Gas supply hitch makes owners think of shutting down factories

Infographic: TBS

Many owners are considering closing down their factories due to insufficient gas supply as years of bargaining with the authorities to solve the crisis is yet to yield any outcome.

Little Star Spinning Mills Limited, a Little Star Group-owned factory based in Savar, is permitted to receive a gas flow of 10 per square inch (psi), which stays around only 2-3psi during day time. Last Tuesday it even went below 2psi.

According to the company, it suffered a production loss worth Tk145 crores in the last four years as insufficient gas supply led to suspended production, fall in production quality, and damage to machinery.

Seeking a solution to this long-persisting problem, the company Chairman Khorshed Alam wrote to the authorities of Titas Gas two weeks ago.

The company also reached out to their association, Bangladesh Textile Mills Association (BTMA), asking them to take measures aimed at solving the crisis.

"We cannot continue like this anymore. Perhaps we will have to shut the factory down," he told The Business Standard.

Not only the Little Star Spinning, many other factories including dyeing, finishing, printing and garments production units are suffering from the same problem for a long time.

According to industry insiders, the issue is common in all industrial areas and the most in Gazipur and Manikganj areas. The situation is also just the same in Narayanganj.

Some affected factories are trying to work around the problem with alternative solutions or opting for suspending and reducing production.

Petrobangla and Titas Gas Transmission and Distribution Company Limited, however, said that it would take one more month to get the supply situation normalised as the damaged pipeline of the Summit Group's Floating Storage and Regasification Unit (FSRU) has not been repaired yet.

Nazmul Ahsan, chairman at Petrobangla, told The Business Standard that they have noticed the low pressure of gas flow in different areas as the supply dropped after a closure of LNG regasification unit in Cox's Bazar's Maheshkhali.

"Hopefully, the damage of the FSRU will be repaired by the first week of February and we will be able to supply gas within that month," said Nazmul.

To meet the rising gas demand in different industries, the government has set up two floating storage and regasification units (FSRU) in Maheshkhali to import and supply LNG into the national grid.

Along with the local production of 2,500mmcf gas, the two FSRUs used to supply 650mmcf gas per day.

But on 18 November last year, one FSRU, owned and operated by Summit Group, stopped supplying LNG due to damage at the mooring pipeline, leading to a fall of around 150mmcf to 200mmcf per day supply to the national grid.

Subsequently, gas supply to the Titas Gas' distribution areas also dropped to 1518mmcf compared to the regular 1800mmcf per day. 

In a notice, Titas gas said that low pressure could persist in different areas till 21 January.

Engr Md Kamrul Hasan, deputy managing director of Regional Marketing Division (Gazipur) of Titas told The Business Standard that they are also trying to solve the pressure problem based on complaints from the clients.

Sources at the BTMA said they received complaints from at least four companies – Little Star Spinning Limited, Mosharaf Composite Textile Mills Limited, Apex Weaving Mills, Hometextile.

Other than these four, Ofazuddin Spinning Mills Ltd, Mithela Textile Industries Ltd, M Hossain Spinning Mills, Abed Textile Processing Mills, M A H Spinning Mills Ltd, Alhaj Textile Mills Ltd, Rising Spinning Mills, Akij Textile Mills Ltd and Monno Textile Mills Limited have been facing the same problem.

According to sources, many factory owners are tired of complaining with no results and are now reluctant to voice their concern anymore.

Abullah Al Mamun, a director of Abed Textile Processing Mills Ltd, and also the vice president of BTMA told The Business Standard, "Due to the gas crisis, one of the two units is closed for a long time. We could not resume operations yet as the situation did not improve."

Situation in some areas of Gazipur and Narayanganj improved a little after an outcry a few months ago. However, recently, the same problem has returned again.

Entrepreneurs say, situation often improves a bit only to go back to the state of supply shortage.

Although there has been talks of introducing LNG to alleviate the crisis, there has been no progress in that regard.

According to the industrialists, there is relatively large investment in the textile sector. If production is disrupted due to the gas crisis and the financial loss continues to increase, factory owners will face trouble repaying the bank loans.

Md Azahar Khan, chairman at Mithela Textile Industries Ltd, told The Business Standard that his factory at Araihazar in Narayanganj is supposed to receive 15psi gas flow but most of the time they get 1-2psi. They get a maximum of 8 to 10psi.

Describing the loss of production, he said that once the gas pressure drops, it takes five to six hours to synchronise the fabric and restart the machines.

"Thousands of yards of cloth are wasted," he said furiously and added, "They have nothing to lose if the industry shuts down."

Mosharaf Hossain, managing director of Mosharaf Composite Textile Mills Limited, one of the largest textile mills in the country, said, "Fluctuating gas pressure affects dyeing colour to change, which affects production quality."  

He added that he is trying to run a portion of his production on his own arrangements.

Mosharaf also informed the Titas Gas authority about the problem with no avail.

"Our deal with us is we will receive 15psi. It is up to them to ensure that we get that," he said before asking, "Who will pay my bank loan?"

Mohammad Hatem told The Business Standard when we paid Tk7.62 per unit, the bill was increased and it was said that LNG would be added to the national grid and the gas crisis would be alleviated.

"Now I am paying an extra of Tk13.5 per unit but the gas crisis remains. In most areas of Narayanganj, the gas pressure of 15psi is allowed but no more than 5psi is available," he said.

"We must pay the minimum bill although we only get a disrupted supply," he added.

He further complained that they do not get EVC metres even after asking for it.

Entrepreneurs are also blaming the mismanagement of Titas authorities for the gas crisis.

Little Star Chairman Khorshed Alam said he took the gas line to his factory at a cost of Tk3 crore.

"The Titas authorities have provided gas supply lines to at least five factories, due to which naturally I do not get adequate gas flow," he added.