The state-owned Shyampur Sugar Mills in Rangpur, which has been out of production for more than 10 months, is increasing the burden of losses on the government with every passing day.
The retained loss of the company has risen to over Tk550 crore as it has been continuing to meet different expenses, such as wages of workers.
According to the audited financial statements of fiscal 2019-20, the retained loss of the mills amounted to Tk505 crore. In a span of one year, the loss increased by Tk60.69 crore, from Tk444.83 crore in fiscal 2018-2019.
It incurred a loss of over Tk50 crore in 2020-21, which is five times its total revenue.
The company, which also manufactures molasses as a by-product, has been incurring losses for years as it cannot extract juice from sugarcane and produce sugar as expected with old machinery.
Both sugar and molasses were sold in the local market.
"The current condition of the mills is dire," Md Ahsan Habib, managing director of Shyampur Sugar Mills, told The Business Standard.
To reduce losses, the Bangladesh Sugar and Food Industries Corporation (BSFIC) suspended the threshing of sugarcane in six sugar mills, including Shyampur Sugar Mills, in December 2020.
Salaries and wages have also been due for six months since April this year.
The sugar mill had 443 permanent and seasonal workers. But after the suspension of production, there are now 123 permanent workers.
Shyampur Sugar Mills is also unable to pay provident fund and gratuity to its retired workers, apart from failing to clear the dues of sugarcane suppliers.
"Such a crisis has never happened before. Six months' salaries and allowances are due," said Md Ahsan Habib.
Explaining the reason behind the situation, he said the machinery is very old and thus it is not possible to extract juice from sugarcane as per target.
"But the amount of unused land of the mills is huge. Some alternatives have been suggested to ensure proper use of this land. If proper use of the land is ensured, it is possible to make the mills profitable," he added.
Loss is five times the income
According to the monthly Management Information System (MIS) report of Bangladesh Sugar and Food Industries Corporation, the income of Shyampur Sugar Mills in fiscal 2020-21 was around Tk12 crore.
The loss against this income is Tk50.45 crore.
The mills incurred the biggest loss in December 2020 when it had a total revenue of Tk30.42 lakh only. But the loss was Tk8.54 crore mainly owing to a clearing of salaries and arrears of workers.
Debts on the rise
The debt of Shyampur Sugar Mills is increasing day by day in trying to deal with the losses as other expenses are still ongoing.
The mill has taken big loans from the state-owned Sonali and Janata banks to meet the deficit.
In all, the debt of the mills in fiscal 2019-20 was 190.09 crore, which is 14% higher compared to the previous year, according to its audited financial statements.
Its short-term loan was Tk164.49 crore and its long-term loan was Tk25.60 crore.
In fiscal 2018-19, the debt amount was Tk167.53 crore.
The long-term debt includes government funds and foreign loans.
It owes Janata Bank Tk17.75 crore and Sonali Bank Tk146.76 crore as short-term loans.
Last year, the loan amount was Tk152.05 crore.
The mills at a glance
Shyampur Sugar Mills was set up in 1965-67 at Shyampur, Rangpur, at a cost of Tk6.51 crore.
The mill has 46,700 acres of sugarcane-cultivable land.
Its installed sugarcane crushing capacity is 1,016 tonnes per day and its sugar production capacity was 10,160 tonnes per annum.
The mills produced 7,140 tonnes of sugar per annum on average at an average sugar recovery rate of 7.63% from sugarcane since the emergence of Bangladesh.
The highest sugar production was 12,825 tonnes in fiscal 1981-82.
In fiscal 2019-2020, it produced 3,002 tonnes of sugar by threshing 44,524 tonnes of sugarcane.
Shyampur Sugar Mills, which got listed on stock exchanges in 1990, has not been able to pay any dividend for the last few years due to losses.
But its share prices have risen by 162% in the last six months, to reach Tk131.6 on September 2, from Tk50 on April 6.
The share price came down to Tk91 on 14 October.