Indian Jute Mills Association launches e-market place to boost exports

The Indian Jute Mills Association (IJMA) has launched an e-market place to create a global demand for jute products that have very limited market access compared to those from Bangladesh.

Indian jute products have nearly no market demand at present. The domestic industry is surviving on the government orders of sacks, which is mainly governed by the Jute Packaging Material Act -1987. Without this Act the jute industry would have ceased to exist, an IJMA official said, adding that there is a need to transform the demand from that of government orders to market driven orders and hence IJMA has created this integrated e-commerce platform.

The e- commerce platform includes four portals — jutekart, fibreofindia, juteflash and juteindex. All of them together will facilitate the supply chain from procuring raw jute for mills, fabric for jute product manufacturers to showcasing jute products in both domestic and overseas markets. The integrated platform will provide end-to-end solution.

Although there are 92 jute mills and more than 5 lakh jute product manufacturers across the country, IJMA initiative has just roped in 3 jute mills and 200 manufacturers into its platform. “We seek to have all the jute mills and jute product manufacturers under this platform,” IJMA chairman Raghavendra Gupta said. IJMA has roped in a lean management consultant, who is working closely with the ministry of textiles to convert the government dependent jute industry to a market driven industry.

According to Debashish Roy, director general, IJMA, since most jute product manufacturers are in the small or micro category, most of them have very limited market access.

Tanmay Bera, managing director of Ladlo Jute and Specialities, said, the demand for jute products is mainly coming up from the US, Europe and Japan and there already exists around $ 80 million market. This has been registering an annual compounded growth rate of 10% per annum. But these markets has more potential, which requires to be fully realised.

Besides, in India a ban has already been imposed on single use plastic, which has opened up new possibilities for jute packaging, though paper packaging is poised to give a stiff competition to it. The jute mill owners have already urged the Centre to make use of jute bags mandatory in all malls and departmental stores. Although this would cost higher than plastic or paper packaging, it will give better return at a later stage.

According to Hemant Bangur, chairman of Glaster, in Europe people initially spend a little money in buying RFID tagged jute bags but at a later stage it fetches returns by way of protecting environmental and health hazards. This can be implemented in India, if use of jute bags are made mandatory in departmental stores and malls.

But Debabrata Choudhury, an industry expert, expressed doubt over the success of the e-market place because sourcing jute fabric would pose a major problem. Most jute mill owners use 80% of their capacity in manufacturing jute sacks and the rest 20% is utilised for manufacturing other products. The limited share of market, which India has for jute products overseas, is mostly enjoyed by the 67 jute mills of West Bengal and so they would all likely thwart on the entry of other players.

Besides, there have been increasing problems in raw jute production since many farmers are shifting from jute cultivation to other crops as cost of producing raw jute has increased more than double and farmers are not getting the desired price. The quality of raw jute that is produced in India mostly in West Bengal, fits only for sack manufacturing and it is difficult to make quality jute fabric that are used in making other products, Choudhury said.

The textile ministry has taken keen interest on development of the e-market place and have expressed willingness to extend financial support to this initiative once it crystallises, an IJMA official said.