Dhaka, Bangladesh (BBN) – At least 1,200 light engineering firms including 29 foundries in the country’s northern Bogra district with an annual turnover of BDT 4.0 billion are in limbo due to high prices of raw materials and lack of government support.
The problems they are faced with are so acute that some of the firms have either stopped production or are on the verge of closure, according to sector people.
At least five foundries including Farida Engineering and GR Casting were forced to shut down due to higher raw material prices, high bank interests, higher rate of government taxes and shortage of running capital, The Daily Star reported quoting Abdul Malek, Vice President of Foundry Owners Association of Bangladesh, the Bogra-based national organization.
“One year ago the rate of pig iron was BDT 32,000 per tonne in local market which is now BDT 85,000” Malek said, adding that the price of hard cook, a kind of fuel, doubled to BDT 80,000 per tonne in the last 12 months.
The price of silicon, one of the most important ingredients for foundry industry, also shot up from BDT 85,000 a tonne to BDT 1,80,000 in a span of one year, he added.
A senior official of Bangladesh Bank Bogra branch told the newspaper that the government took initiative around six years back to promote this sector.
Initially six to seven preliminary meetings were held at the commerce ministry to identify the problems of the sector, but no action has yet been taken, the central bank official said.
BBN/SI/SS/AD-10Npvember08-10:39 AM (BST)