Country’s closed sugar mills are set to reopen soon with huge foreign investment under a modernisation scheme.
China, Japan, Thailand and the United Arab Emirates have shown keen interest in investing in six sugar mills of the country.
The government has taken a new plan to produce sugar as well as by-products from sugarcane including spirits, alcohols, bio-fertiliser and electricity for export to different countries after meeting the local demand, sources said.
However, the government is seeking foreign investment to modernise sugar mills to increase sugar production making this industry profitable.
The government would keep its commitment on procuring sugarcane from the farmers in the catchment areas of the closed mills and no worker would lose their job.
Chowdhury Ruhul Amin Kaiser, secretary of the Bangladesh Sugar and Food Industries Corporation (BSFIC), told the Bangladesh Post, the BSFIC closed the operation of the six sugar mills for upgrading those with modern machines.
The ratio of profit-sharing is under negotiation and the corporation would sign the agreement soon with foreign companies, he mentioned.
To modernise the country's old sugar mills, the BSFIC has received many investment proposals from different companies of different countries including Japan, Thailand, China, Germany and the Netherlands, he said adding that the proposals are under consideration.
Dr Md Jahangir Alam, Chief Scientific Officer of Bangladesh Sugarcrop Research Institute (BSRI), told the Bangladesh Post that the sugar production from sugarcane at mills has now dropped to 5-7 percent from previous 10 percent because of low quality sugarcane and obsolescence of machinery.
As part of its move, the government has taken initiative to modernise the sugar industry, he added.
Dr Jahangir, who is also BSRI Chief of Agriculture and Farming Systems Department, said the BSFIC already discussed with many companies of Japan and Thailand.
The closed mills will reopen soon with modern look, he added.
According to the institute, the total sugar cultivation area has declined to 180,000 acres from around 400,000 acres during the early years of independence as it is no longer commercially viable.
Sugar mills in Bangladesh produce 65,000-70,000 tonnes of sugar annually against the domestic demand for two million tonnes of sugar and jaggery. The country has to import 1.4 million tonnes to cover the shortfall.
Following a government order on December 2, the BSFIC informed that production at six mills among 15 sugar mills—Pabna Sugar, Shyampur Sugar in Rangpur, Panchagarh Sugar, Setabganj Sugar in Dinajpur, Rangpur Sugar, and Kushtia Sugar—would be halted until further notice.
In October 2019, the BSFIC signed a memorandum of understanding with the three investors to establish energy-efficient, modern technology-based environment-friendly sugarcane and liqueur and beer industries in Bangladesh.
Economists said the government should find the way of recovering losses for the state-owned sugar mills endowed with huge land property.
High import tariffs could have bought local sugar industry some time to stand on its own feet while investment in new technology could have raised the efficiency of old sugar mills and the skills of their workers and farmers, they said.
Diversifying the products such as alcohol and the utilisation of by-products such as molasses could have been two other ways of increasing income for state-owned sugar mills, they said.