Buyers seek clarity on gas crisis; BGMEA assures supply to improve soon

International buyers have sought assurances over Bangladesh's gas supply situation and the timely shipment of export consignments, while the ready-made garment exporters have said industrial gas supplies are expected to improve after 8 August and return to normal by around 14 August.

The Bangladesh Garment Manufacturers and Exporters Association met representatives of Buyers Forum Bangladesh in Dhaka yesterday (4 August) to address growing concerns among international brands over whether export orders can be produced and shipped on schedule amid the country's ongoing gas shortage.

Speaking to The Business Standard, people present at the meeting said the BGMEA requested that buyers' representatives in Dhaka support factories facing production disruptions by allowing shipment delays of one to two weeks on a case-by-case basis where necessary.

Buyers seek updates on energy security

Representatives of international brands also sought details of the government's broader plans to strengthen Bangladesh's energy security and the timeframe required to implement those measures, according to a representative of a foreign brand who attended the meeting and spoke on condition of anonymity.

Moyeen Hyder Chowdhury, Bangladesh country manager of Puma, said buyers primarily wanted to know when the existing gas supply situation would return to normal.

"The buyers' representatives wanted to know when the current gas supply situation would normalise," he said.

He said the BGMEA informed the meeting that one floating storage and regasification unit that had gone out of operation is expected to be repaired by 6-7 August, after which gas supplies would begin to improve.

Moyeen said buyers were also informed that another floating storage and regasification unit would be installed within the next 18 to 24 months. In addition, the business community had urged the government to establish a land-based liquefied natural gas storage facility to strengthen long-term energy security.

He said buyers had also requested regular updates on the progress of gas supply restoration.

During the meeting, the BGMEA said the gas shortage had not affected all industrial regions equally. According to meeting participants, the association said factories in Chattogram and Sylhet were facing relatively fewer disruptions, while shortages remained severe in Dhaka, Gazipur, Savar and Mymensingh.

A representative of the Dhaka office of a leading European brand who attended the meeting shared a summary of the discussions with TBS. According to the summary, the BGMEA said reports claiming that factories owned by DBL Group had shut down because of the gas crisis were incorrect.

Buyers also sought further clarification on the government's long-term strategy for ensuring energy security.

Attempts by TBS to contact BGMEA President Mahmud Hasan Khan Babu for comment were unsuccessful.

Earlier in the day, speaking to journalists after an event in Dhaka's Gulshan, Babu said the government had informed the industry that the country's energy situation would improve significantly over the next two years, allowing businesses to proceed with investment plans.

"The government has said the situation will become comfortable within two years. As an association, we will not wait two years before engaging with the government. We will monitor progress every month and continue to follow developments," he said.

He added that the gas shortage had reduced production at garment factories by 30% to 40%.

"The gas crisis is causing financial losses, but our biggest concern is maintaining buyers' confidence," he said.

"That is why we are meeting Buyers Forum representatives to explain the current energy situation, discuss what we expect from them and explore how we can jointly manage the impact."

BGMEA sources said representatives of leading international buyers attended the meeting in person, while others joined virtually.

Exporters say buyers are increasingly concerned

Garment exporters said overseas buyers have become increasingly concerned about whether Bangladesh will be able to meet agreed shipment schedules under the current gas supply conditions.

Three exporters told TBS that buyers had contacted them to ask whether export orders could be shipped on time.

Shovon Islam, managing director of Sparrow Group, which exports garments worth about $350 million annually, said almost all of the company's buyers had emailed seeking updates on the situation.

"They are very concerned, particularly those with large orders," he said.

"No matter how much we try to reassure them, they will not rely solely on our assurances. They are verifying the situation independently."

Shovon said buyers are collecting operational data, while some compliance teams had visited factories to examine generator operating records.

"If the gas supply situation does not improve, some buyers may shift orders to other countries," he said.

More than 3,000 international buyers, brands and retailers source apparel products from Bangladesh. These include H&M, Marks & Spencer, Inditex, Primark, C&A, Lidl, KiK, Mango, Next, LPP, Matalan, Walmart, Gap Inc., Target, PVH, Levi Strauss & Co., VF Corporation, Nike, Under Armour and American Eagle Outfitters.