Revival hope revolves round private sector

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Against the backdrop of a general bleakness in the jute industry, small mills in the private sector hold out hope for the nation.

“We see light at the end of the tunnel. Environment and health awareness is pushing the demand for jute products. More and more entrepreneurs are now showing interests in jute mills,” said Najmul Huq, chairman of Bangladesh Jute Mills Association (BJMA).

The price of jute products was $58 per hundred bags a few years back; it now stands at $72.

According to the BJMA, the dismantled public-sector behemoth Adamjee Jute Mills spun off about 50 profit-making jute mills in the private sector in the past few years.

“These mills have driven the production binge over the few years, with good profit margins,” BJMA Secretary Abdul Barik Khan said.

Of the 5.84 lakh tonnes of jute products manufactured in the country last year, private-sector mills under the Bangladesh Jute Spinners Association (BJSA) churned out around three lakh tonnes while those belonging to the semi-public BJMA produced 1,66,265 tonnes.

The state-owned Bangladesh Jute Mills Corporation (BJMC) factories came in last with only 1,26,726 tonnes.

“Diversification of products in line with global demand is a must” for the private sector, Najmul Huq, the BJMA chairman, said.

The BJSA’s 51 mills produce jute yarn. The BJMA and BJMC factories mostly make hessian, sackcloth, carpet-backing cloth and, on a small scale, carpets.

Experts and officials said the industry could produce over eight lakh tonnes of products every year making use of almost every bale of raw jute grown in the country if all the mills were running.

But the massive Tk 5,500 crore debts owed by some big mills, frequent power cuts, rusted machinery and sloppy management gummed up the BJMC mills and many privatised in 1982-83.

The industry has still upped production in the past few years thanks to ingenuity of the private sector: 5.23 lakh tonnes in 2004-05, 5.43 lakh tonnes in 2005-06, 5.73 lakh tonnes in 2006-07 and 5.84 lakh tonnes in 2007-08.

Nasim Akhter Mollah set up the NN Jute Fibre and Industries Ltd in Pabna’s Ishwardi, snapping up 31 looms from the dismantled Adamjee Jute Mills.

“We buy raw jute when the prices are low…continue seamless production. If there are any mechanical glitches, we fix them immediately,” he described his recipe for success.

His mill needs around 400 tonnes of raw jute a month, producing mostly sackcloth for local and overseas markets, especially India. He said net profit is over 5 percent on a conservative calculation.

Nasim plans to diversify products and has already sought out technical know-how from the Jute Diversification Promotion Centre in Dhaka.

The government-owned jute mills incur losses mostly for corruption in raw-jute purchases and repair of machinery, he said. “The jute that we buy, let’s say, at Tk 600 will be Tk 900 for the BJMC mills.”

“What the government needs to do is encourage these mills and help them diversify,” BJMA Secretary Abdul Barik Khan said.

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