Production in six state-run sugar mills has been suspended for the 2020-21 crushing season for their modernisation.
Earlier, the government with financial support from Japan Exim Bank under took a project to modernise the six mills under the Bangladesh Sugar and Food Industries Corporation.
The state-run mills which faces a halt to sugarcane processing are Shyampur Sugar Mills, Pabna Sugar Mills, Kushtia Sugar Mills, Setabganj Sugar Mills, Panchagarh Sugar Mills and Rangpur Sugar Mills.
Of these mills, Shyampur Sugar Mills is listed with the country's stock exchanges. In a disclosure, the company on Wednesday said that their board of directors took the decision following an instruction from the Ministry of Industry.
BSFIC Chairman Sanat Kumar Saha told the FE the sugar production had been suspended in six mills to implement the initiative of modernisation.
"The state-run mills are incurring losses to the tune of Tk 10 million per year due to old equipment. That's why the government has taken an initiative to modernise the six mills as part of a process of reducing loss," Mr. Saha said.
He also said the modernisation would be conducted in association with the Japan Exim Bank.
"Japan Exim Bank will invest around Tk 50 billion," said Mr. Saha. Two other foreign investors showed interest in modernising the mills, he added.
He said the foreign investors would produce alcohol along side processing sugar. "They will import alcohol for foreign consumers. By-products are the main target of modernising as sugar is processed only for three months."
Asked whether the government's supply of sugar will be hampered in the year 2020-21 due to suspension of sugarcane processing, the chairman of the BSFIC said the government's share in local supply was only 4.0 per cent.
"The greater amount of the local demand is met through private entrepreneurs. So, the supply of sugar will not be hampered due to suspension of processing in six state-run sugar mills," said Mr. Saha.
According to information of BSFIC, 68 thousand and 952 tonnes of sugar were processed through 15 state-run mills for the fiscal year 2018-19. The production declined marginally for the fiscal year 2019-20.
According to the annual report of the BSFIC for 2018-19, the accumulated losses incurred by the state-run sugar mills stood above Tk 68.33 billion.
The chairman of the BSFIC said the modernisation of the six state-run mills would be conducted on a trial basis.
"Modernisation in the remaining nine state-run sugar mills will be conducted gradually to make those companies profitable," said the chairman. He said around 0.2 million tonnes of sugar are likely to be processed through six state-run mills on completion of modernisation.
A senior official of the BSFIC said seeking anonymity that the production of sugar could be more viable, if the payments of farmers were met timely.
"The red sugar which is produced through state-run sugar mills is best compared to that of private companies. So, the government should take the issues of health, local employment in producing sugar through modernizsed mills into consideration," the official said.
© 2024 - All Rights with The Financial Express
