Bangladesh’s textile sector faces acute strain after a technical failure shut down one of its two FSRUs on July 21, slashing gas supply by 450 MMcfd (17%). Factories now operate at just 2–3 PSI—far below the required 8 PSI—causing 30–40% output drops. Diesel substitution has raised energy costs to Tk 34/unit (vs. Tk 14–15 for gas), lifting operating expenses by ~20%. BGMEA estimates weekly losses of BDT 7 million per factory—escalating to BDT 70 million with air freight or BDT 200 million with order cancellations. BKMEA reports up to 50% capacity loss and daily diesel costs of BDT 1.5–2 million.
According to www.textiletoday.com.bd, a 17% national gas supply loss—450 MMcfd—has slashed pressure in textile factories from the required 8 PSI to just 2–3 PSI, triggering cascading cost and output disruptions across Bangladesh’s $46.4 billion apparel export sector.
Gas Pressure Collapse Disrupts Core Manufacturing Processes
The crisis intensified after one of Bangladesh’s two floating storage and regasification units (FSRUs) shut down on July 21 due to a technical fault, cutting national gas supply by 450 million cubic feet per day. Unlike total outages, this shortfall manifests as chronically low and unstable pressure—rendering gas unusable for precision-dependent textile processes. Spinning, knitting, dyeing, finishing, and washing all require continuous, stable gas flow; even brief interruptions cause machinery damage, fabric waste, and production slowdowns.
Shams Mahmud, Managing Director of Shasha Denims, confirmed his factory needs 8 PSI but receives only 2–3 PSI. He warned that unstable pressure is especially hazardous during dyeing: “interrupted processing can ruin entire batches of fabric.” Factories report production declines of 30–40%, while wages and fixed overhead remain unchanged—eroding margins without proportional output recovery.
Cost Surge and Unviable Diesel Substitution
To compensate, manufacturers have rapidly shifted to diesel-powered generators and boilers—a stopgap solution that inflates energy costs more than twofold. Diesel-generated electricity costs nearly Tk 34 per unit, compared with Tk 14–15 from gas. Industry sources estimate operating costs have risen by around 20%, yet global buyers continue rejecting price increases, citing contractual terms and competitive sourcing alternatives.
Fakir Kamruzzaman Nahid, Vice President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Managing Director of Fakir Fashion Ltd., stated the industry is spending BDT 1.5–2 million per day on diesel alone at some facilities. “This is simply not sustainable,” he said. BKMEA also reported many factories have lost nearly 50% of their production capacity due to the shortage—further straining cash flow and delivery reliability.
Financial Losses Escalate with Delivery Failures
Mahmud Hasan Khan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), quantified the immediate financial toll: a typical factory operating only 5–6 hours per day instead of its normal 10–11 hours incurs an operational loss of roughly BDT 7 million over seven days—even before accounting for broader impacts.
“If this continues for seven days, a factory may incur an operational loss of around BDT 7 million, even before considering the wider impact.” — Mahmud Hasan Khan, President, BGMEA
When delays force air freight use to meet buyer deadlines, losses balloon to nearly BDT 70 million. Order cancellations—driven by repeated missed shipments—could push losses as high as BDT 200 million per affected order. Khan emphasized that reputational damage compounds financial harm: “Repeated shipment failures… weaken buyers’ confidence in Bangladesh as a reliable sourcing destination.”
Systemic Risk to Supply Chain and Economy
Fazlee Shamim Ehsan, Executive President of BKMEA, stressed that production planning has become “almost impossible” because factories cannot predict when adequate gas will return. Processing machines must run continuously—even under low pressure—to avoid fabric damage, increasing electricity consumption while output remains depressed. Meanwhile, fixed costs like wages, utility bills, and rent accrue regardless of output levels.
Nahid underscored the crisis’s systemic reach: “If factories continue to suffer, companies will face financial distress, supply chain businesses will be affected, and the overall economy will come under greater pressure.” He noted no practical alternative exists at scale: solar power provides only limited daylight support, and “for our industry, gas remains indispensable.” The association urged immediate government action to restore stable supply—calling it the industry’s “highest priority.”
Source: textiletoday.com.bd
Compiled from international media by the SCI.AI editorial team.
