Jute Industry After 1971
After the independence of Bangladesh, the West Pakistani owners almost closed all the jute mills or abandoned. The government ordered the Bangladesh Jute Board to take over those mills. In 1972, a total of 67 jute mills were nationalized and placed under the Bangladesh Jute Mills Corporation (BJMC). Thus, BJMC was responsible for controlling the price, purchase, and sale of jute in the country as well as the financial and decision-making tasks of the jute industry. But due to mismanagement and corruption, all the jute mills were suffering from operational problems. In 1973, the government established the Jute Division under the Ministry of Finance. Later it turned into the Ministry of Jute.
Privatization of Jute Mills 1981-1982
The number of jute mills under BJMC was increased to 82 by 1981. Though the financial crisis, devaluation of taka, increased price of raw jute — affected the industry badly. Due to a decline in exports and financial losses, the government started to denationalize the jute mills. After 1982, out of a total of 82 jute mills, the government denationalized 35 jute mills, withdrew Capital of 8 mills, and merged 1 jute mill (Banani) with Mymensingh Jute Mills. The government also formed Bangladesh Jute Mills Association (BJMA) to represent the privatized jute mills in 1982.
Since 1993, a number of state-owned jute mills have been closed/sold/consolidated at various times under the World Bank’s Jute Sector Reform Program. In 2002, the government shut down Adamjee Jute Mills – the largest jute mill in the country, due to a severe financial crisis. Although the number of privately owned jute mills has increased during this period.
The jute manufacturing sector is one of the oldest manufacturing fields in Bangladesh. Jute does indeed have a proud past and a chance for a prosperous future. In the periods of 1960s and 1970s, this sector contributed a major share of the manufacturing sector in national economic earnings and also shared a larger portion in manufacturing employment. Jute and jute products exports were the two significant sources of the then Pakistani foreign currencies during the 1960s. In 1971, after the war of independence, West Pakistan originated as Bangladesh. The West Pakistanis who had jute factories in the then East Pakistan left Bangladesh along with their jute mills. In 1972, the government of Bangladesh nationalized all industries, including jute mills. The nationalized jute mills were located under the Bangladesh Jute Mills Corporation. Bangladesh Jute Mills Corporation was assigned with tasks like regulation of price, buying, and selling of jute in Bangladesh. During the 1970s, issues like rising costs, the devaluation of Bangladesh currency, and corrupt practices contributed to economic losses incurred by Bangladesh Jute Mills Corporation. In 1973, the Bangladesh Government set up the jute division and held it within the Finance Ministry, and the jute division became the jute ministry later in 1976. An experienced and skilled panel formed by the government suggested the privatization of the jute factories by the government in 1979. During the 1980s, the government-funded subsidiaries and export incentives to facilitate the sector for coming out from bad performances. In 1982, the
government sector worked a sum of 72 jute mills, shortly before the denationalization initiative by the government. From 1882 to 1983, the government began denationalizing the jute mills held under the public sector- the government privatized 34 jute mills from the 72 government sector jute mills from 1982 to 1985. In July 2007, the Government of Bangladesh took several decisions as regards public sector jute mills and their poor performance. By the time of 2009, the industry contributes more than 3.9 percent of Bangladesh’s total exports, which is exceedingly lower in contrast to its share in the overall export, which was detected in the 1970s. (89.9 percent in 1973).
Jute fiber is not the same all over the period. There is a fluctuation in the production of raw jute from FY 2005-06 to 2018-19. The jute production has an increasing rate from FY 2005-06, and then it is decreasing after FY 2007-08. After that, it is again increasing. Here, a fluctuation in the production of raw jute has been noticed in Bangladesh. In FY 2005-06, the amount of jute production is 50.00 lakh bales, and then it is increasing up to 68.71 in FY 2007-08. After that, it has decreased, and finally, it again has increased in FY 2010-11, and the amount is 78.02 lakh bales, whereas, in FY 2014-15, it was 75.01 lakh bales. In FY 2018-19, the amount was 73.15 lakh bales.
Structure of the Jute Industry in Bangladesh
There are two different kinds of jute factories in Bangladesh; amongst which 19 traditional factories are operate under Bangladesh Jute Mills Corporation (BJMC) manufacturing burlap, CBC, sack. And another 42 traditional jute factories are privately managed running under Bangladesh Jute Mills Association (BJMA). Just seven to ten of these mills are running effectively, five to seven are running with difficulties, and the rest are shut down. Because the original organizations are heavily burdened with bad loans, and the banks cannot fund them in line with the inflated debt situation. The government gave some better quality machinery to mills belonging to Bangladesh Jute Mills Corporation (BJMC) after the biggest jute mill in Asia, Adamjee Jute Mills in Narayanganj being closed down, and sold the remaining almost abandoned machinery to private entities with a capacity of having 20 to 50 looms. There are now 30 mills that produce conventional jute products, and these are also under the supervision of the Bangladesh Jute Mill Association (BJMA). There are fifty privately owned jute spinning mills under the Bangladesh Jute Spinners Association (BJSA) that manufacture jute yarn or twine. The mills under jute spinning sector manufacture 0.29 million (2.90 lakhs) tons of jute yarn or twine and export in abroad equaling 0.261 million (2.61 lakhs) tons of high grade yarn or twine using up 1.9 million (19 lakhs) bales of better quality raw jute and earn foreign currency valued Taka 12 million (1200 crore) per year. Bangladesh had six jute yarn factories before it became independent. But, this industry had expanded in the 1980s, and around the same time, the sector suffered a downturn in the developed countries. These previously owned jute mills were purchased by the entrepreneurial folks of the country with very little funding, and the construction of these jute spinning mills began to set up. There are two basic kinds of views in Bangladesh regarding the operation of currently existing mills under (Bangladesh Jute Mills Corporation) BJMC. One party is in support of privatizing the existing publicly owned jute mills, where another party is in favor of reforming and redeveloping BJMC factories. In 2006-07 the number of jute mills was 19, and during 2008-09 it decreased to only 16. Finally, in the fiscal year of 2017- 2018, there were 22 jute mills