A move is on to reopen six more closed textile mills under Bangladesh Textile Mills Corporation (BTMC) aiming to make the ailing corporation operationally sound and economically viable, officials said.

Under the move, the Ministry of Textile and Jute has sent a proposal to the Planning Commission (PC) seeking the latter's approval to go for joint venture with a Chinese company.

After getting the PC's approval, necessary steps regarding re-opening of the BTMC mills would be taken under a 'government to government' arrangement between Bangladesh and China, they said.

The six textile mills owning a total of 153 acres of land are: Ahmed Bawani Textile Mills in Demra, Quaderia Textile Mills in Gazipur, Dinajpur Textiles Mills in Dinajpur, Dost Textiles Mills in Feni, Tangail Cotton Mills in Tangail and RR Textile Mills in Chittagong.

The move came in line with the government's decision not to sell any mill and revive the state-owned textile mills, they added.

"We have discussed with a dozen of companies and initially have agreed to strike a joint venture deal with a Chinese company to reopen six more closed textile mills," the BTMC chairman Md Bayezid Sarwar told the FE.

A proposal has been sent to Planning Ministry, which is under consideration, he added.

The use of outdated machinery is one of the major problems that the state-owned textile mills have been facing, he said, adding the problem has also been severely hampering the production of existing seven units in operation, while the BMRE (balancing, modernisation, rehabilitation and expansion) is a must to reopen the closed factories.

He, however, did not explain the details of the joint-venture.

The BTMC officials said the operating seven mills are running under 'service charge system', but the proposed six units would be operated under joint-venture, while the Chinese company is expected to do the required BMRE and other production-related activities to run the mills.  

Service charge system was introduced in 1996-97 on a contractual basis, where contracted parties supply raw materials to the respective mills of the BTMC at their own cost and the mills produce different counts of yarn/woolen fabrics as per requirement of the parties within the technical facilities available, they explained.

The mills get only a certain amount of service charge per bale from the parties and the responsibility of the marketing of finished products lies with the private parties, they added.

Due to the use of age-old machinery and mismanagement, many mills under the BTMC have stopped production despite an increase in demand for yarn and fabrics in the country, sources said.

Since 2009, the corporation has been trying to make the mills profitable through public-private partnership (PPP) arrangement, but it has got poor response from private entrepreneurs, they said.

"The closed units don't have the capacity to compete with the export-oriented mills both at home and abroad, while they have shortage of manpower," an official said, adding a large amount of investment is required to reopen and operate the mills under the BTMC.

"The joint-venture will help make investment and produce export quality finished products," he said, adding it will also help create employment for additional 10,000 to 20,000 people and develop infrastructure.  

China is shifting to high-tech industries due to its rising cost of production, he said, adding in this regard Bangladesh has tremendous potential and the state-owned mills have substantial land.

At present, the BTMC has 18 textile mills, down from 86. Under the denationalisation and privatisation policy of the government, 65 mills were handed over, sold and liquidated during 1977 to 2013.

The running mills are producing different counts of cotton yarn/viscose yarn.  Some 2.48 million kgs of yarn were produced by the mills in fiscal 2014-15, according to the BTMC.

Two mills are assigned for setting up Textile Palli (Khulna Textile Mills, Khulna and Chittaranjan Cotton Mills, Narayanganj) and tender has been floated in this regard, officials said, adding the rest three mills are under the Privatisation Commission.

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