BSFIC seeks Tk 2.24b for payments to retirees

The state-run Bangladesh Sugar and Food Industries Corporation (BSFIC) has sought Tk 2.24 billion to make gratuity and provident fund (PF) payments to retirees of both BSFIS and loss-making sugar mills.
According to sources, the BSFIS has pleaded with the government to provide the money from the losses that accumulated through trade gap and subsidy at more than Tk 80 billion.
This staggering amount is has piled up for reasons like the sale of the sweetener at a subsidised rate, lack of basic raw materials, meeting operating costs and making payments to banks against loans.
The retirees and their family members have been going through hard times due to non-payment of dues to the retired employees, according to a BSFIC letter.
Dues cannot be paid to the retirees due to poor funds. Many died untreated for lack of money, while most of them need medical treatment for getting older.
Even they cannot pay their children's tuition fees, reads the letter.
However, the government has already given Tk 1.0 billion to make gratuity and PF payments.
The ousted Hasina government suspended the operation of six state-operated sugar mills in 2020 to reduce costs.
The mills' losses are gradually increasing as they are not adjusting production costs with accumulated losses hitting a new high of more than Tk 91.75 billion since fiscal 2005-06, according to the data from Bangladesh Economic Review.
"The cash-strapped sugar mills are still struggling to meet their running expenses. The BSFIC finds it difficult to service its bank loans and make payments due to lack of required funds," a BSFIC official told the FE.
According to sources, the outstanding dues, including interest, owed by the mills to the five state-owned banks (Sonali, Janata, Agrani and Rupali), now amount to an estimated Tk 92.91 billion.
The BSFIC cannot make profits due to huge loans and interest. The government even subsidised Tk 2.80 billion last fiscal.
"The mills can't produce sugar at an expected level despite having their capacity for inadequate raw materials. Besides, production costs of sugar are higher than its selling prices. So, the mills are incurring heavy losses."
Currently, there are 15 state-run sugar mills under the Corporation, with an annual production capacity of 0.21-million tonnes.
This volume is less than the country's annual demand for 2.0-2.2 million tonnes of sugar. To meet this demand, around 2.2-2.4 million tonnes of raw sugar are imported annually.
The industries ministry has undertaken multiple projects to diversify sugar products by tapping the existing potential to make the mills profitable.
Some projects are currently being implemented, according to the official.
The BSFIC prepared a five-year roadmap for the fiscals 2022-23 and 2026-27 aiming to make the sugar industry profitable.
A source said the loans taken by the mills were intended to support sugarcane farmers. Farmers paid off by supplying sugarcane, but the mills failed to do so.
In fiscal year 2022-23, the state sugar entity generated Tk 8.19 billion from all its mills and factories.
However, management costs exceeded Tk 15.34 billion. For years, these state-owned mills have consistently incurred average annual losses of Tk 10 billion.

[email protected]