Raw material price hike in the international market has become a major crisis for the foundry industry in Bogura as entrepreneurs have been forced to lower production by 30%-40%.
Entrepreneurs said the industry had rebounded after facing the devastating effect of the Covid-19 but the raw material crisis has again caused them to concede huge losses.
They said the price of per tonne ship scrap was Tk28,000 to Tk33,000 which has increased to Tk52,000. On the other hand, the prices of per tonne silicon and coal (boulder) have increased to Tk3 lakh and Tk85,000 from Tk1 lakh to Tk50,000 respectively.
Sector insiders said the factories are being filled with unsold products in recent days as buyers are not interested in purchasing them at a higher rate.
Zakir Hossain, general manager of Gunjan Metal Workshop, told The Business Standard, "We used to do metal casting four days per week after the peak time of the pandemic. But we are doing that only two days a week. We have been forced to reduce production due to rising raw material prices. Not only us but all factory owners have reduced casting."
"Most of the traders do not want to buy new products. It is creating a kind of uncertainty for us," he added.
Azizar Rahman Milton, president of the Foundry Owners Association of Bangladesh, said, "The foundry industry owners have been at risk for months due to the rising price of raw materials. We are counting losses due to this price hike."
"The factory owners could not raise the prices of the finished products as no buyers are interested to buy them at higher prices now. Wholesalers are also not agreeing to buy new products. As a result, the district's foundry owners have reduced production by about 30% to 40%," he added.
Different types of products including water pumps run by shallow engines, pistons, tube wells, wheels, different parts of power tillers, lathe machines, sawmills, auto rice mills, flour mills, textile mills etc are manufactured in this industry by casting metals.
Water pumps produced in this industry are regularly exported to India, Nepal, Maldives, Bhutan and Myanmar.
People concerned said the production cost in this industry is relatively higher as the factories use coal furnaces. If they could use modern electronic machinery for this purpose, the production cost would be lower.
AKM Mahfuzur Rahman, deputy general manager of Bangladesh Small and Cottage Industries Corporation (BSCIC), said, "Foundry is called a mother industry and the demand for products from factories in Bogura is very high across the country. But we have no control over the rise in raw material prices."
Regarding the modernisation of the factories, he said, "The artisans here are the most skilled in the country. However, indeed, they are still using very old technology. We are always trying to modernise their production system. We are trying to help them with various training and incentives."
Industry insiders said there are about 46 foundry factories in the BSCIC industrial area of Bogura. Apart from this, at least 300 more small and large factories have been set up in different parts of the district.
At least 10,000 workers are employed in these factories and another 25,000 people of the district are indirectly involved in this industry.
Azizar Rahman Milton, president of the Foundry Owners Association of Bangladesh, said, "Although the industry is behind a business worth thousands of crores of taka in the district annually, it still runs with old technology. As a result, the production cost is higher."
"The industry needs to be modernised and it is impossible without the help of the government. Modernisation will greatly reduce our production costs. The quality of work will also improve. We would be able to manufacture all the car parts in Bogura which would reduce the country's import dependence," he added.
The foundry factories in Bogura mostly produce agricultural and irrigation equipment and meet 70% of the country's demand.
According to Bscic, the 46 factories set up in their area produce machinery worth around Tk300 crore annually. Other factories in the district produce equipment worth around Tk1,000 crore every year.
As per the Bogura Chamber of Commerce and Industries, three foundry companies here exported centrifugal pumps worth around Tk94 lakh to India in 2021.
Mafuzul Islam Raj, vice-president of BCCI, said, "The foundry industry is the pride of Bogura. If this industry can be developed and modernised, it will take the district to the world market. Besides, it will be able to create employment opportunities for many people."