Power, gas crises throttle newly set up paper mills

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Jasim Uddin Haroon
At least five new paper mills with combined investment of more than Tk 5.0 billion have failed to begin production even after installing all machinery due to crises of power and gas, company officials told the FE.
The combined production capacity of these mills is around 250,000 tonnes a year, equivalent to the country's existing capacity of writing and printing papers, they added.
"My plant is fully ready to go into production. But we are not getting gas for long. This is frustrating," said Feroz Ahmed, a director of Creative Paper Mills Ltd at Rupganj, near Dhaka.
The paper mills is the country's largest single unit having capacity of 200 tonnes a day. "We've invested Tk 1.12 billion in this plant," he added.
The entrepreneurs said that they have set up the plants mainly to meet the domestic demand and explore international market.
Bangladesh imports a large quantity of higher grade paper from Thailand and Korea each year.
"Our paper mills will produce import-substitute products and help save a good amount of hard earned foreign exchange each year," Mr Feroz added.
SA Paper Mills Ltd., a large paper mills in Chittagong, also is waiting for gas connection after setting up its plant at Bhatiari in the port city.
"We're now thinking of alternative power sources as we have been waiting for gas connection for long," Zahir Ahmed, technical manager of SA Paper Mills Ltd said.
Amber Paper Mills, a concern of Partex Group, Ambia Paper Mills and Lina Paper mills have also been facing the similar crisis for long.
"We're facing the pressure of bank loans following delay in operation of our plant," said a senior official at Amber Paper Mills at Rupganj.
Maruf Ahmed, deputy general manager of Amber Paper Mills, said the production cost will rise significantly if the mill uses alternative power sources like furnace oil.
Mr Maruf said they had set up mills seeing a huge demand for high quality writing, printing and industrial papers in country.
Local entrepreneurs are setting up paper mills as the European counties are discouraging these labour-intensive industries mainly because of higher production cost there.
Enamul Aziz, a leading pulp importer, said: "This is a relocation of industries. So global production will remain the same."
He also said after operation of these five new plants, Bangladesh will attain self-sufficiency in paper of all kinds and this will create an export market in European and Asian countries.
Currently, Bangladesh's per capita paper consumption is around 2500 grammes. Its 55 private mills account for a market share worth Tk 25 billion producing more than 550,000 tonnes of paper a year.
The mills use waste paper and imported pulp, which enjoy duty-free import.
Bangladesh has a state-owned paper mills in Chandraghona, which produces 100 tonnes a day by using local bamboo.