Gas crisis forces Monno Fabrics into layoff

The gas supplying authority yesterday approved a solution for Monno
Fabrics to ease a severe gas pressure crisis that forced the leading
textile factory to suspend operations from October 22. Established in
1994 , Monno Fabrics was the largest customer of Titas Gas
Transmission and Distribution Company Ltd (TGTDCL) in Manikganj area,
said Moynul Islam, the company's vice- chairman. "We had contacted
relevant ministries and the Titas Gas office to increase gas
pressures in our factory, but no-one responded," he told The Daily
Star. "Ultimately, we suspended operations." Influenced by news of the
lay-off, shares of Monno Fabrics dropped 10.16 percent to Tk 108. 25
on the Dhaka Stock Exchange yesterday. Islam said although workers
were sitting idle because of "zero gas pressure", Monno Fabrics paid
them for the last six months as they expected the situation to
improve. TGTDCL Managing Director Aziz Khan told The Daily Star that
a proposal to solve Monno's problems with gas pressure reached him on
September 24 , and he sought clarifications on who will bear the
costs of the solution. With the clarifications now available, TGTDCL
was to pass a judgment in favour of Monno Fabrics, where a kilometre
of extra gas pipeline will be installed and the district regulatory
station will be modified, through which gas is supplied to the two
main factories in the area: Monno Fabrics and an unit of Akiz Group.
"We are approving Monno's proposal tonight ( last night)," said Khan.
"It is our responsibility to keep Monno Fabrics alive." Islam said if
TGTDCL ensures a continuous gas supply, it will take the factory a
month to reopen. He also said the company will have to follow a
"legal process" required to reopen a suspended factory. Low
gas-pressure has come as a huge setback to the manufacturing sector.
The boiler of the factory needs a supply of gas at a pressure of 15
pounds per square inch (PSI) while the generator requires 20 PSI --
which TGTDCL was unable to ensure. In March, TGTDCL attempted to
resolve the problem by installing pressure-related equipment -- low
differential regulator, but it did not work. The total investment by
Monno Fabrics has reached Tk 500 crore, Islam said. Prior to the
suspension, the total number of workers at the factory was 2 ,500.
The factory's production capacity was 15- lakh yards of fabric a
month, Islam said. Shares of Monno Fabrics have been falling over the
last four trading days. On October 20 , Monno Fabrics shares came
down by 4.29 percent to Tk 145 on the DSE, while the price declined
by 6.21 percent to Tk 136 on October 21 and by 11.40 percent to
Tk 120.50 on October 22.