Poor gas supply and frequent electricity cuts have been taking a heavy toll on the country's industrial production, thus leading to rise in the cost of doing business, affecting productivity and eroding competitive edge, industry people said.
Textile and garment industry's growth, according to insiders, which is important for macroeconomic stability and sound financial sector, needs government's priority attention to resolve the energy crisis.
Textile millers said up to 50 per cent of their production capacity remained unused due to gas supply shortage, forcing many garment exporters to source raw materials from outside the country.
Frequent load shedding is also causing damage to expensive and sophisticated machinery and electrical equipment.
The whole supply chain of textile and garment exports from spinning to weaving - dying -- printing have been affected.
"We are passing a challenging time. The overall supply chain has been disrupted due to energy crisis," Shams Mahmud managing director of Shasha Denims said.
Spinning mills can't produce in full capacity while price hike has raised the cost. And these factors are forcing exporters to go for imported raw materials like yarn and fabric which are cheaper than the local ones.
Besides, electricity cut or gas supply disruption is also cause damage to goods amidst production process, he said.
Explaining the situation, he said an average-sized textile mill has to pay about Tk 40 million a month following the price hike of gas. The amount was Tk 20 million before the hike.
"I need to pay additional Tk 240 million annually for all energy costs. And it is ultimately affecting cash flow," he noted.
There is liquidity crisis in banks while interest rate has gone up, he said adding that as a result working capital has become costly for private sector.
Even high-performing factories are now facing financial crunch. This will also have a massive impact on financial sector, giving rise to macroeconomic instability, he noted.
Buyers are also shifting to Pakistan, Vietnam, India and Turkey due to long leadtime, rise in cost of production, Mr Mahmud said.
"Industry is suffering and we are losing competitive edges," Mr Mahmud, who is also a director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said.
Talking to the FE on Monday, Khorshed Alam chairman of standing committee on local spinning, weaving, dying and printing mills listed with Bangladesh Textile Mills Association (BTMA) said they held a meeting on 13 July with all members.
Almost all mills located at industrial areas, including Narsingdi, Madhabdi, Baburhat, Pabna and Sirajganj, are not getting electricity for eight to nine hours a day.
And factories mostly spinning, dying and printing are in dire situation because of energy crisis.
"Sudden electricity cut cause damage of 40-60 per cent of the yarn producing from cotton that are in the process ," he said, explaining that weaving mills suspended production and exporters are not buying fabrics from them.
Textile Mills require uninterrupted energy supply to run operation as they operate 24 hours, he said adding the mills need more than two hours to restart.
Similarly printing and dying segments are also facing severe problems due to gas and electricity problems, Mr Alam, who is also chairman of Little Star Spinning Mills Ltd, said.
When asked, BTMA president Mohammad Ali Khokon said government increased gas price with assurance that industry would get uninterrupted gas supply.
"But we are not getting uninterrupted gas. Rather the situation has worsened further," he said adding that power outage for at least 10 to 11 occasions causes 40-50 per cent production fall and rise in cost.
"What buyers are now doing is that they are sourcing goods from other countries," he added.
It takes three years to be nominated by buyers, he said expressing his deep frustration.
The leaders suggested a long-term government policy to help industry to plan better
Like textile and garment, other industries like ceramic and plastic are also suffering.
Talking to the FE, Irfan Uddin general secretary of Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) said ceramic making is largely dependent on gas-fired kilns.
They are also suffering severely not only crisis of gas but the hike in gas prices as they are not uninterrupted gas supply despite significant rise in prices.
The government increased the gas price per cubic meter to Tk 30 from Tk 13.
"At the end of the day, we are paying for air, not gas" he noted
About 25 factories in Dhaka, Gazipur and Narsingdi have been suffering a production loss of estimated Tk 200 million every day for around the last one month due to the supply crunch of natural gas, the BCMEA on June 26 said in a letter to energy state minister.
Ceramic goods-manufacturing units require gas supply pressure at 15 psi (pounds per square inch), whereas the pressure in those areas fluctuate between three and zero only, it noted.
Ceramic is a gas dependent manufacturing industry and natural gas constitutes 10 to 12 per cent of its total production cost, the association said explaining that kilns in the ceramic industry need 24-hour uninterrupted gas supply to burn the products at 1200 centigrade at the desired PSI.
"Whenever the required pressure of gas goes down, the half-done products inside a kiln become wastage, even a kiln needs 48 to 72 hours to resume production in full swing after a halt," the BCMEA said, adding that sometimes an industry owner has to encounter severe trouble due to inoperative machinery.
According to Mr Uddin, there are around 70 ceramic factories across the country while 20-25 are engaged in exports.
Shamim Ahmed president of Bangladesh Plastic Goods Manufacturers and Exporters Association (BGAPMEA) also echoed the same adding that many factories located in Ashulia, Gazipur and Narayanganj could not operate properly for 20 days a month for gas crisis.
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