Production in factories dips due to gas crisis, owners aggrieved

Outpace Spinning Mills in Sreepur of Gazipur produces cotton. But an acute gas crisis, the factory has been suffering from for the past one month, brought down its production to less than 40 per cent of its capacity. As a result, the owner of the factory is worried about meeting deadlines to supply coton to the buyers.

Managing director Rajib Haider is extremely disappointed over the situation.

He told Prothom Alo despite a good order supplying the products have become tougher due to the gas crisis.

Rajib was worried about the situation that would emerge for his failure to supply cotton to buyers on time.

He further said due to less production, cost has increased. This has resulted in a decline in cash flow. As a result, they have been facing challenges to pay salaries and allowances of the workers.

This has become a common scenario for the factories in Sreepur.

Bangladesh Textile Mills Association (BTMA) leaders said production of 70-80 per cent of the factories have plummeted to 40 per cent. As a result, they are not able to supply raw materials for readymade garment factories on time, creating obstacles for export of RMG products.

BTMEA leaders apprehended that this might severely affect the main export product of the country and hence income from the sector.

Ceramics is another sector that requires large-scale gas supply. But this sector is also suffering from the gas crisis.

Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) leaders said the gas crisis has affected the production at 22-25 factories. Against the required 15 PSI (pounds per square inch) gas pressure at the factories, the available gas pressure is 2-3 PSI while this has come down to zero at some factories. As a result, these factories are incurring a production loss of Tk 200 million every day.

The industry entrepreneurs alleged that they have been counting losses due to this acute gas crisis. They are not getting uninterrupted gas supply at factories even after paying higher prices than before.

The government in January last year raised gas prices by 80 per cent on average, the highest hike in prices in the country’s history at a time. The price increased by 179 per cent in some industrial sectors.

Though the traders agreed to pay higher prices after the government had pledged to provide uninterrupted gas supply during meetings with the business community, the gas crisis had actually never been resolved.

Currently, many sectors have been facing severe crises as the gas crisis has intensified. Many entrepreneurs expressed resentment over the situation while speaking to Prothom Alo.

Little Star Spinning Mill chairman Mohammad Khorshed Alam said, “The gas crisis has been persisting for a long time. Although we could use 70 per cent of our capacity in May, the situation has worsened now. Production has come down to 40 per cent of our capacity, raising our production cost. We are incurring losses.”

The factory, situated at Bhulta in Narayanganj’s Rupganj, can use 30-35 per cent of its 120,000 pound cotton production capacity during daytime and can use 40 per cent of its capacity at night.

BTMEA sent a letter to Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) chairman Zanendra Nath Sarker in the first week of last month. It said in the letter that the price of per cubic metre gas has been increased to Tk 31.5 from Tk 16 in January last year. At that time the government assured them that gas supply in the factories will be uninterrupted. But sadly, the gas supply never actually reached the expected level even though the factories have been paying the higher prices. This has resulted in a severe production crisis.

BTMEA president Mohammad Ali told Prothom Alo on Sunday that the gas crisis is acute in Gazipur’s Tongi, Joydebpur, Sreepur and Bhaluka, Narayanganj’s Araihazar, Palash, Madhabdi and Madanpur and in Savar and Ashulia. Around 70-80 per cent of the textile factories are located in those areas. The situation is so severe that the gas pressure drops to 1-2 PSI during daytime while production somehow continues at night.

RMG factory owners also have confirmed that the textile factories are not able to supply raw materials on time. They also have been suffering from the crisis, the RMG factory owners added.

Speaking to Prothom Alo, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Mohammad Hatem Ali said, “The gas pressure before Eid was zero. The gas pressure has increased to 3-4 PSI after the Eid but this is not sufficient to operate all the machines. This is resulting in delay in supply. Production at dyeing factories also has come down to 50 per cent of the capacity.”

Mohammad Hatem said they used to buy gas from nearby CNG stations to run the boiler of the garment factory amid the gas crisis. However, the Titas authorities stopped that.

He said, “Titas can’t provide gas. They are not allowing us to buy gas from alternative sources either. Do they want to shut the industries of the country?”

The BCMEA has written to several government directorates seeking a solution to the gas crisis.

The letter states that a 24-hour gas service is needed to run the boiler of ceramic factories. It is not possible to continue production without a constant gas pressure of 15 PSI. All the components inside the boiler rot without proper gas pressure. And once closed, it takes 48 hours to restart the boiler.

BCMEA president Sirajul Islam Molla also warned in the letter that if a company incurs losses due to the gas crisis, then it won't be able to repay the bank loans.

The gas crisis in the country is nothing new. The local industries are suffering for a long time due to the prevailing gas crisis. The government went for gas imports citing this reason.

Bangladesh started importing liquefied natural gas by the end of 2018. However, gas prices skyrocketed in the global market with the start of the Russia-Ukraine war. At one point, the government stopped purchasing gas from the spot market. However, LNG prices in the global market are a lot less nowadays.

The gas sector has already become import-dependent due to the lack of growth of the gas sector. There are two floating terminals in Maheshkhali of Cox’s Bazar to supply in the pipeline through converting LNG into gas after importing. One of the terminals was damaged during cyclone Remal. It has been sent to Singapore for repair.

Speaking regarding this, Petrobangla director (operations and mines) Md Kamruzzaman Khan tells Prothom Alo that gas supply has declined as one of the terminals is out of service now. It’s likely to resume operations by the second week of July.

*This report appeared on the print and online versions of Prothom Alo and has been rewritten in English by Shameem Reza and Ashish Basu