Bangladesh RMG Output Drops 30-40% as LNG Shortage Disrupts Peak Shipping Season
Bangladesh’s ready-made garment sector is heading into peak shipping season with both hands tied behind its back. Gas shortages triggered by a fire at one of the country’s two floating LNG terminals in July have curtailed textile and apparel output across major industrial zones, with industry officials estimating production has dropped by 30 to 40 percent. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is now asking international buyers to grant one- to two-week shipment extensions.
The disruption goes deeper than idled sewing lines. Natural gas runs upstream through the entire textile chain, supplying captive power generation as well as the boilers and steam needed for dyeing, washing, drying, and finishing. A dyehouse shutdown can stop a sewing factory even when the lights stay on, which is why a “power restoration” headline does not translate into immediate order recovery.
New research from the Centre for Policy Dialogue (CPD), drawing on data from 350 RMG factories, frames the crisis as a structural vulnerability rather than a one-off. The sector is locked into carbon-intensive production at the same time that domestic gas reserves are declining and imported LNG is becoming the marginal fuel source. CPD research director Khondaker Golam Moazzem warned that “relying solely on imported LNG will not be sustainable in the long run.”
The CPD study finds no silver-bullet technology. Washing and dyeing, though representing a small share of installed machines, are the most energy-intensive stage. Sewing accounts for over 85 percent of machine capacity but offers limited savings from substitution alone. Cutting, at just 5.5 percent of machine stock, holds 27.3 percent of the potential savings identified.
Solar offset could trim average monthly energy costs by an estimated 15.7 percent at a 30 percent offset level, but the highest observed offset in the sample was only 10 percent. Rooftop solar can also reduce cost volatility for 96 percent of factories, yet it cannot replace the gas-fired boilers used for thermal finishing. Financing remains a binding constraint: the smallest factories in the sample showed a 57.3 percent energy-efficiency gap, versus 8.9 percent for the largest, mostly because of older machinery and limited access to capital.
H&M is financing supplier projects through its Green Fashion Initiative, with five of 24 current projects in Bangladesh, and is pushing for corporate power purchase agreements to expand renewable access. CPD recommends blended finance, concessional lending, and standardized appraisal frameworks to widen that pipeline.
For B2B buyers, the message is risk-management: expect slippage on Bangladesh-origin programs through the fall peak, and diversify across India, Pakistan, and Vietnam where renewable adoption is moving faster. Order placement should now factor in energy-driven delivery risk, not just price.
Sources: https://wwd.com/sourcing-journal/industry-news/bangladesh-rmg-energy-crisis-1239129058/, https://wwd.com/sourcing-journal/sustainability/bangladesh-bidec-bgmea-fans-retrofit-energy-crisis-1239166465/
