Bangladesh considers a temporary break
Bangladesh, one of the most important manufacturing markets for the large European and Spanish fashion companies, is already showing the effects of the energy crisis attributable to gas shortages. His government has announced restrictions in response to rising fuel prices that include closing its textile factories a few days a week.
Some companies have tried to start up generators that work with crude oil so as not to interrupt their production, but extending this decision over time means facing additional expenses that would increase the hitherto very low cost of their services, the main reason that It has placed it as the second country in the world after China in clothing exports.
The objective of these measures is to reduce the pressure on the demand for electrical energy in the framework of this energy emergency situation that we are approaching, which could lead to a production crisis in the textile sector this August, since the factories They will be running at full capacity.
Effects of the war in Eastern Europe
Aslam Uddin, a spokesman for the Bangladeshi Ministry of Energy, has justified the decision by explaining that international fuel prices have skyrocketed since the Russian invasion of Ukraine, which has led Bangladesh to close diesel plants and keep some gas-fired power plants idle. .
A series of measures that have been incubating since the beginning of June, when the Government ordered stores and shopping centers to close at 8 in the afternoon. On that occasion the decision was postponed, but now it is proposed as the only way to achieve the much-needed energy savings. According to the Bangladeshi authorities, it is estimated that, in this way, they will be able to reserve 550 megawatts per day.
According to the latest available data, shared by the EFE news agency, Bangladesh faced a deficit of 450 megawatts of energy a week ago, as the country’s power plants produced 12,528 megawatts against the demand of 12,978 megawatts they consumed.
Bangladesh is the second country in the world in clothing production, after China
The measure that most affects the textile market is that factories have been asked to decide their day off. An alternative to all of them remaining closed only on Friday, as was originally proposed. “We sat down with the business leaders on Sunday and so they accepted our proposal,” said Nasrul Hamid, Minister of State for Energy and Vitality of the Government of Bangladesh, in an interview.
The clothing consumed on the European continent comes mainly from China (21 billion), Bangladesh (15 billion) and Turkey (8 billion), according to Eurostat data. Germany is the EU’s largest importer of clothing from non-EU countries, ahead of Spain (10 billion euros, 15 percent) and France (almost 10 billion euros, 14 percent).
What does this mean for Spain?
According to data from the last meeting between the ambassadors of Spain and Bangladesh, which took place in the framework of the Rana Plaza tragedy, this strategically located country, close to India and China and open to the Indian Ocean, is one of the main sources clothing supply for large national textile groups, such as Inditex or El Corte Inglés, but also for a multitude of SMEs in the sector. Only imports from Spain represented then just over 1,000 million euros a year, a figure that does not include the clothes that these multinational companies buy in Bangladesh but send to other countries.
The number of imports by Spain contrasts with exports, an estimated flow of 70 million, almost all of them in products destined for the textile industry.
Bangladesh has previously resorted to power outages as a measure to conserve fuel reserves, as poor collaboration between the gas and electricity sectors in the country led to insufficiency, even leading to grid collapses.
One of these electrical failures was the cause of the unforgettable collapse of Rana Plaza that brought to light the difficult employment situation of garment workers in the country. This led to international agreements that were responsible for carrying out periodic inspections to verify electrical installations, fire doors and the structural capacity of factories, as well as the rights of their workers.
In this context, it only remains to be seen how the closures will affect the precarious economic situation of garment workers.