Manufacturing sector's input in GDP declining fast Energy crisis hits production sector
"More than 800 new small, medium and large factories were not able to go production due to power and gas shortage,"
Country's manufacturing sector is reeling under deep crisis due to staggering power cut.The crisis also forced many industrial units to reduce productions causing drastic fall in Gross Domestic Products (GDP), says the economists.(The New Nation )
Contribution of the manufacturing sector in GDP was recorded at 7.1 per cent in FY 2003-04, in 2004-05 at 8.19 pc, in 2005-06 at 10.77 pc, 2006-07 at 9.72 pc, in 2007-08 at 7.21 pc, in 2008-09 at 6.68 pc and it was recorded at 5.92 per cent (provisional) in fiscal year 2009-10, according to Bangladesh Economic Outlook-2009-10.
"Manufacturing sector's contribution to the GDP has been on the declined in the recent years as growth of the sector was hampered seriously due to nagging power crisis," said noted economist and DU teacher of Economics Prof Abu Ahmed.
He said despite opportunity to grow faster, Bangladesh's growth prospects remained stagnant due to major constrains like power and gas supply.
"Wage hike in China creates opportunity for the local manufacturing sector, especially for the textile and garments industries, but the chance could not be materialised fully due to the slow process of power and gas development, ," he opined.
He said: "Delay in energy sector development is raising cost of production of local industries reducing competitiveness of its products in the global market.
However, the economist expressed his optimism to grab the opportunity saying, "The government is trying its level best and the real picture will visible after six months of time." "If the scenario would not improve after the said period, government's target for a sustainable industrial growth might not be achieved," Prof Ahmed feared.
Meanwhile, industry owners said present power crisis is not only hampering manufacturing growth but also inflicted huge operating lose due to additional investment power backup.
They said inadequate power supply has been severely affected industrial production, particularly in the textile industries, steel re-rolling mills, jute mills and garment factories.
"More than 800 new small, medium and large factories were not able to go production due to power and gas shortage," they informed.
Textile and garments industry, the largest industrial sector of the country, is the worst sufferers of power cut and low pressure of gas, according to the Bangladesh Textile Mills Association (BTMA) and the Bangladesh Garments Manufacturers and Exporters Association (BGMEA).
Textile and garments factories at Mirpur, Savar, Ashulia, Gazipur, Tangail, Norshindi and Chittagong area are suffering form long hours of loadshedding and gas shortage, the trade of the concern sector said.
"Production of textile industry declined by almost 40-50 per cent due to the inadequate power supply and low pressure of gas," told Abdul Hye Sarker, president of Bangladesh Textile Mills Association (BTMA) to The New Nation on Monday.
He said textile mills are witnessing power cuts around 9-10 hours a day, causing serious production loss.
"The country's mounting energy crunch could led to a sudden closure of our factories if gas production could not be enhanced soon," feared that the BTMA President.
According to BGMEA present electricity demand for RMG industries is around 720 MW power everyday. Against the demand it has been getting 375 MW.
"Impact of ongoing power crisis is huge on the industry as inadequate power supply has been pushing up production cost of the export-oriented RMG factories," BGMEA president Abdus Salam Murshedy.
He said to fight against the frequent power outages most of the RMG units have installed diesel generators, which are spending additional Tk 691.72 per year for diesel to run generators.
"We're struggling to stay competitive in the global market as it has raised cost of production to 25-30 per cent," he added.
Murshedy also said RMG factories at Mirpur Savar, Ashulia, Gazipur and Naryangonj are suffering huge power crisis at the moment as the government failed to supply uninterrupted electricity.
"The ongoing power and energy crisis, which is impeding investment environment in the country," said Saria Sadiq, managing director of BASF (BD) Limited.
He said Bangladesh can achieve its goal if it can overcomes the infrastructures bottleneck immediately.
"Industries have a little chance to grow within short period as the present power crisis will not improve soon," said a senior official of Power Development Board (PDB).
He said Bangladesh's economy has been growing at an average rate of six per cent since 2003-2004, and expanded industrial activities are raising the demand for energy day by day.
"The overall power demand was increased rapidly during the period but power generation remained same as per the demand," he added.
He further said that power demand for to the industrial use is increasing 20-30 per cent every year but power generation against the demand could not be enhanced.
The country's overall daily electricity generation was around 4000-4200 MW, against the demand of 5500 MW, and average power deficiency was reached at 1500 MW," PDB sources said.
"We expect that from 2015 onwards, supply of power and energy will not remain as an obstacle in the development process when we will able to generate 9426 MW power," he hoped.
Presently country's 80 per cent power plants are gas fired and if adequate gas supply can be ensured to the power plats that will help to add more 800 mw electricity to the national grid, he added,
Meanwhile, Petrobangla officials said about 2000 million cubic feet gas is produced daily from 17 out of 23 gas field while the daily gas demand is about 2500 million cubic feet.
Contribution of the manufacturing sector in GDP was recorded at 7.1 per cent in FY 2003-04, in 2004-05 at 8.19 pc, in 2005-06 at 10.77 pc, 2006-07 at 9.72 pc, in 2007-08 at 7.21 pc, in 2008-09 at 6.68 pc and it was recorded at 5.92 per cent (provisional) in fiscal year 2009-10, according to Bangladesh Economic Outlook-2009-10.
"Manufacturing sector's contribution to the GDP has been on the declined in the recent years as growth of the sector was hampered seriously due to nagging power crisis," said noted economist and DU teacher of Economics Prof Abu Ahmed.
He said despite opportunity to grow faster, Bangladesh's growth prospects remained stagnant due to major constrains like power and gas supply.
"Wage hike in China creates opportunity for the local manufacturing sector, especially for the textile and garments industries, but the chance could not be materialised fully due to the slow process of power and gas development, ," he opined.
He said: "Delay in energy sector development is raising cost of production of local industries reducing competitiveness of its products in the global market.
However, the economist expressed his optimism to grab the opportunity saying, "The government is trying its level best and the real picture will visible after six months of time." "If the scenario would not improve after the said period, government's target for a sustainable industrial growth might not be achieved," Prof Ahmed feared.
Meanwhile, industry owners said present power crisis is not only hampering manufacturing growth but also inflicted huge operating lose due to additional investment power backup.
They said inadequate power supply has been severely affected industrial production, particularly in the textile industries, steel re-rolling mills, jute mills and garment factories.
"More than 800 new small, medium and large factories were not able to go production due to power and gas shortage," they informed.
Textile and garments industry, the largest industrial sector of the country, is the worst sufferers of power cut and low pressure of gas, according to the Bangladesh Textile Mills Association (BTMA) and the Bangladesh Garments Manufacturers and Exporters Association (BGMEA).
Textile and garments factories at Mirpur, Savar, Ashulia, Gazipur, Tangail, Norshindi and Chittagong area are suffering form long hours of loadshedding and gas shortage, the trade of the concern sector said.
"Production of textile industry declined by almost 40-50 per cent due to the inadequate power supply and low pressure of gas," told Abdul Hye Sarker, president of Bangladesh Textile Mills Association (BTMA) to The New Nation on Monday.
He said textile mills are witnessing power cuts around 9-10 hours a day, causing serious production loss.
"The country's mounting energy crunch could led to a sudden closure of our factories if gas production could not be enhanced soon," feared that the BTMA President.
According to BGMEA present electricity demand for RMG industries is around 720 MW power everyday. Against the demand it has been getting 375 MW.
"Impact of ongoing power crisis is huge on the industry as inadequate power supply has been pushing up production cost of the export-oriented RMG factories," BGMEA president Abdus Salam Murshedy.
He said to fight against the frequent power outages most of the RMG units have installed diesel generators, which are spending additional Tk 691.72 per year for diesel to run generators.
"We're struggling to stay competitive in the global market as it has raised cost of production to 25-30 per cent," he added.
Murshedy also said RMG factories at Mirpur Savar, Ashulia, Gazipur and Naryangonj are suffering huge power crisis at the moment as the government failed to supply uninterrupted electricity.
"The ongoing power and energy crisis, which is impeding investment environment in the country," said Saria Sadiq, managing director of BASF (BD) Limited.
He said Bangladesh can achieve its goal if it can overcomes the infrastructures bottleneck immediately.
"Industries have a little chance to grow within short period as the present power crisis will not improve soon," said a senior official of Power Development Board (PDB).
He said Bangladesh's economy has been growing at an average rate of six per cent since 2003-2004, and expanded industrial activities are raising the demand for energy day by day.
"The overall power demand was increased rapidly during the period but power generation remained same as per the demand," he added.
He further said that power demand for to the industrial use is increasing 20-30 per cent every year but power generation against the demand could not be enhanced.
The country's overall daily electricity generation was around 4000-4200 MW, against the demand of 5500 MW, and average power deficiency was reached at 1500 MW," PDB sources said.
"We expect that from 2015 onwards, supply of power and energy will not remain as an obstacle in the development process when we will able to generate 9426 MW power," he hoped.
Presently country's 80 per cent power plants are gas fired and if adequate gas supply can be ensured to the power plats that will help to add more 800 mw electricity to the national grid, he added,
Meanwhile, Petrobangla officials said about 2000 million cubic feet gas is produced daily from 17 out of 23 gas field while the daily gas demand is about 2500 million cubic feet.
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