Maddhapara Granite faces financial woes amid weak sales

Despite a doubling of local demand over the past decade, the country's lone state-owned hard rock mining venture Maddhapara Granite Mining Company Limited (MGMCL) is facing challenges with declining sales and mounting stockpiles.

According to MGMCL officials, a combination of factors, including a lack of marketing initiatives, cheaper imported rocks from India and Nepal, and a decline in sourcing by public construction projects, contributed to the situation.

The granite miner, a subsidiary of state-run Petrobangla, is located in the Parbatipur upazila of the northwestern district Dinajpur.

According to official data, MGMCL's monthly production capacity is around 1.2 lakh tonnes, while average monthly sales hover around 50,000 tonnes.

Officials say the company's financial health is deteriorating as a result of unsold stockpiles, estimated to be worth over Tk 400 crore and exceed 10 lakh tonnes.

To ease the pressure, the mining company was forced to suspend hard rock production for two months at the start of February due to limited storage space and high output by Germania Trest Consortium (GTC) -- Maddhapara's contractor for mining operation and production.

After additional storage space was secured, stone extraction resumed on a limited scale.

In an exceptional surge, sales in September this year reached 1.2 lakh tonnes. To sustain the business, MGMCL is now advertising in national and local newspapers, encouraging public and private sectors to use its hard rock in development projects.

The company produces hard rock in five sizes: 5/20mm, 20/40mm, 40/60mm, blast and boulder. Besides, it produces 5mm dust as a mining byproduct.

The country's annual demand for hard rock was around 1 crore tonnes a decade ago. Currently, it has increased to around 2.2 crore tonnes.

MGMCL produces 11 lakh tonnes of hard rock per year, which accounts for roughly 10 percent of the local demand.

In 2007, the government made it mandatory for public projects to source 50 percent of rocks from domestic sources, a move that boosted MGMCL's sales.

Officials now urge the government to impose high import duties on hard rock and call for stricter quality control measures for imported products.

"The import of hard rock is draining a huge volume of foreign currencies despite the existence of sufficient domestic sources," said Md Fozlur Rahman, managing director of MGMCL.

Maddhapara hard rock mine began commercial production on May 25, 2007.

However, initial production was limited to 700-800 tonnes per shift due to various operational challenges whereas the daily production target was set at 5,000 tonnes across three shifts.

As a result, the company incurred losses of around Tk 100 crore in six years till June 2013.

On February 20, 2014, Germania Trest Consortium (GTC) was awarded a contract to manage MDMCL's mining operations. GTC has employed 850 local miners and 100 international workers, mainly from Russia.