The Weakening Paper Industry of Bangladesh: Problems and Prospects

Aysha Zahan

Roll: 22

Department of Development Studies, University of Dhaka

DS 402: Governance and Development

Nazia Kabir

Assistant Professor, Department of Development Studies

December 17, 2023

 The Weakening Paper Industry of Bangladesh: Problems and Prospects

Paper Industry in Bangladesh and the failures:

Although 79 out of 106 paper mills in Bangladesh, which claims to be self-sufficient in paper

manufacturing, are being closed for a variety of reasons. It is simple to point to the COVID-19,

the Russia-Ukraine war, and the decline in dollar rates as the main causes for all of these issues

from a 2023 perspective, but it is not the full picture. For example one of the largest paper mills

North Bengal Paper Mill, Pakshi, Ishwardi was shut down on 30th December, 2002. The mill's

usage of farness oil resulted in high production costs. However, its manufacturing cost dropped

by 40% if it could operate on gas. The mill was abruptly shut down as the gas hookup was about

to happen. And after all this time on July 21,2022 the final two officials who had been employed

there left the paper factory. The Ministry of Industries is giving the land of North Bengal Paper

Mill to the Ministry of Science and Technology at a nominal price for use in the safety of the

Rooppur Nuclear Power Plant.

Throughout the years there have been many other causes behind the increasing of the price of

papers. Such as loans at high interest rate, penalty for late loan disbursement, making syndicates

to stock up the product to create artificial scarcity, importing lots of papers instead of using the

locally produced stuff etc.

Ways to mold up the paper industry and to recover the loopholes:

After speaking with a few officials and staff members from various paper mills who declined to

give their identities, it became clear that the government must take action to reduce the
unreasonably high interest rates charged when borrowing money for paper manufacture. Imports

of foreign-made paper that effectively eliminate the market for domestically produced paper

should be subject to tariffs. However, there needs to be a lower tax on the import of supplies used

to make paper. This sector needs to be subsidized efficiently. Because the paper business

employs thousands and hundreds of people directly or indirectly, the government must look at

the situation. And the shocking increase in paper prices has a significant effect on the publishing

and education industries, among others.

Summary:

Problems: High interest rate on loan disbursement, unsupportive market for local

production etc.

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Deterrents: Importation of foreign papers, Lack of subsidy, syndicates etc.

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Solution: Lessening the interest rate of loan, imposing tariff on imported papers etc.