A memorandum of understanding (MoU) signed between the Bangladesh Sugar and Food Industries Corporation (BSFIC) and S Alam & Co, for upgrading ailing state-run sugar mills, has been cancelled by the interim government.
The MoU was signed on July 4, last with initial plans to conduct a feasibility study before implementing projects to boost sugar production. Currently, just nine of the 15 sugar mills under the BSFIC are operational.
The government decided to close down the six others in 2020 as they were continually incurring losses and were in desperate need of modernisation.
In a government order issued on December 2, 2020, the BSFIC said production at the state-owned sugar mills in Pabna, Shyampur, Panchagar, Setabganj, Rangpur and Kushtia would be halted until further notice.
The Ministry of Industries (MoI) cancelled the MoU on Saturday, a senior official of the ministry said on Sunday. The MoU was non-binding, for which it was possible to cancel it, the official said. However, no reason was attributed for the cancellation.
In December 2020, the BSFIC said production at the state-owned sugar mills in Pabna, Shyampur, Panchagar, Setabganj, Rangpur and Kushtia would be halted until further notice.
That same month, companies from Japan, Thailand and the United Arab Emirates placed their final proposal to the MoI for a project that would see them team up to upgrade and ensure profitability of the six shuttered mills and export by-products.
Sutech Engineering Co of Thailand, Sharkara International of the UAE and Sojitz Machinery Corporation of Japan planned to invest Tk 5,000 crore under a joint venture.
With the Japan Bank for International Cooperation and Exim Bank of Thailand keen to finance the project, final approval from the Prime Minister's Office was expected by 2022.
However, this never materialized due to unexplained reasons. But the then government was moving slowly to implement the joint venture, S Alam and Co convinced the MoI to sign the MoU for modernising the mills, the BSFIC officials alleged.
According to the MoU, sugarcane production would have been boosted through the training of farmers in the use of different technology.
Alongside that, modern sugarcane processing plants, 6 MW agrovoltaic solar power plants, by-product processing plants and packaging factories would have been constructed.
