Mohammed Badrul Ahsan :
Bangladesh Chemical Industries Corporation (BCIC) is mulling up a plan to run its underperforming factories in joint venture (JV) or public private partnership (PPP), sources said.
The corporation, to this effect is contracting some local and international firms and investors for the JV as a last resort to make its loss-making enterprises efficient, the sources added.
They said both the operational efficiency and financial health of some of the entities were too poor to run and could be shut down any time, leaving jobless the hundreds of employees in the chemical sub-sector.
The state-run corporation, according to the source, is hopeful to manage efficient and capable private enterprises.
Taking into consideration the experience of KAFCO (Karnaphuli Fertiliser Company Ltd), being operated under joint venture and showing good performance, the corporation thought that the operational and financial status of the enterprises could be improved through privately-operated management.
“BCIC has become a burden for the government and the burden is gradually increasing. So, we have decided to run the factories under partnership agreement,” BCIC Chairman Mohammad Iqbal said.
“It is possible to make the factories profitable through partnership. So we are looking for joint venture or PPP,” he added.
Although the operational costs of the factories reduced in the recent months because of some cost-cutting measures, the production costs of the units were still high, he said.
The loss-making units have become a serious burden for the other leading enterprises, which have to spend a significant amount of money from their earnings to run the weak ones.
Of the 12 BCIC enterprises now in operation, only three – Jamuna Fertiliser Company Ltd (JFCL), Ashugonj Fertiliser & Chemical Company Ltd (AFCCL) and Triple Super Phosphate Complex Ltd (TSPCL) – registered a cumulative profit worth Tk 3.91 billion in the financial year (FY) 2015-16.
Almost the entire profit was, however, eaten up by the aggregate loss of Tk 3.26 billion incurred in the same FY by the other enterprises – Chittagong Urea Fertiliser Limited (CUFL), Urea Fertiliser Factory Limited (UFFL), Natural Gas Fertiliser Factory (NGFF), Polash Urea Fertiliser Factory (PUFF), Karnaphuli Paper Mills (KPM), Bangladesh Insulator and Sanitaryware Factory (BISF), Chhatak Cement Company Ltd (CCCL), Khulna Hard Board Mills (KHBM) and Usmania Glass Sheet Factory (UGSF).
A senior BCIC official, seeking anonymity, said the profit margin of the corporation declined remarkably as the losses were ballooning gradually.
According to official data, he said, the corporation managed to register a pre-tax profit of Tk 654 million in the FY’16, which was little more than half of Tk 1.03 billion in net profit (post-tax) in the previous fiscal year.
“The main problem is to manage the employees who think it is a government property and the state will pay the salaries and other benefits. So, there is nothing to be worried. This mentality needs to be changed,” he said.
According to him, when the BCIC moves to take action against any employee for negligence or other form of wrongdoings, the corporation taste bitter experience because of protests by the employees’ associations.
The BCIC official also informed that they have already had talks with a company to run the Dhaka Leather Company (DLC) under a joint venture initiative. The DLC is yet to go for production, but the employees and officials receive salaries.
Chemical experts have appreciated the BCIC plan and said that it will definitely protect a huge amount of money being drained out annually.
Dr. Ijaz Hossain, Professor of Chemical Engineering Department of Bangladesh University of Engineering & Technology (BUET), said the loss-making factories remained outdated due to lack of maintenance and replacement works.
He said the private operator will certainly reinvest in the units or install latest technology to raise its productivity and enforce strict monitoring from production to supply chain to get expected level of return.
“That is what the KAFCO is doing. We need to change our mentality and ensure proper use of the resources for getting maximum return,” he added.
