Depot fire aftermath: Hydrogen peroxide export suffers

The BM Container Depot fire incident, largely blamed on its owners' negligence, has shaken up the entire chemical producing sector with hydrogen peroxide exporters incurring massive losses in the aftermath of the deadly 4 June blaze that has claimed 49 lives so far.

Hydrogen peroxide exporters fear they may lose customers as the export is caught up in uncertainty with shipping lines refusing to transport the chemical and the inland container depots (ICDs) asking exporters to take stored containers back, say industry insiders.  

Two of the largest producers of hydrogen peroxide – Samuda Chemical Complex Ltd, owned by TK Group in Chattogram, and Tasnim Chemical Complex Ltd owned by Meghna Group of Industries (MGI) – have already been forced to suspend production of the chemical.

"The entire industry is paying for the negligence of one," Bikash Kanti Das, head of business at Samuda Chemical, said, adding that the company had stopped its production unit on Friday night.

About the BM Depot fire incident, he said, "Reducing production cost will compromise the quality of hydrogen peroxide and will increase the chances of big accidents."

Infographic: TBS

Bikash Kanti Das expressed concern over the future of the potential sector and said, "Its growth may suffer due to such carelessness."

The Samuda official called for the government's intervention to resume export of chemicals "otherwise it will be difficult for industry owners to pay their employees".

The company is currently storing 1600 tonnes of hydrogen peroxide at its plants in Chattogram and Munshiganj. It previously sent some 102 tonnes of hydrogen peroxide to an ICD, but the depot authority is now asking them to take the containers back.

In fact, the ICDs asked hydrogen peroxide producers to take back the stored chemical, and seeing no other way out, exporters were forced to return the containers to their inventory.

Besides, most shipping lines are declining to carry the chemical following the fire at the BM depot, while the exporters have dispatched about 2652 tonnes for shipment.

"Private depots are returning all our goods and that's why we shut down production two days ago," Manirul Islam, general manager (Sales & Marketing) at Tasnim Chemical Complex Ltd, told The Business Standard.

"If we continue production, it will exceed our inventory capacity," he said and added that the company has a capacity to store up to 2500 tonnes.

Manirul Islam said that currently 20 containers of hydrogen peroxide of Tasnim Chemical are stuck at two ICDs and that the company will need customs clearance to take back the chemicals.

He also said hydrogen peroxide exporters are consulting shipping line operators and depot owners for their cooperation in resuming shipments.

"Shipping line operators have asked us to maintain certain standards, which we have already complied with," added Manirul Islam.

A total of eight companies export hydrogen peroxide, including Samuda and Tasnim, which are also the top two exporters. They are followed by Al Razi Chemical, owned by Smart Group; Infinia Chemical, owned by S Alam Group, and HP Chemical respectively. MH Chemical Works, ASM Chemical Industries and Hossain Chemical are the other three.

According to Chattogram Customs House data, these eight companies have exported a total of 1,30,393 tonnes of hydrogen peroxide from 1 June 2019 to 31 May 2022.

Shahed Sarwar, director of the Bangladesh Shipping Agents Association, told The Business Standard that the inability of main line operators to transport hydrogen peroxide has been a major blow to hydrogen peroxide exports.

"We need a positive attitude from all concerned so that this sector does not close down under any circumstances," he added.

On 12 June, Chattogram Customs House held a meeting with 19 private ICD authorities over the fire incident at BM Container Depot. At the meeting, customs instructed the ICD authorities to ensure proper compliance.

On Tuesday, officials of the top five exporters held a meeting to discuss ways of resolving the current impasse.

The exporters are considering selling hydrogen peroxide in the local market at half the price to clear up their inventory space, said sources with knowledge of the meeting's proceedings.  

The price of hydrogen peroxide per tonne is $480.

"We have discussed how to ensure a smooth continuation of business after an abrupt closure of the export of hydrogen peroxide due to the BM depot fire incident," said Alvee Rana, director of Union Limited, the group that owns HP Chemicals Ltd.

"Management of all five factories were called to the meeting and instructed to do the needful to ensure that no such incidents happen in future and also focus on supplying hydrogen peroxide to the local markets," he added.

Major (Retd) Shamsul Haider Siddiqui, general manager (admin) of Smart Group, told The Business Standard, "Hydrogen peroxide production at Al Razi Chemical, a concern of our group, has been reduced by about 75%. The factory has a reserve of about 600 tonnes of hydrogen peroxide which are currently being sold in the local market."

Chattogram Customs House Commissioner Mohammad Fakhrul Alam and Chattogram Port Authority Secretary Omar Faruk were unreachable for comments.

The BM depot fire incident, which took four days to douse, also left more than 250 people injured. They are being treated in various hospitals in the country.