In this region of Narayanganj, the crisis has already driven around 10-12 mills to the verge of closing their doors over the last five years
The financial crisis caused by unfair competition with larger companies is pushing the flourmills in Nitaiganj towards closure.
In this region of Narayanganj, the crisis has already driven around 10-12 mills to the verge of closing their doors over the last five years. At present, they operate only one to five days a month.
Another 25-30 such mills are in a pitiful condition, running production in only one shift every few days.
Sources said that larger companies – that are competing with the local mills by marketing flour and atta (wheat flour) at a lower price – have the advantage of lower production costs and support from banks.
This unfair competition has put local small and medium sized mills in a perilous situation. Moreover, the city corporation has banned the loading and unloading of goods in the area during the daytime, which is negatively affecting trade in the local market, said sources.
Several mill owners told The Business Standard that there are around 75-80 flour mills in Nitaiganj, but at least 10 of them are very close to shutting down because of a financial crisis and the lack of capital.
Local flourmills in Nitaiganj used to run production around the clock, but now they run for about eight hours a day. Some owners keep their mills running for only 2-3 hours to remain operational, and several others operate after a break of 2-3 days.
The flour milling industry began in Nitaiganj during the Pakistan era with the establishment of the Pak-Malay Mills in the 1950s. The mills in the area met the atta and flour demands in two-thirds of the districts across Bangladesh from 1981 to 2005.
However, in recent times, big industry conglomerates such as Meghna Group, City Group, TK Group, Bashundhara Group and Akij Group have started producing atta and flour using an automated process.
Moreover, they are also distributing their products to shops in remote areas using their own vehicles.
Commenting on the present situation, Sheikh Wazed Ali Babul, former president of the Atta-Flour Mills Owners Association said, "Large industrial groups import wheat, and many companies have their own ships to do it.
"After unloading goods from Chattogram port, these companies transport the consignment to the dock near their mills in small lighter vessels, which cuts down their labour cost significantly."
Babul continued, "Small and medium sized mill owners of Nitaiganj buy wheat from importers, and transport the goods to the local dock on the banks of the Shitalakkhya River using rented lighter vessels.
"The labour cost for carrying a sack of wheat from Chattogram to Nitaiganj ghat by ship and to the mills is around Tk30. But larger companies do not have to spend as much."
Pointing out other advantages enjoyed by bigger companies, he said, "As the larger mills use modern automated machines, their labour cost is much lower than that of the mills in Nitaiganj. The big mills also have their own power plants.
"Their electricity cost for producing goods is much lower than that of the local small and medium sized mills. As a result, the mills at Nitaiganj are suffering more and more financial difficulties."
Jasimuddin Mridha, president of the Narayanganj Atta-Flour mills owners Association, said, "Around 8-9 years ago, the workers at Nitaiganj worked in two shifts. However, the owners are finding it difficult to run the mills for even one shift.
"At least 10 mills are facing closure. Around 30 other mills are finding it difficult to stay operational. The others are not in good condition."
He further said, "Local mill owners are suffering from a shortage of capital because of sluggish trade and pressure from banks. The government has created the scope for big industrial groups to produce atta and flour without considering its impact."
Mridha added that the government did not consider what impact it would have on the survival of small and medium sized mills in the face of competition from big firms.
"My mill already faces being classified as a struggling industry. The production cost in a small mill is Tk40-50 more per sack than that in the big mills. The small mills are failing to compete as the electricity bill is higher," said Sohag Miah, the owner of Hossainia Flour Mills.
Meanwhile, Nuruddin Ahmed Mridha Jitu, owner of New Shitalakkhya Flour Mill, said, "Three to four buyers from rural areas used to buy products such as five-six sacks of lentils, 10-15 sacks of atta and flour almost every day.
"They would rent a truck and then transport the goods to rural areas. However, this is being hindered by the city corporation's ban on loading and unloading of goods during the daytime. The issue is contributing to the seriously sluggish trade across Nitaiganj."
Responding to query, Narayanganj City Corporation Mayor Dr Selina Hayat Ivy, said, "Local businessmen, political leaders, district administration and the city corporation decided to stop the loading and unloading of goods during the daytime in a joint meeting in 2018.
"But after only six months, the people concerned stopped adhering to the decision."