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Tube well manufacturers in Bogura are going through hard times as the costs of raw materials have almost doubled in the last couple of years.
Bogura is a hub for agricultural machinery in Bangladesh as its foundry industries produce more than 85 per cent of the equipment and spare parts needed by farmers and rural households, including tube wells.
However, many foundry owners were compelled to reduce their production while others shut down their industries in the last two years amid the ongoing coronavirus pandemic.
Besides, the increasing use of submersible pumps in houses and the agriculture sector also adversely affected the age-old foundry business in Bogura.
Take the example of Masud Huda, owner of S Haque Metal Works at the Nowdapara area under Bogura’s sadar upazila.
Huda had to shut down his tube well making factory three months ago after sustaining losses in the face of rising costs.
“We started manufacturing tube wells in 1994 and used to produce 8,000 to 10,000 units every month.
“But the rising cost of raw materials forced me to suspend production,” Huda said, adding that he got a Tk 4 crore loan from a bank out of Tk 5 crore promised by the lender.
“I have already invested Tk 5 crore in the industry.”
Huda is one of roughly 400 entrepreneurs in Bogura who signed up for making tube wells to profit from the demand for pure drinking water among households and farms, particularly in the north.
Nearly Tk 70-80 crore of tube wells are made each month in the northwest district, said Mahfuzur Rahman, deputy general manager of the Bangladesh Small and Cottage Industries Corporation (BSCIC) industrial park in Bogura.
For irrigation, around 14 lakh tube wells are used across the country, according to data from the Bangladesh Agricultural Development Corporation.
Bangladesh has nearly two dozen foundries that cater to the demand for tube wells, which is about 12-13 lakh annually, said Kamruzzaman Kamal, director marketing of Pran-RFL Group, which runs Rangpur Foundry, one of the oldest and largest foundries in Bangladesh.
Md Nurul Alam, proprietor of the Messrs Soron Engineering Workshop, said he now produces 800 tube wells per month while he used to make 1,800 units per month two years ago.
The price of raw materials for building tube wells, such as cast iron, pig iron, ship scraps, and even hard coke, has increased significantly in the last two years.
“Therefore, I have decided to reduce my production,” Alam said.
Two years ago, raw iron was only Tk 38 per kilogramme. Now, the price has risen to Tk 50-53 per kilogramme.
Hard coke was previously priced at Tk 46,000 per tonne but it now costs around Tk 80,000 per ton.
“Even the nuts and bolts we import from China have become costlier due to the high tax,” he added.
Anindita Haq Gunjaan, a women proprietor of the Gunjaan metal workshop located in the BSCIC, said that during the pandemic, production costs increased a lot.
“Before the pandemic, we used to run production 4 to 6 times a week but now we produce tube wells only once a week,” she said.
“If we increase tube well production, then we cannot sell it as the demand falls due to the sharp rise of production cost. Besides, demand of the submersible pump is increasing day-by-day while tube well demand is decreasing,” Gunjaan added.
“On the other hand, we have to pay our rent and the salary of our workers. Therefore, we are not getting profit from this sector.”
Pran-RFL’s Kamal said tube well making is labour intensive as a number of processes are involved in its making.
He said the overall growth of the tube well market has been slow as these products have a long shelf-life.
“Besides, use of pumps has increased because of urbanisation,” Kamal added.
When contacted, Shahinur Rahman, estate officer of the BSCIC in Bogura, said the price of raw materials used by foundries increased globally.
He suggested foundry owners file applications with the BSCIC.
“If they give us any application, we will inform the higher authority in another written application,” Rahman said.
“Then we will discuss with the government how to reduce the price or tax on the raw materials,” he added.
(TDS)