Role of technology and innovation to revitalize jute industry

Bangladesh government has taken a large project to upgrade production technology of jute mills under $350 million foreign loans, in view of the continued erosion of competitiveness of jute mills in the country.

Bangladesh's industrial policy of balancing, modernizing, rehabilitating and expanding (BMRE) with 100% import of foreign capital machinery is highly detrimental to the growth of local technology value addition capacity.

The state-owned jute mills are one of the key areas to support the growth of value addition in technology and capital machinery. The other solutions include waiving bank interest, giving cash subsidy, providing an additional loan, importing technology, and imposing a duty on raw jute exports, which forces farmers sell their produce at a low price.

It has been reported that recently around 20 jute mills were shut down, despite the availability of the cheapest labor, locally grown raw material, manufacturing and growing global consciousness of environment. More than  25 out of 97 jute spinning mills are already closed. Even 21 jute mills out of 35 that were privatized before are now closed. Moreover, operational jute mills are now running at less than 50% capacity.

Whenever the situation reaches to crisis level, the government comes up with projects to shoulder the liability. For example, in the past, the ministry has come up with Tk 7.0 billion projects in the name of manufacturing diversified products, and $350 million for technology up gradation with import.


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