SLOWLY but steadily, the government initiative to encourage entrepreneurs to produce new diversified jute products is gaining momentum, raising hope to revive the lost glory of jute.
The Jute Diversification Promotion Centre (JDPC) was set up in March, 2002 to inspire both new and old entrepreneurs to set up small and big factories in such a promising sector by offering technical and financial supports.
The main objective of the first ever such government project is to increase the use of eco-friendly jute goods both internally and externally with a vision to dominate the vast market that has emerged after multi-fibre arrangement (MFA) era in 2004. During the post-MFA era, as per WTO rules, any package should be made of eco-friendly, easily degradable, disposable and have recyclable ingredients. As such, the jute is poised to become the most demanding, reliable and multifaceted component in the packaging sector.
Bangladesh is the second largest jute and jute goods- producing country in the world after India. The other major jute-producing countries are China, Thailand, Myanmar and Nepal. India consumes 90 per cent of its jute and jute products domestically while Bangladesh exports 90 per cent of its jute and jute products.
The jute diversification project with a revolving fund of Tk 20 million started its function with 11 identified technologies. Now the number of its technologies is 31. Over 100 entrepreneurs are now in the race to set up diversified jute product factories. Taking support from the JDPC, two firms -- Sky Land and Farm Ltd -- have been producing 26 diversified jute items since May 2002 in their industries in Narsingdi and the items are 100 per cent export-oriented. Now these products are being exported to Japan and some European countries. The target of the industry that employed nearly 300 staff and workers is to consume 9,000 tonnes of raw and export products worth Tk 120 million every year.
Under its project, the JDPC provides 20 per cent fund of the total loan to the entrepreneurs through banks alongside providing free technical support. It also provides 15 per cent fund of the total cost to the entrepreneurs as grant for direct procurement of machinery. The target of the five-year project is to increase investment in this sector from Tk 5.0 billion to Tk 10.0 billion. Now nearly Tk 2.0 billion is being invested in the sector.
With the JDPC support two industries have so far gone into operation, while two projects under implementation process, five under consideration of various banks and 20 projects at various stages of scrutiny. Unfortunately some banks are allegedly hesitant in sanctioning loans to the entrepreneurs even after recommendation from the high executives of the JDPC.
Diversified jute products can find a huge market at home and abroad in the wake of growing concern for the environment across the world. Admiration for jute products has increased remarkably in recent time across the world as the products made of synthetic fibre result in environmental hazards. Tremendous demands for jute products have been noticed in the USA only because they are environment friendly. But, success of jute and jute products largely depends on making use of the worldwide awareness of the environment. Moreover, the producers have to enhance quality and ensure durability of diversified jute products to survive in the competitive market.
There is no denying that the present world is marked by an urgency to go back to nature. And it will result in the extensive use of jute products. Unfortunately, people are reluctant in investing money and time in research work to diversify jute products. Through a joint initiative of entrepreneurs, the Export Promotion Bureau, commerce ministry and foreign missions can create a huge market of the diversified jute products.
Bangladesh earned foreign exchange worth Tk 403 million in FY2000-01 from diversified jute products export. The amount was Tk 433 million in FY2001-02, Tk 528 million in FY2002-03, Tk 637 million in FY2003-2004 and Tk 830 million in FY2004-05. However, the export earnings represent performance of only 25 local enterprises. Besides, these firms sold jute products worth Tk 757 million in the local market in last five years.
Here, let's cite an example about how initiatives are being taken in the private sector for diversified use of jute. In Nilphamari, innovative skill of some people living in remote village led to the diversified use of the golden fibre. They are producing carpets, blankets, shopping bags and other fashionable items and crafts with simple bamboo and wooden tools.
Boragari village in Domar upazila on the bank of Doani river, 25 kilometres from Nilphamari town, is known for diversified jute products. The work is done mainly by females. They produce the items manually without use of any modern machine. The work needs much concentration which is suitable for females.
They can produce the finest yarn from raw jute to make fancy goods. A woman takes only a week to produce a carpet measuring five meters in length and 1.5 meters in width. To produce such a carpet, a worker needs raw jute and dye worth only Tk 150.00. The product is sold in between Tk 300 and Tk 350. A woman artisan can make four to five such carpets a month that earns her a profit of TK 500 to Tk 1000. Their expertise and fine quantity products have attracted traders, but not any government official to patronise the initiative.
It is evident that such initiatives would open up huge prospects for diversified use of jute and export, if patronised. The government should extend financial support and arrange proper training for the jute artisans to improve their skill. An export promotion drive will definitely create good foreign markets for the items. The Bangladesh Small and Cottage Industries Corporation (BSCIC) should come in a bigger way to patronise the jute diversification programme.
However, experts fear Bangladesh jute industry may collapse within the next three to five years if the present alarming trend in the sector continues. Only a comprehensive jute policy can save the sector in Bangladesh, they observe. When jute goods have good demand in global market, Bangladesh's jute industry continues to cut down production capacity. Some mills are being forced to close down. This may be termed a suicidal trend for the national economy.
Exports and local sales of the Bangladesh Jute Mills Corporation (BJMC) and the Bangladesh Jute Mills Association (BJMA) mills during 2003-04 were only 192,000 tonnes and around 73,000 tonnes respectively as against 514,000 tonnes and 37,000 tonnes respectively of 1982-83. There is a scope to increase the export of traditional products at least to a level of 350,000 tonnes from the present level of nearly 200,000 tonnes which will raise the export earnings by Tk 5.0 billion.
Jute is by far a neglected sector despite having almost 100 per cent local value addition and the farmers fall victims to unstable government policy as they do not get good prices of their produces years after years and are forced to shift to other crops.
Jute experts, however, eye the need for a comprehensive agriculture, industrial and trade policy to boost the jute sector. Country's jute industry must be saved from a host of global conspirators who want to destroy this eco-friendly sector and promote their own 'trash' products.