State-owned jute mills announced closure

Senior Reporter: Bangabandhu Sheikh Mujibur Rahman established the Bangladesh Jute Mills Corporation (BJMC) in 1972, the year after independence, in the dream of a golden fiber-rich economy. At the time of its establishment, there were more than 60 jute mills under BJMC. But due to continuous losses, the number of matches has come down to 25. The government also announced the closure of the latest jute mills on Thursday.

According to the government, BJMC has been at a loss for 44 out of 47 years of its establishment. At present, the company’s accumulated losses have exceeded Rs 10,000 crore. However, many jute mills in the private sector are able to make a profit. Analysts have questioned the decision to close state-owned jute mills at a time when the demand for jute in the world market is increasing in the wake of Kavid-19.

The government has said that the reason for the closure was to consider how to make the jute industry of Bangladesh competitive again and how to strengthen it.

The Ministry of Textiles and Jute recently sent a summary of the action plan to the Prime Minister’s Office on the process by which jute mills can be relieved. By signing that summary, the Prime Minister has given his opinion about stopping the activities. After receiving a positive response from the government, the Ministry of Textiles and Jute started preparing for it. After the discussion, it was announced that all the dues would be settled. Along with that promise, it was informed that the closure may be declared on July 1.

On Thursday morning, the Prime Minister held a meeting with the concerned officials at Ganobhaban. There the final decision was made to close. Later in the afternoon, a press briefing at the Prime Minister’s Office, Chief Secretary to the Prime Minister. Ahmed Kaikaus officially stopped production of state-owned jute mills. At the time, among others, the Secretary to the Prime Minister’s Office. Tofazzal Hossain Mia was present.

Chief Secretary. Ahmed Kaikaus said the decision was taken to reimburse the workers for the renovation and modernization of public sector jute mills. At present 95% of the jute and jute products produced in the country are produced in private jute mills. The public sector has shrunk so much that it has not been able to compete. The closure of the jute mills has now been announced to consider how to bring them back into the competition and strengthen them.

The Chief Secretary further said that if these jute mills are closed, the amount of damage will be more than the amount of damage if it is running. Therefore, to ensure the livelihood of the workers involved in these jute mills, the government has decided to pay them in full according to the 2015 national wage structure. The Prime Minister also gave instructions on how to reopen the closed jute mills so that they can compete with the current and international markets. The Prime Minister also directed the concerned to prepare a course of action in this regard and take it to him very soon.

Highlighting the past of state-owned jute mills. Ahmed Kaikaus said state-owned jute mills have seen only four years of profit in the last 47 years and have continued to make losses for 44 years. In case of loss, the employees had to depend on the government money for their salaries and allowances and the workers were facing this problem every month.

The Prime Minister directed the concerned to prepare a list of jute mill workers within the next three days to pay their dues. According to the latest wage structure in 2015, the government will have to spend Tk 5,000 crore to pay the dues of 25,000 workers of jute mills along with their retirement benefits. Prime Minister Sheikh Hasina has a special focus on the jute sector and her vision is to save the jute mill workers.

Regarding the manner of payment of dues to the workers, the Chief Secretary to the Prime Minister said that in case of payment of dues, the workers who are entitled to not more than two lakh rupees will be paid the entire amount in one lump sum in cash. 50 per cent of the dues will be paid in one-time cash and the remaining 50 per cent will be paid in the form of profit-based savings certificates every three months to ensure the future livelihood of the workers.

Earlier on June 25, after a preparatory meeting on the closure of jute mills, Textiles and Jute Minister Golam Dastagir Gazi Bir Pratik said, “We will explain the dues of the workers through Golden Handshake.” Earlier the mills were sold. We will keep the jute mill without selling it. I will give management so that people are not laid off. These workers will get jobs here, because they will not be allowed to run the mill without skilled workers.

After understanding the mills, there will be a tender, the one who gives more will be given but he must be a jute mill expert. He will not work unless he is a jute mill expert. If you try to take land, we will not give it. The Prime Minister said, Bangabandhu has started a movement for jute, so we have to keep jute. There will be jute mills through public-private partnership (PPP), it is decided.

Even though the government spoke of PPP, the state-owned jute mills were nationalized even before that. The experience then was not good. Most of the mills handed over to the private sector violate the terms of the agreement with the government. In this context, the government has taken back four jute mills given to the private sector. According to the Ministry of Textiles and Jute, the authorities of the mills given to the private sector have kept the mills closed for a long time, depriving thousands of workers from their employment. This has hampered the purpose of handing over the mill and violated the handover agreement.

Ministry sources said that despite repeated letters from the government, BJMC and other financial institutions to pay their dues as per the bilateral and tripartite agreements with the government, the private sector mills have not paid their dues. In addition, it has violated the terms of the contract by not paying liabilities and not increasing production by keeping the mill closed for a long time.

Despite repeated letters to pay the remaining amount of share capital, the buyers of the mill did not pay the amount. The government and government financial institutions have broken the agreement by selling all the machinery and installations of the mill without the knowledge of the government even though they have promised not to sell / transfer any movable and immovable property of the mill without the prior approval of the government before paying all the dues.

In the overall context, several initiatives were taken during the tenure of the present government with state-owned jute mills. A few years ago, a memorandum of understanding was signed between China Textile Industrial Corporation for Foreign Economic and Technical Corporation (CTEXIC) to take technical assistance.

According to the CTEXIC survey, there will be no benefit in repairing the old machines of the jute mills. They suggest replacing all the machines. Now, considering the overall context, the government can implement a plan to operate a state-owned jute mill on the basis of public-private partnership.

Welcoming the announcement of the closure of state-owned jute mills, Bangladesh Jute Spinners Association (BJSA) President. Zahid Mia said, “We applaud the decision of the government.” Hopefully, after the modernization of the mills as per the government’s plan, it will be possible to utilize the potential of the jute sector. However, the global demand for jute is declining. In this context, a well-thought-out plan is needed to manage the mill profitably. Under the PPP, it will be necessary to manage the mills with appropriate decisions in this regard.

Analysts say the world is now pushing for greening. Twenty-six countries of the European Union (EU) have decided to stop using polythene. This will create a huge demand for jute bags in those countries. According to the International Jute Study Group, an international jute organization, there is a demand of five trillion pieces of shopping bags in the world at present. According to the International Natural Fiber Association, after 2020, the US market alone will create a 1.5 billion dollar shopping bag market.

There are also opportunities to produce jute shopping bags, fancy and furniture raw materials. The demand for jute bags in the world market alone is 500 billion pieces. This will create a huge demand for jute products. This will create a huge annual demand for jute bags in the countries. Moreover, there is an opportunity to produce jute shopping bags, fancy and furniture raw materials. As a result, jute can be one of the export sectors. Our competitors already have long-term plans to capture that market. But due to lack of planning and investment, it will be difficult to catch.

President of Bangladesh Jute Diversified Products Manufacturers and Exporters Association and Managing Director of Creation Private Limited. Rashedul Karim Munna said in this regard, the potential of jute is endless due to the production of versatile products. If it can capture even 10 percent of the potential international market, it is possible to earn Rs 50,000 crore a year with this jute alone. Making billions of dollars a year from the jute industry next year is not a dream at all.

For this we have to set up modern technology based factories. In addition, it is necessary to increase the research for the entry of products in the international market and to create skilled manpower in the country to produce products as per the demand of the international market. Large investments are required to increase mechanical facilities as well. For this, just as the private sector needs cooperation, so should the state-owned factories and institutions.

One of the major reasons for the inability of state-owned jute mills to make a profit is the lack of new technology and diversification of products. Besides, there was mismanagement and corruption.