An Analysis of the Revival of Jute Industry of Bangladesh

Report Proposal

Course: Business Communication (C102)

Submitted to
Dr. Rezwanul Huque Khan
Associate Professor
Institute of Business Administration
University of Dhaka

Submitted by
Al Nafee Ibna Siddique
Roll: 32, Section: B
Batch: BBA 29th

Date of Submission:
28.03.2022
 Letter of Transmittal

March 28, 2022

Dr. Rezwanul Huque Khan
Associate Professor & Coordinator, BBA Program
Institute of Business Administration
University of Dhaka

Subject: Submission of Academic Report Proposal on the topic "An Analysis of the
Revival of Jute Industry of Bangladesh"

Dear Sir,
I am pleased to have been presented with the opportunity to write a report on "An Analysis of
the Revival of Jute Industry of Bangladesh". I believe this can be a learning opportunity for me
that not only will help me understand how to write an academic report properly but also help
me better understand the education sector of Bangladesh and the curses it bears.

I would like to express my utmost gratitude for giving me the opportunity to write this report.
I hope that my Proposal meets your expectations and I apologize in advance for any
shortcomings.

Sincerely,
Al Nafee Ibna Siddique,
Roll: 32
Section: B
BBA 29th
Institute of Business Administration
University of Dhaka.

i
 Table of Contents

Letter of Transmittal .................................................................................................................i

Table of Contents.......................................................................................................................ii

1.0 Introduction..........................................................................................................................1

2.0 Literature Review................................................................................................................1

3.0 Methodology of the Study...................................................................................................2

3.1 Scopes of the Report..............................................................................................3

3.2 Limitations of the Report......................................................................................3

4.0 Research Contribution........................................................................................................3

5.0 Budget...................................................................................................................................3

6.0 Timeline/Schedule of Activities..........................................................................................4

7.0 References............................................................................................................................4

ii
1.0 Introduction

Many people in Bangladesh believe that the country’s jute industry has been steadily
declining. Some, nostalgic about the golden days of the golden fiber, are concerned
about this and would like to see a revival of the industry. Others, enthused by the growth
of newer industries, such as the garment industry which has emerged as a major player
in the global market, are more inclined to look past jute and think instead of more
complex products such as electronics and higher value-adding garments as a future
driver of Bangladesh’s exports.

But is the jute industry really declining? There seems to be some misperception about
this. The popular narrative about the secular decline of the jute industry is not correct.
In fact, there has been a revival.

Though there was a decline many decades ago. Much of the decline has been in the
state-owned jute mills. It is a different story for the private sector jute mills. The private
sector jute mills which used to specialize in the traditional jute product s, i.e., the BJMA
mills, have been able to compensate for the decline in demand for traditional jute
products by increasingly shifting to jute yarn production.

2.0 Literature Review

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

1
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 underprice its
products, making it harder for private mills to compete. 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.

3.0 Methodology of the Study

This research will extract data from secondary data sources. The secondary data will be
acquired from online websites, reference books, newspaper reports, magazines and articles..
All of the data will be properly analyzed and summarized in objective analysis in order to
reach a relevant conclusion for this report.

2
 3.1 Scopes of the Report

I will be collecting data from secondary sources to analyze the reasons behind the
revival of the jute industry. The objective is to determine what were the key factors
behind the revival of the jute industry and how can these factors help us in the future in
terms of the progress of the jute industry.

3.2 Limitations of the Report

Due to lack of available research on such topics and unavailability of academic

documents, it is difficult to have an absolute answer to all the question raised. Also as
I used secondary data sources, it is not always genuine and reliable. There are a lot of
generalized data out there in secondary sources. It is tough to determine the authenticity
of this data gathered from secondary sources.

4.0 Research Contribution

Jute is a vital sector from economical point of view in Bangladesh. Once upon a time jute was
called the ‘Golden Fiber’ of Bangladesh. 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 report is to highlight how the jute industry revived from its bad situation.

5.0 Budget

The overall budget utilization in the formulation of the report is illustrated in the table below.

Details Unit Cost per unit (in BDT) Total Cost (in BDT)

Printing 30 5 150

Paper 50 2 100

Internet 5 GB 100 500

Total 750

3
6.0 Timeline/Schedule of Activities

Task Timeline

Research and Making of proposal 23rd to 27th March

Submission of proposal 28th March

Approval of proposal 31st March

Writing of report 1st to 6th April

Submission of report 7th April

7.0 References

Uddin, M. J., Hossain, J., & Haque, M. A. (2014, juni). Present Condition of Jute Sector in
Bangladesh. Banglavision.

Mahmood, S. A. (2021, 30 July). Is Bangladesh’s jute industry really declining? Dhaka

Tribune.
https://archive.dhakatribune.com/business/2021/08/30/op-ed-is-bangladesh-s-jute-industry-
really-declining

Business Haunt. (2020). Jute Industry in Bangladesh | History, Problems, and Prospects.
https://businesshaunt.com/jute-industry-in-bangladesh-history-problems-and-prospects/.

Islam, R. J. A. S. (2021). Jute exports rise record 31% in FY21. The Business Standard.
https://www.tbsnews.net/economy/jute-exports-rise-record-31-fy21-291742

Civil Engi. (2029, 10 December). Jute Fiber – The Cheapest Natural Fiber.

www.civilengi.com. https://civilengi.com/jute-fiber-the-most-cheap-natural-fiber/