The Bangladesh government has introduced a plan to modernize and revitalize six closed sugar mills, with the goal of turning them into profitable ventures through public-private partnerships and the implementation of advanced technology.
The mills were closed in December 2020 due to operational inefficiencies under the previous Awami League administration. The Bangladesh Sugar and Food Industries Corporation (BSFIC) is now in discussions with international firms to develop a modernisation strategy, according to the Ministry of Industries.
A proposal has been put forward to establish a joint venture with potential financing from the Japan Bank for International Cooperation (JBIC) and the Export-Import Bank of Thailand (EXIM), with JBIC expected to provide the majority of the funding, reported The Daily Star.
On March 16, the Ministry of Industries sought input from the Bangladesh Investment Development Authority (Bida) regarding the initiative, as it involves both private and foreign direct investment.
Last July, an MoU was signed between the BSFIC and the controversial S Alam Group to modernise state-run sugar mills. However, after the Awami League government was removed in August, the interim government scrapped the agreement as S Alam Group faced legal troubles.
In February, United Arab Emirates-based Sharkara International (FZC), Thailand’s Sutech Engineering Company Ltd, and Japan’s Marubeni Protechs Corporation submitted a proposal to the industries ministry, expressing interest in forming a joint venture to overhaul the sugar mills.
Back in October 2019, the BSFIC had signed an MoU with these firms to create energy-efficient, technology-driven sugarcane and alcohol industries in Bangladesh. However, the plan had been stalled at the Prime Minister’s Office.
An official from the industries ministry noted that the latest proposal presents a strong opportunity to modernise the sugar mills and make them profitable.
“We have formally requested Bida’s input as their opinion is essential for such investments,” the official stated. “These mills can become profitable again, but significant technological and management upgrades are necessary.”
Ashik Chowdhury, executive chairman of Bida, told The Daily Star that the government should not be directly involved in running businesses and that loss-making industries should be handled by the private sector to improve efficiency.
“Privatising the sugar industry would help the government avoid losses,” he said. “The private sector is better equipped to manage these enterprises effectively.”
Chowdhury also expressed support for the Ministry of Industries’ initiative and confirmed that Bida is working with the ministry to attract foreign investors to take over the mills.
According to a letter sent by the Ministry of Industries to Bida, the project aims to revive the six closed sugar mills through either full government ownership or a joint venture between the BSFIC and private investors.
Under the proposed plan, JBIC and EXIM Bank of Thailand will provide loans for purchasing foreign equipment and designs, while the Bangladesh government will finance local construction and infrastructure.
Sharkara, Sutech, and Marubeni will contribute technological expertise, modern machinery, and management services for the revitalisation project.
A local representative of the investors, who wished to remain anonymous, said the initiative would provide significant support to sugarcane farmers by ensuring steady demand for their crops.
“A well-functioning sugar industry will guarantee fair prices and a stable market for farmers, strengthening the agricultural sector,” the representative stated. “If the government acts quickly, investors may inject around $1 billion into the project and develop a world-class food packaging industry alongside it.”
“Reopening these mills will not only create jobs but also benefit thousands of farmers dependent on sugarcane cultivation.”
Sources within the Ministry of Industries revealed that the government is currently reviewing proposals from the international consortium to finalise partnership structures and financing agreements. Bida is also evaluating the investment feasibility and regulatory considerations.
Mohammad Mujibur Rahman, secretary of BSFIC, said he was not fully updated on the latest developments but reiterated that the goal is to establish a sustainable and competitive sugar industry.
“If this project is successfully implemented, it could mark the beginning of a new era for Bangladesh’s sugar sector, making it more efficient and competitive,” he said.
Bangladesh’s sugar industry has long struggled with outdated machinery, reduced demand for locally produced sugar, and financial losses. BSFIC, which oversees 15 sugar mills nationwide, has been weighed down by significant debt.
The modernisation initiative is expected to bring economic benefits, including job creation and reduced reliance on imported sugar. However, experts warn that without similar efforts, the remaining nine mills will continue to suffer losses.
