Usmania Glass to resume production after a year

The government's lone glass production facility Usmania Glass Sheet Factory Limited (UGSFL) is set to resume commercial production on 10 July after a year as it has repaired and renovated two furnaces.    

"The heating up of the furnaces started on 19 June, and commercial production hopefully will resume on 10 July," Md Akhtaruzzaman, managing director of the UGSFL, told The Business Standard.

According to the Bangladesh Chemical Industries Corporation (BCIC), the UGSFL had two furnaces to make glass sheets. But in the face of recurring losses, the first furnace was shut a couple of years ago and the second one got damaged in an accident on 23 June 2020.

With both furnaces down, the BCIC subsequently initiated their repair that cost Tk3 crore.  

On 17 June this year, a seven-member Bangladesh University of Engineering and Technology (Buet) expert team visited the factory, and then the heating up began, said UGSFL Managing Director Md Akhtaruzzaman.  

The Chattogram-based company began its journey in 1960, and later got listed on both Dhaka and Chattogram bourses.

With both furnaces on, the daily production of Usmania Glass was 40,000 square feet of glass sheets – leading to an annual production of around 1.5 crore square feet.

When production was suspended last year, the company had 31 lakh square feet of glass sheets in the stock. On the eve of production resumption, the stock now stands at around three lakh square feet as sales have been on in the last one year.

After its inception in 1960, the UGSFL introduced its second production unit in 1970, and achieved standard certification by a Belgium company in 1995.

At that time, the glass-maker had been enjoying a market monopoly in Bangladesh. But the good times shattered as its private peers such as PHP Family, Nasir Glass and MEB Group started glass manufacturing in 2004.

The private companies put the UGSFL in a tight spot as they offered better products at cheaper rates. The UGSFL came up with several factory modernisation proposals in the last couple of years, but the policymakers had turned those down.

In the latest development, the BCIC has floated a tender for the feasibility study to set up a container glass plant at the factory. The concerned officials hope Usmania will return to profitability if the plant is set up.

Since the production remained suspended for around a year, the staff salary has become irregular. The employees now have their payments stuck for the past two months. Earlier, the production facility had 300 staff, which has been downsized to only 131 now.    

The company had incurred more than Tk30 crore losses in the last five years. However, it had been providing the shareholders with dividends from the premium of the fixed deposits.
But, Usmania did not give any dividends to its stockholders last year.    

"The government does not want to go for a big investment in glass-making as the policymakers assume that the government will not be able to compete with the private sector," in conditions of anonymity, a senior official at the factory told TBS.

"For this reason, a project has been taken up to manufacture bottles at the factory as an alternative to new investments aiming at stepping up the production. When tenders were floated for the feasibility study in January this year, 29 companies showed their interest for the bottle-making plant. But the feasibility study also got stuck as the virus situation worsened," added the official.