Committed to PEOPLE'S RIGHT TO KNOW
Vol. 5 Num 263 Tue. February 22, 2005  
   
National


Karnaphuli Paper Mill now a losing concern
High price of inputs, undue advantage by CBA leaders blamed


Rangamati: Once profitable Karnaphuli Paper Mill (KMP), the country's largest and oldest paper mill, is now a loss-making unit.

It incurred a loss of over Tk 80 lakh from July to December in the current financial year, allegedly due to hike in input cost and undue privilege enjoyed by a section of CBA (collective bargaining agent) leaders and employees.

The giant mill on 443 acres of land in remote Chandraghona in Kaptai had earned a gross profit of Tk three crore 90 lakh in the last financial year from sale of 28917 MT of different kinds of paper.

The profit margin was over Tk three crore in previous financial years, sources at the mill told this correspondent during a visit to the mill last week.

The mill under Bangladesh Chemical Industries Corporation (BCIC) may face closure or privatisation if the trend continues, it was warned by top BCIC officials recently, the sources said.

But the situation has not improved following the warning, made by BCIC Chairman Brig Gen (rtd.) Imam Uz Zaman during his visit to the mill on December 28, they said.

The BCIC top official also urged the mill management and employees to turn the giant mill into profitable concern.

"Otherwise, the mill will be treated as an ailing industry and appropriate steps will follow", he had said.

But several CBA leaders and employees this correspondent talked to however denied the alleged undue privilege enjoyed by them and a section of employees. They said the loss is solely due to hike in input cost.

Additional expenses are incurred on purchase of Chlorine and Caustic Soda, the two main chemicals, raw materials like bamboo and tropical wood from forests and gas-electricity bills, they claimed.

Increased maintenance cost on old machinery is also an added burden, they said.

They however admitted "misuse" of gas and electricity by a section of employees who reside on the mill area.

Some mill officials seeking anonymity alleged that they often have to succumb to pressure from CBA leaders for undue benefits, which increase the cost.

Its Managing Director (MD) Mir Mozaffar Ali declined to talk to this correspondent.

The officials and CBA leaders said they have to purchase Chlorine and Caustic Soda at higher prices since closure of Karnaphuli Rayon Complex (KRC) two years ago.

Earlier, the KRC supplied Chlorine at Tk 18000 per MT.

Now the mill has to purchase Chlorine at TK 42,000 per MT. The Global Heavy Chemicals Limited, a Bangladeshi company, supplies only two percent of the Chlorine needed.

The rest is imported from India through Benapole border, which increases the cost and takes more time.

Daily requirement of Chlorine is 10 MT.

It was gathered that a section of CBA leaders realise financial benefit from both dealers who purchase paper and from raw materials suppliers to the mill. There are 2049 dealers.

The CBA leaders prevail upon the mill management not to increase the prices of paper to match the production cost.

On the other hand, they have underhand deals with raw materials suppliers and ensure them higher rates, sources alleged.

At lease 14 families, who are not dependents of KPM employees, now reside on the mill compound illegally under the protection of some CBA leaders, who realise rent.

When asked about this, the mill management said steps are being taken to evict them.

They also said it has been decided in principle that the KRM would be reopened to supply chemicals' at cheaper rates.

The KPM produces 22 varieties of paper under three categories -- writing, printing and wrapping papers. It meets a major portion of the country's requirement.

It was set up in 1953 at Chandraghona, 49 km from Chittagong port city on the north bank of the Karnaphuli river by the then Pakistan Industrial Development Corporation at a cost of USD 15 million. Its annual production capacity is 30000 MT.

The integrated pulp and paper mill was set up because of abundant supply of raw materials like bamboo and tropical wood from forests in Chittagong Hill Tracts.

It employs around 2980 people. About three lakh people are directly or indirectly involved with the mill for their livelihood.

Picture
The giant Karnaphuli Paper Mill in Chandraghona is now ailing. PHOTO: STAR