No gas connection, costs 30 percent higher, and a 21,000-kg-a-month factory closed
A factory averaging 21,000 kg of aluminium utensils a month closed around 2015. Denied a gas connection, its production costs ran more than 30 percent above gas-fired rivals.
Talora port in Dupchanchia, Bogura, has made aluminium pots, pans, buckets and bowls since 1952. This factory averaged 21,000 kg of utensils a month with more than 100 workers until losses closed it around 2015. The owner's explanation is a single input: after gas reached Bogura town some owners built gas-fired plants, but Talora was never given a gas connection, leaving his production costs more than 30 percent higher for the same goods, while furnace oil went from 7 taka a litre a decade earlier to 100. Another owner applied repeatedly for a connection, never got one, and also shut at a loss. Demand was shifting to plastic, melamine and ceramic at the same time. About 40 factories closed here in the 22 years after 2000; of more than 50 that once ran, including 25 large ones, one large and 8-10 small units survive.
Lessons
- 1.When a rival makes the same goods on cheaper fuel, a 30 percent cost gap cannot be passed into the price: one connection decides who survives
- 2.Furnace oil went from 7 taka a litre to 100: building a business on a cost you do not control is building on sand
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