BSFIC takes measures to revive ailing sugar mills

Bangladesh Sugar and Food Industries Corporation (BSFIC) has taken measures to revive 15 loss-making sugar mills of the country.

The state-owned corporation is now set to seek a fund of Tk 12.70 billion from the government to narrow the trade gap for revival of these mills which have been making losses for years.

According to BSFIC source, Prime Minister Sheikh Hasina has already approved a fund of Tk 5.0 billion. But the corporation said they have outstanding subsidy of Tk 12.70 billion that they will seek. They will also hire technical people to run modern machinery.

BFSIC has total liabilities of Tk 3.38 billion as salary, wage, overtime, gratuity and provident fund and Tk 69.44 billion bank loan and debt service liabilities (DSL).

The industries ministry submitted a report on the overall situation and the ongoing activities of state-owned 15 sugar mills to the parliamentary standing committee on the industries ministry at its 4th meeting held last month.

BSFIC sources said the 15 sugar mills incur a loss of Tk 600 million per year which meet only 10 per cent of the country's demand.

The 15 mills produce, on an average, 0.1 million tonnes of sugar a year out of its total capacity of 2.0-2.5 tonnes.

While talking to the FE, BSFIC chairman Ajit Kumar Pal has blamed rampant corruption, mismanagement, lack of skilled workers and modern technology for low production and losses by the mills.

"There is no accountability and coordination for which our mills have been suffering. We have to run these state-owned mills on our own and there is option for privatisation as the Privatisation Commission has already been dissolved," he said.

"Corruption is at every level and I will ensure nobody goes unpunished who have contributed to making the loss," he said.

Besides, one-third of the technical posts has fallen vacant. The corporation will start hiring technical people, Mr Ajit added.

"We need to diversify products to run our mills round the year. Now we have an average recovery of 6.0 per cent sugar from sugarcane. I have instructed the mills to raise it up to 8.0 per cent. Our researchers have said it can be 12 per cent," said the chairman.

But the dealers are sometimes not helpful as they don't buy brown sugar from the corporation due to high price. When the price of refined white sugar goes up, they come to buy it from the corporation, he said.

"We have taken action against listed dealers for this type of behaviour. We have sent them notice and will cancel some of the licences for irregularities," he said, adding: dealers at Karwanbazar are not interested to sell our sugar.

This year the corporation expects to produce 0.12 million tonnes of sugar which was 65,000 tonnes last year.

"We sell 0.1 million tonnes from our stock at Motijheel on free sale basis to popularise brown sugar among the people. Besides, we have deployed mini trucks at various points and super shops to make healthy sugar available in Dhaka," said Mr Ajit.

The cost of brown sugar is higher than refined sugar worldwide, said the BSFIC chairman. The price of packed sugar is Tk 65 and loose sugar is Tk 50, a bit higher than that of white ones.

The corporation has been implementing four projects at a cost of Tk 10 billion with an aim to enhance their production capacity. State-owned 15 sugar mills incurred a loss of Tk 34.49 billion in last six years since FY 2012-13.

But the estimated cost of two projects of Tk 8.0 billion will increase threefold reaching Tk 24 billion Development Project Proforma of which is under revision. This will delay the modernisation process further by six months.

The projects will be implemented in Thakurgaon and North Bengal Sugar mills.

Only two companies of the corporation Keru and Co and Renwick, Jaggeswar and Co have made profit of Tk 600 million in past six years since FY 2012-13.

The committee was informed that a project titled Balancing, Modernisation and Replacement (BMR) of Keru and Co (first amendment) is going on at a cost of Tk 1.02 billion.

The duration of the project is from July 2012 till June 2020. The progress was only 40 per cent as of July 2019.

Another project titled replacement of old machinery and installation of necessary machines for production of sugar from beet in Thakurgaon sugar mill is going on at a cost of Tk 4.86 billion.

The project duration is July 2013 till June 2021. But only 17 per cent work of the project has been completed until July 2019.

A project is underway at North Bengal sugar mill for electricity production through the co-generation system. Also a sugar refinery system will be installed there. The project cost is Tk 3.24 billion (first amendment) and duration is February 2014 till June 2021. The progress of the project is only 16 per cent.

Another project taken up for setting up of effluent treatment plants (ETPs) at 14 sugar mills is going on at a cost of Tk 851 million. The project tenure is July 2018 till June 2020. The progress is only 2.76 per cent.