North Bengal Sugar Mills wants to produce liquor

The state-owned North Bengal Sugar Mills at Lalpur in Natore wants to set up a distillery to turn the loss-making company into a profitable one by capitalising on the growing demand of liquor in the country.

A proposal in this regard has already been sent to the authorities concerned, aimed at making the company profitable like Carew & Company (Bangladesh) Ltd through liquor production.

Md Humayun Kabir, managing director of North Bengal Sugar Mills, told The Business Standard, "The mill would be profitable if liquor could be produced from the by-product of the molasses after sugar production. We need to set up a distillery. The raw materials can be supplied from the mill.

"We made the proposal after being asked by the BSFIC [Bangladesh Sugar and Food Industries Corporation] to make the mill profitable. We can achieve this if the mill is modernised and new initiatives are taken," he said.

Giving the example of Carew & Co, Humayun Kabir said, "Carew is making profit from its distillery despite counting losses in sugar production. We have also given the same proposal. Besides liquor, it will also be possible to make organic fertiliser from sugarcane husk."

According to people concerned, only Carew & Co is currently making profit among the 15 sugar mills operated under the BSFIC.

In 2019-20 FY, 14 sugar mills, except Carew & Co, incurred losses of around Tk8,000 crore. Due to continuous losses, the government has suspended sugarcane threshing in six mills, keeping the nine others running.

Meanwhile, Carew officials confirmed that the company overcomes big losses in sugar production by producing liquor in distilleries.

The demand for liquor produced by Carew & Co has increased more than 50% in recent times. The company has taken the initiative to produce liquor using automated technology to meet the increasing demand, they said.

Refinery project suspended

The Project Evaluation Committee (PEC) suspended a project undertaken in 2014 to produce refined white sugar, and electricity through a co-generation system in the North Bengal Sugar Mills.

The project was initiated to make the mill profitable from the electricity production and refined sugar.

The BSFIC was supposed to implement the project at a cost of Tk324.18 crore.

The initial duration of the project was from February 2014 to December 2016. It was later extended till June 2021.

However, six months before the expiration date, the PEC suspended the project in January 2021 and directed a new survey on the sugar mill.

North Bengal Sugar Mills at a glance

The North Bengal Sugar Mills was founded in 1930 by the then British colonial government in Lalpur, Natore to produce sugar from sugarcane as well as molasses, bagasse and pressmud as by-products.

Currently, the mill has a total cultivable land of 22,729 hectares.

The factory's total property and assets amounted to around Tk162 crore as per records till 30 June 2020.

According to the audited financial statement of 2019-2020 FY, the sugar mills posted a revenue of Tk81.64 crore, while it suffered a loss of Tk86.17 crore. The amount of losses stood at Tk94.57 crore a year ago.

Md Humayun Kabir, managing director of the mill, said, "Sugar production has declined. Earlier, 8-9.5 kg of sugar could be obtained from 100 kg of sugarcane but now it has come down to only 6.4 kg.

"The quality of sugarcane has declined. Sugar production also declined due to the old machinery in the mill. As a result, we are counting losses. Now, if we can increase income in an alternative way, it will be possible to get out of the red."