How does a sugar mill turn a profit in Bangladesh? It usually does not, unless it produces liquor. That is how the Darsana Sugar Mill in Chuadanga has been the only one among the 15 government sugar mills to make a profit.
The mill stands on 2,500 acres of land which includes the sugarcane farmland, the processing factory, labour offices, schools, residential areas, a mosque and medical facilities.
But within the mill compound, 10 acres are enclosed by an ominously high 20-foot wall. Only prisons have walls as high or higher.
The foreboding structure houses Bangladesh’s only state-owned distillery - Carew & Co (Bangladesh) Ltd. The high walls prevent the curious passer-by from looking in and keep the operations secured.
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Each year, the Darsana Sugar Mill produces 161.3 million tons of molasses which are turned into 1.26 million litres of liquor Abu Siddique
The Darsana Sugar Mill is able to process 1,150 tonnes of sugarcane on a daily basis. It costs the mill Tk186 to produce 1kg of sugar which later sells in the market for Tk60 – a massive loss. But it has been the distillery unit in the factory has been the saving grace, turning a profit year after year, even after filing taxes.
The restricted entry and high security serve to emphasise the discreet nature of the mill.
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Entry into the distillery unit has to be authorised and strictly moderated. The first steps into the premises are greeted by a pungent miasma of spirit. The walkways are interrupted by verdant gardens, but the greenery does little to assuage the nostrils assailed by the smell of liquor.
The spirit is made from molasses, which are a by-product of sugar processing. Large industrial vats are filled to the brim as workers in safety outfits oversee each individual step in the production of the spirit.
The distillery produces around five million litres of spirit ever year.
The molasses are processed into four different types of spirits: denatured spirit, rectified spirit, country liquor spirit and extra neutral alcohol.
The rectified spirit is used to distil whiskey. The denatured spirit acts as solvent and fuel. The country liquor spirit is, as its name suggests, a local brew. The extra neutral alcohol is used in the production of cosmetics, perfumes and white alcohol.
The rectified and country liquor spirits are fermented and added their respective flavours. The fermentation process takes 72 hours. After the fermentation is complete, the liquor is bottled, packaged and distributed over yet another 72 hours.
Each bottle is individually washed and cleaned by the employees. They stand in neat rows of glassware ready to be filled with alcohol.
The bottles are organised in cases of nine litres. Workers haul cases to the warehouse or directly to the waiting trucks to distribute them nationwide.
Darsana Sugar Mill has churned out a high volume of liquor ever since it was established in the late 19th
century. It currently produces 1,40,000 cases of foreign liquor annually.
The salvation of state-owned sugar mills
Carew & Co has been filing profits year after year solely due to its distillery unit. The other 14 state-owned sugar mills are recording losses annually despite government subsidies. Even the sugar processing unit at Carew & Co has been running at a loss.
In the 2016-2017 fiscal year, the sugar unit incurred a loss of Tk43cr while the distillery profited Tk58cr.
Arshad Ali, managing director of Carew & Co, told the Dhaka Tribune: “The distillery is the key to the profit of our mill. Its profits alone more than make up for the sugar unit losses.”
In the 2016-2017 fiscal year, the sugar unit operated for only 76 days while the distillery ran on 310 days.
“The profit/loss depends on how regular the mill operations are. The more off-days we have, the greater our losses because we have to pay for the upkeep. The supply of molasses is enough to support the regular operations of the distillery, but there is not enough sugar cane for the sugar unit,” Arshad lamented.
The government has realised that distilleries are the only way to save the struggling sugar mills. Two more sugar mills are being considered for distilleries. The Thakurgaon Sugar Mill and the North Bengal Sugar Mill are being considered by the Bangladesh Sugar and Food Industries Corporation (BSFIC) for the operation.
BSFIC Chairman AKM Delwar Hussain told the Dhaka Tribune: “We are working to modernise the two sugar mills with modern distillery facilities. The distilleries will off-set the overall losses incurred by the sugar units.
“If the Thakurgaon and North Bengal mills turn things around, maybe we will try to introduce more distilleries in the other mills.”
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Carew & Co, emboldened by the sheer success of their operations and the unparalleled reception to their line of foreign liquor, are planning to produce beer.
The company has proposed producing beer from crops like wheat, maize and rice. The proposal is currently under consideration by the Ministry of Industries.
A senior BSFIC official, refusing to be named, told the Dhaka Tribune: “If Carew gets the approval to produce beer, then the state-owned sugar industry will be revolutionised. There is a huge demand for beer in Bangladesh, and the government will be able to tap that.”
Fell on importing
The new distilleries and the beer line are not the only initiatives by the government to maximise the liquor production. As the production of sugar has fallen in the country due to a dearth of sugarcane, the government has resorted to importing sugar to ensure the distilleries run on even more days every year.
Private sugar mills owned by City Group and others have been importing sugar from Latin America for a long time to meet the country’s high sugar demand.
The government’s decision to expand the distillery operations of its sugar mills appears to be a sign of the future. Even though alcohol itself is illegal, it is providing the government with a great opportunity to maximise revenue and offset losses in its sugar manufacturing industry.