Published in The Daily Star on Thursday, 5 October 2017
Garment makers demand efficient ports, predictable power tariff
Star Business Report
Garment manufacturers yesterday demanded that the government ensure efficient functioning of the Chittagong port and airports and a stable power tariff for continued growth of apparel exports.
“We want price predictability of electricity and gas so that we can plan for long periods in our business,” said Tapan Chowdhury, president of the Bangladesh Textile Mills Association.
Incentives to the primary textile sector would help it to supply more raw materials to the garment sector, which typically accounts for 82 percent of the export receipts.
Currently, the primary textile sector can supply 85 percent of the raw materials required by the knitwear sector and 40 percent by the woven sector, he said.
Chowdhury’s comments came at a roundtable styled “current situation of the garment industry and a way out”, organised by the Bangladesh Garment Manufacturers and Exporters Association at the Westin Dhaka.
“I agree that the garment sector is passing through a critical time for various reasons,” said Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue.
But the challenge can be viewed as an opportunity too. “We have to do some homework to tap in that opportunity.”
One such exercise would involve ensuring efficient functioning of the Chittagong, Mongla and Payra ports and airports. The export scenario globally has been recovering at a fast rate, he said, adding that Bangladesh is still the top choice for garment retailers and brands.
Bangladesh should also remember that India, China and the Latin American countries import garment items worth billions of dollars every year, so it could target those emerging export destinations.
“India is in a well advantageous position as it produces plenty of raw cotton,” he added.
The garment business did not shrink but the profitability did due to an image crisis caused by the Rana Plaza building collapse and a slump in confidence amongst brands, said Anisur Rahman Sinha, chairman of Opex Group and a former BGMEA president.
He suggested joint efforts from the government and the BGMEA to address the labour issues that continue to plague Bangladesh’s reputation in the Western world.
Price stability was a big factor for businesspersons, said M Tamim, head of the department of petroleum and mineral resources engineering at BUET.
The growth that the garment sector witnessed over the last five years was possible because the garment manufacturers had invested in attaining efficiency to save the costs of power and energy, he said.
The government should formulate a policy determining whether it will allow captive power plants all the time or supply electricity from the national grid as tariff from the two varies a lot, he added.
Commerce Minister Tofail Ahmed asked the Accord and the Alliance, the two foreign garment building inspection agencies, to leave the country upon completion of their tenures in May next year.
“The Accord and the Alliance need not stay here,” he said, adding that the government might allow them at most six months’ time extension to wrap up their ongoing activities.
The two agencies want to extend their tenure to 2021, but the government is yet to respond to their request, the minister said. Ahmed blamed a section of trade union leaders and foreign partners for wrong image of the country’s garment sector.
The garment sector was hit by conspiracies spun by national and international players since exporters and the government announced a target to earn $50 billion from apparel exports by 2021, he added.
The existing crisis for gas would end by April next year as the government was going to import liquefied natural gas, said Nasrul Hamid, state minister for power and energy. “By the next three years the government will ensure uninterrupted power to the industrial units. So you can plan in this line.”
The state minister said the government will not give any power connections to industries if they are not located in economic zones.
“We have decided that we will give household electricity connections within 21 days and in the industrial sector by 45 days. We will start giving gas connections to industrial units from April next year,” Hamid added.
Mohammed Nasir, BGMEA vice-president, presented a keynote paper and Siddiqur Rahman, BGMEA president, moderated the roundtable.
Shahriar Alam, state minister for foreign affairs; Nojibur Rahman, chairman of the National Board of Revenue; and Shafiul Islam Mohiuddin, president of the Federation of Bangladesh Chambers of Commerce and Industry, also spoke.