Local apparel exporters are currently grappling with significant challenges due to an ongoing energy crisis. As production and shipments become increasingly delayed, particularly in the lead-up to the Christmas season, exporters fear not being able to meet commitments, potentially resulting in penalties from international retailers like Levi’s, Armani, Zara, and H&M.
Since late July, disruptions at a floating LNG terminal have severely impacted gas and power supplies. This shortage has resulted in production cuts of 30-40% across various factories, particularly those reliant on gas for essential processes like dyeing and finishing. With the peak shipping period approaching, suppliers are racing to fulfill orders as international buyers demand timeliness amidst the crisis.
The immediate concerns for exporters include not only delayed shipments but also rising costs and thinner profit margins. While larger factories may afford to operate diesel generators to maintain production, smaller units face significant difficulties. Airfreight has become a costly alternative, with charges soaring compared to regular sea freight.
Experts, including Mohammad Hatem and Mahmud Hasan Khan from key industry associations, highlight that while many manufacturers are currently managing to meet production and shipment deadlines through extended work hours and diesel generators, the long-term sustainability of these measures is in question. The looming risk of further production disruptions poses a significant threat to the apparel export market, as buyers are already hinting at discounts and reduced order volumes.
With no immediate end to the energy crisis in sight, the industry must brace for potential worsening conditions that could cripple local garment production further.
