The jute and textile ministry has sought the Cabinet Committee on Economic Affairs’ nod to exclude the Rajshahi Silk Factory from Privatisation Commission’s list because it wants to reopen it under the Bangladesh Sericulture Board.
‘We have recently sent a proposal to the economic affairs committee to remove the Rajshahi Silk Factory, which was closed down in 2002, from the list of state-owned enterprises that were given to the Privatisation Commission for privatisation,’ jute and textile secretary M Ashraful Makbul told New Age on Sunday.
He said that the proposal to reopen the factory was prepared in response to a recommendation by the parliamentary standing committee on the jute and textile ministry.
Makbul said that the Sericulture Board, to make the enterprise successful, had prepared a project proposal to produce silk by cultivating silkworms. ‘There was no point in running the factory with imported yarn,’ he said.
He hoped that the factory, once reopened, would provide a substitute for imports and meet the rising local demand for silk.
The state-owned enterprise incurred a cumulative loss of Tk 19.36 crore before undergoing closure in 2002, leaving over 350 people jobless.
After the closure, the sericulture board submitted a work plan, proposing a working capital of Tk 30 crore as grant to run Rajshahi Silk Factory along with the Thakurgaon Silk Factory which was also closed in 2002.
But the government did not approve the proposed grant and decided to privatise these two silk factories after they failed to arrange any loans from commercial banks.
The Privatisation Commission invited international tenders for the two factories but did not get the desired response.
The annual production of the two silk factories was only 15 tonnes before being closed down.
The annual demand for silk has increased to 400 tonnes at present as compared to around 100 tonnes in 2000 as the demand for silk clothes has increased, said industry insiders.
The demand for silk clothes rose particularly in the last three years due to the growing diversion of silk to meet the rising demand for silk products like curtains, cushion covers, veils and scarves in the international market.
Production of silk yarn has also doubled to 60 tonnes from 30 tonnes in the last 10 years. Imported yarns, mainly from China, meet the rest of the demand. Presently, the country produces silk fabrics worth Tk 1,500 crore per year.
‘The country exported silk products worth $5 million last fiscal year, with shipments growing by 15 per cent annually,’ said a leader of the Silk Manufactures and Exporters’ Association of Bangladesh.
He said that it will help the country to face competition from Chinese silk products if the government restarts the Rajshahi Silk Factory.
The imported silk yarn costs around Tk 3,000 per kg as compared to local yarn whose price ranges between Tk 1,700 and Tk 1,900.
Around 1,500 farmers, mainly in Rajshahi, are now involved directly in producing silk yarn.
