Upload
masum-hussain
View
1.276
Download
0
Embed Size (px)
Citation preview
Welcome to Our
Presentation
Our Topic
“Sick industries: The reasons and remedies for it’’
(A case study in Bangladesh)
Submitted to:Sakufa Chowdhury Assistant Professor, Department of Business Administration, SUST, Guest Teacher, Leading University
Ehsan Ahmed Chy.1201010230
Syed Ali Hasan1201010248
Mahmudul Karim1201010205
Masum Hussain1201010202
Abdul Motin1201010219
Abu Ahmed Shahib1201010247
Submitted By,
Torch Bearers
• Sick Industrial Companies Act, 1985
• A unit is defined as sick industrial company where:• a company is registered for not less than seven years• It incurred cash losses for the current and preceding
financial year.• Its net worth was eroded.• Even 50% or more of the net worth of the past 5
financial years is eroded because of accumulated losses
What is Industrial Sickness
• Colonial exploitation• Agriculture based economy• Lack of capital• Misuse of natural resources• Depend on foreign aid• Natural disaster• Lack of skilled entrepreneur• Corrupted administration
Causes of Sickness(General Point of View)
1. Management Related: (relating to all general management activities, personnel activities, marketing activities etc.)
• a) Improper strategic management policy
• b) Lack of proper training
• c) Improper manpower planning
• d) Lack of market planning
• e) Absence of well developed organizational culture
Causes of Sickness (Contd...) (In Details)
2) Financial: (relating to money)
• Poor financial management policies• Improper managing of accounts,• Lack of timely decisions form government• High interest rate on loans• Improper financial analysis (in some
cases) for investment
Causes of Sickness (Contd...)
3) Technological: (relating to production)
• Defective project planning• Use of defective forecasting data• Improper capacity planning• Inadequate quality control • Absence of use of scientific methods • Improper process planning
Causes of Sickness (Contd...)
4) Environmental: (relating to economy & technology)
• Change of local and global economic conditions• Lack of coordination between various ministries• Strikes, Hartals and other working day losses • Occurrence of Natural calamities • Attitude of mass media• Change of Technology
Causes of Sickness
1) Reduced working capital, fall in sales / profit 2) High managerial and labor turnover, labor unrest, 3) Rise in complaints from staffs and customers, 4) Unfavorable market development, 5) Rise in finished product inventory, 6) Decline in productivity, 7) Difficulty in paying salaries, bills,
Symptoms of becoming Sick
• 1. All functional areas are normal and efficient.• 2. Generating good cash profit.• 3. Positive value of net working.• 4. Positive value of net worth.• 5. Satisfactory debt equity ratio.
Stages of Sickness (contd...)
Stage I (Normal/Healthy)
• 1. Decline in profit during last year.
• 2. Losses estimated in the current year.
Stages of Sickness (contd...)
Stage II (Tending Towards Sickness)
• 1. Cash losses incurred in last year are expected in current year also.
• 2. Deterioration anticipated in current year although current ratio was more than 1 during last year.
• 3. Deterioration anticipated in debt equity ratio during current year.
Stages of Sickness (contd...)
Stage III (Incipient Sickness)
Stages of sickness
• 1. Erosion of net worth by 50% and more.• 2. Units being closed for a total period of 6
months and more during the past year.• 3. Default in payment of loan installment.
Stages of Sickness
Stage IV (Final Stage)
• Political stability• Technical education• Proper use of natural resources• Realistic planning• Use of technology• Govt. investment• Local adviser• Capital formation
Preventive Measures
At Planning Stage At The Operation Stages of Normal Units For Units Tending to Be Sick For Units of Incipient Sick For Sick Units
Corrective Measures
• Term Lending Institutions
• Commercial Banks
• Entrepreneur
• Government
Roles of Concerning Agencies
– Appraisal of Management
– Banning Industries Not Having Scope
– Machinery & Equipment
– Satisfactory Implementation
Role 1Term Lending Institution
• Careful Proper Appraisal
• Timely disbursement
• Feedback from Commercial Banks
• Warning Signals
• Market Intelligence
• Stemming Sickness
Role 2Commercial Bank
• Management Board
• Partners in Enterprise Solvency of Individual
Security of Collateral
Profitability & Viability of Project
Entrepreneurial Capabilities
Partnership
Responsibilities
Awareness Sickness Warning
Role 3The Entrepreneur
• Sudden changes in industrial policy
• Resistance to change
• Power to change
Role 4The Government
Sylhet
12,596
98,07,000
98253
0.64 0.10
Area Population Estate Area Total Industrial UnitActive Unit Sick/Closed
Division Wise Sick Units in Industrial Estates
Sylhet Hobigonj Maulvi Bazar Sunamgonj Total
Area 3,490.40 2,636.58 2,799.39 3,669.58 12,595.95
Population 3,404,000 2,059,000 1,902,000 2,443,000 9,807,000
Density 975.25 780.94 679.43 665.74 778.58
Estate Area 25.76 15.00 14.59 25.52 81
Industrial Plot 255 70 101 116 542
Industrial Unit 150 59 64 21 294
On Production 130 35 29 7 201
UnderConstruction 6 17 10 7 40
Sick or Closed 13 2 7 0 22
Districts Wise Sick Unit in Industrial Estates of Sylhet Division
Rising economy of Bangladesh According to IMO report Total demand Revenue of government International trade
Ship Building Industry (Contd...)
0.03% in 2005 0.57% in 2008 0.80% in 2010 0.90% in 2013
Ship Building Industry (Contd...)
There are 150 small & big shipyards in Bangladesh
International competition (plus point)
Position of Bangladesh in inter- national market
Problems
• Interest rate• Bank guarantee money• Time• Security• Environment• Port facilities• Insurance
Solutions & Possibilities
• Fixed area• Industry policy• Cost & quality• Assurance of minister• Near future
Ship Building Industry
Problems
• Interest rate• Bank guarantee money• Time• Security• Environment• Port facilities• Insurance
Solutions & Possibilities
• Fixed area• Industry policy• Cost & quality• Assurance of minister• Near future
Ship Building Industry
That’s All of Our
Presentation
Thanks for Patient Hearing