.
They also pressed for establishment of a chemical warehouse at a safe distance and full automation of the cargo-village warehouse.
Fazlee Shamim Ehsan, president of Bangladesh Employers Federation, Showkat Aziz Russel, president of BTMA, and leaders of other export-oriented sectors also spoke at the conference.

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