Owners warn of dire consequences as gas crisis paralyses factories across Bangladesh

The gas shortage has extended an 8-hour workday to 16 hours in many factories, resulting in daily losses worth hundreds of thousands of taka

Faysal Atikbdnews24.com
Published : 22 Jan 2024, 04:59 AM
Updated : 22 Jan 2024, 04:59 AM

At the MM Knitwear factory in Gazipur's Konabari, fluctuating gas pressures have been hampering production. Assistant General Manager Manowar Hossain says while gas pressure is adequate at night, it is low during the day.

The inconsistency has led to a significant drop in the factory's daily output capacity from 40-50 tonnes to 20-25 tonnes.

A similar situation is unfolding in Narayanganj's Fatulla, another industrial area near Dhaka. Amjad Hussain, the head of Amjad Dyeing Limited in the Wapdarpool area, says they have been grappling with a gas crisis for the last three months.

The factory has completely halted operations for the past week due to a total lack of gas.

Despite persistent gas shortages for a year, "the price of gas has increased from Tk 11.5 to Tk 34.5," Amjad said.

Conversations with owners, officials, and workers reveal that many factories in areas including Gazipur's Konabari, Kashimpur, Basan, and Tongi are struggling to operate due to the gas shortage.

Consequently, workers are clocking in to factories but remain idle for most of the day, with an 8-hour workday now extending to 16 hours and resulting in daily losses worth hundreds of thousands of taka.

Industrialists are concerned that the ongoing gas crisis, which has been affecting the supply of the industry's main fuel, is pushing these long-operating factories to the brink of closure.

The crisis has also raised fears of an increase in unemployment and disruptions in export activities.

WHAT'S CAUSING THE GAS SHORTAGE?

The ongoing gas crisis is primarily attributed to the maintenance of floating LNG terminals at sea and a reduction in gas extraction from domestic wells.

Over the last two months, the national transmission lines have seen a decrease of about 500 million cubic feet in daily gas supply, amounting to roughly a 20 percent reduction.

Although one LNG terminal has resumed operations post-maintenance, another is scheduled for a 45-day maintenance period.

Officials have indicated that this will prolong the current gas shortage.

The crisis has also impacted the production of gas-based power plants, leading to load shedding of up to 700 MW even during the winter.

Alarmingly, Chattogram, the country's main industrial and port city, experienced a complete gas shutdown for two days on Friday and Saturday.

Addressing the situation, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said on Sunday that a setback occurred while reconnecting a Floating Storage and Regasification Unit (FSRU) after maintenance, leading to the recent widespread gas and electricity crisis.

He reassured that the situation would normalise to some extent in the next one or two days as the problem has been resolved.

However, with the government eyeing uninterrupted gas and electricity supply around the fasting and irrigation season in March, there seems to be little hope that the crisis will be fully resolved before then.

EMERGENCY MEETING

Amid the ongoing crisis, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) convened an emergency meeting at their head office in Narayanganj.

The organisation's President AKM Salim Osman expressed concerns, warning that a continued lack of gas supply could force garment factories to shut down.

"We cannot be held accountable for this," Osman said. "The potential closure of factories could affect 300,000 workers. How are we to bear the costs if we can't operate due to lack of gas, despite being willing to pay for it? We've made numerous attempts to resolve this issue, but to no avail."

Osman also raised suspicions about the timing of the gas crisis, saying, "Just before the election, we had gas for about 10 to 12 days. But seven days after the election, the situation deteriorated again. If it's indeed a crisis, how was gas available before the elections, and why is it scarce now? Winter isn't a new phenomenon."

He cautioned that if the gas crisis persists, the impact could be "2,000 times worse than what we experienced during the COVID pandemic".

Highlighting the importance of the knitwear sector, Osman pointed out that it accounts for 52 percent of Bangladesh's total exports, translating to about Tk 25 billion per month.

"Knitwear is our highest earning sector, indirectly employing 1.5 million people. But now, due to the gas shortage, this sector is on the brink of closure."

Fazlee Shamim Ehsan, another BKMEA leader, emphasised the critical role of gas in the garment manufacturing process, particularly for dyeing, which is essential for producing clothing.

"Without gas, we can't run our dyeing units. For the last few days, this has been impossible, disrupting our garment production and leading to a decline in exports," he said.

Siddiqur Rahman, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), flagged the dire consequences of the fuel shortage for the garment industry.

"Without proper fuel supply, not only will factory operations be hindered, but the machinery will also suffer damage. A production decline due to fuel shortages will threaten the very survival of the industry."

The textile sector, closely tied to the garment industry, is also severely impacted.

Monsoor Ahmed, additional secretary general of the Bangladesh Textile Mills Association (BTMA), said that the gas crisis has reached a critical point over the past month, severely hampering production.

"The production process has almost come to a halt. We're not even operating at 30 percent capacity. Despite the reduction in work, we still have to pay our workers."

"Of the approximately 1,700 BTMA members, at least 500 operate captive power plants that rely on line gas. About 90 percent of these factories are experiencing severe gas shortages, rendering them unable to generate electricity. This has also affected the operation of dyeing boilers, which require gas to function."

NARAYANGANJ FACTORIES HAMSTRUNG

The Narayanganj district, home to 120 factories listed under the Bangladesh Knit Dyeing Owners Association and over a hundred more dyeing factories, is facing a severe gas crisis.

These factories, entirely reliant on gas for production, are experiencing significant disruptions.

The BKMEA notes that Narayanganj hosts over 800 garment factories, both large and small. In addition to dyeing factories, many of these establishments use gas to power captive generators.

Amjad Hussain, president of Bangladesh Knit Dyeing Owners Association, expressed frustration over "unfulfilled promises".

“A year ago, the government assured uninterrupted gas supply while hiking the industrial gas price by 86 percent. Unfortunately, this has not been realised. Instead, we’ve had to completely shut down operations due to a week-long gas outage.”

Highlighting the severity of the situation, he said, "We need a gas pressure of 15 psi but are barely getting 5 psi. Most of the time, we're operating with just 2/3 psi. A continuous gas supply is critical for the garment industry, which plays a vital role in Bangladesh’s export-driven economy."

Mahbubur Rashid Jewel, secretary general of the Bangladesh Re-Rolling Mills Association, shared similar concerns. His factory, Zulfikar Steel Re-Rolling Mill Limited in Godnail, has been shut for the past six days due to the gas shortage.

“Steel and re-rolling mills are major gas and power consumers,” Jewel said.

Highlighting the compounded challenges posed by international conflicts and the local political climate, he added, “The gas crisis has hit us just when we thought we were recovering from the election period.”

He urged the government to address the gas crisis promptly, highlighting the risk of business shutdowns, difficulties in paying worker salaries, and meeting bank loan obligations.

“An uninterrupted supply of gas and electricity is essential for maintaining the momentum of our economy."

Jewel also expressed concern about potential labour unrest if the crisis continues. “If factories shut down, we can't fulfill orders or pay salaries, leading to potential layoffs. This is a situation we desperately want to avoid."

GAZIPUR FACTORY OUTPUT HALVES

Factories in Gazipur City Corporation's Konabari Industrial Zone (BCIC) are reeling from a severe gas crisis, leading to operational challenges and increased costs.

With the factories closed for the past four days due to the gas shortage, they have resorted to using CNG and diesel as costly alternatives to keep boilers and generators running.

Abdus Salam, assistant general manager of Mosharraf Textile Factory in the Bhabanipur Baniyar Chala area, highlighted the extra expenses incurred due to the gas shortage, resulting in heavy losses for the factory.

"We hoped for improvement post-elections, but the crisis has intensified," he said.

A similar situation prevails across several factories in the Sreepur, Konabari, and Kashimpur areas of Gazipur.

AKM Fazlul Haque, general manager of Preeti Group in Salna, pointed to an inability to meet customer demand due to disrupted production, causing substantial business losses.

"The region's industrial plants are at risk if the gas crisis continues," he warned.

Md Ridwanuzzaman, manager of operations at Titas Gas's Gazipur branch, explained that about 2,000 industrial factories in Gazipur are affected by the shortage due to the reduced LNG supply from Chattogram.

While Gazipur's gas demand is 590 million cubic feet per day, only 460 million cubic feet is being supplied.

In Savar and Ashulia, residents and workers are facing similar issues, with gas being unavailable for most of the day and night, and only available at very low pressure for a few hours in the morning.

The shortage has forced garment factories to use alternative fuels for production.

The crisis has also significantly impacted daily life, with many residents unable to cook meals at home. Garment workers in Ashulia's industrial area are particularly affected, often going to bed hungry and facing difficulties in cooking when they return home after work.

Rafiqul Islam, general manager of Winter Dress Limited, noted that the prolonged low gas pressure has adversely affected their product production, further highlighting the widespread impact of the gas crisis in the area.

[bdnews24.com's Gazipur, Narayanganj, and Savar Correspondents assisted in compiling this report]