Production Increases, but Sales Decline

Despite an increase in stone extraction at Madhyapara, the country's only operational granite mine located in Dinajpur, sales have declined. On one hand, stockpiles are growing at the mine; on the other, imports continue unabated. Due to high production costs and tax burdens, the state-owned mine is falling behind in market competition. The decline in sales has also led to losses.
State-run Madhyapara Granite Mining Company Limited officials said domestic stone is lagging behind while competing in the market due to imports from India and Bhutan at relatively lower prices. At the same time, the high burden of taxes, VAT, royalties, and production costs has eroded the mine's profitability.

Currently, approximately 1.4 million tons of unsold stone are lying in the mine's dumping yard. This includes about 1.15 million tons of blasted stone and about 300,000 tons of boulders. Concerned parties fear that if sales do not increase, production activities could be disrupted, and the employment of nearly 800 workers may also be at risk.

Why Sales Are Falling Despite Increased Production

Analysis of mine data shows that production volume has been generally upward over the last six fiscal years. However, sales have seen significant fluctuations.

In the 2020-21 fiscal year, against an extraction of 1,017,000 tons of stone, sales were approximately 1,288,000 tons, which was possible due to previous stockpiles. That year, the company made a profit of about Tk 33.52 crore. But in the 2022-23 fiscal year, although production (including previous stock) increased to 1,063,000 tons, sales dropped to only 572,000 tons. Subsequently, in the 2023-24 fiscal year, production rose to 1,315,000 tons, yet sales declined to about 907,000 tons. As a result, the company incurred a loss of Tk 37 crore. Most recently, in the 2024-25 fiscal year, against a production of about 1,270,000 tons, sales were 993,000 tons, resulting in a loss of approximately Tk 7 crore. In other words, due to the mismatch between increasing production capacity and sales, stone stockpiles are growing in the mine's yard.

Unequal Competition with Imported Stone

Approximately 2.5 crore tons of stone are imported into the country each year. Although the annual extraction from the Madhyapara mine is much lower in comparison, concerned parties believe it had the potential to capture a significant portion of the domestic market.

Mining authorities claim that due to the taxes and charges imposed on local stone, production costs have risen to a level that makes it difficult to compete with stone imported from India and Bhutan.

According to Syed Rafizul Islam, General Manager (Administration) of Madhyapara Granite Mining Company, "The increase in royalties on stone, high customs duties and VAT on imported explosives, the rise in the dollar price, and the tax-VAT burden on contractor firms have increased production costs."

He said that since 2021, the royalty has been fixed at $22 per ton of stone. Whether the stone is sold or not, a 5% royalty must be paid based on that valuation. Previously, this rate was 2.5%.

From Profit to Loss

According to statistics, the Madhyapara mine was consistently profitable from the 2019-20 to the 2022-23 fiscal years. Over these four fiscal years, the enterprise earned over Tk 91 crore in profit. However, a sudden loss of Tk 37 crore in the 2023-24 fiscal year and a further loss of Tk 7 crore the following year indicate a change in the company's financial health.

According to economists, for a production-oriented enterprise, market expansion is more important than increasing production. If produced goods are not sold, inventory costs, storage expenses, and cash flow crises increase. The current situation of the Madhyapara mine highlights this reality.

Dependence on Government Projects

The mine's primary customers include Bangladesh Railway and the Water Development Board. The Railway mainly uses blasted stone, while the Water Development Board uses boulder stone.

Mine authorities say that if the tender activities of government development projects slow down or new projects do not arrive, the demand for stone decreases significantly. Consequently, a large portion of the market has become effectively dependent on government projects.

They hope that if tenders for various development projects are invited after next June, the demand for stone may increase. However, without price adjustments before that, it will be difficult to attract private contractors.

15 Types of Taxes and Charges

According to the company's Managing Director, Engineer D. M. Jobaid Hossain, the National Board of Revenue (NBR) has imposed nearly 15 types of taxes, VAT, royalties, and fees at various stages on the Madhyapara mine. These include VAT and income tax on production bills, duties on machinery and spare parts imports, duties and taxes ranging from 31% to over 108% on explosive imports, royalties, mining lease fees, land development tax, and income tax on company profits.