9 state-owned firms post losses even after economy reopening

Nine publicly listed state-owned companies in various sectors have posted losses in the first quarter (July to September) of the current fiscal year even after the post-lockdown reopening of the economy.

The companies are- Eastern Cables, Atlas Bangladesh, National Tubes, Renwick Jajneswar, Usmania Glass, Shyampur Sugar Mills, Zeal Bangla Sugar Mills Ltd, Bangladesh Services, and Rupali Bank.

Sources said most of the machinery in state-owned firms are back-dated, and it takes about 6 to 8 months to repair any damaged one of them.

The production costs of the firms are higher compared to their competitors because they procure raw materials at a 30% to 40% higher rate as per their tenders.

Sources further said many of the employees in state-owned firms have no subjective qualifications and experiences which is why the credibility of the companies are declining every year.

Besides, mismanagement, irregularities, and corruption are also other reasons behind this situation, they further added.

Eastern Cables

Eastern Cables was established in Patenga, Chattogram on a ​​36.39-acre land.

The company has maintained a high quality for ages but could not maintain its business properly.

In the July to September quarter this FY, the company had a loss of Tk2.68 crore and its revenue was Tk7.83 crore.

Md Mafizur Rahman, shareholder director of the company said "We have passed a bad time in business. If we do not make a profit in procuring raw materials, we will not be able to make a profit in our business."

If the government relaxes public procurement rules (PPR), then it is possible to make profits, he added.

He further said, "We are trying to get orders positively and do business."

Atlas Bangladesh

The glory of Atlas Bangladesh Ltd in the two-wheeler industry started fading seven years ago.

Atlas is now at the bottom of the industry list, down from its previous position as the second-largest player, despite its nearly threefold growth.

The company failed to sufficiently increase its annual motorcycle sales.

In 2016, it signed a two-year contract with the Chongqing Zongshen group, one of the top five two-wheeler manufacturers in China, for importing, assembling, and marketing their motorcycles.

However, the local market did not welcome Zongshen motorcycles.

Last year, the company opened its new motorcycle assembly line on its premises in Tongi to assemble TVS motorcycles under a five-year corporate agreement.

Others

National Tubes mainly produces galvanised iron (GI) pipes that are used in gas transmission lines. But its demand has been declining day by day because PVC pipes are being used in households nowadays.

The Renwick Jajneswar, which provides engineering support to other sugar mills, also faced challenges in making profits.

Its overall business declined amid the pandemic.

On the other hand, despite the rising demand for glass in the country, Usmania Glass, Bangladesh's first glass manufacturing company, has been running at a loss since 2014.

The company manufactures glass sheets with 60-year old machinery, so the production cost is high and the product quality is low. This has made it difficult for the company to sustain itself in the competitive market.