Gas-dependent textile mills have now trimmed their production to 40% owing to acute shortage of this essential fuel. If the situation does not improve, 60% of such factories may shut down in the next few months.
With much lower than required gas pressure, 90% of the mills are having to keep their operation stopped 12 hours a day. The factories in Narayanganj, Narsingdi, Savar, Gazipur, Cumilla and Chattogram are the worst sufferers with very poor gas supplies.
The gas crisis has led to a jump in overhead costs, eventually doubling our production cost of yarns to $2.5 per kg. On top of it, continuous devaluation of taka against the US dollar has put us in more trouble.
The government promised that the gas and electricity supply crunches would improve in October and there would be no shortages in December. But the crises have now worsened. I fear further deterioration in December.
In such circumstances, many textile mills are likely to go bankrupt in the next few months. How will we repay bank loans? Workers will lose jobs, many banks will face a cash crunch, and investors will run out of capital.
The industry now needs attention – if textiles mills are closed down, garment factories will fall into deep trouble regarding the sourcing of yarns and fabrics.
Entrepreneurs are worried about their new investments amounting to $3 billion. If the fuel is not guaranteed, there is a possibility of disinvestment.
Mohammad Ali Khokon is the president of BTMA