Production goes haywire for power disruptions
Thursday, 8 April 2010
Jasim Uddin Haroon
Frequent power outages have been taking its heavy toll on the country's trade, industries and other economic activities as the manufacturing units alone are losing at least 30-40 per cent of their production because of the disruption.
The power disruption is also causing damage to important spare parts of machines forcing many to shut their factories for now.
Production cost is rising sharply in the manufacturing sector amid the power crisis as the entrepreneurs have to purchase high-price diesel and furnace oil to run their plants.
"The expenditure to purchase spare parts has doubled over the past six months compared to the same period in 2008," Shahedul Islam, director of Bengal Pacific, a plastic industry in Narayanganj, told the FE.
M Rahman, the country's leading steel maker, said: "The power outages have reduced the production by at least 40 per cent."
Mr Rahman, chairman of Ratanpur Steel Re-rolling Mills (RSRM), said this will create a demand and supply gap in the market shortly.
"This gap automatically will lead to a surge in the prices of construction items," he added.
A Matin Chowdhury, managing director of Asia Textiles, said: "Our profit is plummeting to zero as the production cost has risen following the power and gas crisis."
Mr Matin, also a former president of BTMA (Bangladesh Textiles Mills Association), said that many factories are now facing trouble repaying the bank loans as the crisis has forced many to put up with a production capacity below expectation resulting in lesser profit.
Md Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) said that the apparel makers are spending at least 15 per cent extra to purchase diesel to operate generators during load shedding.
"Our products' prices in the US and European markets have remained high amid global recession and our competitors there are grabbing market shares fast beating us as they are offering lower prices," Mr Hoque added.
The worst sufferers of frequent power outages are the country's small and medium enterprises (SMEs) as the most of them cannot afford generators.
Workers of the SMEs sit idle during the power outages although the entrepreneurs have to pay them, he added.
Osman Gani, managing director of Agami Prokhashoni, told the FE that workers remain idle for hours together due to load shedding.
He claimed that their production losses are higher than the other sectors as they have to restart the whole process after a single tripping of power.
President of Bangladesh Chamber of Industries (BCI) Shahedul Islam Helal, however, urged the government for a pre-defined load shedding along with decrease in the prices of diesel and furnace oil to meet the crisis.
"I believe the price cut of diesel and furnace oil will help overcome the erratic power failures for the time being," the BCI chief added.
The manufacturers who use diesel and furnace oil as substitutes to electricity pay at least 13 per cent more than that for the government supplied power.
The cost of operating business from offices has also gone up as most of the commercial enterprises have installed expensive instant power supply (IPS) devices or purchased generators to continue business.
"My work is being hampered following the frequent power failures. I have installed IPS, but we cannot operate all the computers with the back-up which are important for our work," said Zaker Ahmed, a chartered accountant.
Khondkar Golam Moazzem, senior research fellow at local think-tank CPD told the FE: "The products are losing competitiveness fast and it will hurt the export and domestic markets."
Mr Moazzem said many have been forced to make air shipment of their products as the power crisis slowed down their production.
Sharply reacting to the rise in the power tariff by the government, Mr Moazzem opined: "BERC (Bangladesh Energy Regulatory Commission) should think seriously about not to raise the power tariff amid this crisis."
Frequent power outages have been taking its heavy toll on the country's trade, industries and other economic activities as the manufacturing units alone are losing at least 30-40 per cent of their production because of the disruption.
The power disruption is also causing damage to important spare parts of machines forcing many to shut their factories for now.
Production cost is rising sharply in the manufacturing sector amid the power crisis as the entrepreneurs have to purchase high-price diesel and furnace oil to run their plants.
"The expenditure to purchase spare parts has doubled over the past six months compared to the same period in 2008," Shahedul Islam, director of Bengal Pacific, a plastic industry in Narayanganj, told the FE.
M Rahman, the country's leading steel maker, said: "The power outages have reduced the production by at least 40 per cent."
Mr Rahman, chairman of Ratanpur Steel Re-rolling Mills (RSRM), said this will create a demand and supply gap in the market shortly.
"This gap automatically will lead to a surge in the prices of construction items," he added.
A Matin Chowdhury, managing director of Asia Textiles, said: "Our profit is plummeting to zero as the production cost has risen following the power and gas crisis."
Mr Matin, also a former president of BTMA (Bangladesh Textiles Mills Association), said that many factories are now facing trouble repaying the bank loans as the crisis has forced many to put up with a production capacity below expectation resulting in lesser profit.
Md Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) said that the apparel makers are spending at least 15 per cent extra to purchase diesel to operate generators during load shedding.
"Our products' prices in the US and European markets have remained high amid global recession and our competitors there are grabbing market shares fast beating us as they are offering lower prices," Mr Hoque added.
The worst sufferers of frequent power outages are the country's small and medium enterprises (SMEs) as the most of them cannot afford generators.
Workers of the SMEs sit idle during the power outages although the entrepreneurs have to pay them, he added.
Osman Gani, managing director of Agami Prokhashoni, told the FE that workers remain idle for hours together due to load shedding.
He claimed that their production losses are higher than the other sectors as they have to restart the whole process after a single tripping of power.
President of Bangladesh Chamber of Industries (BCI) Shahedul Islam Helal, however, urged the government for a pre-defined load shedding along with decrease in the prices of diesel and furnace oil to meet the crisis.
"I believe the price cut of diesel and furnace oil will help overcome the erratic power failures for the time being," the BCI chief added.
The manufacturers who use diesel and furnace oil as substitutes to electricity pay at least 13 per cent more than that for the government supplied power.
The cost of operating business from offices has also gone up as most of the commercial enterprises have installed expensive instant power supply (IPS) devices or purchased generators to continue business.
"My work is being hampered following the frequent power failures. I have installed IPS, but we cannot operate all the computers with the back-up which are important for our work," said Zaker Ahmed, a chartered accountant.
Khondkar Golam Moazzem, senior research fellow at local think-tank CPD told the FE: "The products are losing competitiveness fast and it will hurt the export and domestic markets."
Mr Moazzem said many have been forced to make air shipment of their products as the power crisis slowed down their production.
Sharply reacting to the rise in the power tariff by the government, Mr Moazzem opined: "BERC (Bangladesh Energy Regulatory Commission) should think seriously about not to raise the power tariff amid this crisis."