Home Bangladesh State jute mills to be turn to textile mills
Bangladesh - July 18, 2023

State jute mills to be turn to textile mills

To lease out in pvt sector

Mahfuz Emran: Six years ago, the government shutdown 25 state-owned jute mills simultaneously due to losses. Since then, efforts are underway to lease them to the private sector. However, private entrepreneurs are less interested in setting up jute mills there, although they are interested in taking lease. Considering the situation, Bangladesh Jute Mill Corporation (BJMC) is giving opportunity to set up textile industry there by leasing these jute mills.
According to BJMC, from now on, private sector entrepreneurs can produce jute, jute products or textile products by taking jute mill lease. They can work in both forward and backward linkages in jute and textile. Although earlier the BJMC had allowed only jute or jute products to be produced in state-owned jute mills. In this case, the lease term has also been increased by 10 years to 30 years.
Out of the 25 closed mills, only 9 mills have been leased out in the last six years due to jute-milling conditions only. Even with four rounds of tenders, no interested entrepreneurs were found for jute mills.
In this regard, General Manager (Administration and Social Services) of the organization Nasimul Islam told Daily Industry that the entrepreneurs did not get a response despite repeated attempts to give jute mills to the private sector. Because of that now opportunity is being given to textile. Now let’s see, now it will be understood. Ten new mill leases have been tendered. Nasimul Islam said that those who have leased mills as jute mills can now convert them into textiles even if they want. Necessary changes are being made in terms and references
in this regard.
It is known that the closed jute mills have been leased but the process of re-opening them in the private sector has been slow so far. Private entrepreneurs have started production in only three jute mills after leasing the jute mills two years ago. New machinery is needed to start the old mills, but due to economic crisis and dollar crisis, it is not possible to bring them.
Even though the private jute mills were profiting, the jute mills of BJMC were making losses year after year. Unable to bear the burden of losses, the government started the process of sending 24,886 permanent workers to voluntary retirement (golden handshake) and closed the jute mills.
Then, early in the process of starting the leasing process, large companies of the country expressed their interest to lease the state-owned jute mills at the beginning of the formulation of international tenders. Besides, some entrepreneurs from India and UK were interested in getting lease of jute mills. But due to various conditions of the government and the duration of the medium-term lease, the interest of many organizations later declined.
The Secretary General of Bangladesh Jute Mill Association A Barik told Daily Industry that all the mills of BJMC are very old. The production capacity of these is a quarter of the new machine. Labor costs are several times higher. Apart from this, no development initiative has ever been taken. They (BJMC) have no news about the machine, they are busy with the lease.
He said, besides, bank loan can’t be taken with this factory, this can’t be done, that can’t be done – there are two dozen conditions. Those who will invest, how can they run other factories with such conditions. Again, they are being leased for such a short period of time. Why would an entrepreneur make such a huge investment for such a short period of time?
Barik also said that now there are plans to destroy the entire jute sector by converting jute into textiles. Textiles will bring cotton from abroad to make yarn. And the jute farmers of my country will stop jute production without getting the price. By reopening these mills, the dream of development of jute will end completely.

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