It is a very bad idea for the government to be considering reopening Adamjee Jute Mills.
As a nationalised enterprise, it incurred a loss of over Tk1,200cr in the 30 years before it was closed in 2002. Closure was necessary as the golden age of the old jute industry is behind us, with jute sacks being replaced by cheaper synthetic materials.
While interest in jute as an environmentally-friendly material is reviving, there is no justification for spending tax-payer funds on increasing production by state-owned jute mills. Bangladesh has many privately-owned jute mills which do not deserve to be undercut by loss-making state mills.
The 295 acres at Adamjee should be developed as an industrial park, as was originally envisaged when they were handed over to BEPZA in 2004. It makes no sense to turn back the clock now.
Moreover, the RMG sector, which has long replaced jute as the country’s leading industrial employer and export earner, desperately needs land to develop modern, safe, purpose-built factories, and help prevent another disaster like Rana Plaza.
Helping garment companies secure new sites to allow more manufacturers move out of unsafe multi-storey factory buildings in Dhaka, would support far more jobs and income than re-opening an old jute mill could ever generate.
Subsidies to all remaining state-owned jute mills should be cut off. If they cannot compete with the private sector on a level playing field, they should be shut down just as Adamjee was shut down.
The government should utilise the land of loss-making state jute mills to allow newer profitable sectors to grow. It must not throw good money after bad business.
