Jute is haute! It is no longer the coarse brown fabric used just for packaging!
When George Auckland set up the first jute spinning mill in West Bengal in1855, little did he know that he had opened the doors to a gigantic Indian industry. Today, India is one of the largest producers of jute products in the world and commands a fortune out of it.
And if you thought that jute products just entail packaging, then you are absolutely wrong! Take a closer look into the market and you will find a range of manifestations of the golden fiber—shopping bags, rugs, wall coverings, apparels, the list is long!
Jute products are gaining immense popularity around the globe due to the fiber’s properties. Jute is high on tensile strength, is bio-degradable, inexpensive, and does not emit poisonous gasses when burnt. Moreover, advanced manufacturing techniques have also transformed jute into an attractive and versatile fiber, with a high degree of user appeal. A dash of colours, a master’s hand at work, and you have the perfect fabric that can be transformed into almost anything.
India is one of the major jute producing countries, accounting for nearly two-thirds of jute and allied fibers production. According to UN Food and Agriculture Organisation, India produced 2,041 metric tonnes of jute and jute-like fibers in 2006. Within India, the major jute producing areas are West Bengal, Bihar, Assam, Orissa, Andhra Pradesh and Tripura.
Earlier, jute was used mostly for the purpose of packaging, but the advent of synthetic fibers lead to a drop in the demand of the fiber. This dip, lead to intense research and development resulting in diversified jute products. The versatility of jute has enabled it to be used in a number of industries ranging from fashion to automobile, hence opening new opportunities. For the purpose of this article, we have studied five opportunities around jute.
Shopping bags, beach bags, Christmas bags, wine bags, designer bags—these are just a few of the options. The popularity of jute bags has been increasing tremendously both in the international and domestic markets because it is available in the trendiest of design, while being highly utilitarian and eco-friendly.
According to A Kumar, Marketing Head of MNR Exports, compared to products such as slippers, rugs, etc, the demand for shopping bags is very high internationally. He explains that since plastic bags have already been banned or are being fast phased out abroad, jute bags fit in this space perfectly due to its high tensile strength and durability. Moreover, with shopping marts such as Wal-Mart and Tesco switching to jute bags and others following suite, the demand for these products is not anymore seasonal. Another advantage is that these bags can be manufactured in several colours, designs, shapes, and sizes, according to the consumer’s choice. The bags produced in India find market mostly in Europe, and the profit margin ranges from as low as 20% to as high as 100% while catering to niche markets, according to A Kumar.
On the other hand, the domestic market for jute bags is also fast catching up. This is evident from the mushrooming of several retail outlets catering exclusively to jute products. According to Rajalakshmi of Chennai-based Jute Emporium, in India, these bags are also being increasingly asked for by corporate houses and big businesses, who are becoming environment conscious. She says that besides being inexpensive, another advantage of using these bags is that it can be customised. Festive season also determine the sales of such products in India. For example, for Rajalskshmi, Navratri and Durga Puja season proves to be profitable.
An unit manufacturing jute bags is highly labour-intensive, and a skilled artisan can make up to 50-80 bags in a single day. According to A Kumar, for setting up a medium-sized unit, a jute entrepreneur would require 10,000-12,000 sq feet of land, and equipments such as sewing machines, screens for printing, and cutting equipments. The operating cost of such a unit would be near about 2-2.5 lacs.
The government is also supportive and provides several concessions for exporting such products. Given the nature of investment, demand for such products, and profit margins, this area is worth venturing into.
Jute Handicrafts and Novelties
Indian handicrafts have always been in vogue, especially abroad, and the advantage of jute, in this context, has been its versatility. Handicrafts made from jute include a large variety of items ranging from wall paintings, jewellery, table lamps, toys to innumerable gift items. The bio-degradability, durability and sophistication of jute products have made them a favourite product among consumers in India and abroad.
Currently, even though a large number of units exist, they are mostly tiny and situated in the rural areas. These small production units run on small capital investments, and depend on local raw materials, inherited artistic skills and indigenous technology. They generally earn a profit margin of approximately 20%-30%, catering to the domestic market. However, the biggest disadvantage is that even though they know how to make the products, they are generally unaware of advanced marketing techniques. Therefore, it is a good idea to enter this market and organise the sector as the export potential for such products is high.
written by deepthi reddy, May 31, 2011
written by BISWAJIT ROY CHOWDHURY, May 26, 2011
written by Amit Pal, May 22, 2011
written by bag manufacturers, February 25, 2011
written by bag manufacturers, February 25, 2011
written by Jute Bags, August 20, 2010
written by S.S.RAYUDU, June 05, 2010
written by T.Ayyappan, May 25, 2010
written by vivek pareek, April 08, 2010
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