Konabari Industrial Belt
80pc production gone with gas
Supply cut to feed Jamuna fertiliser factory; exporters of several hundred industries demand uninterrupted supply
Production in scores of industries from Konabari in Gazipur to Mirzapur in Tangail has dropped by 80 percent since last month for severe disruption in gas supply.
Gas distributor Titas has drastically reduced gas supply to these industries since September 8 to divert gas to Jamuna fertiliser factory that had remained shut for five and a half months.
Kaliakoir-Mirzapur Industrial Forum that represents 50 industries claimed they have been making losses of about Tk 6 crore a day since September 8 for acute shortage of gas. The forum has been formed to press home their demand for uninterrupted gas supply.
Bangladesh Garment Manufacturers and Exporters Association said at least 300 of its export-oriented factories have been running at a loss for the recent gas crisis.
The move has put several hundred industries — mostly export-oriented — into uncertainty. The owners of the affected companies feared they might fail to pay their workers wages and bonus before Eid-ul-Azha.
“Some 150,000 people work in these 50 industries. They have been sitting idle for the last one month for the ongoing gas crisis. If it continues, payments of their wages and Eid bonus will be uncertain,” said Bidhan Sarker, general manager of Uttara Group of Industries.
However, the government decision to divert gas to Jamuna Fertiliser Factory has not yielded desired results. The fertiliser factory is not receiving adequate gas pressure to operate at full capacity.
Achinta Kumar Dev, managing director of Jamuna Fertiliser Company, said if gas pressure doesn’t improve, it may cause damage to the factory machinery.
Industries in Gazipur-Mirzapur belt would get enough gas to utilise 70-80 percent of their production capacity before Titas diverted gas to Jamuna last month.
The affected industries now get only 1-1.5 PSI (pounds per square inch) of gas pressure against usual 15-22 PSI. However, these industries are permitted to receive 150 PSI of gas pressure.
The 50 industries have an investment of more than Tk 5,000 crore with an annual turnover of Tk 3,000 crore. They include Square Pharmaceuticals, Naheed Cotton Mills, Meghna Rubber Industries, Youth Spinning Mills, Quasem Dry Cell, Shirin Spinning Mills and Naheed Composite Mills.
Bidhan Sarker, also convenor of the forum, said the 50 industries have been incurring a loss of more than Tk 6 crore a day since Titas diverted gas to the fertiliser factory from the industrial belt. They are now struggling to make repayments of bank loans, he said.
“Sometimes, gas pressure drops to almost zero,” said Shahidul Islam, general manager of Naheed Cotton Mills, the country’s largest yarn producer with 300,000 spindle-capacities.
The cotton mill’s production has fallen below 20 percent for shortfall in gas supply.
“We cannot keep our commitments to buyers, and sometimes we have to pay compensation for failing to deliver yarn to garment exporters on time,” said Islam.
Garment exporters generally buy yarn and other inputs from the local market through back-to-back LC against their export orders.
Many garment exporters may fail to deliver goods on time due to this crisis. It may have a knock-on effect on the sector — from input producers to exporters and financiers, say the industries.
Production of Meghna Bicycle has come to almost a standstill for severe disruption in gas supply. Meghna alone accounts for nearly 80 percent of the country’s bicycle exports worth $100 million in fiscal 2010-11.
Meghna said the peak time for bicycle exports is the period around Christmas between September and October.
Export Promotion Bureau data show bicycle exports had dropped by 16.50 percent in July-August this year compared to last year.
The gas crisis has hit the bicycle production at a time when the export demand is very high, said Halim Khan, executive director of Meghna Group of Industries.
“It will have long-term impacts…we may lose our buyers. Ultimately, the country will lose the much-needed foreign exchange,” said Khan.
An official of Square Pharmaceuticals said the factory production has fallen drastically since September 8.
“We now run the factory by ten rented diesel-run generators that consume 10,000 litres of fuel every day,” said Fakhrul Hasan, senior manager of Square Pharmaceuticals, the largest medicine producer in Bangladesh.
“We make a loss of Tk 2 crore a day with nearly 5,000 employees sitting idle,” said Hasan.
He said Titas had almost stopped gas supply to the factory on September 8 without serving them any notice.
Titas Managing Director M Abdul Aziz Khan has admitted that the gas distributor did not consult with the industrial units before diverting gas to the fertiliser factory.
Titas only complied with the government decision, he said.
Aziz, however, said gas supply to these industries may improve, if the new 30-inch pipeline of Gas Transmission Company Ltd is put into operation by this month.
-With The Daily Star input
