Gas cuts choke off chemical exports

The export of chemical products nose-dived in 2009-10 to less than half the dollar amount of the prior fiscal year, mainly due to inadequate gas supplies that slashed production of chemical fertilisers.
The country received $103 million in foreign exchange from the exports of chemical items in the last fiscal year, down nearly 57 percent from a year ago.
Exports stood at $237.11 million from the sector in 2008-09, according to data published by the Export Promotion Bureau.
That means that $135 million (Tk 9,450 crore) less was earned by chemical products exports, mainly by Karnaphuli Fertiliser Company (Kafco) Ltd.
During this period, the exports of chemical fertiliser declined nearly 73 percent.
Salahuddin Ahmed, chief executive officer of Kafco, the country's lone chemical fertiliser exporter, said the exports of his company dropped by 59 percent (not 73 percent) in the August-July period.
He blamed the insufficient gas supply: "We had to suspend our production for a month, as the government stopped supplying gas to all fertiliser companies.”
“In addition, we suspended our production for a month that we do in every two years for maintenance. This closure of two months slowed down our production capacity, and so too the export."
The company exported 1.35 lakh tonnes of chemical fertiliser, mainly urea, in its last fiscal year, a drop from 2.28 lakh tonnes in the previous year.
However, Ahmed found fault with the EPB data, saying: "Although our production and export declined sharply, yet it is not as steep as the EPB data shows."
The demand for chemical fertiliser stands at 28-30 lakh tonnes a year. Of this, Bangladesh Chemical Industries Corporation (BCIC) supplies 12 lakh tonnes.
In its last fiscal year, Kafco sold four lakh tonnes of urea fertiliser to the BCIC at a price of $250 for each tonnes. Kafco exports fertiliser to Australia, Thailand, Vietnam, Pakistan and India.
Earnings from pharmaceutical exports also shrank by around 10.3 percent in the last fiscal year. Industry executives blamed the global financial meltdown for the decline.
PHARMA EXPORTS
In fiscal 2009-10, pharmaceutical exports stood at $40.97 million, which had shrunk from $45.67 million in the previous fiscal year.
Ashfaque ur Rahman, managing director of Novartis Bangladesh Ltd, the biggest pharmaceutical products exporter of the country, said the export of his company declined by more than 9 percent in 2009.
Rahman blamed "a minor decrease in consumption in government spending on health care in countries affected by the global recession" and new competition.
"In addition, countries to which we export are starting to develop their own pharmaceutical sector increasingly, another big reason for declining export," he said.
Novartis exported medicine worth Tk 85 crore ($12.14 million) in 2008. But Rahman is optimistic about the sales this year, hoping to export eight percent more.
Exports of cosmetics slumped by more than 47 percent. The country earned $.28 million in 2009-10, drop from $530,000 the previous fiscal year.
Other chemical products, including resins, also declined nearly 55 percent, earned $23 million during this period.
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