How a Bangladeshi garment-maker is fighting the Middle East energy crunch

Business Recorder reported that gas and power shortages have disrupted output for most garment producers in Bangladesh, yet 4A Yarn Dyeing in Savar has kept its lines running for now. The company, a supplier to Walmart, Gap and Next, has generated its own power since 2019, partly through solar panels. Data from a poll of 134 knitwear plants shows 55% had lost or reduced orders since late August, while 78% partly stopped production.

The plant on Dhaka's outskirts employs nearly 7,500 people and covers roughly 40% of its power needs with solar, while gas and diesel generators supply most of the rest. Co-owner Abdullah Hil Nakib said the firm has backups for every energy source, but costlier diesel has lifted production costs by 2% to 3%, and its monthly fuel spending has grown by as much as 5 million taka ($40,950). On Monday, Bangladesh raised fuel prices by as much as 17.4%, citing soaring global prices, higher shipping costs and the Middle East conflict.

Other factories have turned to air freight or price cuts to hit delivery dates, and one exporter reported a Canadian customer expected to take 25,000 pieces cut its order to 8,000. Mohiuddin Rubel of Denim Expert Ltd said power and gas problems weigh more on some firms than fuel costs, as rivals such as Vietnam and India are less affected.