Home ›› 30 Oct 2022 ›› Special Supplement
Good news waits for jute producing countries such as Bangladesh, because the demand for environmentally friendly, green, natural, eco-friendly and biodegradable products is increasing across the globe – especially in the developed nations – day by day.
A report by the United Nations shows that the demand for all types of natural products in consumer markets around the world is increasing by 2 per cent to 3 per cent annually. Many nations are encouraging the use of environmentally friendly products by raising taxes and passing laws.
The European Union (EU) has already passed legislation to discourage the use of plastic bags by 80 per cent. From 2020, plastic bags were banned simultaneously in 27 countries across Europe, where around 45 billion pieces of shopping bags are currently being used.
According to the International Jute Study Group, the annual demand for shopping bags in the world market is about 500 billion pieces.
As part of the global movement against plastic, initiatives have already been taken to impose more taxes, while limiting and banning the use of plastic bags in many countries, including in the United States, United Kingdom, Europe, Japan, Australia, China, Southeast Asia, Asia Pacific, and some African countries.
The Queensland government of Australia has banned all plastic bags from July 1, 2018, where about 900 million bags were used annually.
Following a special discussion on the adverse effects of plastic waste on the environment held at the World Economic Forum in 2018, many famous and expensive brands in the world are now rethinking about the plastic wastes they have been producing.
Multinational business giants such as Pepsi and Coca-Cola have jointly decided to invest heavily in “recycling technology” to collect and recycle their used plastic bottles.
Jute a viable replacement for plastic
In the international market, diversified jute products have a huge potential. According to market researchers, the world has a $1.3 trillion market for home gardening and vertical gardening and $2.4 trillion in the fashion, lifestyle, and apparel sector in 2022.
In 2020, the market size for technical textile was $170 billion, while market size for the packaging industry stood at $851 billion in 2017. In 2021, home textile had a $130 billion market, while jute bags had a $2.6 billion market across the world.
The opportunity is there if the countries can produce diversified jute products and expand their market by replanting synthetic fibers.
For example, some countries including India and China are making furniture and other products by adding jute fiber to other natural fibers and polypropylene. The Indian Railways is already commercially producing and using jute boards from jute, reducing the use of wood and plywood.
By blending cotton with jute fiber, they are making home furnishings and home textile products as well.
International Jute Study Group is saying that the use of jute fiber under technical textiles can open up new horizons in some sectors.
Several brand car companies in the world, including Mercedes (Daimler), BMW, Audi, Volkswagen, Ford, Toyota, Tesla, Chrysler, Volvo, and Mitsubishi, are making interior components of their cars using jute fiber.
These car companies are currently using about 1 lakh tonnes of jute and other natural fibers.
India exploring jute’s potential
In India, tax exemption on jute remains in effect. In 1987, the Indian government enacted the Jute Packaging Act. Consequently, 40 per cent of India’s total jute production is used in local markets. As a result, the jute industry in India has gained a strong footing.
Back in 2018, the Indian government approved a proposal to make jute packaging mandatory for 100% food grains.
The Indian government is developing the jute industry and jute diversification through four research institutes, working on seed production, exports, seed development, advanced rating system, creation of skilled manpower using modern technology, commercial production and marketing of latest international standard versatile products according to the market demand.
These institutions – Indian Jute Industries Research Association, The Institute of Jute Technology, Central Institute for Jute Allied Fibres & National Institute for Research in Jute and Fibre Technology – have been working for years in the field of development.
The Indian government has allocated a budget of about Rs 150 crore annually for research in this area. Back in the 1990s, the Indian government first gave special financial incentives to modernise old jute mills with modern technology.
In line with this, in 2013, the special project “Incentive Scheme for Acquisition of Plants and Machinery (ISAPM)” was launched to encourage modernisation and technological development of new and old jute factories, which has played a very important role in the development and growth of this industry.
The country has established its branding in non-traditional markets by undertaking comprehensive market development plans and activities to introduce versatile jute products to the global market.
Efforts have been made to create new products from jute fiber through the National Institute of Design. Besides, Rs 5,500 crore per annum has been allocated for the development of the jute industry.
What should Bangladesh do?
Bangladesh earns $900-$1,000 exporting per tonne of raw jute, $1,000-$1,800 for per tonne of traditional jute fibre, $1,500-$2,000 for per tonne traditional jute products and $3,000-10,000 for per tonne value added diversified jute products.
So, more emphasis should be given on diversification of jute products, which can be done by small, medium or heavy industries.
To determine the demand for versatile jute products in the global market, the Ministry of Commerce should urgently conduct a “market analysis” so that entrepreneurs can take the initiative to produce the right products, keeping in mind the global demand.
Establishment of a subsidiary research institute is necessary where new commercial products based on jute will be developed according to the global market demand. There should also be a design institute involved in developing international standard jute products.
It is necessary for the government to formulate investment friendly policies as soon as possible, so that all types of entrepreneurs are encouraged to invest in this industry.
For the last two decades, there was no institutional framework for the development of human resource and skilled manpower for this industry.
Therefore, the highest importance should be given to building the institutional structure for the development of efficient human resources, to achieve the production capacity of versatile jute products based on modern technology.
And most importantly, there is no alternative to modernising old factories to keep up with other countries in terms of capacity. Therefore, the modernisation of old factories and production of versatile jute products based on new technology must get more attention.
A variety of fabrics are required to produce multi-dimensional versatile jute products. While the government/private jute mills in Bangladesh are producing only 6/7 types of fabric, India is already producing about 106 to 107 types of fabric. The fabric process in Bangladesh is about 20 per cent – 25 per cent higher than that of India.
In this regard, we have to prioritise setting up several specialised jute mills with modern textile technology very quickly, where there will be advanced quality dyeing and lamination facilities with gas supply.
This will ensure the supply of quality and demand-oriented fabric to Bangladeshi entrepreneurs, reduce raw material production costs, and increase the market competitiveness of local entrepreneurs with India.
Importance should also be given to local market expansion. There should be more emphasis on promoting, increasing usage and creating awareness of versatile jute products. Legislation is necessary, especially to mandate the use of multi-purpose jute products in government procurement policies.
The government should pay special attention to the development and expansion of the international market.
Participating in international fairs, making sure the Export Promotion Bureau is more focused in this sector, inking bilateral agreements with jute product importers in countries where import taxes are high, and strengthening Bangladesh’s branding in the global supply chain.
“Sustainable Business Platform” is now an important issue in the world market. Therefore, in this case, it is important for all factories of this industry to take steps in becoming compliant certificate holders.
At present, most buyers do not want to import goods if those are not from compliance certified factories. Big companies do not do this at all.
High quality jute is required for the production of versatile jute products. Therefore, jute cultivation with more productive modern technology and protection of jute farmers should be given importance.
The versatile jute industry has been declared a priority sector in the export policy, and cash assistance has been announced in the current financial year.
If this policy support of the government continues for the next few financial years, the entrepreneurs of this industry will hopefully be more enthusiastic and bold in producing new products and setting up new industries.
It is the need of the hour to bring the “Jute Diversification Promotion Center (JDPC)” into a permanent structure for the development and expansion of a multifaceted jute industry.
Besides, if the government announces a “Jute Paper Act” to manufacture paper pulp and paper from jute, many entrepreneurs will be interested. The Bangladesh Bank has allocated special funds at low interest to several important sectors, but not to the jute industry.
With the aim of increasing and expanding the production of versatile jute products, it is very important to provide loan assistance through the central bank at low interest for setting up new industries with modern technology, while modernising and expanding old ones.
A circular has been issued by the National Board of Revenue on the abolition of tax on sale of jute products in the local market, which will remain in effect throughout FY23. We think it is crucial to extend it for five more years.
The people of Bangladesh are very hardworking and creative. A long-term integrated plan is essential to achieve the above mentioned steps.
If the government and the private sector come forward to implement this plan together, Bangladesh’s jute will have the opportunity to lead the global market.
At the same time, this industry will be at the forefront in helping Bangladesh successfully implement the SDG by creating more momentum in our economy.
Md Rashedul Karim Munna is the chairman of FBCCI’s Standing Committee on Handicrafts, Handloom, Cottage Industry, Ethnical Product and Tribal Product. He can be reached at [email protected]
