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The BJMC – the controller, supervisor, and coordinator of the state-owned jute mills – floated a global tender this February to lease out the 13 mills situated in Dhaka, Chattogram, and Khulna zones
Infographic: TBS
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Infographic: TBS
Eighteen native and international firms have submitted proposals for taking lease of 13 state-owned jute mills in Bangladesh. The entire 4 worldwide corporations which have utilized are eager to speculate solely within the mills situated within the Khulna area.
In keeping with the Bangladesh Jute Mills Company (BJMC), India-based Pacific Jute Ltd and Mohan Jute Ltd have submitted expressions of curiosity (EOI) to lease all the seven jute mills in Khulna.
Apart from, Asiatic Buying and selling LLC, Dubai, and Golden Fibre Australia Pty Ltd-JV have made funding proposals for 3 and two mills, respectively.
The 14 nationwide buyers which have submitted proposals even have expressed curiosity in taking the jute mills in Khulna on lease.
The BJMC – the controller, supervisor, and coordinator of the state-owned jute mills – floated a global tender this February to lease out the 13 mills situated in Dhaka, Chattogram, and Khulna zones.
A closing choice on the leasing of the mills could be made solely after receiving the federal government’s nod following scrutiny by the BJMC’s analysis committee, officers involved mentioned.
Data offered by the BJMC reveals that a few of the 14 native firms which have utilized for lease are already doing enterprise within the jute sector, whereas some others are newcomers.
In keeping with the tender, solely non-public corporations serious about producing jute and jute merchandise can take lease on the jute mills for a interval of 5 to twenty years.
BJMC officers mentioned no software was acquired for 3 jute mills of the Khulna zone within the first section of the privatisation tender, however this time functions have been acquired for all of the mills.
Requested what is perhaps the explanations for the international buyers’ curiosity within the mills in Khulna, they pointed to the comfort of the communication system within the area.
Khulna has a seaport and is nicely linked by river and street, they defined.
BJMC Chief Working Officer Mohammad Jamal Hossain advised The Enterprise Commonplace that personal sector entrepreneurs are very eager to take authorities mills on lease because the mills have a variety of land. Then again, the federal government is leasing the mills out to the non-public sector to cut back losses, he added.
He mentioned, “After receiving expressions of curiosity from non-public sector entrepreneurs, the BJMC has requested them to submit closing proposals by 25 Could. The difficulty of lease will probably be finalised after analysis as soon as the proposals are acquired.”
“The method is predicted to be accomplished in a couple of months in order that the mills can return to manufacturing shortly. It’s because the reopening of the mills entails the difficulty of employment.”
On 7 February this yr, the BJMC once more floated a global tender for the lease of the13 state-owned jute mills.
Earlier in April final yr, the jute authorities had floated one other worldwide tender to lease out 17 out of 26 mills to the non-public sector.
On the time, a number of massive native enterprise teams had proven keenness to spend money on the jute sector, however the BJMC didn’t lease out the mills to them as their value quotations had been low.
Solely 4 mills had been finalised for lease, two of which – one in Palash upazila of Narsingdi and one other in Chattogram – have already resumed manufacturing.
In the meantime, the leasing of two different jute mills – Crescent Jute Mills Ltd in Khulna and Hafiz Jute Mills Ltd in Chattogram – is underneath course of.
It might be recalled that the federal government went for a closure of state-owned jute mills in July 2020. A golden handshake was given to 25,000 employees of the mills. The federal government has paid about 97% of the employees’ dues, however has not been capable of pay the remaining dues resulting from lawsuits and different issues.
How will leasing profit govt?
The jute mills are struggling resulting from low manufacturing brought on by way of outdated equipment, rampant corruption, and recruitment of extreme manpower. Authorities jute mills are counting enormous losses because the expenditure is greater than earnings, although non-public sector entrepreneurs are making good earnings on this sector, because of correct administration.
Towards such a backdrop, the federal government needs to be freed from losses by leaving the jute mills within the palms of the non-public sector.
In keeping with the Financial Survey-2021, the federal government incurred a lack of Tk380 crore within the mills operated underneath BJMC within the fiscal yr 2020-21, down from Tk773 crore within the earlier yr.
Now the federal government will lease out the jute mills on a lease foundation. Personal sector entrepreneurs by utilizing the land of the leased mills will produce jute and jute merchandise.
In keeping with BJMC officers, if all of the mills are leased, the federal government will earn an enormous quantity of income yearly, as a result of the jute mills will probably be rented by the entrepreneurs in change for using the mills’ land and machineries. The federal government will get a number of crores of taka from that lease.
There will even be employment for the employees who earlier labored for presidency mills.
Though the lease settlement doesn’t assure that the outdated employees of the mills will probably be employed even after the lease, non-public entrepreneurs will want skilled employees to run the mills. Consequently, though the employment of all of the outdated employees of the mills isn’t assured, officers of the BJMC suppose that the majority of them will get job alternatives.
Falling pattern in exports
Regardless of growing demand for jute and jute merchandise on the earth market, exports from Bangladesh have been declining.
Jute and jute merchandise produced in Bangladesh are exported to totally different nations of the world.
Though the non-public sector was extra concerned within the export commerce within the jute business, the federal government jute mills additionally used to have vital contributions to the export earnings within the sector.
Within the first 9 months of the present monetary yr, the export of jute and jute merchandise decreased by about 7%, and exports fell in need of the goal by 17%.
Throughout July-March of FY22, the export of jute and jute merchandise was price $887 million, which had been $953.5 million within the earlier yr.
Exports of uncooked jute and man-made filaments and staple fibres elevated in the course of the interval, whereas exports of jute yarn and cord, jute sacks and luggage, and different merchandise posted a unfavorable progress.
Govt jute mills and the BJMC
Previous to liberation in 1971, Bangladesh had 75 jute mills.
On 26 March 1972, the BJMC was fashioned via a presidential order to oversee, regulate and handle 78 mills, together with the non-public and deserted ones, and people owned by the previous East Pakistan Industrial Improvement Company.
The variety of jute mills elevated to 82 in 1981. After 1982, 35 mills had been privatised, whereas the federal government withdrew capital from eight and one mill merged with Mymensingh Jute Mills.
Eleven mills had been shut down, offered or merged with different mills in numerous durations after 1993, together with Adamjee Jute Mills, which was shut down in 2002.
The BJMC later resumed manufacturing in two mills in 2011 and three in 2013, elevating the variety of operational mills to 32 throughout this era.
Amongst them, circumstances relating to 5 mills are underway in courts, whereas a challenge for producing Viscose [a semi-synthetic material used in clothes, upholstery and bedding] is being applied in one other.
Twenty-five jute mills operated underneath the BJMC earlier than the federal government shut down all state-run jute mills on 1 July final yr resulting from heavy losses and extreme manufacturing prices.
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