Khulna Newsprint Mills (KNM)

Khulna Newsprint Mills (KNM) a prime newsprint paper producing industrial unit of Bangladesh in the public sector. The Pakistan Industrial Development Corporation established it in 1959 on the bank of the river bhairab at Khalishpur in khulna district. KNM was set up at a cost of Rs 120 million to produce newsprint by using Gewa (exocecaris agallocha) wood of the sundarbans as raw materials. It is the first newsprint mill in Bangladesh and is the lone public sector enterprise of its kind. Sandwell and Company, a Canadian firm, worked as the consultant in its construction and commissioning.
The initial production capacity of KNM was 50,000 tons, distributed as newsprint (23,000 tons), mechanical print papers (17,000 tons) and lightweight papers like blue match, tissue and wraps (10,000 tons). In the first few years after commissioning, the plant could produce 48,000 tons per year. The production was enough to meet the domestic demand for grade paper and the mills even had surplus to export abroad. In 1965, the government took an expansion project to add one paper manufacturing machine, one grinder and one turbine. The same year the project was completed. After the independence of the country in 1971, the new government took over the KNM plant and placed it under the management of Bangladesh Chemical Industries Corporation. The Mill was then exporting 15,000 tons of newsprint per annum.
Gewa wood used by KNM is not a conventional raw material for paper manufacturing. It grows in abundance in the tidal and swampy areas of the Sundarbans. The wood is hard but light in weight and, under very high temperature and pressure, its logs are softened to get pulp of higher strength.
In December 2000, KNM had about 3,000 workers and other employees. The mill consumes 20 million gallons of water, 350,000 kilowatt of electricity and 33,600 gallons of furnace oil daily to produce papers of different qualities and weight. The types of paper produced include newsprint of 52 and 48.8 gram per square metre (gsm), bluish white print of 50-60 gsm, coloured paper of 55-60 gsm, wrapping paper of 42-125 gsm, blue match papers of 42 gsm, duplicating paper of 68 gsm and tissue paper of 28-29 gsm.
The production capacity of KPM decreased over time because of obsolescence of its equipment and machinery. The performance of KNM in terms of production and marketing was very poor in the late 1990s. Availability of imported newsprint paper of better quality and cheaper price and the rise in price of gewa wood worsened the position of the mill in the domestic market. KNM requires 47 million cubic feet of gewa wood per year. But in 1999, the forest authority supplied only 4 million cubic feet of the wood. Following the declaration of the Sundarbans as a world heritage site, the Forest Department imposed a ban on felling of gewa trees. The allocation for KNM went down to 1.5 million cft. in 2001 and the price charged per cft. went up from Tk 0.06 to Tk. 0.15 in 1999.
In the 1990s, the government implemented a renovation of KNM to produce improved quality of newsprint that can compete with the imported paper. Its manpower was reduced to 1,629. But these helped little in solving its problems of debts and losses incurred. Much of the newsprint paper produced in KNM remains unsold and the mills continue to accumulate debts to the government agencies. In 2001, KNM had debts of Tk 100 billion and the once rated industry unit of the public sector is now on the verge of being declared a sick enterprise.