ISSN: 2079-567X

Banglavision
Vol. 14 • No. 1 • June 2014

Present Condition of Jute Sector in Bangladesh

Mohammad Jamal Uddin∗
Jahangir Hossain∗∗
Md. Anamul Hoque∗∗∗

Abstract
Jute is a vital sector from economical, agricultural, industrial, and commercial point
of view in Bangladesh. Once upon a time jute was called the ‘Golden Fibre’ of
Bangladesh. But due to continuous loss every year, the present and future prosperity
and growth of this industry is in a vulnerable condition. There are different causes
behind this situation. This sector has a good potential to earn a lot of foreign
currencies for Bangladesh. Because at present, people are very cautious about
environment and jute is an environment friendly product. For this a good number of
researches are needed in this area. From this research, the policy maker will get
some idea about how to improve this sector. The aim of this paper is to highlight the
present scenario of jute industry in Bangladesh and give some recommendations to
improve this sector.

Introduction
The contribution of jute sector to economy of Bangladesh is enormous. This sector has been
generating employment to a large segment of total population of the country, directly and
indirectly over the years. Bangladesh produces 5.5-6.0 million (55-60 lakh) bales of raw jute
every year of which some 3.2 million (32 lakh) bales are used in the existing 148 jute mills.
The country exports 2.4 million (24 lakh) bales of jute. Some 1,60,000 employees of the
country are directly employed in the jute mills.
The total demand for jute goods in the international market is 0.75 million (7.50 lakh) tonnes.
Bangladesh exports 0.46 million (4.60 lakh) tonnes of jute goods while India enjoys a share
of 0.285 million (2.85 lakh) tonnes in the international market. Dhaka controls 62 per cent
share of the total jute goods market of the world and earn Taka 20.125 billion (2012.5 crore)

∗
Professor, Department of Business Administration, Bangladesh University, Mohammadpur, Dhaka.
∗∗
Assistant Professor, Department of Economics, Victoria Government College, Comilla.
∗∗∗
Lecturer, Department of English, Dhaka Residential Model College, Mohammadpur, Dhaka -1207.
 Present Condition of Jute Sector in Bangladesh 69

by exporting jute goods. Bangladesh is the lone exporter of raw jute. In recent year the
country exported 2.4 million (24 lakh) bales of raw jute valued at Taka 9.77 million (977
crore). In total Bangladesh fetched Taka 29.395 billion (2939.5 crore) by exporting raw jute
and jute goods. (Yusuf, 2007)
As jute industry is economically an important industry of Bangladesh, any problem this
industry faces should be studied carefully and should be removed as early as possible. At
present, the industry faces some serious problem both in public and in private sector. Some
of these problems are; ever-increasing need of subsidies and rise in cost of production, share
increased in idle looms, managerial vacuum, lack of effective operating policies, alleged
gross mismanagement in procurement of raw jute, shortage of varied nature of orders
received from the buyer, imbalance, obsolete and worn out equipment’s and some other
problems like these. All these problems have converted this industry into a heavily loosing
industry and hence needed generous subsidies from government. But it is being observed that
recently different organizations organizing seminars, symposium etc. and publishing various
articles in newspaper regarding present ailing situation on jute industries. All are concerned
how to overcome this situation and salvage the jute industry (Yusuf, 2007). So the authors of
this paper make a study on the jute industry of Bangladesh.

Objectives of the Study

This study is made to fulfill the following special objectives:
1. To introduce the present scenario of jute industry in Bangladesh.
2. To identify local sales and foreign sales for both BJMC and BJMA.
3. To identify the number of employees in both BJMC and BJMA.
4. To identify production efficiency.
5. To conduct a comparative performance evaluation of public and private sector jute mills

Methodology of the study

This study is made on the basis of secondary data. The authors did not find much difficulty to
collect relevant data to conduct this secondary based study. Data are collected on the basis of
production, employment, raw jute consumption, export earning, local sales of jute goods,
annual reports of BJMC and BJMA, statistical year book, study on jute and cotton textile
(Vol. 1) prepared by ministry of planning commission, various books and journals, etc.
Limitation of the Study
This paper has some limitations. As we know that jute industry is a very large industrial
sector, so it was not possible for the authors to discuss all of its area. For that reason, the
authors discuss the main area of this sector. The main limitations are as follows:

Lack of data: For comparative purposes, data is the main thing. Sometime data are
available but the figure is given in different unit in BJMC (Bangladesh Jute Mill
Corporation) and BJMA (Bangladesh Jute Mill Association), so conversion of data
into one form to another become difficult.

Lack of current data: Collection of recent data in jute sector is not an easy task. So
the authors used some non recent data.
70 Banglavision Research Journal Vol. 14, No. 1, 2014

Difference in figure: Difference in data of same type collected from different sources
had created some hazardous situation and sometime it was confusing.

Reliability of secondary sources: The reliability of the secondary data is not possible
to test.

Verifiability of data: There are some sources of data which are unreachable to be
verified.

Reforms in the jute sector: a brief history

After Bangladesh’s independence in 1971, the government pursued a program of
nationalization of large manufacturing enterprises. As part of this program it took over all
the abandoned jute mills and nationalized those owned by Bangladeshi citizens. The
operations of these nationalized mills were put under the Bangladesh Jute Mills Corporation
(BJMC). In the early 80s, some rethinking led to a partial reversal of this policy and over 50
percent of the mills (35 out of 66) under BJMC were privatized. Notwithstanding this
change, market forces were still not allowed to guide the operation of the mills and both
public and private sector mills remained mired in large financial losses.
In the 90s, the government focused again on the jute sector problems through a restructuring
program in order to create a commercially viable jute industry. Supported by the World
Bank’s Jute Sector Adjustment Credit (JSAC), the government put together a Jute Sector
Restructuring Program (JSRP) in 1993 to rationalize the cost structure in the jute industry
and to introduce mechanisms through which financial discipline and accountability could be
established. The measures under the program included closing the worst performing mills (9
out of 29) and downsizing two large public mills, privatization of at least 18 of the remaining
20 public mills, retrenching 45 percent of labor force, and debt restructuring of about Tk.35
billion (roughly US$900 million). For the retrenched workers the JSRP had a safety net
program, which included separation benefits varying between $2,600 and $13,000 depending
on the years of service, and re-training. All the 20,000 retrenched workers got the separation
benefits, but the retraining program failed to attract their participation.
It was anticipated that at the completion of the reform program, most of the jute mills would
be in private hands. However, political instability in the following years stalled the reforms.
Debt restructuring, loss financing and labor retrenchment were implemented but closure and
privatization of jute mills were put in abeyance. There was an unintended and adverse shift
in production from the relatively more efficient private mills to less efficient public mills
largely because of the creation of an uneven playing field for private mills. BJMC’s access
to budgetary funds as well as a guarantee of loss financing for several years allowed it to
under-price its products, making it harder for private mills to compete.
The poor financial performance of jute mills continues to be a major concern. Today BJMC
is the second largest loss maker among public sector manufacturing enterprises, with annual
losses of Tk.2.3 billion, accounting for over 50 percent of total manufacturing SOE losses in
FY2006. (http://go.worldbank.org/5WSKFPXCFO)
 Present Condition of Jute Sector in Bangladesh 71

Recent reforms
In 2002, jute sector reforms got a new lease of life with the closure of Adamjee Jute Mills
(AJM). This alone led to a decrease in BJMC’s losses from Tk.3.9 billion in FY2002 to
Tk.2.1 billion in FY2003. It also led to an increase in BJMC’s productivity, which jumped
from roughly Tk. 25,000 per employee in FY2001 to Tk. 39,000 per employee in FY2003.
The conversion of Adamjee into an Export Processing Zone (AEPZ) in 2006 is a landmark in
the country’s economic management and industrial development history. All developed plots
have been allocated to both local and foreign companies and as of January 2007, industries in
operation have created direct employment for 34,000 people. Once fully operational, AEPZ
is estimated to employ 70,000 people. The closure of AJM resulted in loss of 25,000
permanent jobs and 5,000 temporary jobs.
Closure of public mills has resulted in growth of private mills, particularly in northern
Bangladesh, a jute growing area, where industrialization is much needed. Five small mills
have been set up in the Greater Rangpur area, mostly with old machinery of closed public
mills. Investment in these five mills has been around Tk.1 billion (US$14 million) and they
provide employment for around 3,000 workers, producing about 40 tons of jute bags and
fiber daily. Three more mills are also expected to be established in the northern districts
shortly, which will provide employment for an additional 5,000 people.
More recently, the government has closed four jute mills. Given their dire financial position,
these public jute mills have been unable to pay their workers. Having accrued arrears of six
to nine months’ wages, workers had resorted to all kinds of distress coping mechanisms,
including borrowing and selling personal belongings for subsistence. Under the recently-
initiated retrenchment program, arrears are now being paid. In the case of Adamjee Jute
Mills closure, workers were given a “golden handshake” and gratuity payments, calculated
by a formula based on service length. Furthermore, as part of a safety net program for the
retrenched workers, BRAC is involved in a “Social Protection Package for Retrenched SOE
Workers” (the Kallyan project), providing training to workers to adopt new skills which will
allow them to gain employment elsewhere or set up their own businesses. Among other
components, including microcredit, the project also provides education stipends for the
children of retrenched workers so that they may continue with their schooling.
(http://go.worldbank.org/5WSKFPXCFO)

Production Efficiency
Production efficiency of jute mills depends on efficient and optimum utilization of both
spinning and weaving capacities of mills. The employees are all along pressed on the need to
increase the production efficiency of the industry, which was estimated to be working at
about 90% of the theoretical capacity. Among the principal factors, the poor state of
equipment which had suffered from both inadequate supplies of spare parts and a virtual lack
of appropriate maintenance programs, shortage of skilled personnel especially weaving and
management personnel, major bottleneck is extremely in sufficient and inadequate quantity
of yarn to permit looms to operate at their efficient levels, lack of operating efficiency of
spinning frames because of heavy dependence of spinning section on imported spares then it
is the case of looms, which suffered most especially in them early years of independence
because of inadequate supplies of spare parts and also lack of effective of BJMC and
inadequate foreign exchange allocation for spare import made the problem very serious.
72 Banglavision Research Journal Vol. 14, No. 1, 2014

Install Capacity and Looms in Operation

BJMC BJMA
Year Installed Loom in Installed Loom in
Percentage Percentage
Capacity Operation Capacity Operation
2001-02 15808 13024 82.38% 10239 5955 58.15%
2002-03 15808 12451 78.76% 10239 5240 51.17%
2003-04 14026 12554 84.10% 10217 5148 50.38%
2004-05 14866 12302 82.75% 10207 4317 42.29%
2005-06 14866 12204 82.09% 10207 4063 39.81%
Source: BJMC & BJMA Reports.
From the above table no 8 it is easy to say that presentation of loom in respect to installed
capacity of BJMC mills is much higher that the BJMA, it is on an average 48%. Detail of
installed capacity of BJMC and BJMA mills are given:

Export and Local Sales Performance

Output of jute mills are sold both in foreign sales of hessian in the year 2001-02 was 82,456
m.ton, in the year 2002-03 it increase to 10,000 but in the year 2003-04 it decreased to
87,178, after that there is a decreasing trend in case of foreign sales of hessian in the next two
years, in the year 2004-05 it was 80,965 m.ton and in 2005-06 it was 50,865.
In case of hessian, we find bigger quantity sold (83306) than what was produced by BJMC’s
mill (73004) in 2001-02. Again in year 2002-03 the sales of hessian (103598) was higher
than its production (86418). Some case was happening in 2003-04 and 2004-05 but in 2005-
06 sales (53031) of hessian was less then its production it production (78768). In case of
sacking sales was greater than its production in the year 2001-02, 2002-03 and 2004-05 but
in the year 2002-03 and 2005-06 production was higher than sales. In case of C.B.C year
2001-02, 2004-04, 2004-05, 2005-06 have production higher than sales, only in the year 93-
94 sales exceed production.
In case of BJMA, hessian sales was higher than production in the year 2001-02, 2002-03,
2003-04, 2004-05 but in the year 2005-06 the production is higher then sales. In case of
sacking 2001-02, 2002-03, 2003-04, 2004-05 and 2005-06 production was greater than sales,
only in 2003-04 sales in the year 2001-02, 2003-04, 2004-05 sales is greater than production
in 2002-03 and 2005-06.
Export of Jute Products by type from Bangladesh
in ‘000 tonnes (1 tonne = 1000 Kg)
Manufactures
Year Carpet
Yarn Hessian Sacking Backing Total
2008-2009 301.32 31.39 110.6 9.15 454.43
2007-2008 368.85 42.83 113.95 18.53 548.49
2006-2007 199.49 110.15 147.32 18.62 481.1
2005-2006 149.68 112.55 151.03 21.07 439.09
 Present Condition of Jute Sector in Bangladesh 73

2004-2005 143.9 100.43 124.17 n.a 389.29

2003-2004 175.85 48.68 81.76 19.21 326.24
2002-2003 183.04 57.17 117.29 25.81 383.7
2001-2002 147.15 84.16 130.86 27.55 394.42
2000-2001 153.54 75.2 144.1 31.34 408.54
1999-2000 156.56 87 123.69 34.62 405.19
1998-1999 158.7 107.29 134.4 25.55 431.4
1997-1998 122.95 78.29 83.77 36.73 343.9
1996-1997 134.59 79.03 153.75 32.92 409.61
1995-1996 85.4 97.2 163.8 45.7 427.4
1994-1995 107.3 115.88 194.82 48.42 494.87
1993-1994 90.55 133.47 159.38 57.17 466.85
1992-1993 85.1 122.1 213.6 48.8 491.8
1991-1992 90.5 132.6 192.3 58.2 487
Source: International Jute Study Group, http://www.jute.org/statistics_03.htm

Employment
Jute sector employees about 41% of total manpower employed in the major industrial sector
of Bangladesh, of which jute sector employees about 23% and the rest by the cotton sector.
Jute manufacturing industry is substantially labor incentive. The industry is one of the
biggest employers of the industrial workers engage in industrial sector of the country. The
following table no 23 show that in the year 2001-02 there was total 96586 employees in
BJMC mills. In the year 2002-03 it decreased to 88087 and in 2003-04 it decreased to 83717.
It again increases to 89416 in the year 2004-05 and then again in the year 2005-06 it fall to
87180 no of employee.
In case of BJMA mills total no of employee was 84325 in the year 2001-02 then it started
declined and in the year 2002-03 it was at 77523, in the year 2003-04, then it was at 59691,
the year 2004-05 it was 56414 and in the year 2005-06 it was 57046.
Total Number of Employee

Year BJMC BJMC

2001-02 96586 51326
2002-03 88087 48631
2003-04 83717 45883
2004-05 89416 38859
2005-06 87180 37339
Source: BJMC & BJMA Report
74 Banglavision Research Journal Vol. 14, No. 1, 2014

Portrayal of Jute sector in Bangladesh

1. Structure of Jute Industry in Bangladesh: There are two types of jute mills in
Bangladesh: a) 19 conventional/traditional jute mills are running under Bangladesh Jute
Mills Corporation (BJMC) producing Hessian, CBC and sack and 42 conventional jute mills
are under the Bangladesh Jute Mills Association (BJMA) in the private management. Out of
these mills only seven to ten mills running well, five to seven are limping and the rest being
closed. The reason is because of original entrepreneurs are burdened with heavy bad debts
and banks are unable to finance them due to overdrawn position.
After closing down the largest jute mill in Asia, Adamjee Jute Mills at Narayanganj, the
government handed over some of its good condition machineries to mills under Bangladesh
Jute Mills Corporation (BJMC) and sold rest of almost useless machineries to the private
entrepreneurs by which they set up having a capacity of 20-50 looms. Now, there are such 30
mills, producing traditional jute goods, they are also under Bangladesh Jute Mill Association
(BJMA).
There are 50 private jute spinning mills producing jute yarn/twine under Bangladesh Jute
Spinners Association (BJSA). The mills under jute spinning sector produce 0.29 million
(2.90 lakh) tonnes of jute yarn/twine and export 0.261 million (2.61 lakh) m. tonnes of
quality yarn/twine consuming 1.9 million (19 lakh) bales of high quality raw jute and earn
foreign exchange worth Taka 12 million (1200 crore) per annum.
Before the independence, the country had six jute yarn mills. However, this sector had
flourished during the '80s as the industry experienced a setback in the developed countries
during the same period. The entrepreneurs of the country bought these second-hand jute mills
machineries with a very low investment and started setting up these jute spinning mills.
Two types of opinion exist in Bangladesh over the management of existing mills under
BJMC. One group is in favor of privatization of the existing state owned jute mills,
where another group advocates reorganization/restructuring of BJMC mills. The mills
under Bangladesh Jute Mills Corporation are exporting 0.128 million (1.28 lakh) m.
tonnes of jute goods i.e Hessian, Sacking and CBC. (Yusuf, 2007)
Structure of Jute Manufacturing Industry: 2002-03 to 2009-10
Production of Jute Goods in Bangladesh: 2003-04 to 2009-10
(Thousand Million Tonnes)
Year Hessian Sacking Carpet backing Others Total
2003-04 60 179 26 279 544
2004-05 45 131 17 293 486
2005-06 53 164 25 302 544
2006-07 40 153 18 360 571
2007-08 48 173 21 48 290
2008-09 20 80 06 2 108
2009-10 25 102 10 7 154
Source: Statistical Pocket Book Bangladesh’2010-BBS
 Present Condition of Jute Sector in Bangladesh 75

Production of Jute Products by type in Bangladesh

in '000 Tonnes (1 tonne = 1000 Kg)
Production (in '000 Tonnes)
Year
Yarn Hessian Sacking Carpet Backing Total
2008-2009 359.09 40.49 180.6 11.13 594.42
2007-2008 377.3 48.49 173.22 21.4 628.41
2006-2007 228.26 118.82 197.92 19.4 571.99
2005-2006 200.28 127.92 206.12 23.87 565.93
2004-2005 201.47 120.24 175.57 18.93 521.77
2003-2004 187.8 49.4 145 19.8 404.7
2002-2003 228.4 71.6 187.1 27.3 515.9
2001-2002 188.3 72.5 183.8 29.4 479.0
2000-2001 179.2 85.6 180.5 32.6 483.4
1999-2000 176 99.1 178.1 27.3 486.3
1998-1999 192.9 89 198.8 37.7 526.5
1997-1998 160.6 89.9 231.1 40.4 551.4
1996-1997 144.8 91 218.9 43.6 510.7
1995-1996 110.4 100.5 210.9 48.1 502.3
1994-1995 114.3 117.3 212.7 49.9 536.0
1993-1994 109 114.3 223.1 51.5 529.3
1992-1993 130.7 116.6 244.2 55.8 577.2
1991-1992 109.6 132 202.8 60.8 521.9
Source: International Jute Study Group, http://www.jute.org/statistics_03.htm
Prices of Jute at Grower Level in Bangladesh India & Thailand
Note: 1 Maund = 37.32 Kg
1 Tonne = 1000 Kg

Year Bangladesh India Thailand

Taka/ US$ / US$ / Rupees/ US$ / US$ / Baht / US$ /
maund maund Tonne maund maund Tonne tonne Tonne
2009-2010 1009.4 21.39 573.25
2008-2009 991.90 14.42 386.29 702 14.69 393.71
2007-2008 727.50 10.60 284.12 452.9 11.22 300.64
2006-2007 630.58 9.13 244.68 475 10.75 288.02
2005-2006 684.83 10.20 273.22 537.9 12.02 322.15 7435 186.30
2004-2005 562.58 9.15 245.26 446.2 10.00 268.02 6027.5 150.59
2003-2004 343.9 5.84 156.60 299.9 6.60 176.97 7547 188.22
2002-2003 315.3 5.45 145.92 324.5 6.77 181.41 6997 164.31
2001-2002 450.1 7.90 211.59 402.1 8.44 226.16 7304 163.75
2000-2001 396.6 7.46 199.98 368.9 8.04 215.36 11415 272.23
1999-2000 339 6.73 180.46 360.1 8.25 221.10 8977 234.09
1998-1999 281.3 5.85 156.75 341.8 8.02 215.03 6330 166.30
1997-1998 212.9 4.69 125.67 235.2 6.13 164.15 5088 126.32
76 Banglavision Research Journal Vol. 14, No. 1, 2014

1996-1997 367.3 8.66 232.07 439.5 12.29 329.23 8720 343.17

1995-1996 510.8 12.50 334.97 515.4 15.03 402.75 10328 410.49
1994-1995 275.5 6.85 183.63 296.9 9.45 253.28 6070 243.87
1993-1994 304.8 7.65 204.86 271.5 8.65 231.91 6000 237.02
1992-1993 243.9 6.23 166.93 173.6 6.25 167.44 7016 276.97
1991-1992 273.19 7.16 191.79 181.79 7.04 188.69 7248 283.89
Source: Source: International Jute Study Group, http://www.jute.org/statistics_03.htm

2. BJMC makes profit after 29 years: The state-run Bangladesh Jute Mills Corporation
(BJMC) made a net profit after 29 years as both of its production and sale have increased
significantly. The corporation has started making operating profit as the production and sale
of jute goods have increased simultaneously in local and overseas markets. Besides, the
prices of raw jute and jute goods have also marked rise by 33 per cent in the international
market, because of its environment-friendly quality. From this April the jute mills under the
corporation made operating profit and gradually covering the losses and going to be a
profitable concern. The BJMC earned operating profit of Tk 69 million (Tk 6.92 crore) in
May this year while the profit during the July- May period of FY 2010-11was Tk 77 million.
At present some 19 jute mills are in operation under the BJMC management. Of the mills, 15
made operating profit in May this year but the corporation officials were hopeful that all the
mills will make profit .The Latif Bawani Jute Mills made profit worth Tk 35.2 million, the
highest among the BJMC mills. Bangladesh Jute Mills has earned Tk 12.4 million, while
Karim Jute Mills Tk 7.8 million, Rajshahi Jute Mills Tk 4.3 million, Gul Ahmed Jute Mills
Tk 6.58 million, and Hafiz Jute Mills Tk 5.09 million. The BJMC-run mills could not make
profit since 1982. The corporation for the last time made profit worth of Tk 175 million in
1982. After that it was always in the red. The BJMC exported 89,391 tonnes of jute products
in FY 2008-09. However, the corporation is expecting to increase it to 150,000 tonnes in
present fiscal. The demand of jute products will increase in the domestic markets in the near
future due to introduction of the mandatory jute packaging act-2010.
3. Seven Khulna jute mills earn Tk. 22.8m in the month of June: Seven out of eight state
run jute mills of Khulna industrial area under BJMC have profited Tk. 22.8 million (2 crore
28 lakh 25 thousand) during the month of June. However, Carpeting Jute Mills has lost Tk.
0.75 million during the period for poor selling of its production. BJMC Khulna zone has
achieved its success in June due to proper finance in the jute sector. Seven jute mills
produced 7202.63 metric tonnes of jute goods during the month of June.
Of them, Khalishpur Jute mill has profited Tk. 5.89 million by producing 960.43 metric
tonnes jute of goods, Crescent Jute Mill earned Tk. 5.26 million against the production of
1896.882 metric tonnes, JJI mill Tk. 4.54 million against the production of 714.11metric
tonnes, Star Jute Mill 2.6 9 million against the production of 922.86 metric tonns, Alim Jute
Mill 1.62 million against the production of 416.78 metric tonnes, Eastern Jute Mill 1.51
million against the production of 572.82 metric tonnes and Platinum Jute Mill Tk. 1.29
million against the production of 1458.08 metric tonnes. Only Carpeting Jute Mill has lost Tk
0.76 million by producing 260.62 metric tonnes during the period (source: www.worldjute. com).
 Present Condition of Jute Sector in Bangladesh 77

4. Success of the private sector: the rarely heard story: Contrary to the performance of the
public mills, there has been a private resurgence in the jute sector represented in the
Bangladesh Jute Spinners Association. Their members are engaged in the production of
profitable yarn and twine. With the growth of the wholly private spinning sub-sector, there
are now 118 privately-owned mills in the jute sector.
The deteriorating performance of BJMC mills did not have an unfavorable effect on the total
production of jute, which has remained relatively stable between 500,000 to 600,000 metric
tons. Instead, there has been major product re-orientation: from traditional products such as
hessian, sacking and CBC, to yarn and twine. The share of traditional products in total
production has fallen from 80 percent in the early 90s to 45 percent in FY2006, with
yarn/twine now making up more than half of total production. Since FY2000, export
earnings of the spinning sector have grown at an average 12 percent annually and account for
60 percent of export earnings (US$180 million) from jute goods.

Suggested Policy Measures

Cost control: The need for cost control has been felt comparatively much more severely and
urgently in case of jute industry than any other industries of Bangladesh. Adequate and
effective process cost control measures can only let this industry survive. Installation of
standard costing would bring about a revolutionary change by identifying imperfections,
inefficiencies, and causes of leakage of profits.
Effective production Planning
For effective production planning the line of demand of jute goods, buyers preferences, needs
and accordingly the market strategies should be fixed from time to for various jute goods and
also various regional markets.

Employments
Rationalization of employment, by removing surplus workers, considering operable installed
capacities of mills both under public and private sectors and also by providing sufficient
incentives, especially to the Line Sardars, who contribute more to the productivity efforts of
the jute mills. A rational wage policy should immediately be adopted and restored as quickly
as possible, so as increase the productivity which is now extremely low.
Raw jute pricing policy
The raw jute pricing policy should be guided with twin objective of providing fair price to
growers and reasonable procurement price for mills. Raw jute inputs be supplied to growers
through BKB and Grameen Bank, as there should of short-term finance for raw jute buying mills.

Revamp the capital structure

Steps should be taken to revamp the capital structure of jute mills by reassessing the value of
assets and providing them with loans and equity. If necessary the burden of previous loans
and interests should be written off for putting relevant units on sound financial footing and
farmers in hand and to putting relevant units on sound financial footing and farmers in hand
and to enable the processing units themselves to remain competitive in the world market.
78 Banglavision Research Journal Vol. 14, No. 1, 2014

Pricing policy
BJMC and BJMA mills should adopt aggressive marketing and pricing policies by keeping
low the coast of jute goods produced, ensuring better quality of jute goods for buyers by
enforcing strict quality control measures and by managing men, machines, materials
[especially raw jute] and money effectively, with a view to controlling cost as far as possible.

Training program
BJMC can play an important role in imparting technical knowledge in the industries
producing spare and machinery. Government should set up a training programme for the
existing entrepreneurs for the development of technical knowledge in producing jute mills
machinery and spare parts.

Research and development

Measures need to be undertaker for necessary programmes including product Research and
Development in order diversify product line in the area of developing new products from jute
viz., making of paper pump, hull making for boats, etc and improve quality of jute goods and
also alluring the consumers regarding safety of using raw jute, a natural produce, in
comparison to danger of excessive use of synthetic fabric.
Closely monitoring of performance
Performance and efficiency of jute mills should be improved by closely monitoring the
performance of jute mills and analyzing cost of each individual mills through a monitoring
dell and gradually eliminating the sick mills from the public and private sector.

Moving forward
One possible direction the jute sector in Bangladesh could take is to consolidate production
capacity in the more efficient mills and to create a market-responsive and cost-competitive
industry. The government’s new jute policy is expected to focus on enhancement of the
country’s production capacity, diversification of the product base and growth of export
earnings. It would be good if it is complemented with good corporate governance practices
within the remaining BJMC mills to ensure that both public and private mills can compete on
equal footing. BJMC’s financial losses continue to be a significant fiscal burden. This has
arisen not only from BJMC’s nearly automatic access to loans from the nationalized
commercial banks (NCBs) for many years, but also BJMC’s greater control over the
purchase price of raw jute and export price for jute goods. These conditions do not create a
level playing field for the private mills. Addressing these issues would enhance efficiency
and competitiveness of the sector and may help Bangladesh regain its past glory in the jute
market.
 Present Condition of Jute Sector in Bangladesh 79

Conclusion
Jute industry is beset with certain very serious problems, it is depend on heavy subsidies
from the Government, there is growing feeling in the mind of the people that this industry
which fed with locally produced indigenous raw materials should b e able to stand on its own
legs by effective and efficient husbanding of human and material resources. The failures of
JSAC program tell us that privatization cannot be solution of situation. What we need to
reestablish our jute industry is sincere effort from the side of employee as well as from the
side of Government. This is, of course, beyond doubt that the first problem to be tackled is to
formulate and affective and well-balanced jute policy. Because if we want to exercise
controls over the industry of bring out operational efficiency we must have a workable jute
policy. Above all sincerity, honesty, and integrity of the employee are the best panacea of the
lot of management ills.

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