Govt move to overhaul BJMC mills to make them profitable

Talha Bin Habib | Published: August 22, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The government has initiated a move to overhaul the state-owned jute mills by replacing century-old machinery with modern equipment aiming to make the units operationally vibrant and commercially viable, officials said.
To push the move forward Bangladesh Jute Mills Corporation (BJMC) signed three memorandums of understanding (MoUs) with China Texmatech Co Ltd (CTMTC), China Hi-Tech Textile Design Institute Co Ltd and China Wuhan Textile University Tuesday last for balancing, modernisation, rehabilitation and expansion (BMRE) of the 26 state-run jute mills.
BJMC Chairman Major General (Retd) Humayun Khaled and President of CTMTC, China Hi-Tech Textile Design Institute Co Ltd and China Wuhan Textile University Jing Chen signed the MoUs on behalf of their respective sides. Textile and Jute Minister Mohammad Imaj Uddin Pramanik and other high officials were present.Â Â Â Â Â
As per the MoUs, the Chinese government will send a high-powered delegation to Bangladesh to conduct a survey for assessing the financial requirement for implementing the BMRE project.
China Hi-Tech Textile Design Institute Co Ltd and China Wuhan Textile University will jointly work for consultancy of the BMRE project.
To run the BMRE project a financial agreement under the Official Development Assistance (ODA) will be signed between the governments of Bangladesh and China after completion of the assessment/survey. The Chinese government will provide soft loan for the BMRE project with 1.5 per cent interest which is repayable within 20 years.
It is roughly estimated that Tk 30 to 35 billion may be required for the BMRE project, sources said.
Under the MoUs the CTMTC has expressed interest to purchase some of the selective jute products from BJMC. The price, quantity and category of the products shall be determined later through mutual discussion. A commercial agreement shall be signed between the BJMC and CTMTC confirming the purchase order before signing the contract.
After completion of BMRE project, the jute mills under BJMC will be able to produce high value jute textiles products that have a wide range of demand in the local and international markets.
"We will replace high-tech modern machinery to the state-owned jute mills to produce high quality jute goods/textiles that will help boost the sector," Joint Secretary of the ministry of textiles and jute (MoTJ) M Shamsul Kibria told the FE.
He said the BMRE project will help bring the glory of jute sector. It will help integrate jute traders and jute growers under one umbrella through 'contract farming system' that will create a win-win situation for both sides in terms of financial benefit.
Jute, considered the 'golden fibre' of Bangladesh, will also become a 'magic fibre' as different types ofÂ high-value juteÂ textiles productsÂ will be produced by the BJMC jute mills after the completion of BMRE. The jute products will have a wide range of demand both locally and internationally.Â Â Â
Once the mills are replaced by modern machinery through BMRE project these will be able to produce new high value added jute products such as housing textiles, medical textiles, kitchen textiles and ready-made garment (RMG) textiles.
The BJMC under the MoTJ has started exporting 15,000 bales of hessian cloth worth Tk 670 million to China, officials said.
The first-ever shipment of hessian cloth to China was made in December 2013. And so far, 8,700 bales of the product were exported to the Sinochem Plastic Company based in Shanghai, China.Â Â Â Â Â
Hessian cloth - an environment friendly product - has an immense demand in China for preserving tobacco leaf. China has started to stop production of hessian cloth because of high labour cost there. The labour cost in China is six to seven times higher than that of Bangladesh, giving the latter an ample opportunity to export hessian cloth there. Â
"China is a big market for exporting jute goods, especially hessian cloth. Our export to China will grow significantly if we could grab a big portion of the market that will also help lessen the large trade gap with the country," Director (Marketing) of BJMC Babul Chandra Roy told the FE.
Apart from exporting 15,000 bales of hessian cloth, the BJMC is going to get more orders from different Chinese buyers.
Bangladesh has a massive trade deficit with China, which imported goods worth only US$485 million against its $6.3 billion exports in 2012-13 fiscal year (FY).