Many textile mills about to shut down due to faulty policy: BTMA
NN ONLINE:
The Bangladesh Textile Mills Association (BTMA) on Sunday warned that many textile mills are about to shut down due to faulty policy and economic meltdown.
The BTMA issued the warning from a press conference held at the Gulshan Club in Dhaka on Sunday. Speaking at the event, BTMA’s present and former leaders emphasized that the US $22 billion industry is past the point of needing simple assistance; it now requires structural rescue measures.
They said that the sector has entered the “Intensive Care Unit” (ICU) and requires immediate, large-scale government intervention to survive. Former president of BTMA Mohammad Ali Khokon pointed out that a combination of rising operational costs and a sudden spike in taxes has pushed mill owners to the brink.
“The time to save this sector with just ‘oxygen’ is gone. To bring this $22 billion industry back from the ICU, the government must take massive steps,” Khokon said.
He criticized the current fiscal policy, noting, “In the previous budget, the textile sector paid 12.5 percent to 15 percent tax. In the current budget, it has jumped to 27 percent. This is a ‘death blow’ to a struggling industry.”
Khokon further explained that current yarn sales are barely enough to cover labor wages and gas bills, leaving no room for profit or loan repayments, which is forcing owners to shut down their factories.
BTMA President Showkat Aziz Russell urged to shut yarns import from neighboring countries to save the country’s textile sector.
To stabilize the sector, the BTMA chief proposed several urgent measures: Dedicated Banking Window: Bangladesh Bank should create a separate window specifically for the textile sector with tailored interest rates.
Utility Cost Reduction: A significant reduction in gas and electricity prices is essential to lower production costs. Lowering Interest Rates: High bank interest rates are currently unsustainable for spinning mills.
Former president Khokon warned that the collapse of the domestic textile industry would have a domino effect on the Readymade Garments (RMG) sector. He cautioned that if local backward linkage (spinning and weaving) fails, the country will become entirely dependent on imports from neighboring countries like India. “If we cannot save our members, a day will come when India might stop exporting cotton, yarn, and fabric. On that day, the backbone of our garment industry will break,” he warned.
While the current situation is dire, Khokon expressed hope that the upcoming political leadership would recognize the strategic importance of this sector. “We believe and expect that those who take leadership in the coming days will give special priority to this industry,” he added.
The present BTMA President, Russell, hints that 50 mills have already closed and demanded a policy decision from the government within the next 72 hours. Senior BTMA leaders and textile owners were also present at the press conference.