News / Cargo village blaze destroys $1bn-worth of pharmaceuticals and garments

Source: Bangladesh fire service and civil defence

Dhaka’s air cargo community fears that cargo worth some $1bn have been lost in the devastating fire at Dhaka Airport on Saturday, acccording to Mohammad Hatem, president of the Exporters Association of Bangladesh (EAB).   

Garments, fabrics, yarn and spare parts were among the larger items destroyed, as well as a large volume of raw materials for pharmaceuticals. 

Zakir Hossain, secretary general, Bangladesh Pharmaceutical Industry Association, explained there were some 307 pharmaceutical companies in Bangladesh. Today, 32 have reported that their raw materials, worth more than Tk2bn ($16.8m) and destined to produce medicines worth between TK30bn and Tk50bn, had been destroyed in the blaze. 

“Once the remaining companies give their accounts, the damage will be even greater,” he said. 

Mr Hatem claimed the authorities had shown “extreme failure” to detect and prevent fires in important facilities such as the cargo village, causing huge losses for businesses. 

And it is likely to get costlier for shippers. Mariusz Filec, airfreight product director CEE, Rohlig SUUS Logistics, said he expected freight rates, for both exports and imports, to rise, and that a cargo backlog was likely to develop. He added: “An alternative for supply chains in this direction is a sea-air service with transshipment in air terminals such as Colombo (Sri Lanka), Singapore, Dubai (United Arab Emirates), or Malé (Maldives), followed by sea delivery to Bangladesh.” 

Meanwhile, the government has formed a number of committees to identify the cause of the fire and to assess losses.    

“We demand speedy settlement of insurance claims against the goods damaged in the fire,” said Mr Hatem, who is also president of Bangladesh Knitwear Manufacturers and Exporters Association. And he said that for any goods that were uninsured, a special government fund should be formed to ensure compensation and assistance to the businesses. 

After visiting the cargo village area yesterday, Enamul Haque, acting president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said: “The damage caused by the fire will affect current exports and also disrupt future business opportunities.” 

He said BGMEA had begun to assess the loss and asked its members to submit lists of damaged goods in a prescribed format. 

According to India’s Ligi Logistics, freighter operators have cut capacity into Dhaka, but are prioritising flights for clothing retailer Inditex. Qatar has reportedly cut back to two flights per week, for Inditex and about five tons of general cargo. No EU-bound cargo is being accepted. Emirates is also prioritising Inditex and other key customers. Ligi added that B2B charters, of which Dhaka sees three to four per week, have been suspended.

It is the third major fire in Bangladesh in the past week. Just 48 hours before the airport incident, Chattogram Export Processing Zone faced a large factory fire – the second that week, after a garment factory and chemical warehouse next door caught fire in Dhaka, with at least 16 fatalities.