Bangladesh Jute Industry

Topics: Brand, Brand equity, Brand management Pages: 33 (9949 words) Published: February 15, 2010
Bangladesh Jute Industry
The jute industry in the public sector, by virtue of its location in East Pakistan, became the property of Bangladesh after independence in 1971. Pakistani mill owners (about 68% of the total loom strength) left the country, leaving the industry in disarray. Abandoned jute mills were subject to heavy looting. The new government of Bangladesh had to take up the responsibility of rebuilding the industry. By a nationalization order, about 85% of industries, including all jute mills, were nationalized. Bangladesh Jute Mills Corporation (BJMC) was formed to manage and look after all the 73 jute mills having 23,836 looms at that time. At one stage the number of jute mills under the jurisdiction of BJMC went up to 78. BJMC had to resurrect the industry from a ruined position. Immediately after liberation, it became very difficult to solve problem of financial hardship of the jute industry because financial institutions were not working well. Frequent power failures and power stoppages also compelled the industry to suffer heavy losses in terms of production and foreign exchange earnings. In addition to these problems, the short supply of spares, labor unrest, wastage in production etc. also shook the industry severely. For jute industry of Bangladesh, the first two years after liberation was the period of reorganization. The government offered cash subsidy to the industry, which amounted to Tk. 200 million annually. The annual cash subsidy was reduced to 100 million since 1976-77. Thanks to this policy and periodic devaluation of currency, Bangladesh could retain its position of a prime exporter of jute goods in the dollar areas of export. The industry earned profit in 1979-80, when the subsidy was withdrawn. By December 1979, BJMC had 77 jute mills, two carpet backing mills, and two spare parts producing units. Jute is abundantly grown in Bangladesh, amounting currently to about 1 million tons a year, which constitutes nearly 40 percent of the world‘s jute production. Jute has a long historical role in the socioeconomic development of Bangladesh. Once, jute was known as the Bengal fiber of Bangladesh. It provided considerable employment opportunities to the country‘s work force as well as foreign currency. For example, Page 1

during 1975-1979, exports of jute and jute-products accounted for 73 percent of Bangladesh‘s total exports. Over the last two decades, the traditional uses of jute have—due to the emergence of synthetic fibers—declined drastically. Today, jute and jute products amount to less than 5 percent of Bangladesh‘s total exports.

Jute Carpets
Jute Carpet one of the three major items produced in JUTE mills of Bangladesh. The other two items are hessian and sacking. Production of carpet from jute increased in Bangladesh with a decline in the demand for sacking due to increased use of paper bags and bulk handling. In 1951, woven carpets and rug making activity in East Pakistan was pursued in 674 enterprises, of which only 3 were power driven, which implies that carpet making was basically a domain of cottage industries. The government established some jute mills in the 1950s and the mills bailed 130,000MT of jute in 1955-56. The output rose to 561,000MT in 1969-70. The industry suffered during the WAR OF LIBERATION and the production fell to 315,000MT in 197273. The production gradually increased after rehabilitation and rose to 577,458MT 1981-82. Only a few jute mills converted sacking looms into carpet looms. By 1980, there were seven carpet mills with a total capacity of 65,100MT. Some new mills were established later and the volume of carpet production was 425,812MT in 1998.

Jute Carpet Industry Becoming Extinct
The rusting machines imported from Belgium have been silent since 2003, when Bengal Carpets, a sister concern of Bengal Group and one of the country's last mass carpet producers, closed down its operations. Like so many industries linked to jute, the decline of the...
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