Gas crisis: Concerns over production fall in Chattogram heavy industries
Entrepreneurs in Chattogram, where heavy industrial steel, cement, and glass factories are concentrated around the port, are facing challenges due to a shortage of gas supply. These factories were strategically located near the port for convenient transportation of raw materials.
However, the ongoing gas crisis has led to disruptions in production, and entrepreneurs are struggling to operate at 50 per cent of their capacity.
The gas crisis in Chattogram started in November, and since then, production has been consistently disrupted. Entrepreneurs have had to close many factories when the gas supply to the LNG terminal stopped due to a technical fault at around 10:00 pm on Thursday.
Although the supply resumed after fixing the terminal fault, the gas crisis has persisted, causing a production decline of 30 to 50 per cent in heavy industries.
The Karnaphuli Gas Distribution Company Limited (KGDCL) revealed that they are supplying gas to approximately 1,200 small and large factories in Chattogram.
The total gas demand in Chattogram is between 300 to 320 million cubic feet, with a daily demand of 80 to 100 million cubic feet for industries. Unfortunately, two-thirds of the gas is not meeting the industry's demand.
Aminur Rahman, General Manager of KGDCL, stated that gas is supplied to residential, industrial, and commercial establishments from the same line.
He said it is hard to precisely determine the amount allocated to the industry. However, it is estimated that at least 50 million cubic feet of gas is being supplied to the industrial sector.
Director (Operation and Mines) of Bangladesh Oil, Gas, and Mineral Resources Corporation (Petrobangla), Kamruzzaman Khan, informed Prothom Alo that priority is being given to both residential customers and industrial establishments in Chattogram regarding gas supply. Gas supply to Chattogram was resumed promptly after fixing the fault at the Maheshkhali terminal.
Examining the impact of the gas crisis on heavy industries, Golden Steel Ltd., a medium-sized rod factory in Sitakunda, Chattogram, with a daily production capacity of 600 tonnes of rods, was halted from Thursday due to the gas shortage. Although LNG supply has resumed, the factory remained non-operational until Sunday evening.
However, factory officials are making efforts to partially reopen the factory by Sunday night.
Additionally, another rod production factory of Mustafa Hakim Group, HM Steel, is operating in two phases in Anowara, utilising 50 per cent of its 1,000-tonne per day production capacity.
When questioned, Mohammad Sarwar Alam, Director of Mostafa Hakim Group, informed Prothom Alo that it used to take 40 minutes to heat the furnace, but now it takes two to two and a half hours due to low gas pressure. As a result of the gas crisis, production costs are increasing by 15-20 per cent. Due to the high costs, production cannot be increased by more than 50 per cent.
The gas shortage has emerged at a time when the steel industry is at its peak. Chattogram factories supply more than 70 per cent of the country's rod demand, with the top four factories—BSRM Group, Abul Khair Group, KSRM Group, and GPH Ispat—all located in Chattogram. Officials from these four factories revealed that production has decreased by 30-35 per cent since November due to the gas crisis.
Tapan Sengupta, deputy managing director of BSRM Group, a leading company in the steel sector, informed Prothom Alo that due to the acute gas crisis, it is challenging to operate the billet factories, which serve as intermediate raw materials for making rods.
Presently, production is being sustained in rod-making rolling mills using alternative fuel oil, leading to an increase in production costs.
Similar to the steel industry, the cost of production is also on the rise in the cement industry due to the gas crisis. The cement industry relies on gas to power gas generators and for drying the raw material slag. In Chattogram, there are currently nine cement factories in operation, although not as significant as the rod industry.
When asked, Abdul Khalek Parvez, managing director of Diamond Cement and second vice president of the Cement Manufacturers Association in Isanagar area of Chattogram's Karnaphuli police station, informed Prothom Alo that the gas crisis is preventing the generation of electricity using gas generators. As a result, there has been an increased reliance on electricity consumption.
The gas shortage has also impacted the glass industry. Among the two glass factories in Chattogram, the PHP float glass factory is operational at Barobkunda in Sitakunda.
Amir Hossain, Managing Director of PHP Float Glass Industry, mentioned to Prothom Alo that maintaining the furnace operation is challenging due to the gas crisis, and low gas pressure is adversely affecting the production.
Industrial sector should be given importance
The heavy industry sector has been grappling with one crisis after another for more than two years. Entrepreneurs are still concerned about opening letter of credit (LC) loans and importing raw materials due to the dollar crisis.
Meanwhile, the entrepreneurs are uncertain about maintaining full-scale production due to the gas crisis. According to them, if such a crisis persists, new investments will decline, and employment opportunities will not increase.
When asked, Federation of Bangladesh Chambers of Commerce & Industries (FBCCI) president Mahbubul Alam told Prothom Alo that if production in the industrial sector is disrupted, there will be additional pressure on the economy. The Ministry of Energy suggests that uninterrupted gas supply will be possible in 2026.
Alternative measures should be considered now so that Chattogram factories do not face such a crisis for two more years before achieving uninterrupted gas supply.
Instead of relying solely on imported gas, we should explore options for supplying gas to Chattogram from the national grid. If necessary, an alternative system for supplying gas to factories in Chattogram should be considered, possibly from Bhola.
*This report, originally appeared in Prothom Alo print and online edition in Bangla, has been rewritten in English by Farjana Liakat