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Easing energy-crisis relieves Bangladesh’s apparel units with fresh orders coming in


 Bangladesh energy

The last month of 2022 has sparked hope and optimism amongst Bangladesh apparel manufacturers as was predicted by the Prime Minister Sheikh Haseena. Ever since the pandemic followed by Ukraine war led to a chaos in global energy supplies, particularly in Europe, Bangladesh’s largest apparel market, the situation was getting tough. The world’s second largest exporter of garments was being threatened by dark days as high global inflation saw orders drying up and in domestic front, apparel factories were plagued by rolling blackouts, an unreliable gas pressure and raw material supply crunch as the government had to tighten its belt to protect the fast-depleting forex reserve. The seriousness of the matter affected livelihoods and started gaining momentum as a major issue for the nation’s upcoming general election. However, the apparel sector demonstrated professionalism by delivering commitments and taking on leaner profit margins.

Government negotiations on energy bring a boost

Petrobangla is upbeat that it has done a good job in restoring confidence amongst apparel manufacturers by easing the energy crunch they faced until November. With pleasant winter weather having arrived, power consumption in the consumer sector has dropped considerably and Petrobangla is able to redirect the availability to the industries that play a key role in the country’s economy.

Additionally, government curbed commercial usage through power rationing and rescheduling of office and school hours. A spokesperson of Petrobangla recently said, industrial zones are no longer dealing with power or gas pressure issues. Petrobangla explores and supplies fuel and gas, is now supplying 2,700 million cubic feet (mmcf) of gas per day to the national grid – up from 2,600 mmcf in the corresponding period last year.

It is hoped that before the onset of summer in March 2023, additional imports of LNG will be underway as a preventive measure. Industrial zones in Gazipur's Maona to Mymensingh's Bhaluka belt have already started experiencing unhindered availability and industrial units in Narayanganj are seeing an improvement although not ideal.

However, manufacturers operating in Manikganj, Savar, Narayanganj's Araihazar and Gazipur readymade garment hubs say they have not benefitted and conditions have not improved. The overall mood however is one of positivity as exporters are excited that fresh orders are slowly coming in and manufacturing units are enabled again to commit to deliveries. Everyone in this sector is keeping fingers crossed that come summer, things will not slide back to Bangladesh re-entering another phase of energy-led crises. The main concern is Bangladesh is a big importer of raw cotton and making yarn requires a steady and large amount of power which if unavailable will regenerate another wave of crisis. The period between January and April 2023 will be critical for Bangladesh as this is the busiest apparel manufacturing season in the country.

Positive outlook

Bangladesh’s strategy of manufacturing basic and low-end garments may have been criticized by experts as the main reason the country is unable to fetch higher prices but in severe times but this strategy may have just paid off. As global inflation has curbed spends on non-essentials, basic clothing is not only a requirement but also not as affected as the more premium garments. This is the advantage that the nation’s manufacturers are looking at to tide through the crisis. Thanks to the strained Sino-US relations that affected trading between the two super economies, Bangladesh became a beneficiary by default and hopes to leverage the situation to its maximum advantage.


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