Closed jute mills get new life in private hands

The tide has turned for government jute mills. Five of the 25 mills, closed down in mid-2020 over accumulating losses, have returned to production, while the joint inventory of eight others has already been finalised before they can be geared to production.

The Midas touch came in the form of investments from the private sector after the government decided to lease them out.

So far, private sector entrepreneurs, including two Indian companies, have leased and invested in 16 closed government jute mills, according to the Bangladesh Jute Mills Corporation (BJMC).

The corporation officials say the goal is to reopen all these mills within this year, a target that has been communicated to the entrepreneurs who have leased the mills.

The government in 2020 laid off around 26,000 workers of the closed jute mills with a golden handshake. If the mills are reopened, new investments will lead to a revival of the jute sector and the creation of new employment, they think.

The companies that have already started commercial production include Unitex Composite Mills Ltd, Jute Alliance Limited – a joint venture with the major stakeholder Bay Group and TK Group; Akij Jute Mills, Rashid Automatic Rice Mills, and Uniworld Footwear Technology.

In April 2021, the government decided to lease out 17 of the 25 state-owned jute mills to the private sector for five to twenty years. With such an end in view, the BJMC floated an international tender so that local, foreign and partnership firms could participate in the bidding process.

According to the BJMC, the tender process is currently being invited for four other mills, which will end on 6 February.

The mills are Platinum Jubilee Jute Mills, Star Jute Mills, Rajshahi Jute Mills and Co-operative Jute Mills.

According to the BJMC, 10 companies have submitted 13 expressions of interest to lease these four mills. They have been asked to submit the final proposals by 6 February.