Karnaphuli Paper Mills

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Karnaphuli Paper Mills Ltd.
Type Government-owned corporation
Industry paper and forest products
Founded 1953 (1953)
Headquarters Chittagong, Bangladesh
Parent Bangladesh Chemical Industries Corporation

Karnaphuli Paper Mills is a Government-owned paper pulp and paper manufacturer is Chittagong, Bangladesh. The factory is the largest paper producing factory in Bangladesh and operates as a subsidiary of Bangladesh Chemical Industries Corporation.

History[edit]

Karnaphuli Paper Mills was the first paper manufacturing industrial establishment registered under the Factories Act. At the time of its establishment, it was the biggest paper mill in Asia, with over 3,000 workers. It was established under a World Bank loan supported by a consortium of suppliers from the United States, United Kingdom, Germany, Sweden and Italy. The factory went into production in 1953 with an installed capacity of 30,000 tons of paper per year. The capacity utilization, however, went down within a few years of its establishment. In 1964, Karnaphuli Paper Mills was sold to the Dawood Group of Pakistan, which undertook a balancing, modernization and rationalization program. Karnaphuli Paper Mills sold its paper to both East and West Pakistan. The price of its paper was the same in both wings. As a result, users of Karnaphuli Paper Mills paper in East Pakistan paid a price higher than its actual cost plus a normal profit. They compensated for the cost of transportation of the paper to West Pakistan and thus implicitly financed the subsidy enjoyed by its users in that province.

Immediately after the Bangladesh Liberation War, Karnaphuli Paper Mills became an abandoned property. Bangladesh Industrial Development Corporation took control of the company and began to search for new markets for its products. The local market did not expand due to slow growth of education facilities and of the publishing industry. The sale of paper, which was 31,378 tons in 1969-70, went down to 19,044 tons in 1973-74. When Karnaphuli Paper Mills was managed by the Dawood Group it had a network 50 distributors. The Bangladesh Industrial Development Corporation selected 407 new dealers, who had marginal or no experience in the sale of this specialized product. The stock of unsold papers piled up. On the supply side, there was the problem of availability of raw material. The Bangladeshi Planning Commission took measures for ensuring a regular supply of wood from the Forest Industries Development Corporation. Meanwhile, Bangladesh increased the proliferation of journals, newspapers and periodicals which contributed to an increase in the demand for paper in the country.

In 1976, the government took an initiative to identify the problems of Karnaphuli Paper Mills and approved a 240M reconstruction plan in 1979-80. Experts from India, Sweden, United States and Japan were involved in the task. In 1984, efforts were made to upgrade paper quality, to improve capacity utilization and to reduce the cost of production. These efforts were aimed at reducing losses, which averaged 161M per year during the period between 1972-73 and 1979-80. In 1983-84, the sales volume of Karnaphuli Paper Mills was 28.39MT, translating into sales revenue of 731M. Karnaphuli Paper Mills fully recovered by 1991. It reached its prime capacity production level and could export to foreign markets. That year, it had a workforce of 4,102 workers and office personnel. Its products consisted of writing, printing and typing papers, corrugated boards, wax-coated papers, paper cones, gummed tapes, and bitumin paper. In 1990-91, the installed capacity of Karnaphuli Paper Mills was 33,000 tons and the budgeted production was 28,438 tons, while the actual production was 30,216 tons.

Production[edit]

Karnaphuli Paper Mills uses pulp obtained from fibrous raw materials, like bamboo, extracted from the Chittagong Hill Tracts. It also uses the pulp produced in the Sylhet Pulp and Paper Mills as well as imported pulp. KPM has a sister concern, the Karnafuli Rayon and Chemicals Ltd., and the two mills are built on shared premises covering 442 acres (1.79 km2) of land. KPM is managed by an executive director assisted by a general manager and the chiefs of nine different departments, such as administration, engineering, production, marketing and accounts. The controlling authority lies with the Bangladesh Chemical Industries Corporation head office and the enterprise board draws up plans and programs within the broad policy guidelines provided by the corporation.

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