All BTMC mills to be run under PPP

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Badrul Ahsan The Bangladesh Textile Mills Corporation (BTMC) has planned to run all its mills under public-private partnership (PPP) arrangement with a view to making the debt-burdened organisation again a financially viable one, an official said. The BTMC recently made a set of proposals to the government in this respect. According to the proposals, all the mills either individually or in a group can be put under separate and 'limited company structure' where the BTMC has either majority or minority stakes depending on its portion of investment. These companies can be formed through PPP or joint venture (JV) with private companies of reputation (both local/international) which have experience and track record of running profitable operations in this sector, the proposal said. In the proposal, it is also stated that the BTMC will be in the role of shareholder instead of management to facilitate private companies/entrepreneurs to make faster business decisions and their implementation. "We can make the mills vibrant by running them under PPP or JV rather than fully privatising," Chairman of the BTMC Brigadier General Mahmood-Ul-Alam told the FE. Mr Alam said the BTMC mills own a large quantity of industrial plots in the prime industrial areas with readymade infrastructure including gas and power connections, developed land and approach roads which can easily lure local and foreign investors. "Recognition of the proposals would save the Corporation from 'slow death' along with creation of thousands of jobs across the country and would also help contribute to the increasing demand of yarn and fabrics of the country's apparel industry," the BTMC Chairman added. However, appreciating the BTMC's initiative to make it vibrant, Secretary for the Ministry of Jute and Textiles Ashraful Moqbul said the ministry is actively considering approval of the proposals. "This is an appreciable initiative. We have made some queries to the Corporation and are hopeful of coming to a positive decision soon," he added. At present, the Corporation has 18 textile mills of which four are in operation under service charge system. However, the mills remain closed for most of the time due to some loopholes of the system. The Corporation has either sold out or handed over 65, out of its 86 mills, to the private sector, up to the calendar year 2010. Meanwhile, President of the Bangladesh Textile Mills Association (BTMA) Jahangir Alamin said he had initial discussions with the concerned ministry high-ups on use of the lands of the BJMC mills for establishing 'Textile Pallis'. "Each textile mill of the Corporation has vast land with ready infrastructure where installation of new machinery and setting up of 'Textile Palli' would ensure its optimum use and would also help meet the increasing local demand for yarn and fabrics," Alamin said. Mr Alamin, however urged the government to take a prompt decision on the issue so that the country can reduce reliance on foreign countries for yarn and fabrics. According to a recent study by the Ministry of Textiles and Jute (MoTJ), the demand for yarn and fabrics has considerably been increasing in the country over the last ten years. The country's private sector has been meeting around 60 per cent of the total demand, while the rest is imported. The MoJT study showed that the country's aggregate annual demand for cotton yarn is 1,872 million kgs. Local mills produce about 951 million kgs and the rest 921 million kgs are imported. Besides, the country annually needs 5,612 million metres of fabrics, and the demand would increase up to 7,164 million metres within the year 2015. Presently, the country has over 1,158 cotton and textile mills, of which the private sector owns 1,136 mills and the BTMC 22 mills. According to sources at BTMC, the mills under the Corporation have long been incurring substantial losses despite an increasing demand for yarn and fabrics allegedly due to lack of expert manpower, use of outdated machinery, mismanagement of officials and bureaucratic tangles.