Gazi tyre factory fire: Economic impact on low-and mid-income classes

Kamrul Hasan

Sun, 1 Sep 24

Nearly 10,000 people become jobless

Prices of rickshaw, auto-rickshaw tyres may witness instability

Middle-income house owners to lose tenants

Family members of missing persons fear to face economic crisis

The massive fire that began on August 25 in Gazi auto tyre factory, one of the largest tyre factories in Bangladesh, is turning out to be a massive human tragedy. The factory was set ablaze following a series of looting and arson incidents that began on August 5. The arson has completely burned the entire building to ashes. Factory authorities and the authorities concerned in the government are yet to disclose the extent of the damages. Apart from Gazi's financial setback and claiming the lives of nearly 130 people, the fire incident leads to direct economic damages to a quarter of the low and middle income classes.

Nearly 10,000 people become jobless

Located in the industrial township of Narayanganj near Dhaka, the Gazi auto tyre factory of Rupshi was well known as it was considered to be one of the country’s biggest tyre factories. The fortune of the Gazi group began to change with the fall of the Hasina government on August 5. Golam Dastgir Gazi, the chairman of the once powerful Gazi group, who was the minister of textile and jute under PM Hasina was finally arrested on August 25. He had earlier gone into hiding.

Sometime after the news of Mr Gazi’s arrest was telecast on TV, a large crowd gathered from nearby areas which raided the main warehouse in the back of the tyre factory that had many items including very large amount of inflammable liquid substances.

The mob started looting the factory and set it on fire. The factory continued to burn for six days and turned into a risky building. Gazi Group officials reported that their factory suffered extensive damage. The building, warehouses, vehicles, and machinery were all destroyed, resulting over 10,000 employees unemployed.

Mustafizur Rahman, AGM (commercial marketing) of Gazi Auto Tyre, told the Views Bangladesh: "Those who were serving the factory are mostly the middle and low income people. Over 10,000 employees of the factory became jobless overnight as we are not in the state to reopen it."

"Almost all our assets are either damaged or looted. So, it could not be possible to make any remark of when the factory could go for production again," he added.

A team of BUET experts who visited the fire-ravaged five-storey building, said that it can collapse at any moment. Referring to BUET experts' remarks, some employees who were present on the spot said they have lost the hope.

Deputy Director of Gazi Group Rafuquzzaman told Views Bangladesh that they will pay the salary of the months of August. "No other assurances can be given right now."

Prices of rickshaw, auto-rickshaw tyres may witness instability

Gazi auto tyre factory used to produce tyres of rickshaw, auto-rickshaw, light commercial vehicle, motorcycle, easy bike, cycle and vehicles used in agricultural purpose. These products are main purchased by middle-income group and are used by low-income people. Being one of the biggest tyre factories in the country, Gazi auto tyre factory reportedly produced and supplied over 60 percent of rickshaw tyres and nearly 60 percent of auto-rickshaw, rickshaw van and CNG-run auto tyres.

Due to the sudden closure of the factory, the supply market would see a major blow within a short time, fear the businessmen concerned.

Noting that the price of these tyres has already increased by Tk100 (per tyre), Mohammad Islam, the owner of Mariam Cycle Store, told View Bangladesh: "Vountry's has demands of tyres of three companies -- Gazi, Alam, Meghna. The most important thing is Gazi Group used to process and supply rubber, which is used as the raw materials for making tyres. If the supply of this rubber is stopped, there will be instability in the market within the next three months."

Mustafizur Rahman, AGM (commercial marketing) adding that "According to our recent survey, more than half of the light vehicle tyres market are dependent on our tyres. So, the sudden halt in supplies will impact adversely the market."

Ainal Mia, owner of some rickshaws, told the Views Bangladesh: "The low and middle-income people are the first ones to suffer when products see price hike. If the prices of tyres go up, we will suffer directly."

Middle-income house owners to lose tenants

Of the 10,000 employees of the factory, almost 60-70 percent are not local residents. The migrated employees stay in rented houses in the neighbourhood. A wide range of single rooms and small apartments are given for rent to the factory employees. According to locals and factory workers some 3,000 to 4,000 families stay in rented houses in various villages adjacent to the factory. Locals feared that after being unemployed, many families will migrate to another place, resulting a huge financial setback for the local house owners, small businessmen and educational institutions.

Sabuj, a small trader in Khadun village, said: "The house owners, traders, restaurant businesses and local educational institutions usually see a transition of over Tk3 to Tk5 crore due to the factory employees. Most of the employees will leave the area in a short time as the factory has completely been destroyed. This incident will cast negative impact on the economy of the neighbourhood."

Local house owner Mohammad Selim said: "Although Gazi did not hire the local residents, we were benefitted with the factory as we can give our house for rent to the outsiders. Of the 10,000 employees, many will manage new jobs in nearby factories. But, I am afraid most of them will leave the area for search of new job. We will fall in financial setback due to the fire incident."

Brig Gen (Rtd) Muhammad Quamruzzaman, executive director (Admin, HR, fire safety and security) of Gazi auto tyre factory, told the Views Bangladesh: "I assume that the impact would not be ended with only economic lose. Many local youths are also financially dependent on the factory in various ways. This group, aged 18 to 35, may get engaged in various unethical activities like robbery or drug addiction out of financial frustration."

Family members of missing persons fear to face economic crisis

Soon after the news of Gazi’s arrest was telecast on TV, a large crowd gathered from nearby areas and entred the main warehouse in the back of the tyre factory that had many items including very large amount of inflammable liquid substances.

According to store assistant Russel Hossein, several hundred individuals who had turned up to cart away the materials hoping to earn some cash by selling them in the nearby scrap market. But, when the people were busy in collecting things, a fire began in the lower portion of the building which trapped everyone upstairs.

Soon after the news of fire spread, the family members of the trapped persons started gathering in front of the factory and urged the firefighters to rescue their family members. Some of those who entered the factory and have been missing ever since had made brief phone calls claiming that they were surrounded by fire and sought help. Nothing more has been heard about them. Till evening of Thursday, the authorities maintained that at least 129 individuals had been missing. Although wailing relatives outside the gate informed that the actual figure was much higher.

As of Thursday, rescue teams have been unable to recover any bodies from the building. As three floors of the six-storey building collapsed in the fire, the investigation committee of the fire service and district administration said it was risky to enter the building and search for any bodies and the search operation was called off on Friday afternoon.

Russel said those who are missing are not labourers of the Gazi group. However, Md Zakir, elder brother of Md Manir Hossain, 28, who went missing on August 25, said his brother was one of the workers of the factory.

He said Monir did not get his salary of last two months. So, he was curious about what is happening in the factory. Now he is missing and his family including his two children are at the verge of collapse.

One Noor Alam's mother Noor Banu also came to look for his son with his ID card. It is known that Noor Alam also entered this building along with his seven friends on Sunday night and got trapped. The same situation happened with Apu and his uncle Nazrul.

Most of the missing were the lone breadwinner of their family. Immediately after the announcement that no body was found, the relatives of the missing people erupted in anger at the main gate of the factory demanding compensation.

Contacted, BNP executive committee member also the coordinator for the traders of the upazila, Kazi Moniruzzaman Monir, said: "People might have anger on Mr Gazi but any act that could snatch the earnings of hundreds of people can never be accepted."

"Whatever the reason -- revenge, greed or anything else, those who had attacked the factory should have not done it," he added.

He said: "An interim government just took the power. It is difficult for them to address the issue right now. However, we have urged the government to take necessary step over the issue because it is a matter of people’s survival."