Energy crisis hits orders at 55% of Bangladesh knitwear factories
Power and gas shortages disrupt production, delay shipments and raise costs, BKMEA survey finds
DHAKA, Bangladesh — International retailers and brands have cancelled or reduced orders at 55% of knitwear factories surveyed in Bangladesh amid ongoing shortages of electricity and gas, according to a survey by the Bangladesh Knitwear Manufacturers and Exporters Association.
The disruptions have also led to production losses, shipment delays and higher operating costs, while nearly three-fifths of surveyed factories face the risk of defaulting on bank loans, the survey found.
BKMEA surveyed 20% of its member factories in Narayanganj, Gazipur, Chattogram, Dhaka and other areas between Aug. 21 and Sept. 14, BKMEA Executive President Fazlee Shamim Ehsan said.
About 78% of the factories surveyed reported partial production shutdowns, while 87% experienced shipment delays. Around 60% said they had been forced to offer discounts to buyers because of the disruptions.
Electricity shortages were the most widely reported problem, affecting about 90% of the factories. Nearly 75% reported being affected by gas shortages, while about 14% cited other supply disruptions.
Among factories that provided data on gas pressure, supply had fallen by an average of about 78% from normal requirements, according to the survey.
Electricity disruptions have also increased significantly. Factories that provided data on load-shedding reported that the average daily duration of power outages had risen by about 200% from the previous period.
Production hit
The energy shortages have taken a toll on production across several stages of the knitwear industry.
Knitting output fell by an average of 37% to 38%, while dyeing production declined by 51% and garment sewing output fell by 40%, the survey found.
Energy crisis, about 92% of surveyed factories reported additional costs for alternative fuels. A similar proportion reported losses in labor and working hours because of the disruptions.
Nearly 89% said the situation posed a risk of losing buyers’ confidence, while about 59% faced the possibility of defaulting on bank loans. Around 7% of the factories surveyed said they had completely halted production.
“The garment sector is going through a difficult time,” Fazlee said. “Even though many of us are doing well, some factories got shut down. If the government gives us good policy support, we can overcome this challenge.”
Of the surveyed factories, about 45% to 46% were in Narayanganj, 20% in Gazipur, 18% in Chattogram, 13% in Dhaka and nearly 3% in other areas.
The findings highlight the impact of energy supply disruptions on Bangladesh’s knitwear industry, a major part of the country’s garment export sector.
