Deshbandhu Group seeks bank support to resume sugar production before Ramadan

Deshbandhu Group has been forced to keep its sugar refinery closed for over a month due to a shortage of raw materials, and the company is now seeking support from banks to reopen the facility and ensure a steady supply of sugar ahead of Ramadan.

During a recent visit to several Deshbandhu Group factories in Palash upazila of Narsingdi, senior officials of the company shared that banking issues have prevented them from importing both raw and refined sugar, which has led to the temporary shutdown of the refinery. 

Deshbandhu Group has had banking relationships with First Security Islami Bank since 2017, Social Islami Bank since 2019, and Islami Bank since 2023. While the company claims to have repaid most of its loans, some unpaid amounts are obstructing its ability to open letters of credit (LCs) needed for raw material imports.

The company has requested that these defaulted loans be rescheduled in line with Bangladesh Bank's regulations. However, officials claim the banks have refused their request and are not facilitating the import of raw materials under a supplier credit contract, which, according to the company, would not pose any liability for the banks.

MA Bashir Ahmed, additional managing director and CFO of Deshbandhu Group, expressed frustration, saying, "Other companies are having their loans rescheduled by the banks, but we have not been given the same opportunity. Despite following all the rules and applying for a loan reschedule, the banks have not explained why they are refusing our request." 

He added, "With Ramadan approaching, we need to import raw sugar now to ensure a steady supply. For this, we urgently need the banks' cooperation, but we are not receiving it."

However, Mohammad Abdul Mannan, chairman of First Security Islami Bank, told TBS, "We don't have a dollar crisis and are allowing LCs to be opened. However, Deshbandhu Group has defaulted on loans that exceed our bank's loan limit. They also have several compliance issues. To be eligible to open LCs, they must adhere to the loan limit and comply with the regulations."

 "At times, this group tries to put pressure on us," he added.

Meanwhile, Deshbandhu Group's other factories in Palash, which produce bottled water, cold drinks, and cold drink bottles, remain operational. The Deshbandhu Polymer Factory is also active. However, the sugar refinery, which typically processes about 3 lakh tonnes of sugar annually and holds a 15% market share, remains shuttered.

To keep the cold drink production running, the company has been sourcing sugar from other suppliers, while plastic materials are being purchased from local suppliers, as they are unable to import raw plastic materials.

Brigadier General (retd) Md Zakir Hossain, additional managing director (operation, HR, admin, and compliance) of Deshbandhu Group, expressed concern over the situation, saying, "We had to completely shut down the sugar factory because we couldn't import raw materials. Production in other factories, including polymer and drinks, has also been cut by two-thirds. 

"If the banks don't cooperate as per the regulations, our investment of Tk2,000 crore will be at risk, and thousands of people will lose their jobs."