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Idle and loss-making state-owned factories are drawing growing interest from private investors, with nearly 100 investment proposals submitted to the government for projects ranging from agro-processing and electric vehicles to data centres, renewable energy and light engineering.
The growing response is raising hopes that long-dormant public industrial assets can be brought back into production, creating jobs and generating economic activity without requiring the government to shoulder the full cost of rehabilitation.
The proposals are now being vetted, officials said.
The government has opened the assets to domestic and foreign investors through public-private partnerships (PPPs), joint ventures, long-term leases and outright acquisition.
Recently, PRAN-RFL and Hamko Group took leases of three closed jute mills with plans to invest around Tk619 crore. Agreements were signed between the Bangladesh Jute Mills Corporation (BJMC), PRAN-RFL Group and Hamko Group in the presence of Prime Minister Tarique Rahman at his office at the Secretariat.
Under the agreements, PRAN-RFL will take over National Jute Mills Ltd in Sirajganj and Star Jute Mills Ltd in Khulna, while Hamko will take over Platinum Jubilee Jute Mills Ltd in Khulna.
The three mills are expected to create at least 11,629 jobs and generate combined annual turnover of around Tk1,175 crore once operational under private management.
The BJMC, under the Ministry of Textiles and Jute, has already leased 17 of 20 selected mills. It has also invited investment proposals for the remaining three – KFD Jute Mills Ltd and M M Jute Mills Ltd in Chattogram, and Co-operative Jute Mills Ltd at Motijheel.
The corporation has 25 mills in total. Two are embroiled in legal complications, while three are under the custody of the Dhaka and Chattogram city corporations.
BTMC also moves ahead
The Bangladesh Textile Mills Corporation (BTMC) has signed agreements and handed over four factories for PPP projects, while two more are close to being handed over.
According to BTMC, Latif Bawany Jute Mills Ltd has been handed over to Tanjila Bawani Textiles Ltd, with an investment of Tk750 crore and a target of creating 8,000 jobs.
Kaderia Textile Mills Ltd has been handed over to Orion Quaderia Textiles Ltd, which plans to invest Tk500 crore and create 6,000 jobs.
R R Textile Mills Ltd in Sitakunda, Chattogram, has been handed over to PRAN-RFL Group, with a proposed investment of Tk300 crore and 5,000 jobs.
Rajshahi Textile Mills has been handed over to Barendra Rajshahi Ltd and PRAN-RFL Group, with an investment of Tk500 crore and a target of 12,000 jobs.
BTMC has also invited international tenders for Tangail Cotton Mills Ltd and Khulna Textile Mills Ltd. Tendering is being prepared for several other mills, including those in Dinajpur, Chattogram, Savar, Jashore, Satkhira, Rangamati and Kurigram.
Of BTMC’s 25 mills, one has been handed over to the Army, four to private investors, while Kurigram Textile Mills and Khulna Textile Mills are close to being handed over. Four face legal complications and one is at the approval stage. The remaining 13 are expected to be offered under PPPs.
Kazi Feroz Hossain, chief operating officer and project director of PPP Projects at BTMC, said the corporation was gradually bringing more factories into the investment process.
“Initially, we had a very strict policy that we would allow investment only in textiles and industries connected to textile backward and forward linkages. But despite issuing tenders, investors were not coming forward,” he told the Daily Sun.
The scope was subsequently widened to allow “any production-oriented industry” capable of establishing a viable manufacturing operation at the factories. The broader approach has generated a much stronger response, he said.
Industries Ministry assets await policy
Progress has been slower for factories under the Ministry of Industries, including units of the Bangladesh Sugar and Food Industries Corporation (BSFIC), Bangladesh Chemical Industries Corporation (BCIC) and Bangladesh Steel and Engineering Corporation (BSEC).
A new policy governing private investment and joint ventures is still being prepared.
BSFIC Director (Planning and Development) Azharul Islam said the process remained at an early stage.
“The process of inviting private investment in state-owned mills is still at an initial stage, with a policy framework yet to be finalised. We have no progress,” he told the Daily Sun.
BSFIC has 15 mills, nine of which are operating and six closed. Tenders will be invited after the policy is finalised.
Officials of Invest Bangladesh said the policy was being prepared on a priority basis and that a number of investment proposals had already been received.
Earlier, the government identified 44 industrial sites covering more than 10,000 acres of strategic industrial land owned by five state-run corporations for possible investment.
The sites include 12 under BTMC covering around 238 acres, five under BJMC covering 151 acres, 13 under BSFIC covering around 8,632 acres, 10 under BCIC covering around 925 acres and four under BSEC.
Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), said reopening the factories was a positive initiative because much of the necessary infrastructure was already in place.
“Closed factories already have much of this infrastructure, making them far more attractive for potential investors,” he said.
However, he stressed that reliable energy supplies would be crucial. He suggested giving preference to investors willing to adopt renewable energy, including rooftop solar, to reduce dependence on the national grid and diesel generators.
The key challenge now is to convert growing investor interest into actual investment and ensure that the dormant public assets become commercially viable production centres.
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