Bangladesh Textile Mills Association on Tuesday warned that textile manufacturers would shut down their factories immediately after Eid-ul-Fitr if the government does not provide support to the industry according to their demand.
'We will take the time up to Eid for observing what measures the government takes to help the textile sector,' BTMA president Jahangir Alamin said at a press conference held at BTMA conference Room.
He said that the textile sector has been wallowing in deep crisis since September 2010 because of some reasons for which they were not responsible.
He cited unusual hike of cotton price on the global market since April 2010, changing the origin criteria from two stages to single stage by EU in January this year and shift of export order to other countries as the cotton price decreased on the global market as the reasons for crisis faced by the textile sector.
Alamin claimed that the import of yarn forced the association to stockpile 2,50,000 tonnes of yarn worth Tk 9,000 crore. The country imported around 2,78,000 tonnes of yarns from January to June this year that is 25 per cent higher than the import in the same period in 2010.
By supplying 80 per cent of the total yarn and 40 per cent of the total fabrics required for the RMG sector, the primary textile sector is contributing to save around 70 per cent of the remittances received by the country from exporting ready-made garments.
Although the Indian government had imposed bars on export of cotton to ensure uninterrupted supply for their domestic industries, recently it lifted the bar on export of cotton and yarn and introduced 7.67 per cent special cash incentive for compensating the loss incurred from export bar.
Jahangir Alamin said the utilisation capacity of the textile mills decreased by around 50 per cent, running only 4.5 million spindles out of 8.7 millions at 37 spinning mills in the country. The spindles would be shut down soon if the situation persists.
The BTMA president demanded increasing the rate of alternative cash incentive from 5 to 15 per cent with extension of validity up to 2015.
He claimed that the local textile manufacturers were losing in the competition with Indian counterparts as it was impossible to offset the 20 per cent price advantage driven by 7.67 per cent cash incentive with 12.50 per cent price advantage under the GSP rules while they were getting only 5 per cent incentive.
The association also demanded countervailing measures so that the use of export quality local yarn and fabrics would be encouraged.
It demanded 2 years of moratorium for the loans taken by factories that incurred loss by selling the fabric at lower prices.
The BTMA demanded exemption of all duties from the import of polyester and viscose staple fibres and acrylic to encourage diversification and reduce the dependence on cotton.
It also demanded setting interest rate at a single digit.
BTMA past president A Matin Chowdhury also spoke at the press conference while BTMA vice-presidents MA Zaher, Engr. Ahmed Ali and other directors were present.
Source : New Age
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