Deshbandhu Group has closed its sugar refinery for over a month due to a lack of raw materials, creating concerns about the sugar supply ahead of Ramadan. The company has turned to banks for support, seeking help to reopen the refinery and ensure steady production.
During a visit to the groupтАЩs factories in Narsingdi’s Palash upazila, senior officials highlighted that banking hurdles have blocked the import of both raw and refined sugar, forcing the sugar refinery to temporarily halt operations.
Deshbandhu Group has worked with First Security Islami Bank since 2017, Social Islami Bank since 2019, and Islami Bank since 2023. While the company says it has repaid most of its loans, a few outstanding amounts are preventing the issuance of letters of credit (LCs) needed to import raw materials.
The company has requested to reschedule its unpaid loans following Bangladesh Bank’s regulations. However, officials allege that the banks have declined their request and are unwilling to support imports under supplier credit contracts, which the company claims would pose no risk to the banks.
As per news report by TBS News, MA Bashir Ahmed, the additional managing director and CFO of Deshbandhu Group, voiced his frustration, saying, тАЬOther companies have had their loans rescheduled, but we havenтАЩt been given the same opportunity. WeтАЩve followed all the rules and applied for a reschedule, but the banks havenтАЩt explained their refusal.тАЭ
He added, тАЬWith Ramadan nearing, itтАЩs crucial to import raw sugar now to ensure supply. We urgently need the banksтАЩ cooperation, but so far, we havenтАЩt received it.тАЭ
On the other hand, Mohammad Abdul Mannan, chairman of First Security Islami Bank, shared a different perspective. He stated, тАЬWe donтАЩt have a dollar crisis and are approving LCs. However, Deshbandhu Group has defaulted on loans that exceed our bankтАЩs limit and faces compliance issues. They need to adhere to the regulations to qualify for new LCs.тАЭ
He further commented, тАЬAt times, the group tries to put pressure on us.тАЭ
While DeshbandhuтАЩs sugar refinery, which holds a 15% market share and processes about 3 lakh tonnes annually, remains closed, its other factories in Palash are still running. The facilities producing bottled water, cold drinks, and plastic bottles continue operations, as does the polymer factory.
To keep its cold drink production alive, the group is purchasing sugar from other suppliers, while local vendors are providing plastic materials in the absence of imported raw supplies.
Brigadier General (retd) Md Zakir Hossain, additional managing director of Deshbandhu Group, expressed alarm over the crisis. тАЬWe had to completely shut down the sugar factory due to the inability to import raw materials. Other factories, including the polymer and drinks units, have reduced production by two-thirds.
тАЬIf the banks donтАЩt cooperate under the regulations, our Tk2,000 crore investment is at risk, and thousands of jobs will be lost,тАЭ he warned.
The groupтАЩs appeal for banking support comes as the clock ticks down to Ramadan when the demand for sugar peaks in the country.
