The Financial Express

Frozen foods units seek Tk 11.41b for interest payment

| Updated: January 25, 2021 12:48:59

Frozen foods units seek Tk 11.41b for interest payment

The Bangladesh Frozen Foods Exporters Association (BFFEA) has sought a block allocation of Tk 11.41 billion for 48 running units to pay bank liabilities.

The promising frozen food sector is now in a tight corner due to the Covid-19 pandemic, sources said.

The BFFEA has also requested to give a bailout facility for another 28 sick units, they added.

It has recently written to commerce ministry with a plea for allocation and a bailout package.

"We've received a letter from the BFFEA recently. We are working on the issue for the next course of action," a high official of the ministry.

When asked, BFFEA president Kazi Belayet Hossain said, "Export business of the functioning factories is being hampered due to the spread of deadly Covid-19 pandemic across the world."

The demand for luxury food items, especially frozen shrimp and fish, globally has decreased and the cancelled consignments, including prices of products, have also been reduced, he added.

"We've requested the government to provide Tk 11.41-billion block allocation (equivalent to interest amount of the banks concerned) for the factories which are still exporting amid Covid-19."

Since March 2020, Mr Hossain said, shrimp per pound has been sold $1-3 less than that of the previous fiscal.

Some 290 consignments worth Tk 4.60 billion have been cancelled by buyers to date. For this, factory owners have faced liquidity crunch, according to the BFFEA.

Most out of the total 76 factories involved in processing shrimp and fish items are having difficulty operating without profit.

Currently, some 28 out of 76 units are sick. Some 48 factories have somehow kept their export activity.

The association fears that the running factories are likely to face shutdown failing to undergo the burden of losses, according to a BFFEA document.

Many factory owners concerned have already closed their respective units due to unavailability of necessary regulatory support, it cited.

The sector produced more than 0.56-million tonnes of shrimp and other fish items between 2010 and 2020.

It made Tk 318.22-billion export earnings during the same period.

The entrepreneurs of the sector borrowed more than Tk 24.76 billion from banks and financial institutions.

Of the amount, over Tk 15.37-billion interest (Tk 11.41 billion and Tk 3.96 billion are for 48 running and 28 sick units respectively) is imposed by the lenders.

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