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Tk 8.90b investment plan to revamp Chhatak Cement Co

The state-owned entity incurs Tk 3.63 billion losses in last five fiscal years

FE Report | January 09, 2019 00:00:00

Chhatak Cement Company Limited incurred an accumulated loss of over Tk 3.63 billion in last five fiscal years from 2013-14 to 2017-18 mainly due to gradual erosion in production capacity with old, outdated machinery, officials said.

They said ropeway, crusher, kiln, overhead crane and some other equipment and machinery are 60-80 years old, reducing substantially the production capacity on a regular basis and gradually intensifying the extent of its losses.

Presently, the annual production capacity of the 80-year-old state-owned factory, a concern of Bangladesh Chemical Industries Corporation (BCIC), declined to only 70,000 metric tonnes.

The factory was established in 1937 with an initial annual production capacity of 60,000 tonnes of ordinary Portland cement.

However, the capacity reached to 190,000 tonnes following three times of BMRE (Balancing, Modernisation, Rehabilitation and Expansion) in 1985, 1987 and 2000.

After running for a long period of time after the BMREs, the rate of production at the factory deteriorated badly due to the aging of the machinery and equipment, according to a source at BCIC.

He said there is a recommendation for conducting another BMRE with installation of a new kiln of dry process for additional clinker production to save the energy and reduce the production cost, according to a BCIC source. For sustaining of the production

According to a senior official at the cement company, a work plan has been taken to convert the factory into a dry process from wet process one to increase the production capacity.

In this regard, he said that necessary measures have already been taken to prepare the Development Project Proposal (DPP) with a target to implement the project by 2021.

The production capacity of the factory would then increase and the company is expected to turn into a profit-making one, said the official, adding that the annual profit would stand at around Tk 1.0 billion if the project is implemented.

The project is planned be implemented with government finance at an estimated investment of Tk 8.90 billion - Tk 5.34 billion as loan with a payback period of seven years and the rest as equity.

Earlier, the company had a plan to offload shares, but failed due to continuous losses, said a source.

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