The government has asked nine state-owned sugar mills to start crushing of sugarcane for producing sugar during the current season.
The ministry of industries (MoI) has already asked the authority of Bangladesh Sugar and Food Industries Corporation (BSFIC) to give green signal to nine out of 15 state-run sugar mills to start crushing of sugarcane for producing sugar this year.
"We have directed the authorities of nine sugar mills to start crushing of sugarcane for sugar production this season," a high official of the MoI told the FE on Monday.
He said the decision was taken at a virtual inter-ministerial meeting on Sunday last with Industries Minister Nurul Majid Mahmud Humayun in the chair.
The MoI has also taken decision to purchase sugarcane, cultivated in the catchment areas of six other sugar mills (which are not allowed to crush sugarcane this season), directly from the farmers.
The nine mills are: Carew and Company (BD) Ltd, Mobarakganj Sugar Mills Ltd, Faridpur Sugar Mills, Rajshahi Sugar Mills, North Bengal Sugar Mills Ltd, Natore Sugar Mills Ltd, Thakurgaon Sugar Mills Ltd, Joypurhat Sugar Mills Ltd and Jill Bangla Sugar Mills Ltd.
The MoI official further said the meeting also decided not to axe jobs of the officials and employees of Kushtia Sugar Mills, Pabna Sugar Mills, Panchagarh Sugar Mills, Shyampur Sugar Mills Ltd, Rangpur Sugar Mills and Setabganj Sugar Mills.
These sugar mills will not crush sugarcane this year, but sugarcane, grown in the catchment areas of the six sugar mills, will be purchased by the government directly from the farmers, he added.
A high official of BSFIC said production at those sugar mills will remain shut until further notice.
He mentioned that the mills had long been incurring losses for several reasons, including the declining production capacity of sugar mills.
He, however, said they will soon fix the target of sugar production by nine sugar mills.
Managing directors of some of those sugar mills said they think losses worth of millions of taka could be recouped by maintaining the current salary structure, even if production is halted.
Fifteen state-owned sugar mills have been counting losses worth billions of taka every year due to various reasons, including excess manpower, the deteriorating condition of machinery, shortage of raw materials, mounting interest on long-term bank loans.
The sugar mills incurred financial losses of Tk 9.7 billion in the fiscal year 2019-20.The accumulated losses in the last five years stood at Tk 39.76 billion, according to BSFIC.
Sugar produced in private refineries is available in the market at Tk 60-Tk 80 per kg while sugar produced at the state-run mills is priced between Tk 250 and Tk 300 per kg, according to sector insiders.
Managing Director of Pabna Sugar Mills Saif Uddin Ahmed told the FE that the government had decided to run nine sugar mills this time and keep the remaining six closed which has never happened in the history of sugar mills.
He, however, said the BSFIC has come up with this idea to reduce losses. "Costs will go down a bit as production costs are high."
Pabna Sugar Mills has employed a total of 687 people. Apart from this, hundreds more work during the threshing/crushing season.
Around Tk 10 million to Tk 10.6 million is needed to cover their salaries.
An official of Setabganj Sugar Mills told the FE that the they had incurred financial losses of around Tk 500 million after the threshing season in the fiscal year (FY) 2019-20.
He said they were directed to stop production this year/season. Sugarcane belonging to this mill will go to Thakurgaon Sugar Mills, he added.
The meeting on Sunday also decided to modernise the state-run sugar mills aiming to diversify production that will ultimately help the mills become profitable.
State Minister for Industries Kamal Ahmed Majumder, State Minister for Labour and Employment Begum Monnujan Sufian and high officials of the BSFIC and different sugar mills also took part in the meeting.
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