Pharmaceutical industries fear Tk4,000cr loss due to Dhaka airport fire
The initial loss estimate of Tk200 crore may increase to Tk4,000 crore, as each raw material is directly linked to the production of multiple finished products, says pharma industries association
Highlights
- Bangladesh Association of Pharmaceutical Industries (BAPI) fears Tk4,000 crore loss from airport cargo fire
- Raw materials worth Tk200 crore from 45 firms burnt
- Damage may disrupt drug production and re-imports
- BAPI seeks tax refunds and waivers to aid recovery
- Pharma firms vow no price hikes or supply shortage
The Bangladesh Association of Pharmaceutical Industries (BAPI) has estimated that the recent fire at the Cargo Village of Hazrat Shahjalal International Airport may cause losses of around Tk4,000 crore to the country's pharmaceutical sector.
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The association disclosed the information at a press conference held at its office today (21 October), following Saturday's (18 October) massive fire at the airport's import cargo village.
In a written statement, BAPI Secretary General Zakir Hossain said the association had collected preliminary information from various pharmaceutical companies immediately after the incident.
Based on the initial data, raw materials worth about Tk200 crore belonging to 45 leading companies were burnt in the fire.
He added that the total losses are expected to rise further once damage assessments from other affected companies are completed.
The destroyed materials included essential ingredients used in the production of antibiotics, vaccines, hormones, and medicines for diabetes and cancer.
The loss of these raw materials has raised concerns about potential disruption to the production of related drugs.
Zakir noted that several spare parts and machinery were also damaged in the fire.
Re-importing and reinstalling these components would take time, which could delay the restoration of normal production.
The association added that the initial loss estimate may increase, as each raw material is directly linked to the production of multiple finished products.
Considering this, the fire at the Cargo Village could cause an overall economic impact of around Tk4,000 crore on the pharmaceutical sector.
In addition, BAPI expressed concern over the preservation of goods unloaded at other airports, as many of the raw materials require storage at specific temperatures.
Any disruption in temperature control could lead to further damage, the association warned.
According to BAPI, a significant portion of the burnt goods consisted of raw materials approved by the Narcotics Department, which are subject to a complex and lengthy re-import process.
This has created major uncertainty in both production and market supply.
BAPI Secretary General Zakir Hossain said, "In the current situation, we expect special attention and appropriate direction from the government to prevent further risks and a potential crisis in the pharmaceutical sector."
The association placed several demands to help affected companies recover and maintain production continuity.
These include refunding import duty, tax, and VAT already paid for goods destroyed in the fire, and waiving bank charges and interest on Letters of Credit (LCs) opened for the damaged goods.
BAPI also urged that banks allow re-import of destroyed goods on easy terms without requiring new margins, charges, or interest.
It called for the waiver of customs-related charges and fees, including customs duty, VAT, advance income tax, and other levies on the burnt consignments.
Similarly, all penalties imposed by the Civil Aviation Authority and Biman Bangladesh Airlines should be lifted, including godown, demurrage, and handling charges.
For goods destroyed before the creation of a Bill of Entry, BAPI requested that importers be allowed to release LC payments without assessment, provided insurance claims are settled.
The association also sought a minimum grace period of six months for such payments.
BAPI further urged authorities to ensure the smooth release of new consignments by keeping importers' Business Identification Numbers (BINs) active and simplifying customs procedures, including the Import General Manifest (IGM).
The association called for the waiver of VAT on finished products manufactured from the damaged raw materials and for expedited permission to re-import narcotics-controlled raw materials under existing authorisations.
It also recommended that the Customs House at the cargo village remain partially operational after office hours and on weekends to facilitate the release of goods, especially those requiring cold chain maintenance.
BAPI requested that any intact consignments identified at the site be promptly reported to the concerned companies and assessed on a fast-track basis with the cooperation of insurance firms and surveyors.
Finally, it urged the authorities to expedite cargo operations at Hazrat Shahjalal International Airport and convene an immediate coordination meeting with the DGDA, Narcotics Department, Customs, NBR, Civil Aviation, and other regulatory bodies to address the issues raised.
At the briefing, it was noted that Bangladesh currently has 307 registered pharmaceutical manufacturing companies, of which about 250 are active in production.
BAPI Secretary General Zakir Hossain assured that despite the crisis, pharmaceutical companies would not raise prices or create an artificial shortage of medicines.
"Due to this situation, our member companies will not increase prices or disrupt supply. The supply chain remains stable, and there is no opportunity for manufacturing companies to raise prices — nor will we do so," he said.
Halimuzzaman, treasurer of the Bangladesh Association of Pharmaceutical Industries, said the damaged products could not be recovered but stressed the importance of ensuring uninterrupted exports and production.
"If the supply chain is disrupted, we will all be affected. Therefore, other airlines must be given a green signal to resume operations quickly. The system must be activated with urgency," he said.
He added that there was still uncertainty over storage for temperature-sensitive goods, as no cold chain facilities were currently available.
"We do not know where to store products requiring cold chain maintenance. If arrangements are not made soon, exporters may stop sending such products. While there is no immediate impact, urgent measures are essential to prevent future disruptions," he said.
Halimuzzaman noted that medicine supplies remain stable for now, but warned that inaction could lead to shortages in the coming months.
"There is no immediate fear of a shortage. However, if the next steps are not taken promptly, a supply crisis may emerge, and its impact will be felt," he said.
Kaiser Kabir, CEO and managing director of Renata PLC, criticised the lack of safety measures at the Cargo Village, calling it a "major government failure."
"Our goods were under government custody in the customs warehouse. How could there be no firefighting system in place? A long-term, international-standard firefighting system must be established. Bangladesh's economy is no longer small," he said.
Mossadek Hossain, senior vice president of the Bangladesh Association of Pharmaceutical Industries, said the sector currently has sufficient reserves to manage the immediate situation.
"We have a stock of imported products for four to six months, and air-shipped products for two to three months. However, we need cooperation from all parties — especially Customs and banks. If the cold chain issue is resolved quickly and Customs support is ensured, product availability will remain stable. This must be done urgently," he said.
BAPI Secretary General Dr Zakir Hossain urged the government to establish dedicated facilities for pharmaceutical storage at the airport.
"We are demanding the construction of a separate cold room for the pharmaceutical industry in the Third Terminal. Since chemicals are highly combustible, a separate chemical warehouse must also be established to reduce risk," he said.
Halimuzzaman added that interim measures were needed until new storage facilities are built.
"Until the cold room is ready, arrangements should be made for pharmaceutical companies to immediately transfer their products to their own cold storage facilities upon arrival," he said.
