Meghna Group of Industries (MGI) has 12 factories in Narayanganj that process sugar, wheat, soybean seeds, crude edible oil and other essential commodities. Production at the factories had been declining for several days as gas pressure fell.
As the crisis worsened on Wednesday, the group was forced to shut down its soybean crushing and oil-processing, flour and other essential-goods processing plants one after another.
MGI has a significant share of the country’s essential-commodity market. According to data from the National Board of Revenue (NBR), the group accounted for 22 per cent of the country’s total imports of seven major commodities and raw materials in the just-concluded fiscal year.
According to MGI, its factories process around 9,000 tonnes of essential goods and raw materials a day, or about 3.3 million tonnes a year. The simultaneous shutdown of so many factories has raised concerns about its impact on market supplies.
The gas crisis, however, is not limited to MGI. Factories owned by several other major processors of essential commodities have also shut down. Some have continued production using alternative fuels or at well below their normal capacity.
MGI Chairman Mostafa Kamal told Prothom Alo on Thursday that the group had been forced to shut down all gas-dependent factories, including those processing essential commodities, one after another from Wednesday because of the gas shortage.
“Keeping the supply of essential commodities normal is important. So gas supply should be restored to these factories to keep production running, on an emergency basis, if necessary,” he said.
According to NBR data, about 15.4 million tonnes of seven major essential commodities and raw materials—including sugar, wheat, edible oil and pulses—were imported in the last fiscal year. That means more than 42,000 tonnes entered the country each day on average.
A large portion of these imports arrives in crude or unprocessed form and is processed at local factories before being supplied to the market. Businesspeople therefore fear that if the gas shortage continues, supplies of finished products could be disrupted even though factories have enough raw materials.
Gas shortfall rises to 1.77 billion cubic feet
Daily gas demand in Bangladesh is around 3.8 billion cubic feet. Even in normal times, the full demand cannot be met. The national grid usually receives around 2.7 billion cubic feet a day, including about 1 billion cubic feet from imported liquefied natural gas (LNG).
One of the two floating LNG terminals at Maheshkhali in Cox’s Bazar was shut down following a fire and technical problems on 21 July. The terminal, operated by US-based Excelerate Energy, had been supplying around 450 million cubic feet of gas a day to the national grid.
After remaining shut for more than two weeks, the terminal partially resumed operations on 6 August. But as of 12 August, it was operating at roughly half its capacity. According to the Energy Division, gas supply fell to 2.03 billion cubic feet on Wednesday, leaving a shortfall of around 1.77 billion cubic feet against daily demand of about 3.85 billion cubic feet.
The gas shortage has hit industrial areas hard. Production has been disrupted not only in essential-goods factories but also in gas- and boiler-dependent industries such as steel, glass and textiles.
Officials at Petrobangla and the energy sector said the shutdown of the LNG terminal had already caused severe disruptions in industries and power generation during the period it remained offline.
Factories of major industrial groups also shut
Prothom Alo spoke to six major industrial groups involved in importing and processing essential commodities. These six groups accounted for 61 per cent of the imported raw materials for the seven commodities under review last fiscal year. They said many of their factories were completely shut on Wednesday, while several others were operating at less than half capacity.
All 12 of MGI’s essential-goods processing factories have stopped production. Of 28 processing plants operated by another major industrial group, TK Group, 20 are currently shut. The group ranked second in imports of the seven commodities and raw materials last fiscal year, importing around 1 million tonnes. It processes and markets soybean and palm oil, wheat and pulses.
TK Group Director Muhammad Mostafa Haider told Prothom Alo that only four of its 28 factories were operating on a limited scale. The others remained shut, most of them producing essential commodities.
Smile Food Products has also shut all three of its major factories in Chattogram and Narayanganj, which process sugar, crush soybeans and refine palm and soybean oil. Only a small flour mill in Chattogram remains operational. The group imports and processes nearly 900,000 tonnes of products a year on average.
A company official said the three major factories had been shut since Tuesday because of the gas shortage.
Three factories operated by Delta Agrofood, a subsidiary of Seacom Group in Narayanganj, including its soybean crushing and edible-oil processing plants, have also been shut since Tuesday. Seacom Group Managing Director Amirul Haque said the factories had enough raw materials, but production had stopped because of the lack of gas. “It is not possible to keep production running unless gas supply returns to normal,” he said.
Factories owned by City Group at the Hossendi Economic Zone in Narayanganj have also been unable to resume operations because of the gas shortage. Production at the group’s other essential-goods processing plants has also been disrupted, according to a company official.
Production capacity at nearly 20 factories operated by Nabil Group has fallen to around 40 per cent, company officials said. The group is using alternative fuel to keep production going.
Nabil Group Managing Director Aminul Islam told Prothom Alo that the group had made alternative arrangements at its factories in anticipation of gas shortages. It is now using electricity to keep production going because of the lack of gas. But this allows only 40–50 per cent of normal production capacity to be utilised. Production has fallen, while production costs have risen, he said.
Existing stocks keeping the market supplied for now
Officials of the industrial groups said they were currently supplying the market with processed goods already stored in their warehouses. As a result, there has not yet been a major supply shortage. But stocks are declining as production remains suspended.
They said one or two days of production disruption could generally be managed with warehouse stocks. If the crisis continues for longer, however, the situation could become more difficult.
Asked about the situation, CPD Distinguished Fellow Mustafizur Rahman told Prothom Alo that given the ongoing gas shortage, priority should be given to maintaining the supply of essential commodities. At the same time, the market needs to be monitored to prevent traders from exploiting the supply situation and creating disorder.
“The government should discuss the situation with businesses and step up market monitoring. It should also make public what measures it is taking to resolve the crisis and how long it is expected to take,” he said