Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
The Bangladesh Blade Factory Limited (BBFL), owing to gross mismatch between its income and expenditure, has become a burden for the state-run Bangladesh Steel and Engineering Corporation (BSEC), officials said.
The financial sharpness of the once-dominating blade maker has become blunt due to gradual fall in production and earning. Simultaneously, the state-owned BBFL has been gradually losing its market share to the private sector players.
Established in the mid-80s, the blade manufacturing unit under the BSEC fulfilled the key portion of local demand for double-edge safety razor blade, commonly known as Sword Blade.
But things went wrong with the emergence of vibrant private sector entrepreneurs in the business in the early 2000s. As a result, the state-operated blade maker has been getting weaker since then in terms of production, market share and profit earning.
According to the official statistics, the BBFL produced 76 million pieces of blades in the financial year (FY) 2013-14. Its production continued to decline, and the figure was only around 47 million in FY 19.
In terms of earning, the blade manufacturer has been incurring loss for the last several years. Its combined loss was Tk 5.0 million in FY 14, which soared to Tk 35 million in FY 19.
Seeking anonymity, a senior official of the BSEC said the blade making unit has become a serious burden for the corporation because of its poor performance.
He criticised marketing system of the BBFL, which managed to sell blades worth Tk 34 million in FY 19, although the volume was over 71 million six years ago.
"The age-old factory needs to be modernised immediately to compete with the private manufacturing units. Otherwise, it'll be very difficult for the corporation to continue its operation," he opined.
Md Nazmul Haque Prodhan, the BSEC chief engineer, said they have already taken initiatives to modernise the production plant and produce disposable razor blades.
"The BBFL is one of the most struggling units of the corporation. Once the initiatives are fully implemented, its financial and operational capabilities will significantly improve. I hope it will turn around then," he added.
However, managing director of the plant S M Noimul Hasan denied making any comment over its sorry state.
Research Director at the Centre for Policy Dialogue (CPD) Khondaker Golam Moazzem said blade is one of the products, where the steel corporation has failed to make any profit for quite a long time.
"I don't know how long the corporation will feed such a loss-making unit through cross-subsidy. It does not make any sense."
The CPD research director further said the government can consider discontinuation of production in the unit, as private sector has strong presence in the particular field.
"What the government can do is to make a small industrial park there with the help of the Bangladesh Economic Zones Authority (BEZA), and allocate it to the investors for much better output," he added.