A papermaking industry is struggling to compete with cheaper overseas alternatives.
But the industry’s problems are not being limited to papermaking in India.
In Bangladesh, a papermaking company, Alwai Paper Industries Ltd, has closed up shop.
It closed down a manufacturing plant in Bengaluru in April last year and now relies on outsourcing its papermaking operations to third-party suppliers.
Its closure is the latest in a string of closures and bankruptcies in the world’s largest papermaking market.
In a statement, AlWai said it was not prepared to invest in new plants and that it had no plans to restart operations in the near future.
“The company will focus on the development of its operations in Bangladesh,” it said.
“As a result, we will be taking the appropriate steps to manage our financial position.”
In a separate statement, the owner of a Dhaka-based papermaking unit said it would continue to employ about 60 people.
The move comes amid the ongoing financial crisis.
The country is facing a global financial crisis with the cost of imports rising to more than $1bn per day.
It has seen a sharp rise in the number of factories shut down and layoffs in recent months.
But Alwani Paper Industries was the biggest casualty.
The business had been running at a loss for three years.
The company, owned by a group of brothers, had recently signed a joint venture with a Bangladeshi papermaking plant to take the business to the next stage of development.
But this has come at a heavy cost, with the joint venture failing to deliver the desired result.
“We are going through tough times and this is a big blow to the company,” said a senior employee at the factory.
The employees said that the company had been unable to pay the wages it was owed.
“They (the brothers) are now in a state of bankruptcy and the government is trying to keep them afloat, but there are no funds to support them,” the employee said.
In April last month, Alwais Paper Industries, which made paper for the Indian market, closed its factory in the Indian city of Dhaka, shutting it down.
The closure of the factory, along with several other papermakers, also resulted in the closure of a second factory in Bangladesh.
This is not the first time that a papermaker has closed down in Bangladesh due to financial difficulties.
In March this year, Alwalas Paper Industries filed for bankruptcy in Bangladesh, after losing $3.2 million due to the debt of its paper-making unit.