Home ›› 02 Jul 2022 ›› Front
The crisis is deepening in the basic chemicals industry sector due to the imposition of shipping line restrictions on the transportation of chemical products known as Dangerous Goods (DG cargo) to and from Bangladesh.
Many foreign buyers of Bangladeshi chemicals are now cancelling orders as the impasse has continued for around one month.
International shipping lines cut off DG cargo to and from Bangladesh after the massive accident at the BM Container Depot in Chattogram earlier this month.
As a result, several export consignments of hydrogen peroxide, chlorine, caustic soda, charcoal and many other chemical products have been stuck in the country.
Due to restrictions on the shipping of basic chemicals, factories in Bangladesh have been forced to suspend production.
“Apart from shutting down production, we have been forced to cancel some orders as buyers are taking back the money they paid in advance,” said MD Monirul Islam, general manager (GM) of sales and marketing at Tasnim Chemical Complex, a factory of Meghna Group, one of the leading industrial groups of the country.
He said they had about 7,000 tonnes of hydrogen peroxide in stock and they have stopped production now. In addition, exports of chlorine and caustic soda had to be stopped.
At least 10 factories in Bangladesh produce and export various types of basic chemical products. They exported goods worth $21,203,501.8 in FY2020-21, according to the Basic Chemical Manufacturers Association of Bangladesh.
Samuda Chemical Company, a subsidiary of TK Group, has also suspended production due to its inability to export about 4,000 tonnes of hydrogen peroxide, said the company’s Managing Director (MD) Mostafa Haider.
Besides cancellation of hydrogen peroxide export orders, chlorine is no longer being exported, he said. “If the stagnation in chemical cargo transport continues, there could be long-term damage to the entire sector.”
Since shipping companies have stopped transporting import and export consignments of almost all chemicals following the BM Container Depot fire, at least 100 containers of hydrogen peroxide and 60 containers of charcoal have remained stuck at the Inland Container Depots (ICDs) that process shipments of export goods.
Imports stuck around the world
Many imported cargos bound for Bangladesh are also stuck in various marine ports of the world as shipping companies have stopped transporting chemicals.
At the same time, Chittagong Port has also instructed importers and exporters to follow the guideline for DG cargo strictly. As a result, there is a risk of a production crisis in various important industrial sectors of the country.
JMI Group, the country’s leading manufacturer of medical products, said Hyundai Merchant Marine and HMM, a shipping line, were not transporting their imported ethylene oxide used in manufacturing disinfectant products.
The letter sent by JMI Industrial Gas Ltd further said if ethylene oxide was not imported on time, various medical equipment manufacturers in the country would be in crisis.
A company official told The Business Post that there were two consignments of ethylene oxide (100pc) stuck at Shanghai Port in China and if the consignment does not arrive immediately, the entire medical sector of the country would face a crisis.
Mohammad Wahid, GM of Ocean International ltd, local agent of Hyundai Merchant Marine, told The Business Post that the owners of many consignments are not following the specific guidelines that importers are supposed to follow regarding the discharge of chemical cargoes.
DG cargo transport has been suspended due to fears that shipping agents may also be harmed by the restrictions imposed by the Chattogram port and customs, he added.
Companies such as Meghna Group and TK Group also say their imported chemicals were not being transported and the delay in the delivery due to additional restrictions on transportation is causing problems in their normal production.
Immediate govt intervention sought
Last week, the Basic Chemicals Manufacturer Association wrote a letter to the Commerce Ministry amid the stalemate in exports and uncertainty in imports.
In the letter, they said if the current stalemate continues the overseas market for this product will be lost. They urged the ministry to take initiative to request the Chittagong Port and Customs House to provide immediate assistance in the export of goods.
But no action has been taken so far to resolve the stalemate, exporters alleged.
After the BM Container Depot incident, the Chittagong Port Authority (CPA) insisted on strictly following the International Maritime Dangerous Goods (IMDG) guideline and transport policy.
CPA also says such cargo transportation must follow the instructions of the Bangladesh Navy as well.
Earlier, CPA Secretary Mohammad Omar Faruk told The Business Post, “We did not impose any restrictions or impose any additional restrictions. We have only asked them to follow the existing policy to the letter.”
Chemical exporters said they did not receive any permission from the Bangladesh Navy since the BM depot fire, which killed over 40 people and injured dozens.
However, the UN-approved packaging policy on chemical exports is being followed, said TK Group MD Mostafa.
The crisis can be overcome with immediate initiatives with the participation of all parties, he added.
