A new Adamjee in the making
Thursday, 9 September 2010
Shahiduzzaman Khan
Adamjee Jute Mills Limited is going to be reopened soon. It's great news! The government is planning to start work on the ambitious project after getting return of 22 acres of land of the closed jute mill from Bangladesh Export Processing Zone Authority (BEPZA).
According to reports in the media this week, Bangladesh Jute Mills Corporation (BJMC) is due to start work on the project after formalities of getting land from BEPZA are over. The entire project entails a cost of over Tk 6.08 billion for constructing a 1000-loom jute mill. In the first phase, the report says, work on an export-oriented 500-loom mill under 'Jute Yarn Diversity' will start. It will cost Tk 3.04 billion. When this mill will go into production, it is expected to create job opportunities for 5720 people. The ministry has already formulated a guideline for a 1000-loom factory on the premises of the closed jute mill. The government is reportedly holding negotiations with a number of Indian and Chinese companies to import machinery for the said mill. In fact, all things are going in positive direction.
Adamjee Jute Mills was closed down during the erstwhile BNP-led four-party alliance government. At the time of closure, Adamjee was incurring huge losses. Several tenders for selling the mill to the private sector were floated and there were no encouraging responses from intending buyers.
Overseas buyers did not also show interest in buying the loss-making entity. It was then dubbed as a 'White Elephant'. Pervasive corruption and widespread mismanagement continued to eat into the vitals of the mill since its nationalization in the '70s.
After its sad demise, many experts saw it a 'landmark' decision on the part of the government and in the history of the country's economic management and industrial development. After its closure, the entire land and property were handed over to BEPZA to convert Adamjee into an export processing zone. The then government wanted to set up 50 industrial units on the ashes of the Adamjee with an investment outlay of $400 million. Many local and foreign entrepreneurs were approached to invest in the Adamjee EPZ. Yet mostly the response was lukewarm.
There are, however, no reports available as to how many industrial units have so far been established in the said EPZ. If the situation was really encouraging, the government would have given second thought about reopening the closed jute mill. In fact, Adamjee EPZ failed to entice the desired investment portfolio -- both from home and abroad.
When the government is mulling over the reopening the word's largest jute mill, there are some points which need to be considered. The jute ministry wants to re-open this mill under the direct supervision of the BJMC. Now the question remains -- is the state-run corporation capable of handling such a big task? The organization has a bad name as corrupt and inefficient one. None other than the finance minister himself termed the BJMC as a failure and corrupt institution. And the organization itself is running at a huge loss. The finance ministry provided Tk 400 million to the BJMC for giving salaries and bonuses to its employees before the last Eidul Fitr. Finance Minister AMA Muhith, in a strongly worded note, called for taking stern action against corrupt officials responsible for turning the corporation into a burden. He also raised questions about the standard of maintaining the accounts of BJMC and its mills. Muhith wondered how the officials and employees of the corporation could draw salaries and bonuses from the government fund when the corporation could not earn a single penny!
When the government is trying to regain the lost glory of jute, it is necessary that it takes initiatives to make the country's jute industry commercially viable and operationally sound. Under BJMC management, how far this objective will be achieved remains a big question. Then again, there is no clear-cut direction about a very small number of the industrial units established on the premises of Adamjee EPZ. Will those be demolished or will they be allowed to operate on their own? What will happen to the assets and liabilities of the new industries set up in EPZ if Adamjee is born again?
Reports say thousands of people belonging to Pakistani nationality still live in Adamjee land. Most of them were former employees of the closed mills and their kiths and kin. Several attempts were made to rehabilitate them elsewhere but those ended in failure. The government must take a firm decision on their fate.
Many experts feel that a nexus of international and local conspirators were instrumental in closing down the world's largest jute mills. They said the government should carry out a complete investigation into such affairs by Anti-Corruption Commission (ACC) and publish a white paper on the reasons behind closing down the celebrated mill. Adamjee, according to some experts, could still be reopened using its own assets. The government evaluated the price of the mill's assets and equipment at only Tk 103.8 billion. But some experts estimated its value at Tk 1095 billion.
It is to be noted here that building infrastructure for a large jute mill is not that important. It is important how it can be managed and run profitably. With BJMC at the helm, it is unlikely that the Adamjee will make a positive turnaround. On this issue, there is no disagreement with what Muhith said recently: 'It (Adamjee) should be operated through a separate financial planning arrangement in a different way.' That should be the core point of new Adamjee planning.
Reopening of Adamjee Jute Mills is obviously a landmark event. But its mere reopening will not solve problems of the local jute industry. There must be some initiatives on the part of the government and the private sector for diversifying the uses of jute and jute products. szkhan@dhaka.net
Adamjee Jute Mills Limited is going to be reopened soon. It's great news! The government is planning to start work on the ambitious project after getting return of 22 acres of land of the closed jute mill from Bangladesh Export Processing Zone Authority (BEPZA).
According to reports in the media this week, Bangladesh Jute Mills Corporation (BJMC) is due to start work on the project after formalities of getting land from BEPZA are over. The entire project entails a cost of over Tk 6.08 billion for constructing a 1000-loom jute mill. In the first phase, the report says, work on an export-oriented 500-loom mill under 'Jute Yarn Diversity' will start. It will cost Tk 3.04 billion. When this mill will go into production, it is expected to create job opportunities for 5720 people. The ministry has already formulated a guideline for a 1000-loom factory on the premises of the closed jute mill. The government is reportedly holding negotiations with a number of Indian and Chinese companies to import machinery for the said mill. In fact, all things are going in positive direction.
Adamjee Jute Mills was closed down during the erstwhile BNP-led four-party alliance government. At the time of closure, Adamjee was incurring huge losses. Several tenders for selling the mill to the private sector were floated and there were no encouraging responses from intending buyers.
Overseas buyers did not also show interest in buying the loss-making entity. It was then dubbed as a 'White Elephant'. Pervasive corruption and widespread mismanagement continued to eat into the vitals of the mill since its nationalization in the '70s.
After its sad demise, many experts saw it a 'landmark' decision on the part of the government and in the history of the country's economic management and industrial development. After its closure, the entire land and property were handed over to BEPZA to convert Adamjee into an export processing zone. The then government wanted to set up 50 industrial units on the ashes of the Adamjee with an investment outlay of $400 million. Many local and foreign entrepreneurs were approached to invest in the Adamjee EPZ. Yet mostly the response was lukewarm.
There are, however, no reports available as to how many industrial units have so far been established in the said EPZ. If the situation was really encouraging, the government would have given second thought about reopening the closed jute mill. In fact, Adamjee EPZ failed to entice the desired investment portfolio -- both from home and abroad.
When the government is mulling over the reopening the word's largest jute mill, there are some points which need to be considered. The jute ministry wants to re-open this mill under the direct supervision of the BJMC. Now the question remains -- is the state-run corporation capable of handling such a big task? The organization has a bad name as corrupt and inefficient one. None other than the finance minister himself termed the BJMC as a failure and corrupt institution. And the organization itself is running at a huge loss. The finance ministry provided Tk 400 million to the BJMC for giving salaries and bonuses to its employees before the last Eidul Fitr. Finance Minister AMA Muhith, in a strongly worded note, called for taking stern action against corrupt officials responsible for turning the corporation into a burden. He also raised questions about the standard of maintaining the accounts of BJMC and its mills. Muhith wondered how the officials and employees of the corporation could draw salaries and bonuses from the government fund when the corporation could not earn a single penny!
When the government is trying to regain the lost glory of jute, it is necessary that it takes initiatives to make the country's jute industry commercially viable and operationally sound. Under BJMC management, how far this objective will be achieved remains a big question. Then again, there is no clear-cut direction about a very small number of the industrial units established on the premises of Adamjee EPZ. Will those be demolished or will they be allowed to operate on their own? What will happen to the assets and liabilities of the new industries set up in EPZ if Adamjee is born again?
Reports say thousands of people belonging to Pakistani nationality still live in Adamjee land. Most of them were former employees of the closed mills and their kiths and kin. Several attempts were made to rehabilitate them elsewhere but those ended in failure. The government must take a firm decision on their fate.
Many experts feel that a nexus of international and local conspirators were instrumental in closing down the world's largest jute mills. They said the government should carry out a complete investigation into such affairs by Anti-Corruption Commission (ACC) and publish a white paper on the reasons behind closing down the celebrated mill. Adamjee, according to some experts, could still be reopened using its own assets. The government evaluated the price of the mill's assets and equipment at only Tk 103.8 billion. But some experts estimated its value at Tk 1095 billion.
It is to be noted here that building infrastructure for a large jute mill is not that important. It is important how it can be managed and run profitably. With BJMC at the helm, it is unlikely that the Adamjee will make a positive turnaround. On this issue, there is no disagreement with what Muhith said recently: 'It (Adamjee) should be operated through a separate financial planning arrangement in a different way.' That should be the core point of new Adamjee planning.
Reopening of Adamjee Jute Mills is obviously a landmark event. But its mere reopening will not solve problems of the local jute industry. There must be some initiatives on the part of the government and the private sector for diversifying the uses of jute and jute products. szkhan@dhaka.net