S Alam shuts down 8 sugar, steel, bag factories
Workers from the affected factories have been protesting since 4pm today after the notice of the shutdown was hung in the factories
Highlights:
- Raw material shortages lead to factory shutdowns
- Around 10,000 workers affected by closures
S Alam Group has shut down its eight sugar, steel, and bag factories after being unable to import raw materials due to a lack of cooperation from banks.
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Following the closure announcement today (24 December), some factory workers staged protests around 5pm at Moijjartek in Chattogram's Karnaphuli area, according to the duty officer of the Karnaphuli Police Station.
However, after receiving payment for overdue wages and overtime, the workers left around 5:30pm, the officer added.
According to factory sources, at least 10,000 workers and employees were employed at the eight factories that have been shut down.
The closed factories are S Alam Refined Sugar Industries, S Alam Bag, S Alam Cold Rolled Steels Limited, Infinity CR Strips Industries Limited; steel sector companies NOF, Chemon Ispat, S Alam Steel, and Galco.
A notice, signed by Mohammad Borhan Uddin, head of HR and Administration at S Alam Group, reads, "Due to unavoidable circumstances, the factories will remain closed from Wednesday until further notice as per the authorities' instructions."
However, the notice added that the security, supply, and emergency departments will remain operational.
"We are unable to import raw materials due to a lack of cooperation from banks. Without importing raw materials, there is no possibility of reopening the factories. Therefore, the factories have been temporarily closed,"Borhan Uddin told TBS.
Seeking anonymity, a source from S Alam Cold Rolled Steel said, "Since 5 August, we have been in constant fear. After that, due to a shortage of raw materials, production in the factory has been irregular for the last two to three months.
"With today's factory closure announcement, we are now in a difficult situation, along with our families."
Since the ouster of Sheikh Hasina on 5 August amid a student-led mass uprising, the Chattogram-based group has been finding it hard to keep its factories running, as banks have taken a hard stance in dealing with it.
Saiful Alam Masud, largely known as S Alam, a highly influential figure in Bangladesh's financial sector and chairman of S Alam Group, was previously known to be a controlling force behind seven banks.
He allegedly drew over Tk1 lakh crore from various banks during Hasina's more than 15-year regime.
Sources within the group and banking sector previously told TBS that banks are becoming increasingly reluctant to engage in new business with S Alam Group. Those willing to open import Letters of Credit (LCs) are demanding a 100% margin due to the group's tarnished reputation.
Amid financial pressures, several S Alam Group factories reportedly halted operations in mid-November, resulting in significant layoffs as the company struggles to maintain its former productivity and financial stability.
Two mills – S Alam Vegetable Oil and S Alam Refined Sugar – have already shut down, and other mills may follow suit, according to Ashish Kumar Nath, deputy manager of S Alam Group.
"Some factories, reliant on imported raw materials, have closed due to our inability to open LCs for imports. The remaining factories may face the same fate," he told TBS last month.
S Alam Group, a major client of Islami Bank Bangladesh, acquired the bank in early 2017 by buying shares from the market in the name of shell companies.
A senior Islami Bank official said the lender has now sought a 100% margin from S Alam Group for opening import LCs.
