Chhatak Cement sinks in quicksand of mismanagement

Production has again been suspended at the state-owned Chhatak Cement Factory – the first and the oldest cement manufacturer in Bangladesh. 

Amid the production suspension, Jalalabad Gas Transmission and Distribution System Limited, Monday, snapped the gas connection to the production facility for Tk31 crore in utility dues.

Cement manufacturing at the factory on the banks of River Surma has been suspended since 9 February due to a shortage of limestone – a key cement-making material. 

Due to mechanical glitches, cement production at the factory was halted at least twice in the last year. On top of this, production shut for around two months owing to the pandemic-led countrywide shutdown. 

Photo: TBS.

Wishing anonymity, several mid-level officials of the factory said though the factory stopped production at different times due to various reasons, its gas connection had never been severed before. 

They said the cement company is facing a deep crisis due to the production shutdown as well as the cut off gas connection. The officials claimed mismanagement, poor decision-making and corruption are to blame for the worsening situation.

According to factory officials, limestone is one of the basic raw materials for cement-making. The factory meets the limestone demand through imports from India. Pandemic-led movement restrictions have affected the imports, forcing the cement-maker to come to a grinding halt.      

There are widespread allegations that a syndicate sells the imported limestone to the black-market, prompting limestone shortages from time to time. 

Meanwhile, Jalalabad gas sources said Chhatak Cement Factory was notified several times regarding the utility dues. However, the factory authorities did not pay any heed to the notifications.  

Photo: TBS.

When contacted, Engineer FM Bari, managing director of Chhatak Cement Company Limited, said the factory is trying to restore the gas connection by clearing the utility bill as soon as possible.     

"The limestone crisis will also be over in a couple of days. We are trying to resume production this week," he added.

However, he declined to comment on allegations of corruption and mismanagement.

Chhatak Cement Factory was established in 1937 in Chhatak, Sunamganj district. 

Currently, a Tk667 crore modernisation project is underway to transform the production system from wet process to dry process. The crisis – led by a production suspension and cut off gas line – occurred while the project by the Bangladesh Chemical Industries Corporation (BCIC) is ongoing.

Officials said four mills produce cement at the factory, while two of the mills have been out of order for a long time. The remaining two old mills frequently stop production due to mechanical glitches. 

Engineer FM Bari said the renovation and repair of a factory is a regular process, and all production facilities require it.  

"We have to do the repairs more often since our machines are old. As a result, production remains halted sometimes," added the cement company's managing director.  

The old factory has been loss-making for a long time. Chhatak Cement last saw profits in the 2003-04 fiscal year, after producing a maximum of 1.80 lakh tonnes of cement. From then on, production has been falling. 

According to Chhatak Cement Company sources, the daily production target of the factory is 500 tonnes, while the factory produced only 200-250 tonnes of cement a day before the latest shutdown.

The loss of the factory was Tk10.44 crore in the 2011-12 financial year, while the losses rose to about Tk30 crore last fiscal year.

Amal Krishna Biswas, general manager (production) of the factory, has high hopes in the factory's modernisation. 

He said it will be possible to produce three lakh tonnes of clinker, per year, in dry process after the project is completed. The general manager hopes to earn at least Tk76 crore this year.