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Jute Manufacturing Sector of Bangladesh Challenges, Opportunities and Policy Options

Khondaker Golam Moazzem
Senior Research Fellow
Centre for Policy Dialogue (CPD), House No. 40/C, Road No. 11 (New), Dhanmondi R/A, Dhaka-1209 Bangladesh

Md. Tariqur Rahman
Research Associate
Centre for Policy Dialogue (CPD), House No. 40/C, Road No. 11 (New), Dhanmondi R/A, Dhaka-1209 Bangladesh

Abdus Sobhan
Programme Associate
Centre for Policy Dialogue (CPD), House No. 40/C, Road No. 11 (New), Dhanmondi R/A, Dhaka-1209 Bangladesh

Abstract/ Executive Summary:

Jute manufacturing sector of Bangladesh is passing through a critical juncture in the course of its long track record of development. The sector faced both opportunities and challenges. The sector has inherent weaknesses, but it has also demonstrated strengths. These weaknesses and strengths of the jute sector need to be identified in order to provide appropriate directions of reform and restructuring for the growth and development of the sector. The CPD study has strived to fill in a long gap in this respect. The study has attempted to provide an analysis on the basis of real-time data generated through a broad-based survey. The study comes out with specific findings in terms of performance of jute mills, particularly in economic, technological, operational and managerial terms, which has led to the identification of major weaknesses and strengths of the sector and also helped to identify opportunities in order to take advantage of the emerging market conditions. It is hoped that these findings will help to provide necessary policy suggestions for the development of the sector. based survey. The study comes out with specific findings in terms of performance of jute mills, particularly in economic, technological, operational and managerial terms, which has led to the identification of major weaknesses and strengths of the sector and also helped to identify opportunities in order to take advantage of the emerging market conditions. It is hoped that these findings will help to provide necessary policy suggestions for the development of the sector.

Keywords: Jute, Jute manufacturing, Economic, Technological, Managerial, Labour related, Worker-related issues, Jute mills, Efficient jute manufacturing

Location: In Bangladesh

Start Date: 00-00-2007

End Date: 00-00-2007

Program Area: Variety and Species

Commodity: Jute

Objectives:

Major objectives of the present study are: a) To understand the changes in structure and composition of jute manufacturing sector of Bangladesh and analyze economic, technological, managerial and labour related issues of the jute manufacturing sector under different regimes. b) To study economic, technological and worker-related issues of jute mills currently in operation, under the public and private sectors, in order to identify major factors responsible for their efficiencies/ inefficiencies. c) To identify opportunities and challenges that needs to be confronted by the jute manufacturing sector in the near future. d) To extract appropriate policy suggestions with a view to developing a viable and efficient jute manufacturing sector.

Methodology:

The CPD conducted a primary survey of 45 jute mills in 2007—these accounted for about 35 percent of the total number of jute mills currently in operation in Bangladesh. Of the 45 jute mills, 14 jute mills were owned by the BJMC, 17 by the Bangladesh Jute Mills Association (BJMA) members and 14 by the Bangladesh Jute Spinners Association (BJSA) members. A total of 85 workers working in different jute mills were also interviewed. A structured questionnaire was prepared to conduct the survey, which was discussed with all major stakeholders and pre-tested in two jute mills before finalization. Major issues highlighted in the questionnaire were production and export, availability of technologies, workers, management, productivity and efficiency of machinery and workers’ efficiency of management, procurement of raw jute, access to finance, cost and income, export market, major challenges, etc. In order to understand the trend in jute production, employment, capacity utilization, cost and profit, most of the questions were directed towards two specific time periods: 2002 and 2007. The survey was conducted for three continuous months from November 2007 to January 2008. The production trend of the jute manufacturing sector can be broadly categorized into four periods: first phase (1950-1970); second phase (1972-1981); third phase (1982-1990); and fourth phase (1991-onward) (Figure 1). During these four phases, jute manufacturing sector had experienced various changes in policies, and also in the pattern of utilization of jute and jute goods. In the pre-independence period, jute mills were owned by a small number of private entrepreneurs. During this phase, the average hessian production was 155,586 metric ton (MT) per year, of which 87 percent was exported; the comparable figures for sacking were 267,614 MT and 78 percent respectively. Production reached its peak in 1969, with an output of 5.74 lakh MT. Due to political instability and damages caused during the year of Liberation in 1971, operations of jute mills were interrupted. Consequently, production declined in 1971 and 1972. Thereafter, production started to increase. In the second phase (1972-1981), the government decided to nationalize the jute manufacturing sector and took control of all the private sector jute mills. During the 1970s, an average level of production of hessian was about 165,000 MT, of which 94 percent was exported, while comparable figures for sacking were 225,460 MT and 86 percent respectively. Growth in the production of jute goods between 1960 and 1980 can be attributed to the growth in production of hessian, sacking and carpet backing cloth (CBC) products.

Source of Information: CPD Occasional Paper Series 78, ISSN 1818-1570 (Print), ISSN 1818-1597 (Online)

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

Jute manufacturing sector of Bangladesh is passing through a critical juncture in the course of its long track record of development. The sector faced both opportunities and challenges. The sector has inherent weaknesses, but it has also demonstrated strengths. These weaknesses and strengths of the jute sector need to be identified in order to provide appropriate directions of reform and restructuring for the growth and development of the sector. The CPD study has strived to fill in a long gap in this respect. The study has attempted to provide an analysis on the basis of real-time data generated through a broad-based survey. The study comes out with specific findings in terms of performance of jute mills, particularly in economic, technological, operational and managerial terms, which has led to the identification of major weaknesses and strengths of the sector and also helped to identify opportunities in order to take advantage of the emerging market conditions. It is hoped that these findings will help to provide necessary policy suggestions for the development of the sector. based survey. The study comes out with specific findings in terms of performance of jute mills, particularly in economic, technological, operational and managerial terms, which has led to the identification of major weaknesses and strengths of the sector and also helped to identify opportunities in order to take advantage of the emerging market conditions. It is hoped that these findings will help to provide necessary policy suggestions for the development of the sector.

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