BJMC set to become a losing entity again

Arafat Ara Bangladesh Jute Mills Corporation (BJMC) is going to become a loss-making organisation once again due to lack of proper policy support, said experts. Industry players and analysts blamed inefficient management, appointment of too many labourers and showing of too much courage in reopening the closed mills for this, saying that the moves pushed up their expenditure to a much higher level than their income. The state-owned jute mills made a net profit of Tk 195 million for the first time of its history in fiscal year (FY) 2010-2011 after 29 years, which created a ray of hope over the fate of those mills. But after that the organisation has been continuing to incur losses. It incurred losses to the tune of Tk 3.20 billion in the FY 2012-13. It also made a significant amount of losses in the first three months of the ongoing FY, said a BJMC official without disclosing the figures. Centre for Policy Dialogue (CPD) senior research fellow Khondaker Golam Moazzem said BJMC is about to go back to its earlier status because of lack of proper policy support. He said after the present government had come to power it took up a good policy including appointment of skilled manpower to establish the BJMC as a profitable organisation. But they did not continue the strategy and appointed unskilled manpower on political consideration. The decision to reopen the old mills without pre-evaluation was another fault which increased the expenditure instead of enhancing profit. Besides, the number of labourers was not reduced despite there being more workers than necessary. The CPD researcher fellow also said the government has not yet implemented the mandatory jute packaging act which has a negative impact on public and private jute mills. Mr Moazzem suggested taking a proper policy including hand-over of sick mills to the private sector for making them capable of going for adequate production. Private jute goods exporters said BJMC failed to explore potentiality of foreign markets as it has no proper research work to promote Bangladeshi jute bags in the international arena. They said it should appoint efficient people who have necessary knowledge about market promotion. BJMC marketing director Abu Sayeed said because of economic recession in Europe and the Middle East crises, export of jute products has declined in the ongoing fiscal year. He said the demand of hessian cloth and carpet backing cloth has fallen in those areas. India also is not purchasing jute bags due to depreciation of its rupee against dollar. Due to implementation of wage commission award of 2009, the expenditures of state-owned mills have increased, the BJMC director added. Mr Sayed, however, expressed hope that after implementation of the Mandatory Jute Packaging Act 2010 the earning will increase significantly. According to official figures, the government jute mills exported 177,000 tonnes of jute products worth Tk 13.63 billion in FY 2012-13 which is up from 128,103 tonnes worth Tk 10.58 billion in FY 2011-2012. A total of 18 jute mills are now in operation in the country under the BJMC.