“Bangladesh recently decided to close all 22 state-run jute mills and lay off 24,886 workers. The step is the result of heavy losses incurred by the Bangladesh Jute Mills Corporation (BJMC)”, textiles and jute minister Golam Dastagir Gazi said at a virtual press briefing. The mills will be modernised and reopened under public-private partnership, joint venture or lease.
The laid-off workers will be accorded priority while the modernised mills are reopened, said the minister.
Financial benefits and wages of all workers—retired and currently working—will be paid in due course. A Tk 5,000-crore fund will be allocated for the purpose.
“These mills are run with machinery that dates back 50 to 60 years. The BJMC’s management system is very old-fashioned and not suitable for managing modern factories,” the textiles and jute ministry said in a statement.
Tens of thousands of workers have been protesting against BJMC’s mismanagement for years, according to Bangla media reports. In the wake of this, the government on November 26 last year allocated Tk 100 crore to the BJMC for paying due wages and financial benefits of the workers.
Several conditions were attached to it. One of those was that the BJMC would not use the fund for any other purpose than disbursement of outstanding wages and financial benefits of the workers.
However, BJMC officials said the fund was too small to pay all the dues and asked for more. In the last 10 years, BJMC could do little to improve the state of its mills, spending thousands of crores of public funds.
The jute industry in Bangladesh is critically dependent upon exports which contributes close to 80 percent of its income. However, in recent times the international market has shrunk due to falling demand in India and Turkey which were its two major markets.
Bangladesh is a major global supplier of Jute products. In volume terms it contributed close to 80 percent of global demand in 2018. On an average, the country produces 1.5 million tonnes of Jute per year with a combined share of above 90 percent of global production.