Uncertainty over the prices of imported liquefied natural gas (LNG) and the ongoing gas shortage in the industrial sector have severely jeopardised investments in the country’s primary textile industry.Uninterrupted supply of gas and electricity is a must for the textile industry, as blackouts significantly degrade the quality of spin, sources from the industry told the Dhaka Tribune.However, the government has halted new gas connections indefinitely, and is preventing the factories from setting up generators to produce captive power to ensure electricity supply during the power cuts, said sources from the factories.As a result, new investors are losing interest in the primary textile sector, while existing businesses are facing hardship due to the hike in prices of gas and electricity.Moreover, a proposal for a further 14.78% rise in power prices has been submitted for the government’s approval.According to Bangladesh Textile Mills Association (BTMA), only 17 new companies have started production in the last five years. Of the 17 mills, 10 are spinning mills, five are weaving mills, and the remaining two are dying units.The association represents about 1,500 members from the textile sector.President of BTMA and Managing Director of Square Textiles Limited Tapan Chowdhury told the Dhaka Tribune the production cost of his factory has gone up by Tk22 crore over the past year due to the power price hike.Also Read- Almost 90% of Bangladesh’s workers are unskilled“A good number of factory owners are facing trouble as they do not have any forward linkage industry. They are struggling to survive,” added Tapan.The BMTA president further said: “Over the last two years, gas prices have seen a 222% jump. On top of that, the government is going to import LNG. If the prices of imported gas are more expensive than the local supply, that would hit the industry even harder. The spinning industry will have difficulty just surviving.Crisis in the primary textile industry may create a negative impact in the country’s $28 billion apparel industry, as the former industry supplies the lion’s share of raw materials to the latter. Also Read- 6 killed in Munshiganj textile mill fireTapan added that the government should plan for multiple energy sources and should allow importing duty free heavy furnace oil (HFO). in a bid to reduce the cost of per unit electricity production.“It costs Tk11 to generate per unit electricity after purchasing HFO from the Bangladesh Petroleum Corporation (BPC), while it would cost Tk6.5 per unit if it was directly imported with duty free facility,” Tapan told the Dhaka Tribune.“We have already started talks with the government to make HFO import duty-free so that the primary textile sector can run well,” he said.Also Read- Made in Bangladesh, available hereMeanwhile, BMTA Directer Razeeb Haider told the Dhaka Tribune: “The textile sector supplies raw material to the RMG sector. If there is any adverse impact on the primary textile industry, it would consequently hurt the apparel sector, as manufacturers will have to buy the material from other countries at a higher price.”The textile industry contributes more than 12% to the country’s overall GDP. 85%-90% of the demand for knit and 40% of the demand for woven fabrics for the export oriented RMG sector are met by the primary textile sector.According to the BTMA, most of their member factories have captive generators to ensure instant power supply for which the factory owners need gas or HFO.But the older power generators consume more fuel and gas to produce electricity. So the factory owners have been looking for new energy efficient technologies with a view to reducing power consumption.To get rid of the existing power crisis and to be equipped with uninterrupted power supply for smooth production, primary textile millers urged the government to allow the import of energy efficient machinery.They have also demanded duty-free or bonded warehouse facility for importing the HFO needed for their captive power generators, amid the ongoing gas shortage. Currently, importers have to pay a 35% duty when importing HFO.“The primary textile industry, including spinning and weaving, consumes more energy than the RMG industries. So energy shortage would create a serious impediment in attracting the investors to this sector,” said former BTMA president Jahangir Alamin.
