The industry sector was severely damaged during the WAR OF LIBERATION in 1971. Replacement and rehabilitation costs estimated for the industries were estimated at Tk 291 million, of which Tk 223 million was estimated for public sector enterprises. The public sector started in 1972 with 72 jute mills (with production capacity of 79,200 tons), 44 textile mills (13.4 million pounds), 15 sugar mills (169,000 tons), 2 fertiliser factories (446,000 tons), one steel mill (350,000 tons), one diesel engine unit (3,000) and one shipbuilding yard. Mills and factories in the public sector however, soon became losing concerns largely because of mismanagement and leakage of resources. The government had to quickly review its policy of dominating the public sector. Although it continued to exercise control over industries, it soon raised the allowable ceilings of private investment. However, this did not bring much improvement.
After a series of adjustments and temporary changes in state policy, the government finally adopted a new industrial policy in 1982, following which 1,076 state-owned enterprises were handed over to private owners. Unfortunately, denationalisation created a new problem of industries. They started getting sick because of failures of the inexperienced owners. Many of them were more interested in getting ready cash from selling of the cheaply acquired property than in sustaining and developing the industries. The result was that industrial sickness affected 50% of industries in food manufacturing, 70% of them in textile, 100% in jute, 60% in paper and paper board, 90% in leather and rubber products, 50% in chemicals and pharmaceuticals, 65% in glass and ceramics, and 80% in engineering industries.
The largest group of industries in Bangladesh falls in the category of small and cottage industries and their number in 1984 was 932,200 units, of which 20.7% were in handlooms, 15.4% in BAMBOO and CANE work, 8.1% in carpentry, 6.1% in products from jute and cotton yarn, 3.4% in pottery, 0.3% in oil crushing, 3.2% blacksmiths, 0.8% in bronze casting, and the rest in other types of crafts. Weavers work in almost all parts of Bangladesh but their major concentration is in areas like NARSINGDI, BABURHAT, HOMNA, BANCHARAMPUR, BAJITPUR, TANGAIL, SHAHJADPUR and JESSORE. The silk industry has flourished in Rajshahi and BHOLAHAT. Other places earning reputation in cottage industries during the 1980s in Bangladesh include Chapai NAWABGANJ and Islampur (bronze casting), Sylhet (mat and cane furniture), COMILLA (pottery and bamboo work), COX'S BAZAR (cigar), BARISAL (choir) and RANGPUR (checkered carpet).
In 1984, Bangladesh had 58 textile mills with 6,000 looms and 1,025,000 spindles. The annual production of the mills was 106.2 million pounds of yarn and 63 million metres of cloth. Textile is a public sector dominated industry in Bangladesh and like most other sectors, textile also incurred losses, which amounted to Tk 353.4 million in 1984. Problems in the sector include poor management as well as difficulties in developing skilled workers and shortage in supply of raw material and power. Bangladesh had 70 jute mills with 23,700 spindles in 1984. These employed 168,000 workers and 27,000 other staff and used 545,000 tons of raw jute. But their production was less than the 561,000-tons figure of 1969, when the country had 55 jute mills with 21,508 spindles. The three major centres of jute industry in Bangladesh are Dhaka, Chittagong and KHULNA. The jute industry in the country has been declining in the face of competition from India and in an international situation, where jute goods are being replaced by cheap and durable plastic products.
Development of new industries like sulphuric acid, chemicals, paper, caustic soda, glass, fertiliser, ceramics, cement, steel and engineering in Bangladesh was slow in the period before 1985. There were only two plants for production of sulphuric acid in the country in 1985 and their total production was 5,995 MT, while the production of this important ingredient for industries like soap, paper, cast iron and steel was 6,466 MT in 1970. Production of caustic soda in 1985 was 67,87 MT. The soda was used almost entirely in paper mills. Because of availability of SAND, salt and limestone within Bangladesh, the country has a good prospect in developing its glass industry. Dhaka and Chittagong are the two major centres for this industry. The automatic glass factory at Kalurghat of Chittagong produced 12.9 million sq ft of sheet glass in 1985.
The fertiliser industry in the country uses NATURAL GAS as the main raw material. The fertiliser factories produced a total of 808,660 MT in 1985. 741,463 MT was urea, 9,634 MT ammonium sulphate, and 57,563 MT triple super phosphate. The three major factories were at FENCHUGANJ, Ghorasal and Ashuganj. The total production of cement in the country in 1985 was 292,000 MT. The major industries were at Chhatak and Chittagong. Pakshi of PABNA and Chandraghona of Chittagong were the main locations for the paper industry in Bangladesh. The total production of paper in 1985 was about 75,00 MT. In 1985, Khulna had a newsprint mill with a production capacity of 55,000 MT and a hardboard mill that produced 1,621 sq metre of hardboard. Around this time Bangladesh also had some mills for production of particle boards and partex. The country also achieved self-sufficiency in producing matches; major centres of match production were Dhaka, Khulna, Khepupara, Chittagong, Sylhet, BOGRA and Rajshahi. The total production was 1.30 gross boxes in 1985. That year Bangladesh had 8 sugar mills with a total annual production of 87,000 tons. The sugar mill at Darshana (ISHWARDI) produced sugar as well as alcohol, methilated spirit and rectified spirit. The iron and steel mills in Bangladesh were mostly under the Steel and Engineering Corporation and were concentrated in Chittagong and Dhaka, although there were some steel and ironwork enterprises in Khulna, KUSHTIA and Bogra.
Industries marked by notable development in Bangladesh in the mid-1980s include shipbuilding, automobiles (assembly), oil refinery, insulators and sanitary wares, telephone equipment, electrical goods, televisions (assembly), cigarette, and vegetable oil. The country achieved a significant success in developing GARMENT INDUSTRY in this decade. The government followed a strategy of planned growth blended with 'free play' of market forces. The manufacturing sector showed some growth in the 1990s. The share of the manufacturing sector in the country's GDP rose to 11% in 1996. Investment in the sector was Tk 57.8 billion in 1997 as compared to Tk 22.5 billion in 1991. The share of the public sector in the total investment in the country's industries fell from 37.03% in 1991 to 8.63% in 1997.
The government continues to implement a PRIVATISATION programme to hand over public sector enterprises to private owners. Simultaneously, the government implements a programme of rehabilitating industries identified as sick because of various reasons. Industries identified for rehabilitation under the programme in 2000 included one cement factory (annual production capacity 0.15 million tons), one paper mill (30,000 tons), one newsprint mill (52,000 tons), 6 cigarette factories (630 million sticks), 8 oil mills (934,818 tons), 2 food processing units (950,400 tons), 2 fish processing units (6.9 million tons), 2 cold storages (5.9 million lbs), one beverage producing unit (4.3 million bottles), 3 chemical industry units (26,100 tons), one glass factory (7.5 million feet) and 12 pharmaceutical units. The fifth Five-Year Plan for the period 1997-2002 stipulated a total outlay of Tk 8.95 billion in industry including Tk 1.39 billion in the private sector. In 2000, the total employment in industries was estimated at 0.6 million, of which the private sector employed 0.5 million.
Industrialisation efforts of the government during the 1990s included investment in balancing, modernisation and reconstruction, creation of new industrial estates and export processing zones, promotion of private investment, and attraction of foreign direct investment. The policy changes have been in line with trends in the international market, recommendations of donor countries and agencies for liberalisation of trade and investment, and STRUCTURAL ADJUSTMENT PROGRAMMEs. Almost at regular intervals of 4 to 6 years after 1982, the government adopted new industrial policies with increased incentives for private investors from both home and abroad. These policies have some common aspects such as incentives to promote industrialisation in rural and remote areas and to encourage entrepreneurs to use local raw materials, and the efforts towards development of a system that would help in transfer of technology.
