Garment industry needs a clear, long-term energy strategy to sustain export growth, attract investment and remain competitive in international markets, Mohiuddin Rubel, additional managing director of Denim Expert Limited, has said.
In an interview with Just Energy News Editor Md Shamim Jahangir, he warned that unreliable energy supplies, infrastructure weaknesses and rising production costs were putting businesses under mounting pressure.
Drawing comparisons with Vietnam, he stressed the importance of policy continuity, investment and efficient logistics. Rubel also called for better coordination between energy and industrial policies, greater use of renewable energy and practical support for businesses navigating global uncertainty and increasingly stringent environmental requirements.
Md Shamim Jahangir: Bangladesh’s garment industry has been targeting 15% growth, but businesses are facing domestic and international challenges. How realistic is this target under the current circumstances?
Mohiuddin Rubel: Businesses and trade are under pressure from both domestic and external factors. The post-Covid world continues to face uncertainty, with conflicts in the Middle East and natural disasters reshaping the global business environment.
These external factors are beyond our control, and businesses everywhere must learn to operate amid uncertainty. However, we must also address our domestic problems.
International buyers will not judge us by our internal challenges. Ultimately, they will consider product quality, price and delivery time. We therefore need a clear plan that identifies our problems, assesses their scale and explains how we intend to move forward.
I would describe the 15% growth target as both ambitious and practical. Bangladesh has achieved this level of growth before, so it is not an impossible ambition. However, we did not anticipate that the current gas crisis would become so severe.
Whether the industry can achieve 15% growth under these conditions remains uncertain. Nevertheless, this level of expansion is important for the garment sector and its future development.
Md Shamim Jahangir: Beyond the gas crisis, what domestic challenges are affecting the industry’s competitiveness and sustainability?
Mohiuddin Rubel: We need to look beyond the gas crisis. As a representative of the garment industry, I often compare Bangladesh with Vietnam, one of our major competitors.
Vietnam’s total exports reached $475 billion last year, while garment shipments account for the lion’s share of Bangladesh’s exports. The scale of Vietnam’s export economy reflects a long-term development strategy rather than overnight success.
Interestingly, Vietnam pays higher wages than Bangladesh. This raises an important question: how can it achieve such strong growth despite higher labour costs?
The answer is that garment manufacturing does not depend on wages alone. Buyers consider the combined cost of production, infrastructure, energy availability, logistics and delivery times.
Vietnam has moved towards higher-value clothing, while Bangladesh is still struggling with basic infrastructure constraints. Our energy, financial and logistics systems must become more efficient if we are to move up the value chain and improve profitability.
Competition in basic garments has intensified, and prices have fallen. We therefore need to increase value addition, improve productivity and strengthen our capacity to manufacture higher-value products.
India has also made significant progress. We must recognise these competitive pressures and address them collectively as a country.
Md Shamim Jahangir: How should the government address these longstanding structural problems?
Mohiuddin Rubel: We need to treat these challenges as national problems rather than blaming any particular person, organisation or government. Policy continuity and a long-term strategy are essential.
The current administration has been in office for only six months, and I do not think it would be justified to blame it for problems that have developed over many years.
The energy crisis illustrates this clearly. We often attribute our difficulties to the Middle East situation, but the underlying issue is our dependence on imported fuel and liquefied natural gas (LNG).
That dependence did not emerge overnight. We did not do enough to develop domestic gas production and alternative sources of power generation, leaving us increasingly reliant on imported energy.
We cannot eliminate this dependence within a short period. Even with the right policies, onshore and offshore gas exploration takes time. Developing new LNG terminals also requires substantial investment and preparation.
It may be painful for businesses to hear that these problems cannot be solved within two years, but that is the reality. We need to acknowledge the constraints, set realistic timelines and explain clearly how the problems will be addressed.
Md Shamim Jahangir: What should the government do to help the industry maintain its growth targets amid the energy shortage?
Mohiuddin Rubel: Organisations such as the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Textile Mills Association (BTMA), together with factory owners, should engage with the government to establish what level of energy support can realistically be provided.
The government should clearly communicate how much energy it can supply to industry and where shortages are likely to persist. Businesses need to know what they can expect so they can plan accordingly.
There must also be coordination between the Energy Ministry, which oversees energy availability, and the Commerce Ministry, which sets trade and export growth ambitions.
If the country wants 15% growth despite an energy crisis, the government must explain what additional support might be available, including financial incentives or tax and VAT relief.
Otherwise, businesses may need to reconsider their growth plans. It is difficult to expect industries to achieve ambitious targets without reliable energy or other forms of support.
Clear communication would help businesses make informed decisions and prepare for the next two years.
Md Shamim Jahangir: Has the energy crisis discouraged private investment in the garment sector?
Mohiuddin Rubel: As an entrepreneur, I would certainly think twice before making a new investment under the current circumstances.
If my existing factory is struggling with fuel shortages, I must consider whether a new venture would face the same difficulties.
Domestic and foreign investors examine fundamental conditions, including energy availability, infrastructure, logistics and the overall business environment. These factors are particularly important because investments do not generate returns overnight.
The government cannot resolve all these problems within a few months. However, it can build investor confidence by presenting realistic plans, coordinating policies and demonstrating progress in implementation.
If investors know that a particular problem is expected to be resolved within six months or two years, they can incorporate that timeline into their business plans.
We often announce plans without ensuring realistic implementation and monitoring. Acknowledging the challenges and showing that solutions are being implemented would help attract investment.
Md Shamim Jahangir: A recent Centre for Policy Dialogue report highlighted slower employment generation in Bangladesh. How is this linked to investment?
Mohiuddin Rubel: Employment creation is closely linked to investment. If there is no new investment, how can businesses recruit more workers?
Companies expand and hire additional employees when they see opportunities to grow. Without expansion, new jobs are unlikely to be created at the necessary pace.
At the same time, technological advances, including robotics, may reduce labour requirements in some existing operations. If we fail to create new opportunities through investment, we could face pressure from both slower business expansion and increasing automation.
Investment is therefore essential.
Vietnam provides an important example. A substantial share of its exports is associated with foreign direct investment. In my view, economic development and investment are directly connected, and Bangladesh must create conditions that encourage both domestic and foreign investors.
Md Shamim Jahangir: Domestic gas production is projected to decline over the coming years, potentially increasing reliance on imported LNG. How should the government approach this challenge, including disputes over floating storage and regasification units (FSRUs)?
Mohiuddin Rubel: We cannot comment directly on a legal dispute that is sub judice. However, from a broader economic perspective, we sometimes need to make compromises in the greater national interest.
If an existing FSRU can be brought into operation through a lawful resolution of the dispute, it could help ease the energy shortage. Developing a new FSRU may take at least two years, so making use of an available asset sooner could benefit the country, provided there is no legal barrier.
However, importing more fuel is not a complete solution. We must also consider how that energy will be processed, transported and distributed.
For example, Bangladesh has only one major oil refinery, Eastern Refinery, which limits its capacity to process imported crude oil. This constraint has been known for years, yet it remains unresolved.
The same principle applies to LNG infrastructure. We must plan distribution networks alongside import facilities rather than waiting until new terminals are ready and then discovering that the necessary infrastructure is inadequate.
These are longstanding problems. Previous administrations and the interim government also had opportunities to initiate reforms. We should learn from those missed opportunities rather than repeatedly postponing essential decisions.
Md Shamim Jahangir: How can Bangladesh balance imported fuels, domestic gas exploration and alternative energy sources to ensure long-term energy security?
Mohiuddin Rubel: We need a carefully considered energy mix. Bangladesh cannot depend indefinitely on imported oil and LNG, nor can we eliminate import dependence overnight.
The country must assess the costs and benefits of onshore and offshore gas exploration, imported coal, LNG, nuclear power and renewable energy. Other options, including hydropower and biogas, also deserve consideration where feasible.
Our financial resources are limited, and the government must make difficult choices about how to allocate them.
For example, policymakers need to compare the costs of imported coal, electricity generation at Rooppur Nuclear Power Plant and the allocation of scarce gas between industries and other users, including fertiliser factories.
The objective should be to determine which combination of energy sources and allocations would deliver the greatest economic benefit.
If the government wants the economy to grow by 15%, it must assess how energy allocation can support that ambition. Reliable energy for productive industries may generate significant economic benefits, but those benefits must be weighed against the costs of alternative fuel arrangements.
A coordinated and evidence-based approach would help reduce the pressure on businesses. With the right decisions, we could see improvements over the next two to four years.
Md Shamim Jahangir: As Bangladesh becomes more dependent on imported energy, are garment manufacturers prepared to pay higher prices for reliable supplies?
Mohiuddin Rubel: The international garment business is intensely competitive, and manufacturers cannot easily pass rising production costs on to buyers.
In 2025, US inflation was around 2.7%, while retail garment prices rose by only 0.6%, according to the figures I have cited. This illustrates the pressure within the supply chain: manufacturers often have to absorb a significant part of the cost increase.
As our domestic costs rise, we may still be forced to lower our prices to remain competitive.
International oil prices are beyond our control, but we can improve efficiency in other areas. We should examine whether gas is being lost through leaks, whether it is being distributed properly and whether the available supply is being diverted or wasted.
Better distribution and management could reduce costs.
However, uninterrupted energy supply is the most important issue for manufacturers. If electricity or gas fails during washing or dyeing, production costs can rise sharply, and entire batches may be damaged.
Suppose a disruption causes a loss of Tk 100, but paying an additional Tk 10 for energy would have prevented it. A manufacturer would naturally prefer reliable supply at the higher price.
Higher energy prices will undoubtedly hurt businesses and consumers. Nevertheless, manufacturers can adapt and negotiate with buyers if supply is dependable.
Without uninterrupted energy, the debate over price becomes much less meaningful.
Md Shamim Jahangir: Can stopping gas theft and improving distribution guarantee uninterrupted energy for industry?
Mohiuddin Rubel: Not by themselves, but they would provide significant support. The government must make clear decisions about which sectors should receive priority when energy is scarce.
It must consider whether more gas should be allocated to industries and less to other uses, and whether gas or furnace oil should be used for power generation.
If furnace oil can be used to generate electricity while gas is directed towards industries that depend on it, the economic outcome may be better. But this requires careful cost-benefit analysis.
We cannot expect to use the same limited gas supply to meet every demand for electricity generation and industrial production simultaneously.
The government must decide which imports are necessary, which domestic activities should receive priority and how energy should be allocated to support economic growth.
A coordinated plan would help the country use its limited resources more effectively.
Md Shamim Jahangir: Bangladesh has made significant progress in green factories. How does this compare with its progress in adopting green energy?
Mohiuddin Rubel: We need to distinguish between green factories and green energy. Bangladesh has made remarkable progress in developing environmentally certified garment factories and is a global leader in this area, alongside China.
However, having a green factory certificate does not mean that the factory is powered by renewable energy.
We have achieved much more in green building and factory standards than in the transition to green energy. This is an important gap that we must address.
The garment industry needs to reduce its dependence on conventional energy sources, particularly as European environmental requirements become more stringent. Sustainable production will be increasingly important for maintaining access to international markets over the long term.
Solar energy offers significant opportunities, but businesses need practical support to adopt it. Simply asking factories to install solar systems is not enough.
The government should facilitate access to financing, ease the import of solar equipment and consider reducing taxes and VAT on relevant machinery. Excessive bureaucratic procedures can discourage investment and delay the transition.
Factories should also adopt energy-efficient machinery and technologies that reduce consumption. Lower energy use would reduce dependence on imported fuel and ease pressure on the national grid.
Industrialists must take the initiative, but the government also has a vital role in creating an enabling environment.