The new electricity tariff rate will badly hit the country’s export-oriented apparel sector, the $34 billion industry and lifeline of economy, by eating up the competitiveness in the global markets.
The apparel sector also fearing the sharp rise in production, which to eat up the competitiveness in the global export markets.
“With the existing prices, the sector is struggling to survive and to retain the competitiveness in the global markets,” Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) First Vice President Mohammad Hatem told Textile Today.
According to him, if the 8.4% increased rate is implemented; it will increase the cost of a single unit by Tk37800, which now pays TK4.5 lakh per month.
The new rate would rub salt on the wound of the manufacturers, who are going through a tough time to rise in production cost caused by the rise in gas and electricity prices as well as the implementation of the new wage structure, said Hatem, also Managing Director of MB Knit Limited.
Amid the given grievance, we strongly urged the government to reconsider the prices and offer an interim rate for the country’s textile and apparel sector so that we can overcome the dull time, he added.
“Bangladeshi apparel manufacturers enjoy better competitiveness due to lower electricity prices. It will be great pressure on the business people as the production cost went up erasing the competitive edge to the global markets,” said AB Mirza Azizul Islam, an economist to Textile Today.
It would be difficult to absorb the new cost, when the profit, as well as the business, is in a declining trend, he added.
Talking on the issue, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President opined that the sector cannot bear the load of further rise of electricity prices.
“Since our costs have gone up by almost 29.40% in the last 4 years and products prices have steadily gone down, there’s no way we can afford any increase of any sort of price hike of electricity,” BGMEA President Rubana Huq told Textile Today.
This will not be beneficial for the industry, she added.