Apparel Online Bangladesh Magazine May Issue 2019 | Page 46

BANGLADESH CANVAS APPAREL RESOURCES NEWSLETTERS FACEBOOK FRIENDS To subscribe, send us an email at [email protected] Join more than 10,000 people who are already fans of Apparel Resources on facebook. Search for Apparel Resources at https://www.facebook.com/apparelresources/ Industry bats for long-term policy approach to combat recurrent gas price hike I t’s not very often one would see a particular sector losing its sleep over another! However, for the Bangladesh garment industry, the country’s energy sector is emerging more than a cause of worry, in the prevailing circumstances. Amidst talks of proposed hike in gas prices (distributors’ proposal for doubling the average gas price – from Taka 7.35 to Taka 14.91 per cubic feet), garment manufacturers are at their wits end as to their survival and future. With wafer thin margins, increased workers’ wages and overheads, and the economical burden brought in by sustainability-related demands, further hike in gas prices is the last thing garment makers could afford to accept. “There is no scope to raise gas price… For whose interest will the gas price be increased? If the gas price is hiked at the moment, many factories would shut down,” the observations of BGMEA’s former President Siddiqur Rahman demanding scrapping Government’s move to implement the hike draws a very grim picture for the industry, if the same is affected in principle. It may be mentioned here that the Government wants to hike prices of gas to reduce the burden of subsidies as it has to buy per cubic metre of LNG at Taka 32 and selling it at Taka 7.17, keeping in mind which Bangladesh Energy Regulatory Commission (BERC) held a series of meetings with industry bodies and other stakeholders. Even though the Government necessarily may not strictly stick to what it has proposed and rather try to hammer out a more agreeable middle path, to wriggle out of this situation. However, as per Nurul Islam, a former professor of the Bangladesh University of Engineering and Technology (Buet), there’s no choice but increase the gas price given the fact that the huge liability in form of subsidy would hit the country’s exchequer for sure. So what is the way out? As per industry insiders what it calls for now is a long-term energy policy for the export-oriented manufacturing industries to enable entrepreneurs plan things accordingly and well in advance. Economists are of the opinion that prices should be reasonable and the policy must be stable. Otherwise, it could have a lasting impact on investment and manufacturing industry, hindering not only the industry’s growth but also the country’s overall economy. The garment industry after all is the backbone of Bangladesh’s economy contributing for more than 80 per cent of foreign earnings besides providing large-scale employment. “…the policy should be predictable so that an investor can take decisions in making new investments. Frequent changes in policy are a barrier to invest, while it hinders the stability on investments both from home and abroad,” underlined a former BGMEA President interacting with the media. Some are calling for increased transparency in the whole process to rein in the abrupt price hike as they feel even though Bangladesh is purchasing gas following the Public Procurement Rules, the same is not always followed when it comes to the energy sector. Given the present scenario, the continuous hike in gas prices as has been witnessed in the last few years, would definitely eat up Bangladesh’s competitiveness in the global market (due to rise in production cost) thereby providing opportunities to the competitors to grab its apparel export share, fear many within the industry. 46 Apparel Online Bangladesh | MAY 2019 | www.apparelresources.com PM congratulates Dr. Rubana Huq on winning BGMEA elections Prime Minister Sheikh Hasina congratulated Dr. Rubana Huq on winning the Board of Directors of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) elections and becoming the first female President of BGMEA. On 7 April, Dr. Rubana Huq met the Prime Minister at her office and it was during this meeting that the PM wished the new President and the Sammilita Forum panel for sweeping the BGMEA polls to the garment entrepreneurs’ body. The Sammilita Forum panel won all 35 posts for directors in the polls held on 6 April. Dr. Rubana Huq, also the Managing Director of Mohammadi Group, was elected in full panel for a term of two years and it is worth noting here that her husband Late Annisul Huq was also a former BGMEA President. She has also been vocal about her commitment to rebuild the image of country’s apparel sector in addition to helping the industry people adopt the best of technologies. Before being elected the President, Dr. Rubana Huq stressed on the need to rebuild the image of the sector, which as per her, was a major challenge. “If my team wins, I will be committed to rebuild the image of Bangladesh at home and abroad as negotiation over the price of products largely depends on it. Besides, I will also ensure measures are initiated to help the industry people adopt the latest technology,” said Dr. Rubana Huq. B'desh continues good show in exports Bangladesh continued to witness a good show in exports in March 2019, fetching 9.51 per cent more than what it was during the same period last year. The overseas shipment in March, according to the Export Promotion Bureau data, brought US $ 3.3 billion, which is 2.45 per cent more than the target set for the month. At this pace, the country is in a comfortable position to reach US $ 39 billion (current fiscal year’s target). March’s inflows take the receipts so far in fiscal 2018-19 to US $ 30.9 billion, which means the shipments have to bring US $ 3 billion each for next 3 months to achieve the year’s target. It is imperative to note that apparel shipments, which constitute over 80 per cent of export receipts, collected US $ 2.8 billion, which is a jump of 9.73 per cent y-o-y. More on the same, Siddiqur Rahman, the former President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said, “We hope that the garment export receipts will be at least 10 per cent more than what it was there in last fiscal year even if the shipment falls for any reason.”