Galfra-Habib, Lagan to make jute machinery

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Talha Bin Habib The country will produce jute mill machinery and spare parts upon the finalisaiton of operating agreement between Galfra-Habib Ltd and Indian Lagan Engineering Company Ltd in the next three months, officials said. Last week the two parties signed a memorandum of understanding (MoU) that clearly says the signing of the operating agreement shall be made within 120 days from the date of signing. "We requested the ministry of textiles and jute (MoTJ) to finalise the operating agreement incorporating necessary clauses," Chairman of Bangladesh Jute Mills Corporation (BJMC) TD Mitra told the FE Monday. Asked when the operating agreement could be signed, he said it shouldn't go beyond the stipulated time. Galfra-Habib Ltd was set up in 1967 in Chittagong under a joint venture of Pakistani, Scottish and British entrepreneurs. It was nationalised in 1972, and now under the control of BJMC. The MoU says the Galfra- Habib will run by Lagan under an operating agreement between BJMC and Lagan. BJMC shall be the owner of the company while the management will be under Lagan Engineering Company Ltd. The operating agreement shall be valid for a period of ten years subject to the clauses to be contained in the agreement. The parties shall be at liberty to renew the agreement on terms and conditions as they may agree. The managing director shall be the chief executive officer of Galfra. Heshe will be responsible for day to day management of Galfra and control the management team which shall be responsible for all management activities including control finances, hiring of personnel, human resources and purchasing etc. The management team shall have complete autonomy from BJMC or the GoB subject to the direction, superintendence and control of the board as per existing laws of the country. The existing ownership shares of Galfra-Habib Ltd owned and vested by the government to BJMC shall remain unchanged, said the MoU. It says the Lagan shall be responsible for the sale and export of machinery and spare parts from Galfra. Lagan shall ensure full local demand of Bangladesh. In case the demand from local market is insufficient, Galfra shall export its products at internationally competitive price to any country. Machines and spare parts from Galfra shall be allowed to carry the name of both Lagan and Galfra. G0alfra will continue to manufacture jute mill machineryand spare parts for Bangladeshi jute industry. It shall also develop design and manufacture new range of jute mill machinery, management expertise, and modernisation of the Bangladesh jute industry. On the other hand, the BJMC or Galfra shall contribute existing infrastructure and machinery of Galfra including land, buildings, factory sheds, offices, quarters, plant and machinery, repayable interest bearing loan for modernisation and expansion through the government. In case of any difference of opinion or dispute arising between two parties, the matter shall be referred to an Arbitration Committee to be headed by the minister of MoTJ and one representative each from BJMC and Lagan as members. If either of the parties disagrees with the decision of the arbitration committee, it shall have the right to file regular suit in the Bangladesh International Arbitration Council in accordance with national laws. Both the parties shall have the right to terminate this understanding and subsequent operating agreement by serving the other party six months prior notice in writing.