The dyeing section of Mitali Fashion’s factory in the Konabari area of Gazipur has been closed for eight days due to a gas shortage. As the fabric cannot be dyed, 18 of the factory’s 30 sewing production lines remained idle.
Mitali Fashion Chairman Abu Yusuf Abdullah told Prothom Alo on Monday that the gas shortage had made it difficult to keep up production. The company would not be able to ship garments on time against several export orders, he said, adding that they might have to offer discounts to buyers as a result.
Like Mitali Fashion, factories across the country have been suffering from a severe gas shortage for two weeks. They are also facing load-shedding. Production at many industries has fallen by half. As a result, the supply of several food and non-food products is failing to meet demand. At the same time, exports are being disrupted because production is falling short of demand.
Prothom Alo spoke to the owners of 15 factories on Monday. Leaders of business organisations also described the impact of the gas shortage. Their observations show that factory production has fallen by 40 per cent over the past two weeks. Some factories said they were extending the holiday around the government holiday on 5 August.
Businesspeople from various sectors said the gas shortage was disrupting production in glass, steel, textiles and garments, ceramics, biscuits and cakes, and consumer goods. Lower production is increasing costs and causing losses. If the gas shortage is not resolved soon, some companies may have to take measures such as laying off workers.
The country’s industrial sector has been facing gas shortages for a long time. The crisis intensified after a liquefied natural gas (LNG) terminal was shut down following a fire on 21 July. Petrobangla has said gas supply could increase by 300 million cubic feet a day if the terminal is partially brought back into operation soon.
Bangladesh produces gas from its own fields and also imports it. There are two floating terminals in Maheshkhali, Cox’s Bazar, for converting imported LNG into gas for supply. One of them, operated by US company Excelerate Energy, is closed because of the fire. As a result, overall daily gas supply in the country has fallen to 2.15 billion cubic feet. Once the terminal resumes operation, supply is expected to rise to 2.7 billion cubic feet. Daily demand, however, is 3.8 billion cubic feet.
Consumer goods production disrupted
The Kohinoor Chemical factory in the Tejgaon industrial area of Dhaka operates two shifts from 6am, producing for a total of 16 hours a day. But production has been suspended during the day because of the gas shortage. Production resumes at night when gas pressure improves somewhat. As a result, production of soap, detergent and cosmetics has fallen by 20 per cent.
Kohinoor Chemical Senior Vice-President (Brand) Golam Kibria Sarkar told Prothom Alo that the cost of importing raw materials had increased because of the Middle East crisis. On top of that, production had fallen because of the gas shortage, making it impossible to supply enough products to meet market demand. Overall, the company was incurring losses, he said.
PRAN-RFL Group said production at its industrial park in Habiganj had fallen to 40–45 per cent. Gas shortages had nearly halted electricity generation through captive generators, leaving the factories to operate somehow on electricity supplied by the rural power network.
Production at the group’s industrial facilities in Narsingdi and other areas has also been disrupted. Because of the gas shortage, the company has been forced to reduce production and supply of plastic furniture, biscuits and cakes, bakery products and other goods.
PRAN-RFL Group Director (Marketing) Kamruzzaman Kamal told Prothom Alo that overall, only about 60 per cent of production capacity could currently be utilised because of the gas shortage. As a result, many products, including export items, could not be supplied according to demand. He expressed hope that the crisis would be resolved soon.
Crisis deepens in textile sector
Little Star Spinning Mills in Savar has the capacity to produce 24,000 pounds of yarn a day. But production stood at only 10,000 pounds on Monday because of the gas shortage. For several days before that, production had remained at 40–50 per cent of capacity.
Little Star Group Chairman Khorshed Alam said that operating a factory at half capacity could result in monthly losses of Tk7 million to Tk12 million.
Some factories extend holidays
Production at the dyeing section of DBL Group’s factory in Gazipur, one of the country’s leading garment manufacturers, has been severely disrupted by the gas shortage.
This has made it difficult to maintain normal production in the sewing section as well. The company has therefore extended the government holiday on 5 August by another three days.
DBL Group Vice-Chairman MA Rahim told Prothom Alo that a dyeing factory could not operate without gas. The company had initially declared a holiday from 5 to 7 August, but extended it by another day at the workers’ request. He expressed hope that gas supply would improve somewhat before the holiday ended.
Like DBL Group, several other garment factories have added one or two extra holidays to the government holiday marking July Uprising Day on 5 August. The reason is that they cannot dye enough fabric to meet demand because of the gas shortage. This has left garment factories facing a shortage of fabric.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Mahmud Hasan Khan told Prothom Alo that garment factories were operating at only 60–70 per cent capacity because of severe gas and electricity shortages. In the past, factories could fill cylinders with gas from filling stations, but that facility was no longer available.
He said BGMEA had written to Titas but received no response. Instead of supplying CNG to private vehicles, gas should be supplied to industrial factories, he said.
Crisis at construction-material factories
Gas is used to melt raw materials in furnaces for glass production. Once a furnace is started, it has to remain operational continuously for 12 to 15 years. If a furnace is shut down because of a lack of gas, it cannot simply be restarted; the old furnace has to be dismantled and a new one installed. This has left glass manufacturers particularly concerned about the current gas crisis.
PHP Float Glass Industries Managing Director Amir Hossain in Chattogram told Prothom Alo that gas pressure had fallen to 75 PSI (a unit of measurement) over the past few days. If it falls further, the furnace will gradually become unusable. Replacing the furnace would require an investment of around Tk5 billion. He said the furnace had been commissioned in 2019 and that uninterrupted gas supply was essential to protect the existing investment. He urged the government to prioritise gas supply to gas-dependent industries.
Sources at Karnaphuli Gas Distribution Company Limited (KGDCL) in Chattogram said that in the 24 hours up to 8:00am on Monday, the company received only 190 million cubic feet of gas from the national grid, against daily demand of at least 350 million cubic feet in Chattogram.
As a result, gas pressure has fallen across all sectors, including industries, residential consumers, power plants and CNG filling stations.
Steel manufacturers are also increasingly concerned about the gas shortage. Tapan Sengupta, deputy managing director of BSRM Group, told Prothom Alo that if the shortage continued, the factory would eventually have to shut down production.
He said furnace oil or diesel could temporarily be used as alternatives to gas, but that would significantly increase production costs. At most, factories could operate for one or two days using alternative fuel. It would not be possible to continue production this way if the gas shortage persisted.
The Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), in a letter sent last week to the managing director of Titas Gas Transmission and Distribution Company, said production was being disrupted by severe gas shortages at 20 ceramic factories in Dhaka, Narayanganj, Gazipur, Narsingdi and the Bhaluka and Trishal areas of Mymensingh. Gas pressure at the factories was sometimes falling from 2–3 PSI to almost zero. The organisation called for urgent measures to protect the industry.
What is the solution?
The Awami League government, which was ousted during the July Uprising, had focused on imports rather than increasing gas extraction from domestic fields. Gas imports began in 2018. However, importing gas has put pressure on the country’s economy.
After the Russia-Ukraine war began in 2022, gas prices in the global market rose sharply. Spending on imports reduced the country’s foreign exchange reserves. Gas prices were subsequently increased several times, but the crisis did not go away. The previous interim government and the current government have focused on increasing domestic gas production, but this will take time.
Khondaker Golam Moazzem, research director at the private research organisation Centre for Policy Dialogue (CPD), told Prothom Alo that because of its availability and low cost, Bangladesh had developed a gas-dependent electricity, fertiliser and industrial sector after independence.
Whenever shortages emerged, a group pushed for greater dependence on imported LNG. The crisis had essentially worsened because the country had failed to diversify its sources of energy, he said.
Khondaker Golam Moazzem recommended prioritising the rapid repair of the floating LNG terminal. In the future, Bangladesh would need to diversify its energy sources and avoid excessive dependence on LNG, he said. Alongside exploring domestic gas reserves, the country should focus on solar power and renewable energy. Industries, too, would have to reduce their dependence on gas.