Indian Jute Mills Association Launches Electronic Marketplace to Boost Exports
The Indian Jute Spinning Association (IJMA) has launched an electronic marketplace to create global demand for jute products which have very limited market access compared to those in Bangladesh.
Indian jute products have virtually no demand in the market today. The domestic industry survives on government sack orders, which are mainly governed by the Jute Packaging Material Act -1987. Without the law, the jute industry would have ceased to exist, an IJMA official said, adding that there was a need to turn demand for government orders into market-driven orders. This is why IJMA created this integrated e-commerce platform.
The e-commerce platform includes four portals: jutekar, fiberofindia, juteflash and juteindex. All together will facilitate the supply chain from sourcing raw jute for spinning mills, fabric for jute product manufacturers to the presentation of jute products in domestic and overseas markets. The integrated platform will provide an end-to-end solution.
Although there are 92 jute mills and over 5 lakh manufacturers of jute products across the country, the IJMA initiative has just integrated 3 jute mills and 200 manufacturers into its platform. “We are looking to bring all jute mills and jute product manufacturers together under this platform,” said IJMA President Raghavendra Gupta. IJMA has hired a lean management consultant, who is working closely with the Ministry of Textiles to convert the government dependent jute industry into a market driven industry.
According to Debashish Roy, Managing Director of IJMA, since most manufacturers of jute products fall into the small or micro category, most of them have very limited market access.
Tanmay Bera, managing director of Ladlo Jute and Specialties, said demand for jute products is mainly from the United States, Europe and Japan, and there is already a market of around $ 80 million. This has recorded a compound annual growth rate of 10% per year. But these markets have more potential, which needs to be fully exploited.
In addition, in India, a ban has already been imposed on single-use plastic, which has opened up new possibilities for jute packaging, although paper packaging is poised to compete with it. The owners of the jute mills have already urged the Center to make the use of jute bags compulsory in all malls and department stores. Although it would cost more than plastic or paper packaging, it will give better feedback at a later stage.
According to Hemant Bangur, president of Glaster, in Europe people first spend a little money to buy RFID tagged jute bags, but at a later stage they collect returns protecting environmental and health risks. This can be implemented in India, if the use of jute bags is made compulsory in department stores and shopping malls.
But Debabrata Choudhury, an industry expert, expressed doubts about the success of the electronic marketplace as the sourcing of jute fabric would be a major problem. Most jute mill owners use 80% of their capacity in making jute bags and the remaining 20% is used in the manufacture of other products. India’s limited market share for overseas jute products is mainly enjoyed by the 67 West Bengal jute mills and therefore would likely hamper the entry of other players.
In addition, there have been growing problems in the production of raw jute as many farmers switch from growing jute to other crops as the cost of producing raw jute has more than doubled and farmers are not getting the desired price. The quality of the raw jute which is produced in India, mainly West Bengal, is only suitable for making bags and it is difficult to make quality jute fabrics which are used in making other products, said Choudhury.
The textile ministry has taken a keen interest in the development of the electronic marketplace and has expressed willingness to extend financial support for this initiative once it crystallizes, an IJMA official said.