BSFIC highest loss incurring govt organisation
Zarif Mahmud: The state-owned sugar mills have been at a loss for a long time. Bangladesh Sugar and Food Industries Corporation (BSFIC) has taken various plans including replacement, repair, production of diversified products and establishment of refineries to overcome the losses. But due to lack of financial capacity, everything has been ruined. This once profitable company is not getting financial support due to repeated losses. No government or non-government financial institution is interested in helping them. Now they are looking at foreign investment. That, too, is limited to several years of de facto promise. Apart from the overall development activities, the current situation is such that BSFIC cannot even afford to import and sell some sugar during the crisis.
A few months ago, a parliamentary committee on the industry ministry recommended that the company import sugar to meet the sugar crisis during Ramadan. But he could not do that because he did not have money.
According to the data, BSFIC has been running at a loss for decades. The total loss in the last five years is about Taka four thousand 351 crore. In the financial year 2020-21, the loss has been Tk 972 crore. Its previous year (2019-20 fiscal year) loss was Tk 960 crore. In all, the company is responsible for more than Tk 8,000 crore bank loans.
According to the Ministry of Finance, the loss of state-owned corporations in the last fiscal year 2020-21 was Tk 1,995 crore. Bangladesh Sugar and Food Industries Corporation (BSFIC) has the highest loss. The second phase is Bangladesh Chemical Industry Corporation (BCIC) and the third phase is Bangladesh Jute Mills Corporation (BJMC).
BSFIC chairman Arifur Rahman Apu said that efforts are being made to restore the organization. Several activities are underway. It is hoped that this situation will end.
After independence Bangladesh Sugar Mills Corporation was formed. Later, Bangladesh Food and Allied Industries Corporation merged with this organization to form BSFIC. At present the corporation has 15 sugar mills, one engineering, one distillery and one organic fertilizer factory. However, six of the 15 sugar mills have been shut down since 2020.
Among these companies, Keru & Company is making a profit by producing organic fertilizers, alcohol, spirits, vinegar and hand sanitizers from sugarcane as well as sugarcane in Chuadanga. All other institutions are incurring losses. Although Keru has made a loss by selling sugar, it has been making a profit of Tk 10 crore to Tk 15 crore a year due to by-products for several years.
The biggest source of income of this company is sugar production. But the annual production capacity of the sugar mills is two lakh 10 thousand 440 tons but in the last season (FY 2021-22) the production was only 24 thousand tons. The country’s market demand for sugar is more than 2 million tons per year. That is being met through imports. It is going abroad more than seven thousand crore tala a year.
Meanwhile, financially, the corporation is not able to play any role in sugar production as well as sugarcane cultivation. For several seasons, the registered sugarcane farmers could not get loans for fertilizers, pesticides and irrigation. As a result, sugarcane production is declining rapidly. The mills are facing the crisis of raw material production of more sugar even if they want it later.
Most of the officials of the corporation think that it is not possible to return the company to a profitable position with the sugar mill at present. Because out of 15 sugar mills in the country, three were established in the thirties, three in the fifties, seven in the sixties and two after the independence of Bangladesh. Most of the parts of the sugar mill are very old and dilapidated. The production cost of these sugar mills is several times higher than the selling price.
There are other reasons for the loss. Last year, the company itself identified eight reasons behind its continuous losses. According to the report, lower selling prices than the cost of producing sugar, lower global sugar prices, higher debt and interest rates, lack of inventions of pest and disease resistant sugarcane varieties, long-standing and dilapidated mills,marketing of refined sugar produced at low prices from privately imported raw sugar has resulted in unsold sugar of BSFIC, inconsistency between sugarcane price and sugar price, increase in production cost and reduction in sugar collection rate.
To know what kind of steps the Ministry of Industry is taking to overcome this situation, the Joint Secretary of the Ministry (BSFIC and BSEC) Md Al-Amin said. He said the government was taking steps to make it profitable again. That is somewhat time consuming.
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