• Sunday, Aug 09, 2020
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Stopping production at BJMC jute mills-II: Incurring losses since inception

  • Published at 09:50 pm July 11th, 2020
File-photo-of-a-jute-mill-Syed-Zakir-Hossain
Syed Zakir Hosain/Dhaka Tribune

Corporation incurs losses in 44 out of 48 years, has 9 chairmen in 10 years

The BJMC has counted a staggering amount of around Tk11,000 crore in losses since its birth in 1972 owing to  corruption, incompetence, lack of accountability and inept leadership.

While private sector jute mills in the country have marched forward with their innovative and diversified ideas to grab foreign jute and jute goods markets, public sector jute mills have kept losing, despite their attractive locations and infrastructure.

Being a corporation, the BJMC is supposed to run with its profits, pay taxes against profits and deposit the disposable amount to the exchequer.

During a long journey of 48 years, the jute mills under the Bangladesh Jute Mills Corporation (BJMC) have managed to log profits only in four years, which has been a little over Tk180 crore altogether.

The BJMC made a profit of Tk106.21 crore in 1979-1980 fiscal year, Tk33.15 crore in 1980-1981 fiscal year, Tk24.73 crore in 1982-1983 fiscal year and Tk17.54 crore in 2010-11 fiscal year.

Officials at the BJMC say the loss in the just concluded fiscal year will be around Tk500 crore.

The highest amount of loss of Tk729.23 crore the BJMC incurred was in 2014-2015, followed by Tk573.58 crore in 2019-2020 fiscal year and Tk513.09 crore in 2013-2014 fiscal year, according to data from the BJMC.

Why are the public sector jute mills incurring losses, despite their ready infrastructure and good locations?

“Actually, old machines that produce traditional goods and designs cannot compete with the private sector in local or foreign markets,” Md Abdur Rouf, Chairman, BJMC, told Dhaka Tribune.

Besides, high salaries and lack of professionalism and innovation weighed down on the corporation, he added.

Rouf said the government was in the right direction in washing its hands of the loss making jute mills and resuming the factories on the public private partnership (PPP) model.

The staggering losses of the BJMC through its 25 running jute mills have been taking place for decades, despite their strong workforce of above 55,000. Of the total, 25,000 workers are permanent, while the remaining around 30,000 are casual workers.

The total monthly salary the corporation counted was Tk58 crore, said Rouf.

The salaries of public sector jute mills’ workers were more than double those in the private sector jute mills.

However, despite good pay and perks, the market share and exports from the BJMC jute mills had kept declining over the period.

In the 2017-2018 fiscal year, the jute mills under the BJMC   produced roughly 2.18 lakh tons, which declined to only 69,000 tons in the following year.

On the other hand,  jute goods produced in the private sector jute mills in 2018-2019 amounted to 8.15 lakh tons.

On the export front, BJMC exported jute and jute goods worth Tk264 crore in 2018-2019 fiscal year, in contrast to Tk772 crore worth of goods exported by private sector jute mills.

Khondoker Golam Moazzem, Research Director, Centre for Policy Dialogue, said the BJMC had never tried to operate under market discipline. It had deficits in pricing, procurement and marketing, he added.

“The BJMC distorted the jute and jute goods market. Irregularities, corruption and mismanagement crippled the organization at the cost of taxpayers’ money,” Moazzem told Dhaka Tribune.

The BJMC had never been run by experienced manpower, but rather by bureaucrats who often got posted to the organisation for a few months before leaving it for better postings.

He believes prospects for the jute sector lie in the hands of the private sector.

According to research by the CPD, nine chairmen were at the helm of the BJMC from 2009 to 2019, each spanning 13.22 months on average.

As many as 12 directors (marketing) were posted at the BJMC during the time, while 6 directors (production), 9 directors (planning), 10 directors (research) and 7 directors (finance) were posted at the BJMC during the ten years from 2009 to 2019.

“Actually, bureaucrats posted to the BJMC consider the organisation a dumping ground, and they quit at the earliest,” Moazzem said.

As a result, the BJMC has suffered for most of the time from  a lack of efficient human resources that could have reshaped its activities and turned it into a profitable venture, he added.

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