Offer to run BTMC mills under PPP gets poor response

A government move to run the state-owned textile mills on the public-private partnership (PPP) basis did not yield any results due to poor response from private entrepreneurs, officials said.  

None of the 18 units under the Bangladesh Textile Mills Corporation (BTMC) could be brought under the PPP arrangement even nearly four years after the government move initiated in 2009, they said.

"Due to non-availability of any aspirant private entrepreneurs, the BTMC could not bring any of its mills under the PPP arrangement," said Mr Abdul Hai Sarker, Chairman of the Purbani Group of Industries, a leading manufacturer of high quality apparels for leading international brands, while talking to the FE.

He said: "Due to use of outdated machinery and mismanagement, many mills under the BTMC have stopped their production despite an increase in demand for yarn and fabrics in the country".

Most of the factories did not get gas and electricity connections, the primary requirement of an entrepreneur, Mr Sarker said.

 "We are facing a shortage of entrepreneurs to undertake projects under PPP," BTMC Chairman Brig. General Md. Bayezid Sarwar told the FE.

He said during the last four years they could not make any headway in operating the BTMC mills on the PPP basis.

Mr Sarwar said: "We want to make the mills profitable through PPP or joint venture (JV), but we're getting no response from entrepreneurs."

He said some companies did approach the authorities seeking to make some units vibrant during the last fours years. But till now they could not sign any memorandum of understanding (MoU) with them for handover of the mills.

Mohammad Nurul Islam, director of BTMC, told the FE that primarily, they decided to hand over Ahmed Bawany Textile Mills Ltd to a private company under a PPP project but got poor response.

He said a few months ago, a local company, namely Shamura Technical Fibre Ltd, had contacted them to take over mills under the PPP arrangement, but there was no development yet.

Mr Islam said the Shamura Technical Fibre Ltd met the BTMC authorities several times to discuss some conditions, but they could not arrive at a final decision.

He said: "Since 2009 the BTMC has been trying to run all of its mills under the PPP arrangement".

Due to old and dilapidated machinery, now only four out of 18 textile mills are in operation under the BTMC and producing cotton and polyester yarn of different qualities.

According to the BTMC, any individual company or a group can take over a BTMC unit under a separate 'Limited Company Structure', where the BTMC will have either majority or minority stake depending on its portion of investment.

These companies can be formed through PPP or JV with private companies of reputation (both local/international) who have experiences and a track record of running profitable concerns in this sector.

An official at the Shamura Technical Fibre Ltd told the FE that for quality production, they needed modern machinery in place of the old ones, but the BTMC did not agree to that. So the Shamura lost its interest.

He said Shamura wanted to establish 'a viscose solution' factory at the Ahmed Bawany Textile Mills but the BTMC authorities did not agree.

The 'viscose solution' is used to spin fibre viscose rayon, a soft man-made fibre commonly used in dresses, linings, shirts, shorts, coats, jackets and other outer wear. It is also used in industrial yarns (tyre chord), upholstery and carpets.

Bangladesh Textile Mills Association (BTMA) President Jahangir Alamin told the FE that all BTMC mills lacked minimum facilities and as such the private companies were not interested in running those.

He further said: "Each textile mill of the corporation has a vast tract of land where a 'textile village' could ensure the optimum land use and meet the increasing local demand for yarn and fabrics. We have to just procure modern machinery."

Presently, the country has over 1,158 cotton and textile mills, of which, the private sector owns 1,140 mills and the BTMC 18.

According to the BTMC, the country's aggregate annual demand for cotton yarn is 1,872 million kgs.

Local mills produce about 951 million kgs and the remaining 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 by 2015.