Over 25 Jashore vermicelli factories shut in 5 years

Six years ago, Janani Semai Mill, a factory producing handmade loose vermicelli, was established at the intersection of Sheikhhati High Court in Jashore. The owner, Sachin Biswas, took a Tk20 lakh loan to ramp up production after a promising first year of business.

However, starting from the following year, the demand for loose vermicelli in the market suddenly declined.

Subsequently, the Covid-19 pandemic hit, worsening the factory's challenges. Now burdened with debt, the factory is on the brink of closure, operating with just a handful of workers.

"There is a high demand for fried and lachchha vermicelli in the market. People no longer prefer loose vermicelli. The production costs have also increased significantly," Sachin Biswas told The Business Standard.

"Due to insufficient profit margins compared to the costs, many entrepreneurs have shuttered their factories and moved to other businesses," he added.

Entrepreneurs say over 25 loose vermicelli factories, primarily handmade, have shuttered in Jashore over the past five years. They attribute this trend to the diminishing demand for loose vermicelli, rising production costs, and the entry of corporate brands in vermicelli production.

The scene is similar in factories within the Bscic Industrial City, Jashore, where the majority of flour mills have ceased vermicelli production over the past years. Some factories persist in production but on a limited scale.

Rafiqul Islam, manager of Purbani Flour Mill, said, "The handmade vermicelli market has been in decline for quite some time, but this year the situation has worsened."

He noted that during Ramadan, an average of 1,000 kg of vermicelli used to be sold per day, but now the market has dwindled to only between 400 kg and 500 kg.

Entrepreneurs have also noted a decline in profit margins in vermicelli sales owing to heightened production costs. The wholesale price of one kilogram of vermicelli is Tk45 to Tk50, with production costs ranging from Tk42 to Tk48, according to them.

Sakir Ali, president of the Jashore Bscic Industry Owners Association, said small factories are gradually cutting down on their vermicelli production as larger industrial groups in the country focus on its manufacture.

"Loose vermicelli once enjoyed popularity, but now medium or small companies struggle to compete with larger enterprises due to rising production costs," he said.

"Additionally, some producers used to exclusively make vermicelli for Eid, but they are no longer viable due to cost constraints."

He added that this year, due to increases in the prices of flour, sugar, oil, and other materials, many have refrained from making vermicelli out of fear of incurring losses.

Retailers say packaged vermicelli from various brands has gained popularity due to increased health awareness and the diverse range of flavours they offer. They estimate the annual demand for vermicelli in the country to be around 30,000 to 40,000 tonnes, with the majority now dominated by major brands. These companies have achieved this market position within a decade.

Farid Hossain, a grocery shop owner, said two types of vermicelli are prevalent in the market around Eid: lachchha and fine. Lachchha vermicelli is typically prepared with vegetable oil or ghee. However, both varieties are equally favored by people in the country, he said.

Jaydev Nandi, a vermicelli trader in Jashore city's Borobazar area, said urban dwellers tend to prefer lachchha vermicelli, whereas fine vermicelli is more popular in rural areas. "Previously, loose lachchha vermicelli had greater demand, but nowadays people prefer it only when it comes in a packet."

Entrepreneurs categorise the vermicelli market into three segments: general bakeries, regional brands, and corporate brands. Currently, the highest demand is for products from major companies such as Pran, Banoful, ACI, BD Food, Kolson, Deco, and Romania.

This year, the price of vermicelli in the market has slightly increased. Specifically, the price of a 200-gram packet of vermicelli has risen by Tk10. Previously, a 200-gram packet of white vermicelli sold for Tk30-Tk40, but this year it is being sold for Tk40-Tk50, depending on the brand. Similarly, the price of the same amount of lachchha vermicelli has increased from Tk40-Tk50 to Tk50-Tk70.