Summary:
- S Alam Group has indefinitely shut down eight factories, including sugar, steel, and bag units, due to raw material shortages caused by banking restrictions.
- Around 10,000 workers have been affected, with protests erupting briefly before workers received overdue payments.
- Banks have imposed strict conditions on opening import Letters of Credit (LCs) for the group, citing financial instability and a tarnished reputation.
- The closures follow months of operational struggles after the ousting of Sheikh Hasina, which left the group facing financial and reputational challenges.
Chattogram-based industrial conglomerate S Alam Group has announced the indefinite closure of eight of its factories, citing raw material shortages caused by a lack of cooperation from banks. The decision, effective December 24, 2024, has left approximately 10,000 workers and employees uncertain about their future.
The affected factories include S Alam Refined Sugar Industries, S Alam Bag, S Alam Cold Rolled Steels Limited, Infinity CR Strips Industries Limited, and steel sector companies such as NOF, Chemon Ispat, S Alam Steel, and Galco. A notice signed by Mohammad Borhan Uddin, head of HR and Administration at S Alam Group, stated that the closures are “due to unavoidable circumstances” and will remain in effect “until further notice.” However, essential departments such as security and emergency services will continue operations.
Workers staged protests at the Moijjartek area in Chattogram’s Karnaphuli region following the announcement. Demonstrations began around 5 PM but subsided after employees received overdue wages and overtime payments. Despite this temporary resolution, many workers expressed concerns about their long-term livelihood. “With today’s factory closure announcement, we are now in a difficult situation along with our families,” said a worker from S Alam Cold Rolled Steel.
The closures come amid broader financial challenges for the group. Since the ousting of Prime Minister Sheikh Hasina on August 5 during a student-led uprising, S Alam Group has faced increasing difficulties in maintaining operations. Banks have reportedly taken a hard stance against the conglomerate, demanding a 100% margin for opening Letters of Credit (LCs) due to concerns over its financial stability and reputation. These restrictions have severely hampered the group’s ability to import raw materials necessary for production.
S Alam Group Chairman Saiful Alam Masud, once considered a dominant figure in Bangladesh’s financial sector with significant influence over seven banks, now faces mounting scrutiny. Allegations have surfaced that he withdrew over Tk1 lakh crore from various banks during Hasina’s regime. This has led to reluctance among financial institutions to engage with the group further.
The financial strain on S Alam Group has been evident for months. In mid-November, several factories halted operations due to similar issues. Deputy Manager Ashish Kumar Nath previously warned that more closures could follow if the group remained unable to secure raw materials through LCs. “Some factories reliant on imported raw materials have closed due to our inability to open LCs for imports,” he stated last month.
The group’s troubles are compounded by its controversial past. S Alam Group acquired Islami Bank Bangladesh in 2017 through shell companies and has been accused of leveraging loans from multiple banks for its business expansions. The conglomerate’s financial practices have drawn criticism from industry experts and government officials alike.
The sudden factory closures have not only disrupted the lives of thousands of workers but also raised concerns about potential ripple effects on the local economy. As one of Chattogram’s largest industrial employers, S Alam Group’s challenges highlight broader vulnerabilities within Bangladesh’s banking and industrial sectors.
While the group has yet to announce specific plans for reopening the factories or addressing its financial woes, insiders suggest that international arbitration may be pursued if asset and investment issues remain unresolved within six months. For now, uncertainty looms over both the workers and the future of one of Bangladesh’s most prominent business conglomerates.
Source: TBS News
