Shahjalal Fertilizer Company Limited (SFCL) in Sylhet has resumed limited operation after around five months of closure due to gas supply shortage.
The company's operations restarted on August 06 when Jalalabad Gas began supplying gas on a limited scale the day after the fall of the Sheikh Hasina government. Previously, the factory had been closed on March 13 of this year, citing the gas shortage as the reason.
At that time, the authorities stated that due to the outstanding bill of Tk 779 crore, the Jalalabad Gas Transmission and Distribution System Limited had cut off the gas supply that forced the fertiliser factory to stop their production. The authorities described the fourfold increase in gas prices as another reason for the closure.
Although the outstanding gas bill has not yet been paid by the authorities, gas supply has resumed on a limited scale based on higher instructions, allowing the factory to restart, according to the SFCL sources. However, there is uncertainty about keeping the factory operational if the gas issue is not resolved.
According to the SFCL sources, the fertiliser factory was constructed at a cost of Tk 4,985 crore and started production on August 14, 2016. Though the factory was established with a capacity to produce 1,760 tonnes of urea fertiliser per day, was producing an average of 1,450 tonnes. Additionally, the factory was producing liquid ammonia as a by-product.
The production target for Shahjalal Fertilizer Company for the fiscal year 2023-24 was set at 3,80,000 tonnes. However, before the factory was shut down on March 13, it had produced 2,40,000 tonnes of urea.
SFCL sources further stated that Jalalabad Gas has quadrupled the price of the gas they supply. The price per unit of gas has been increased from Tk four to Tk 16.
Additionally, while it costs around Tk 36,000 to produce each tonne of fertiliser, it was sold for only Tk 25,000. This estimates a loss of Tk 11,000 that the company incurs per tonne.
Despite high expectations for the SFCL, the project has not been profitable. So far, Tk 555 crore has been deposited into the government treasury from the sale of fertiliser produced by the factory, the Jalalabad Gas Authority still has an outstanding claim of Tk 779 crore against the company.
The Ministry of Industries is trying to resolve this issue by negotiating subsidies with the Ministry of Agriculture.
Admitting the arrears unpaid, Gopal Chandra Ghosh, general manager (Operations) of SFCL, said the factory is still facing challenges with insufficient gas supply which affects its production capacity.
Gopal Chandra added that the outstanding gas bill has not yet been paid. Efforts are underway to coordinate the subsidy funds with the Ministry of Agriculture. An inter-ministerial effort is working to resolve the issue. Additionally, there are some "technical problems" at the factory that need to be addressed in order to achieve full-scale production.
