Jute Industry Analysis

A REPORT ON
ANALYSIS OF JUTE INDUSTRY IN INDIA
Submitted in partial fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
BY
G.M.SHAJAHAN
MBA III SEMESTER
R.NO: O8931E0034
Under the esteemed guidance of
P.GUNA SHEELA
Assistant Professor
Department of MBA
SRI KOTTAM TULASI REDDY MEMORIAL COLLEGE OF ENGINEERING
KONDAIR, ITIKYALA MANDAL,
MAHABOOB NAGAR- DISTRICT-519125 (AP)
DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION
1
DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION
SRI KOTTAM TULASI REDDY MEMORIALCOLLEGE OF ENGINEERING
KONDAIR, ITIKYALA (MANDAL)
MAHABOOBNAGAR (DIST)-509125(A.P)
(Affiliated to J.N.T.U.H)
CERTIFICATE
This is to certify that the industry analysis report on Software Industry

in India submitted by MS.G.M.SHAJAHAN in partial fulfillment of the
requirements for the award of degree of MASTER OF BUSINESS
ADMINISTRATION in Jawaharlal Nehru technological university Hyd is a
record of bonafied work carried out by her in this department.
Internal guide Head of the department
Examiner:
2
ACKNOWLEDGEMENT
I am thankful to our guide, for his motivation, help and continuous support which
made this industry analysis happen. I am also indebted to him for his invaluable
suggestions, which made me to correct my faults and improve myself.
I express my deep sense of gratitude and thanks to B.PARIMALADEVI (Head of
Department) for her consistent support and guidance. I am also thankful to her for helping
me find and overcome many problems faced during the period.
I am very much obliged to SRI KOTTAM TULASI REDDY MEMORIAL
COLLEGE which has given me opportunity to carry our industry analysis in its
premises.I feel privileged to thank wholeheartedly our Director Dr.K.S.NAYANTHARA
for giving me this opportunity.
3
DECLARATION
I here by declare that this project entitled A STUDY OF REPORT ON JUTE
INDUSTRY IN INDIA is a bonafied work carried out by me under the guidance of
P.GUNA SHEELA Assistant professor, Dept. of Management SKTRMC, Kondair. I
also declare that report is original and not submitted to any other university/ Institution for
the award of any degree / Diploma.
Date:
Place:
Signature of the student.
4
CONTENTS
S.NO TITLE PAGE NUMBER

1-4
1 INTRODUCTION
2 5-6
OBJECTIVES
3 6-9
INDUSTRY STRUCTURE
4 10-15
INDUSTRY PERFORMANCES
5 16-17
INDUSTRY PRACTICES
6 17-18
INDUSTRY ENVIORMENT
7 19-20
NATURE OF COMPETION
8 21-27
SWOT ANALYSIS F INDUSTRY
9 27-28
LABOUR CONDITIONS
10 29-30
RECENT ISSUES AND DEVELOPMENTS
11 30-31
EXPORT GROWTH
12 32-43
MAJOR PLAYERS OF JUTE INDUSTRY
13 44-48
FINANCIAL ANALYSIS
14 48-49
CONCLUSION
49-50
15 FINDINGS AND BIBILOGRAPHY
5
6
7
INDUSTRY ANALYSIS
INDUSTRY
Definition
A basic category of business activity. The term industry is sometimes used to describe a
very precise business activity (e.g. semiconductors) or a more generic business activity
(e.g. consumer durables). If a company participates in multiple business activities, it is
usually considered to be in the industry in which most of its revenues are derived
INDUSTRY ANALYSIS
Definition
A market assessment tool designed to provide a business with an idea of the complexity of
a particular industry. Industry analysis involves reviewing the economic, political and
market factors that influence the way the industry develops. Major factors can include the
power wielded by suppliers and buyers, the condition of competitors, and the likelihood of
new market entrants
JUTE INDUSTRY ANALYSIS
8
Jute is the most versatile fiber gifted to man by nature. Known mainly as the raw material
for making sacks, jute finds extensive use in the making of handicrafts today.
The products like bags, home furnishing, apparel, textile industrial goods, carpets &
handicrafts are made of the ECO-friendly natural fiber are JUTE PRODUCTS
HISTORY OF JUTE INDUSTRY
Indian Jute Industry

The jute industry occupies an important place in the Indian economy. Providing direct
employment to about 0.26 million workers and around 4.0 million workers indirectly in
the allied sectors, Indian jute industry is an integral part of the Indian Textile Industry. It is
9
a very old industry, predominant in the eastern part of India. The Government has
included the Jute Sector for special attention in its National Common Minimum
Programme.
Jute Technology Mission
The Government of India has started the "Jute Technology Mission" keeping in view the
growing contribution of the industry to the economy. This will benefit jute growers, the
workers engaged in the sector, jute entrepreneurs and others employed in related activities.
It will play a vital role in modernizing the jute industry and help the country to reap the
benefits of enhanced levels of jute diversification.
Jute Mills
Jute mills comprising the industry are located in West Bengal (the maximum number of
mills is here), Andhra Pradesh, Assam, Orissa, Uttar Pradesh, Bihar, Tripura and
Chhattisgarh. India has around 78 jute mills and the eastern state of West Bengal alone has
around 61 jute mills. The central government owns 6 jute mills, the state government 4, 2
jute mills are under cooperatives, and 64 jute mills are under private ownerships.
Earnings
This industry today accounts for a turnover of Rs 6,500 crore annually, contributing to
exports to the tune of nearly Rs.1000 crore. In the financial year 2006-07 (April-
September) exports of total jute products was at 104.3 thousand M.T whose value was Rs.
583.55 crore.
Organizations
Organizations which control the Indian Jute Industry are as follows:
National Centre for Jute diversification, Kolkata

Jute Manufacturers Development Council, Kolkata
National Jute Manufacturers Corporation
Jute Corporation of India Ltd., Kolkata
10
Birds jute & Exports Ltd.
Institute of Jute technology, Kolkata
Indian Jute Industries Research Association, Kolkata
Acts and Rules

The various Acts and Rules which govern the Indian Jute Industry are as follows:
Jute & Jute Textiles Control Order, 2000

Jute Packaging Materials (Compulsory use in Packing Commodities), Act, 1987
Jute Manufactures Cess Act, 1983
Jute Manufactures Development Council Act, 1983
Advantages of Indian Jute Industry
Largest production of raw jute in the world

Largets production of jute finished goods
Environment friendly packaging material
Availability of large scale skilled and cheap labor
Availability of entrepreneurial skills
Huge export potential of jute products
Large domestic market
Flexible textile manufacturing systems
Demerits of Indian Jute Industry
mports of cheap and alternative textiles from other Asian countries

I
Use of old methods of manufacturing
Poor supply chain management
Huge decentralized and unorganized sector
High production cost
OBJECTIVES
1) Enable millions of jute farmers to produce better quality jute fibre for
value added diversified jute products and enable them to enhance per hectare
yield of raw jute substantially.
2) Facilitate the Jute Sector to attain and sustain a pre-eminent global

standing in the manufacture and export of jute products.
11
3) Enable the jute industry to build world class state-of-the-art
manufacturing capabilities in conformity with environmental standards, and,
for this purpose, to encourage Foreign Direct Investment, as well as research
and development in the sector.
4) Sustain and strengthen the traditional knowledge, skills, and capabilities
of our weavers and craftspeople engaged in the manufacture of traditional as
well as innovative jute products.
.5) Expand productive employment by enabling the growth of the industry;
Make Information Technology (IT), an integral part of the entire value chain of
jute and the production of jute goods, and thereby facilitate the industry to
achieve international standards in terms of quality, design, and marketing.
.Increase the quantity of exports of jute and jute products by achieving a
CAGR of 15% per annum.
6) Involve and ensure the active co-operation and partnership of
State Governments, Financial Institutions, Entrepreneurs, and Farmers;
organization in the fulfillment of these objectives.
JUTE INDUSTRY STRUCTURE
PRODUCTS
12
Jute Bags
Jute bags imprinted with designs can be used for promotion of a
company or as a corporate and personal gift.
Cotton Bags
Cotton bags in various shapes, styles and sizes are ideal for almost all
occasions and can be put to number of uses.
Wine Bags
Wine bags in eco friendly materials are a perfect choice for storing your
best wine and also for gifting purpose.
Designer Bags
Jute designer bags are manufactured in every possible design and have
an inimitable style.
Christmas Bags
Christmas bags are ideal for both personal use and corporate promotion
and gifting.
Jute Dresses
We manufacture an exclusive range of dresses in unusual patterns
including stripes, checks and in different color combinations.
Jute Cushion Covers

Made from eco friendly material, Jute cushion covers have been an
inherent part of the home furnishings.
13
Jute Mats
Attractive jute mats in bright shade combinations and attractive weaves
are easy to wash and maintain.
Jute Trays
Innovatively designed and easy to clean, maintain and durable jute trays
can last for years to come.
Jute Placemats
Attractive jute placemats in spectrum of shades and attractive weaves
are easy to wash and maintain.
Jute Carpets
Hand woven and machine made jute carpets are in innovative designs
and patterns are in demand the world over.
Jute Fashion Accessories

We design and create elegant and highly fashionable jute accessories
from superior quality and eco friendly jute.
Jute Stationery
Our collection of jute stationery is both stylish and handy. These
products are designed for both corporate and personal use.
JUTE NECKLACE
JUTE BANGLES AND CLIBS
14
INDUSTRY PETFORMANCE
PRODUTION
15
Production of jute goods during 2000-01 was an all time record of 16.78 lakh tonnes as
against 14 lakhs tonnes in 1998-99. Production during 1999-2000 (April/Oct.) also
recorded a marginal increase by 1% to reach 9.37 lakh tonnes from 9.32 lakh tonnes
during the same period of last year. This increase in production is attributable to
comfortable raw jute availability at reasonable rates at the beginning of the current year,
stable domestic demand and consequent normal functioning of jute mills. If the current
trend is maintained, production of jute goods is likely to touch around 16 lakh tonnes.
PRODUCTION OF JUTE GOODS

QTY : IN 000' M.T. VALUE : Rs / Crores
CORRESPONDING
(APRIL / MARCH) HESSIAN SACKING CBC OTHERS TOTAL CONSUMPTION OF RAW JUTE IN
'000 BALES
1998 99 413.9 676.3 30.5 5312.3 1433 8290
1999 00 368.7 666.6 25.2 340.4 1400.9 8023
2000 01 392.4 864.6 19.8 401.6 1678.4 9598
2001 02 344.1 903.3 18.5 330.3 1596.2 9068
2002 03 344.5 909.2 8 328.5 1590.2 9087
2003 04 337.9 952.9 6.6 327.5 1624.9 9280
2004 05 275.3 1034.3 5 286.2 1600.8 9142
2006 08 338.3 1000 5.4 278.1 1621.8 9262
2008 09 305.2 979.3 5.7 281.1 1571.3
SALES
The sales of the top three jute companies have shown below.
( Rs ,in crores)
companies 2005 2006 2007 2008 2009
GLOSTER JUTE MIL
LTD 1318 1362 1539 2782 2964
JANTA JUTE MIL LTD 1129 1329 1456 1829 2041
SADAT JUTE MIL LTD 1492 1812 2011 2930 2930
16
Interpretation
GLOSTER JUTE MIL LTD: This is Public Sector Company. These company sales are
continuously increased from 1318 cr in 2005 to 2964 cr in 2009.
JANATA JUTE MIL LTD: This is public Sector Company. These company sales are
SADAT JUTE MIL LTD: This is Private Sector Company. These company sales are
Jute company sales are increased year_by_year.
TURNOVER
Jute industry alone accounts for an annual turnover of Rs 6,500 crore and the value of
export of total jute products is nearly Rs1000 crore.
The Indian jute industry with a turnover of Rs 5,500 crore is finding more takers for
bio-degradable, eco-friendly jute made-ups both in the domestic and international
markets. The rising demand for value-added jute products has encouraged SME jute
17
players to go for diversification and modernization of their product base.
Although the jute sectors mainstay will be packaging material for agro-food
commodities, the small-scale units in the industry also need to expand their product
lines and enter into the production of non-traditional jute items such as soil saver,
decorative fabrics and special Hessian, said Hukmi Chand Bang, proprietor of India
Jute Mills, a small-sized jute mill in Murshidabad, West Bengal.
Some small-scale jute mills in the country have already started using the natural fibre
to make a variety of items including fancy party bags, stylish clutch bags, laundry
bags, rucksacks, branded totes, shopping bags and wine bags.
Given that the market demand for value-added jute products is robust, most small-
scale units in the industry are looking at ways to take up product diversification, while
many are also making sincere attempts to revamp their stores and modernise their
machineries and equipments, said Sanjay Dhelia, proprietor of Aaltex International, a
leading Kolkata-based manufacturer and exporter of jute products, especially different
types of fashionable jute bags.
Besides small jute players making an attempt to modernise their units, the Jute
Manufactures Development Council (JMDC) is also doing its bit by initiating a
massive modernisation drive in the jute sector to enable jute units to diversify their
product portfolio.
PROFITABILITY
The Indian jute industry, which dates back to over a century, is one of the oldest
industries in the country. Dominated primarily by small-sized players, the industry is
18
an important generator of revenue and employment for a large section of the rural
population. Over the years, owing to increasing demand in international markets, the
industry has become largely export-oriented.
Although the market for Indian jute products has witnessed moderate growth in the
last decade, several factors have prevented it from expanding further. Some of these
factors include poor technology and stiff competition from Bangladeshi exporters. In
addition, the global economic recession has led to declining sales for most jute
exporters.
Notwithstanding the turmoil in the international markets, Indian jute exporters have
been reporting healthy margins in recent times. This can be attributed largely to the
sudden surge in demand for Indian jute products in the UK.
Indias jute exports in 2008-09 stood at an impressive Rs 200 crore, significantly
higher than the Rs 120 crore reported in 2007-08. Notably, a considerable share of
Indian jute products was exported to the European market.
According to market experts, the ban on plastic and non-biodegradable bags in the UK
has been the key factor behind the sudden increase in jute exports from India.
Moreover,
The volumes of jute exports from Bangladesh have been low due to poor monsoons
and crop failures. This has put the Indian SMEs in the jute segment in an advantageous
position.
To capitalise on the rising popularity and demand for Indian jute products, Indian
SMEs should focus on producing different varieties of jute items. They should also ensure
that their products are competitively priced in order to compete with the Bangladeshi
TOTAL DEMAND AND SUPPLY OF JUTE INDUSTRY
19
Though jute and jute products are enjoying growth in global demands, its production
has not increased accordingly, since paddy is coming out as a more lucrative harvest
for jute producers.
Even if the current market price for raw jute is Rs. 2,000-2,200 per quintal, the
harvesters are switching over to paddy production as they can generate more income
through it.
This is creating an acute gap between the demand and supply of jute, said Mr. AK
Barua, Marketing Manager Jute Corporation of India (JCI). Demand of various
procurement agencies for raw jute has increased to 2.4-2.5 million bales per year,
which was around 1.5 million bales before 2 years.
20
IN CRORES
2003-04
4%
2004-05
2008-09
8%
28%
2005-06
16%
2007-08
2006-07
20%
24%
Demand for jute and jute products is rising across the world due to the awareness among
people regarding the benefits of the products made from eco-friendly materials such as
jute, said Mr. TK Mandal, Deputy Director, office of the jute commissioner
Around 70-75 percent of total jute production of the country is consumed domestically,
however, according to the Textile Minister Mr. Dayanidhi Maran, markets for jute should
also be developed in foreign countries as its a right time for jute fiber to cash on the
global trend in support of natural fibre.
He added that the stakeholders need to take efforts, such as modernizing work process and
21
exploring new markets, to make jute products price competitive. Jute producers have not
exploited the benefits of the technology up-gradation funds scheme, he added
INDUSTRY PRACTICES
DISTRIBUTION
. Under the Jute Packaging Materials Act, 1987
(JPM Act), the Government is empowered to consider and provide for the compulsory
of jute packaging material in the supply and distribution of certain commodities in
theinterests of production of raw jute and jute packaging material and of persons engaged
in
the production thereof and for matters connected therewith.
Sacking of Food grain and Sugar consumes approximately 58% of the raw jute produced
in the country. The jute sector occupies an important place in the economy of India in
General and eastern sector in particular. It is estimated that the jute industry provides
Directs employment to 0.37 million workers in organized mills and in diversified units
Including tertiary sector and allied activities and supports the livelihood of around 4.0
Million farm families. Therefore, there is a need for protection in the form of reserving
Certain commodities for packaging in jute.
22
PROMOTION
Promoting arrangements for better marketing and sale of jute.
Suggesting norms of efficiency for jute industry aiming at optimum production, cost
reduction, quality improvement and product standardization.
Devising marketing strategy for maintaining and improving of existing markets and
development of new markets outside India for jute manufactures.
Sponsoring and co-ordinating technilogical and economic research on matters directly

beneficial to the development of jute sector.
Promoting or undertaking the collection and formulationof statistics regarding jute

industry.
Propagating information useful to the growers,dealers and exporters of jute and

producers or manufacturers of jute goods.
Council in its effort towards prioritising promotional activities with focus on

product-market linkage conducts or commissions product, market and
entrepreneurs specific survey and studies.
INDUSTRY ENVIORMENT
JUTE INDUSTRY LIFE CYCLE
Till 1947 Indian jute mills dominated the world jute market with 70% of its products
finding place in the global market. It was after the partition in 1947 when almost all jute
producing area went under East Pakistan (now Bangladesh) causing decline to Indian jute
market. At the same time, major jute consuming nations switched to bulk handling
23
systems and developed alternate synthetic packing materials. Two other issues faced by
Indian jute industry were:
(a) Dependence for raw jute on East Pakistan.
(b) Rapid decline of export market.
Gradually, jute goods exports declined by 30% from 70%. In spite of constraints, jute
goods production showed a gradual increment. In 1947, the total jute production was 10
lakhs MT and the same figure was 16.2 lakhs in 2003 MT respectively. In five decades,
Indian Jute industry expanded by 62%. In recent times plastic bags substituted jute bags
and thus jute was in the verge of extinction. In order to revamp jute industry, in 1987
Government of India reserved the packing of traditional commodities, viz, sugar, food
grains with jute material by proclaiming the Mandatory Jute Packaging Act (PJMA) 1987.
Today PJMA is restricted to 100% coverage for sugar & foodgrains, which is the main
bread earner for the industry. Now, in the face of multidimensional threats this industry is
again confronted with danger of extinct.
NATURE OF COMPETITION
. There is an expansion of the market for jute composite products and geo-textiles in both
the domestic and International sectors. Continued and focused attention will be given to
handicrafts, which will include the upgradation of skills, the creation of a better work
environment, design and technology intervention, and the development of clusters for
specific crafts with common service facilities, and the overall improvement of
infrastructure, and market development.
24
A full-fledged Design and Development Centre, and dedicated retail outlets in public-
private initiative mode for diversified jute products in all the towns and cities with a
population of more than 5 lakhs will be established
Domestic Marketing:
Considering the immense potential of jute products in the domestic market, focused
attention will be given to untapped sectors. The thrust will be on adopting suitable market
promotion programmes for increasing consumer awareness, and highlighting the
environmental advantages of jute by working closely with environment groups.
International Marketing
With the objective of increasing exports to Rs.5000 crore by 2010 from the present level
of Rs.1000 crores:
A multi-disciplinary institutional mechanism will be established to formulate policy

measures and specific action plans, including those relating to the WTO and for closely
monitoring financing proposals;
Strategic alliances will be forged with an aim to gain access to technology;

A brand equity fund, exclusively for jute and jute products will be set up. This will be
consistent with WTO norms;
The proposed Jute Board will incorporate an Export Promotion Council which will play
the role of facilitator and professional consultant for dealing with disputes under various
agreements of the WTO, establishing warehousing facilities in major jute and jute product
importing countries, and identifying the existing patent issues with a view to patenting
Indian R&D efforts
MARKETING STRATEGIES
25
HC Bang, Proprietor, India Jute Mills, says, Earlier, jute items were used as sacks
for packing food grains, cement, wheat and sugar, but today it is used for
different purposes and is considered very fashionable. Designers and handicraft
artisans are using the natural fibre for making a variety of items including fancy
party bags, stylish clutch bags, laundry bags, rucksacks, branded totes, shopping
bags and wine bags.
The rising popularity of jute items has prompted small and mid-sized companies
to revamp their processes, introduce better designs and adopt new marketing
strategies. Jute companies have begun exploring various solutions to improve
their process technology and expand their product base to woo international
buyers.
As M Mukherjee, Spokesperson, Basu Exports, says, Keeping in view the

increasing market demand for green goods, we are largely focusing on the
optimum usage of eco-friendly geo-jute and soil savers. In addition, we are also
working towards increasing our productivity and diversifying our product range.
Besides, the government has also begun taking initiatives to help small jute
companies upgrade their manufacturing processes and modernise their units.
The Jute Manufactures Development Council (JMDC) has already initiated a
massive modernisation drive in the jute sector to enable jute units to diversify
their product portfolio.
SWOT analysis of jute industry
Despite its fortune on decline, jute is an emerging niche market with plenty of
opportunities for growth and the future of jute lies in its scope of work, declare
Pooja Sharma, Neeraj Kaushik and K N Chaterjee, mooting proposals for the
industry's revamp.
26
Twenty-first century witnessed a new resurgent and resolute Indian industry in
terms of volume as well as in quality. India has become a hub of not only
Information Technology, Textile, Bio-Technology but also of Leather, Automobile
and other Industries. India experienced the economic growth of 8 - 9% per annum.
The progress of industry has not been achieved overnight but it is the effect of
sustained and gradual efforts by the government & its associate bodies.
Textile & garment industry is among the second highest employment provider in
India after agriculture. It is the mother industry in India, like most of the
industrialised nations, and given the present economic development, it has the
potential to propel the economy at least for next few decades. With the ATC
(Agreement on Textile & Clothing) agreement under WTO (World Trade
Organisation), the global textile industry is presenting enormous potential, at the
same time challenges for nations.
Traditionally India's core competence is in garment sector, however increasing
competition necessitates her to explore new arena and develop her competence
there. Jute industry in this regard presents a vast scope. Jute exists in nature as
weeds. The word jute was used by Roxburgh, Superintendent, Botanical Garden,
Shibpur, West Bengal in 1795 in his letter to the Board of Directors, East India
Company. At that time Oriya word 'Jote' or 'Jhuta' was used for this type of fibre.
Thus, the word jute was the anglicised version of these words. Jute is a natural
vegetable fibre under the category of bast fibres like flax, hemp, kenaf and ramie.
Jute is annually renewable plant belonging to the genus Corchorus of the order
Tiliacea. For commercial use two species, viz, Corchorus olitorious and Corchorus
capsularis, commonly known as Tossa and white jute respectively are produced.
In the year 1832 - 33, a spinner in Dundee, UK successfully spun jute yarn of
acceptable quality using machinery in blends with other fibres. After a year or two,
100% jute yarn was spun easily by applying whale oil and water in the process.
Later in 1855, the first jute mill was established in India, near the present Hasting
Jute Mill.. In a span of 10 years Indian jute goods took over the Dundee jute goods
in world market. Thus started decline of Dundee jute mills and last mill was closed
down in 1996.
27
At present, an average of 9,71,000 hectares of land is under raw jute cultivation,
and the production of raw jute has been 10,940 thousand bales for last four years.
There are 77 jute mills in India out of which 60 are in West Bengal followed by
Andhra Pradesh where 7 mills are established. The average production of jute has
been 1,597 thousand tons per year and its domestic demand has been 1,372
thousand tons per annum. There are 9 units of jute which are working as 100%
export oriented units, and the average export of jute for last four years have been
286 thousand tons or Rs 10,746 million per annum.
Jute Industry: Growth & Decline
Till 1947 Indian jute mills dominated the world jute market with 70% of its products
finding place in the global market. It was after the partition in 1947 when almost all jute
producing area went under East Pakistan (now Bangladesh) causing decline to Indian jute
market. At the same time, major jute consuming nations switched to bulk handling
systems and developed alternate synthetic packing materials. Two other issues faced by
Indian jute industry were:
Gradually, jute goods exports increased by 30% to 70%. In spite of constraints, jute goods
production showed a gradual increment. In 1947, the total jute production was 10 lakhs
MT and the same figure was 16.2 lakhs in 2003 MT respectively[6]. In five decades, Indian
Jute industry expanded by 62%. In recent times plastic bags substituted jute bags and thus
jute was in the verge of extinction. In order to revamp jute industry, in 1987 Government
of India reserved the packing of traditional commodities, viz, sugar, food grains with jute
material by proclaiming the Mandatory Jute Packaging Act (PJMA) 1987. Today PJMA is
restricted to 100% coverage for sugar & foodgrains, which is the main bread earner for the
industry. Now, in the face of multidimensional threats this industry is again confronted
with danger of extinct
28
For the successful revamp of Indian Jute Industry, a turnaround strategy is the need of the
hour. The authors have endeavoured to critically analyse the strengths, weaknesses,
opportunity and threats (SWOT Analysis) of this industry.
STRENTHS
Jute is a labor intensive industry, which engages 4.35 million people.

Jute industry has lot of potential of providing employment especially in East
Indian region. The industry offers employment opportunity to 7,500 persons per
year, besides more opportunity lie ahead in expansion of existing capacity in new
mills that are coming up in SSI and MSI.
Jute is an eco-friendly and biodegradable product. With the pressure from green
movement, it is going to sustain through consumer's preference.
WEAKNESS
Frequent revision of PJMA guidelines (to add or dilute items for jute packing)
leaves the industry in confusion whether to invest further on the Jute technology
development/product development/market expansion or wait for new policies etc.
Though jute industry is a labour intensive, wages represent 35% of total

conversion cost of jute industry, which evades the profit margins.
Multi unionism is one of the major problems faced by jute industry and engages
major concentration of routine management in resolving labour dispute.
The machinery used in jute industry is old and obsolete with age of machinery
ranging between 40 - 150 years. They have lost their capacity to produce quality
products and in spite of routine maintenance, fail to yield standard machine
29
production. In fact, the 150 years old industry with 75% obsolete machinery is
tagged as "Sunset industry" with "Vintage machinery". Though National Jute
Policy, 2005, aims at revamping the domestic jute industry through modernisation
& by upgrading technology, only a few mills could utilise the fund provided by
Jute Manufacturers and Development Council (JMDC) for modernising theirplant
and machinery plant partly. Thus JMDC had to return major part of the fund, ie, Rs
80 crores after using less than Rs 10 crores. The Government has ear-marked Rs
75 lakhs per year per mill for capital investment in modernisation but industry
feels it is inadequate for an average mill and wants it to be raised to Rs 2 crores.
Another weakness of jute industry is poor Research & Development (R&D)

initiation, invention/reverse engineering effort has been grossly neglected in this
sector. The reasons for this are lack of farsightedness & forward planning on the
part of government and industry.
Marketing has been another weak point of jute industry. It has been maintaining a
very slow pace in coming out of traditional way of marketing. Time has come for
the industry to think how to market this versatile, eco-friendly and natural fibre.
Government can only give initiation in product development and test marketing
but the follow-up rests on the industry.
Within the country, wage for workers varies from Rs 50 - Rs 250 per manday.
Government must take immediate steps in this concern and formulate need based
wage structure for jute sector. While doing so, there should be productivity linked
payment. Payment by result is a universally accepted phenomenon and accepted
by ILO. Trade Unions in the jute sector agree on it but at plant level, same unions
resist, thereby causing labour productivity to be lower than standard.
Indian jute has not been able to build brand image for jute that goes with the
quality.
Opportunites:
30
In many areas Indian Jute industry is ahead of other jute producing and manufacturing
countries viz.
It has learned how to upgrade a lower grade fibre in the batch mix.
It also leads in diversified value added products.
The Government at the centre and at state has pro-jute mindset. They have plans
for taking jute industry to new horizon. This is evident from National Jute Policy
2005 which targets to reach export Rs 5,000 crores in the 11th fine year plan from
present amount of Rs 1,000 crores.
Brazil is one of the major importers of Indian Jute, and is estimated to have a
market of 25,000 tonnes of foodgrains, and few of Indian jute bag producers have
been awarded zero duty which opens new doors to other industry producers[12].
Industry should accomplish Total Quality Management so as to build quality in the

products.
One of the major threats faced by Indian jute industry/producers is from

Bangladesh Jute industry, which is armed with 7% cash subsidy on all items of
jute products without any string.
Withdrawal of Export Subsidy Assistance (ESA) from 1 April, 2007 has been a
setback to the export of Indian Jute industry.
The Union Cabinet Committee for Economic Affairs (EA) has approved the
continuation of Technical Upgradation Fund Scheme (TUFS) for next 5 year plan
2007 - 12 for Indian Textile industry including jute industry. The size of
investment is projected at Rs 1,506 crores for this period but it is understood that
jute sector may not get its due share from TUFS money, particularly for jute
machinery modernisation and for upgrading technology.
31
The Department of Food and Public Distribution (DFPD) has issued orders for
packaging paddy and coarse grains in used gunny bags which is a violation of Jute
Packaging Material Act, 1987, which is considered as threat by jute industry.
As the synthetic lobby is gaining power there is a pressure on government to
dilute jute reservation norms from existing 70% to 30% for grains and from 75%
to 25% for sugar. Though the government has not made the revision yet, this
pressure on government is a threat to jute industry.
Recent government decision to withdraw 10% import duty on jute and jute
products to nil with effect from January 1, 2008, is seen as a threat by the
industry..
The competitive environment that international business face is, to a certain
extent, a function of technological environment and the degree of technological
innovations attributed to the competitive environment. With markets and
competition going global, firms and nations are trying to understand the
implications for their competitive strategies. Indian Jute industry .
Jute is a golden fibre. Being a natural, bio-degradable and eco-friendly fibre, jute
can be blended with other compatible fibres for providing better physicalchemical,
thermal, comfort and other important properties required for other applications.
The inherent negative surface characteristics of jute fibres like itching problem,
comfort characteristics, etc, can be modified through bio-technology and scientific
techniques.
Till today, jute fibre is being considered as a cheap fibre, and its uses are only
restricted to the jute granny bags, low-quality house-hold articles. It is the
requirement of the whole world for producing value added products out of jute
material.
The application area of jute need to be enlarged, ie, jute should be used in new
areas like agro-textile, geo-textile, technical textile as well as home textile.
Marketing and promotion of jute has been a major problem, and so the
government and industry should come forward and take adequate steps in this
direction like highlighting its eco-friendly and biodegradable characteristics.
32
Labour problem is one of the major problems faced by the jute industry. For its
solution government and industry should device a tri-party agreement between
government, mill owners and the trade unions, so as to overcome loss of work by
strikes, lockouts, law off, closure of mill, etc.
Jute Research Association such as JTRL, IJIRA, Institute of Jute Technology
should come forward for better utilisation of resources like jute raw material,
manpower and machinery and equipment for the betterment of jute industry.
The future of jute lies in its scope of work. A detailed research by government
organisations like JRTL, IJIRA and Institute of Jute Technology, Research
Scholars and students in the following areas like Survey on Raw Material, Survey
on Fibre and Survey on Marketing need to be undertaken. Research on cultivation
and marketing of jute, jutefibre, jute promotion and jute blended products is
required to be done, not merely to enhance the sphere of jute but also to give the
industry a new zone to expand.
The Indian jute industry is having lots of opportunity by its side; It is not only one
of the oldest industries of India but also among the major employer of the nation.
There are a lot of strengths and also much opportunity to grab them but it could
only be done if it overcomes its weaknesses and threats. Jute, the golden fibre, has
a potential of reaching the height where it used to be in the past, but it is only
possible through constant efforts by government and a proper follow-up by the
industry. After all, converting your threats into your opportunities is the success
mantra for the millennium.
HR PRACTICES
There are 73 jute mills in the country, of which 59 are situated in West Bengal, 3
each in Bihar and UP, 4 in Andhra Pradesh and 1 each in Assam, Orissa, Tripura
and MP. At the end of October, 1998, the total number of looms installed in the
industry stood at 44035 and installed spindles at 546836 on the fine side and
84612 on the coarse side. These jute mills employ around 2.32 lakh workers. The
33
maximum achievable spinning capacity in the organised mill sector is estimated
to be of the order of 18.6 lakh tonnes per annum. As on 23.11.98, only six mills
were lying closed. Out of these six mills two mills namely , Kanpur Jute Udyog in
UP and Katihar Jute in Bihar are lying closed for more than 12 years. These two
closed mills had employed a total of 2340 workers before closure.
With the rise of inescapable competition facing the Indian jute sector, both in the
international and domestic markets, it will be the endeavour of the Government to
facilitate upgrading the skills of both workers, and supervisors and managerial
staff who are employed in the jute industry. The Government will support
programmes of organisations and institutions engaged in HRD that address the
professional manpower needs of the industry, as well as at the cutting edge level
of workers and shop-floor supervisors. Institutions will be encouraged to network
and pool their resources and co-operate amongst themselves. IT will become an
integral part of the HRD effort recognizing its vital role in a progressively IT
driven global economic environment.
RECENT ISSUES AND DEVELOPMENT
The a view to streamline the supply of jute bags, the Indian Jute Mills Association
(IJMA) has sought third party study on logistics issues connected with the
despatch of jute goods.
The association has pointed out that the third party study needs to be
commissioned at the earliest by the Directorate General of Supply and Disposal
(DGS&D) to overcome the problem
The issues pertaining to logistics of the dispatch of jute bags were taken up in a
meeting held on Monday between VP Gupta, deputy director general (S&D) and
the representatives of IJMA.
34
Domestic Market Development
Promoting arrangements for better marketing and sale of jute.

Organisation of domestic exhibitions and sales.
Collaboration with the apex state and central marketing agencies and jointly
organising show rooms, exhibition etc.
Holding of seminars, workshops and live demonstration.
Grant of financial support to jute training institutions.
Running of promotional offices.
Export Market Development
Implementation of External Market Assistance (EMA) scheme.

Providing trade intelligence services to the manufacturer exporter.
Partnership in the specialised trade shows and fairs.
Sponsoring of market exploratory mission.
Organisation of buyer-seller meets.
Commissioning of product specific and market specific studies.
Carrying out of publicity and promotional campaigns. Release of informative
Running of common textiles promotional offices a strategic cities abroad.
Changing scenario of Jute industry
At present, jute has been defined as an eco-friendly natural fiber with utmost
versatility ranging from low value geo-textiles to high value carpet, apparel,
composites, decoratives, upholstery furnishings etc.
35
In future, a number of jute mills and mini-jute plants have been seen to be engaged
in jute products and jute blended yarns. We all know that the uses of jute are
manifold, with the traditional usage pattern remaining constricted to packing,
hessian and carpet backing.
The jute sector in India engages a key role in the Indian economy, providing direct
employment to about 0.26 million workers, and supporting the lives of around 4.0
million farm families. Around 0.14 million people are believed to be engaged in
the tertiary sector, that supports the jute industry. Currently it also contributes to
exports to the tune of about Rs. 1000 crore.
EXPORT GROWTH
India's jute goods export increased by over 45 per cent in March 2009 to 15 million
dollar as compared to 28 million dollar in the same period last year owing to poor
off take in major markets of the US and Europe. During 2008-09, the jute product
shipments fell 9.5 per cent to 296 million dollar from 327 million dollar in the
previous fiscal, according to the official data.
The major jute exportable items from India are Hessain, floor coverings and
shopping bags. Industry experts feel that besides less orders from the US and
European markets, hit by the global economic crisis, the sector is also facing
tough competition from its neighbour -- Bangladesh -- which enjoys an
36
advantage of natural fibre and commands a bigger share than India in the global
jute market
Export Promotion Bureau (EPB) statistics shows that jute goods worth US$30.20
lakh exported to Australia in fiscal year 2008-09 while the total export to the
country was US$901.39 lakh. The countrys overall export of jute goods in fiscal
year 2008-09 was US$269.25 million
Jute sector employs about four million farm families, besides providing direct
employment to about 2.6 lakh industrial workers and livelihood to another 1.4 lakh
persons in the tertiary sector and allied activitie.
TOP TEN COMPANIES OF JUTE INDUSTRY
GLOSTER JUTE MIL LTD COMPANY
SADAT JUTE MIL LTD
JANTA JUTE MIL LTD
SANJOY INTERNATIONALCOMPANY
MNR EXPORTS PVT LTDC
BIRDS JUTE & EXPORTS LTD.
37
CHEVIOT COMPANY LTD.
NAKHAT & CO.
DINESH GUPTA LTD
MAJOR PLAYER OF JUTE INDUSTRY
Gloster Jute Mills Ltd
PROFILE
Gloster Jute Mills Ltd is a Public Company having its registered office at 21 Strand
Road Kolkata 700 001 incorporated on 18th February 1992.It is a professionally managed
company engaged in the manufacture of Jute & Jute allied products. The factory is
situated at Bauria, P.O. Fort Gloster, Dist. Howrah. The present management has an
experience of over 50 years in running large jute manufacturing units. The unit has
extensively been modernized to produce value added diversified jute products like floor
covering, geo-textiles, processed decorative and industrial fabrics, Food grade quality jute
cloth and bags apart from traditional jute products including yarn/twin.
38
Gloster Jute Mills is one of the few ISO Certified Companies in the jute industry. It is one
of the fast growing Jute manufacturing & exporting company and is a Recognized Export
House.
The company presently has two business units along with one Captive Power Plant (CPP)
which is used as standby situated in the district of Howrah. The Domestic Tariff Area unit
is in operation since 1890 and was taken over by the Bangur Group in the year 1954. A
100% Export Oriented Unit (EOU) started its commercial production in jute industry
Profit loss account
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Income
Operating income 169.15 159.57 130.05 136.98 122.94
Expenses
Material consumed 91.63 77.21 74.57 79.06 68.79
Manufacturing expenses 9.42 11.59 8.76 9.89 5.89
Personnel expenses 33.28 33.85 23.43 26.16 1.21
Selling expenses - 4.25 3.38 3.68 0.73
Adminstrative expenses 14.64 6.40 6.02 5.57 36.31
Expenses capitalised - - - - -
Cost of sales 148.98 133.30 116.15 124.37 112.93
Operating profit 20.17 26.26 13.90 12.62 10.01
Other recurring income 2.47 0.20 0.19 0.20 3.21
Adjusted PBDIT 22.64 26.47 14.09 12.81 13.22
Financial expenses 2.67 3.31 4.32 3.62 2.75
Depreciation 5.11 5.12 4.51 3.64 2.96
Other write offs - - - - -
Adjusted PBT 14.86 18.04 5.26 5.55 7.51
Tax charges 5.78 6.70 1.97 2.02 3.46
Adjusted PAT 9.08 11.33 3.29 3.54 4.05
39
Non recurring items - -0.51 0.39 0.46 -
Other non cash adjustments - 0.21 0.55 0.37 -
Reported net profit 9.08 11.04 4.23 4.36 4.05
Earnigs before appropriation 11.20 12.89 5.97 5.83 4.99
Equity dividend 1.31 0.65 0.52 0.52 0.46
Preference dividend - - - - -
Dividend tax 0.22 0.11 0.09 0.07 0.06
Retained earnings 9.67 12.12 5.35 5.23 4.47
Balance sheet
Sources of funds
Owner's fund
Equity share capital 2.62 1.31 1.31 1.31 1.31
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 48.75 42.51 32.40 27.28 23.51
Loan funds
Secured loans 30.33 25.26 22.93 25.38 23.81
Unsecured loans - 5.77 12.22 11.35 6.95
Total 81.69 74.84 68.86 65.31 55.58
Uses of funds
Fixed assets
Gross block 86.43 79.95 74.49 62.32 54.98
Less : revaluation reserve - - - - -
Less : accumulated depreciation 29.94 24.96 19.92 15.51 11.93
Net block 56.49 54.99 54.57 46.81 43.05
Capital work-in-progress 1.00 2.55 1.30 5.10 0.78
Investments 0.35 0.35 0.15 0.15 1.60
Net current assets
Current assets, loans & advances 50.50 42.18 29.91 29.07 24.39
Less : current liabilities & provisions 26.66 25.23 17.07 15.97 14.52
Total net current assets 23.84 16.95 12.84 13.10 9.86
Miscellaneous expenses not written - - - 0.14 0.29
Total 81.69 74.84 68.86 65.31 55.58
Notes:
Book value of unquoted investments 0.20 0.20 - - -
Market value of quoted investments 0.15 0.15 0.15 0.15 1.14
Contingent liabilities 5.84 6.51 4.87 4.26 -
Number of equity sharesoutstanding (Lacs) 26.17 13.08 13.08 13.08 13.08
40
INTERPRETATION: The net profit of GLOSTER JUTE MIL LTD COMPANY to
is increased to 5.29 in 2009 as comparing to previous year. company growth is high
comparing to previous year
Ratios
Per share ratios
Adjusted EPS (Rs) 34.70 86.64 25.13 27.03 30.94
Adjusted cash EPS (Rs) 54.22 125.80 59.59 54.83 53.53
Reported EPS (Rs) 34.70 84.34 32.35 33.35 30.94
Reported cash EPS (Rs) 54.22 123.51 66.81 61.16 53.53
Dividend per share 5.00 5.00 4.00 4.00 3.50
Operating profit per share (Rs) 77.08 200.75 106.22 96.42 76.54
Book value (excl rev res) per share (Rs) - 334.88 257.63 217.39 187.49
Book value (incl rev res) per share (Rs.) - 334.88 257.63 217.39 187.49
Net operating income per share (Rs) 646.42 1,219.61 994.00 1,046.99 939.64
Free reserves per share (Rs) - 313.42 236.16 207.39 -2.21
Profitability ratios
Operating margin (%) 11.92 16.45 10.68 9.20 8.14
Gross profit margin (%) 8.90 13.24 7.21 6.55 5.74
Net profit margin (%) 5.29 6.90 3.25 3.18 3.20
Adjusted cash margin (%) 8.26 10.30 5.98 5.22 5.55
Adjusted return on net worth (%) 17.67 25.87 9.75 12.43 16.50
Reported return on net worth (%) 17.67 25.18 12.55 15.34 16.50
Return on long term funds (%) 21.46 34.38 16.36 21.80 18.46
Leverage ratios
Long term debt / Equity 0.59 0.41 0.73 0.47 1.24
Total debt/equity 0.59 0.70 1.04 1.28 1.24
Owners fund as % of total source 62.87 58.54 48.94 43.76 44.65
Fixed assets turnover ratio 1.96 2.00 1.75 2.20 2.24
Liquidity ratios
Current ratio 1.89 1.67 1.75 1.82 1.68
Current ratio (inc. st loans) 1.89 0.83 0.79 0.56 1.68
Quick ratio 0.58 0.63 0.67 0.49 0.52
Inventory turnover ratio 4.84 6.80 8.75 7.37 7.33
Payout ratios
Dividend payout ratio (net profit) 16.85 6.93 14.46 13.67 12.89
Dividend payout ratio (cash profit) 10.78 4.73 7.00 7.45 7.45
Earning retention ratio 83.15 93.25 81.38 83.13 87.11
Cash earnings retention ratio 89.22 95.36 92.15 91.69 92.55
Coverage ratios
Adjusted cash flow time total debt 2.14 1.89 4.51 5.12 4.39
Financial charges coverage ratio 8.47 8.00 3.26 3.54 4.80
Fin. charges cov.ratio (post tax) 6.31 5.89 3.02 3.21 3.54
Component ratios
Material cost component (% earnings) 56.72 51.83 53.17 61.51 55.00
Selling cost Component - 2.66 2.59 2.68 0.59
Exports as percent of total sales 22.61 20.65 19.60 18.70 -
Import comp. in raw mat. Consumed 3.36 9.79 35.81 14.23 -
Long term assets / total Assets 0.53 0.57 0.65 0.64 0.65
41
Bonus component in equity capital (%) 75.00 50.00 50.00 50.00 50.00
JANATA JUTE MILL Ltd
PROFILE
Janata Jute Mills Ltd., is a public limited company, which was established in the year
1966, in the wake of Bengali nationalism. The factory is located in Polash, Ghorashal in
the district of Narsingdi. It is situated on the bank of river Sita-Lakshya, which is about 45
k.m. north-east of Dhaka city on the Dhaka-Sylhet highway covering an area of 50acres of
land.
The factorys trial production commenced in 1968 and commercial production in

1969.The unit had an installed capacity of 150 Hessian and 100 sacking looms primarily
weaving to produce and export Hessian cloth and sacking bags having annual weaving
production capacity of 9,000 tons per annum.
After the emergence of Bangladesh, governments policy towards socialism it was

nationalised in May, 1972. For long ten years it was under government management. But
in 1982 the then government took a bold decision to denationalise the jute mills which
were 100% owned by Bangladeshis. So Janata Jute Mill Ltd, was handed over to its
original Bangladeshi owners on 10th, January 1983.
After denationalization, the company immediately went into expansion by adding 18

Hessian looms under its expansion plan. But due to change in the global economic
scenario and closing down of the jute spinning in Europe, the company took the
opportunity to import second-hand jute mill machinery for producing jute yarn for the
carpet industries in Europe. This is how the jute yarn manufacturing section came into
existence.
The first yarn unit started production in 1986 with 16 spinning frames and a production
capacity of 12 tons per day of specialized jute yarn for the carpet industries. The unit has
42
the capacity to manufacture jute yarn from 3.5 lbs. (8.2nm) to 16 lbs (1.8nm) of 1 to 3
plies for specialized carpet industrie
Profit loss account
Income
Expenses
Expenses capitalized - - - - -
Cost of sales 137.87 123.29 115.14 123.26 101.82
Adjusted PBDIT 21.55 25.36 13.58 12.70 12.11
Depreciation 5.15 5.97 4.58 3.53 2.85
Adjusted PBT 13.75 17.23 5.15 5.34 6.40
Tax charges 5.67 6.69 1.86 2.01 3.35
Adjusted PAT 10.17 10.32 2.18 2.43 3.64
Equity dividend 1.29 0.54 0.41 0.41 0.35
Dividend tax 0.21 0.10 0.08 0.06 0.05
Balance sheet
43
Sources of funds
Owner's fund
Loan funds
Secured loans 30.29 25.26 21.93 24.38 23.81
Unsecured loans - 4.77 11.22 10.35 6.92
Total 82.55 72.74 68.86 65.31 55.58
Uses of funds
Fixed assets
Gross block 85.43 72.95 71.49 68.32 57.98
Net block 66.49 64.98 53.57 45.81 43.05
Investments 0.37 0.37 0.18 0.15 1.60
Net current assets
Total 80.58 63.73 57.75 64.20 54.47
Notes:
13.27
Number of equity sharesoutstanding (Lacs) 25.16 13.18 13.08 13.08
INTERPRETATION:
The net profit of JANATA JUTE MIL LTD is decreased in 2009 as comparing to
previous .the company growth and profit is decreased
RATIOS
Per share ratios
Adjusted EPS (Rs) 9.89 8.22 7.53 6.45 6.03
Reported EPS (Rs) 9.56 10.61 9.63 6.45 6.03
Book value (excl rev res) per share (Rs) - 2.52 60.13 51.28 44.38
Book value (incl rev res) per share (Rs.) - 2.52 60.13 51.28 44.38
Net operating income per share (Rs) 150.96 115.68 107.13 90.14 91.73
44
Free reserves per share (Rs) 55.46 54.39 47.64 38.59 32.92
Leverage ratios
Liquidity ratios
Current ratio 4.92 4.88 4.53 4.63 5.52
Quick ratio 4.15 3.88 3.46 3.43 4.04
Payout ratios
Coverage ratios
Component ratios
Selling cost Component 2.09 2.94 2.23 2.32 2.11
Exports as percent of total sales 32.78 45.07 33.32 25.76 22.25
Import comp. in raw mat. Consumed 8.77 8.46 3.05 0.31 0.21
SADAT JUTE MIL LTD
Sadat Jute MIL Ltd., is a public limited company, which was established in the year
1984 as a 100% export oriented Jute Yarn producing unit. The factory is located in
Jafarpur, Debidwar, in the district of Comilla. It is situated on the road side of Dhaka-
Chittagong Highway, which is about 85 k.m. north-east of Dhaka city and 12 k.m. South-
West from Comilla town covering an area of 15 acres of land.
The factorys trial production commenced in 1986 and commercial production in 1987.
45
The unit had an installed capacity of 18 spinning frame. Since then, a new yarn unit has
been added in 1994 which had an installed capacity of 23 spinning frame and primarily
both the unit produces and export yarn/twine having production capacity of 10,000 tons
per annum.
In addition to that the company had undertaken a new industrial project of 100% export
oriented for manufacturing special type of Jute Fabrics (Lenoleum hessian) based on its
backward linkage industry in the name of Weaving Plant of which production commenced
in the year 2000. This plant produce and export Linoleum Hessian (special types of Jute
Fabrics) having production capacity of 2.25 million linear meters per annum.
The first yarn unit started production in 1986 with 18 spinning frames and a production
capacity of 12 M.tons per day of specialized jute yarn for the carpet industries. The unit
has the capacity to manufacture jute yarn from 4.00 lbs. ( 7.25 nm) to 30 lbs (0.96 nm) of
1 to 5 plies for specialized carpet industries.
In the backdrop of good demand of its yarn in the foreign market an expansion of the
existing yarn unit was undertaken for manufacture of yarns of 8 lbs. ( 3.60 nm) to 72 Lbs.
(0.40 nm). This expansion yarn unit of 23 spinning frames with second-hand machinery
went into production in 1994. It has a capacity to produce 20 M.Tons per day of yarn.
Profit loss account

Income
Expenses
Expenses capitalized - - - - -
Cost of sales 149.09 134.41 127.26 125.48 123.04
46
Adjusted PBDIT 23.45 25.58 16.06 13.82 13.33
Depreciation 5.23 5.23 4.62 3.55 3.07
Adjusted PBT 15.97 17.15 5.37 5.56 7.62
Tax charges 6.89 7.69 1.78 2.13 2.55
Adjusted PAT 10.09 12.34 4.30 3.65 3.16
Equity dividend \2.31 0.68 0.63 0.53 0.57
Dividend tax 0.84 0.72 0.69 0.53 0.16
Balance sheet
Sources of funds
Owner's fund
Loan funds
Secured loans 40.44 34.27 33.94 26.49 23.81
Unsecured loans - 5.78 14.23 12.46 7.96
Total 81.69 74.84 68.86 65.31 55.58
Uses of funds
Fixed assets
Gross block 86.43 82.76 75.50 63.43 58.99
Net block 57.60 55.90 55.68 47.92 44.36
Investments 0.39 0.37 0.17 0.16 1.71
Net current assets
47
Total 82.67 70.85 69.97 66.42 66.69
Notes:
15.52
Number of equity sharesoutstanding (Lacs) 26.17 13.38 13.17 13.09
INTERPRETATION:
The net profit of SADAT JUTE MIL LTD in 2009 is increased, as comparing to
previous year. company growth is high comparing to previous year.
Ratios
Per share ratios
Adjusted EPS (Rs) 11.19 17.78 18.56 28.92 19.46
Reported EPS (Rs) 14.46 25.58 24.11 31.21 18.99
Book value (excl rev res) per share (Rs) 394.09 383.79 334.87 364.67 226.11
Book value (incl rev res) per share (Rs.) 394.09 383.79 334.87 364.67 226.11
Net operating income per share (Rs) 503.75 413.96 366.62 441.78 311.58
Free reserves per share (Rs) 378.80 370.52 321.61 346.34 206.90
Leverage ratios
Liquidity ratios
Current ratio 2.33 2.31 2.22 2.41 1.84
Quick ratio 1.54 1.44 1.46 1.61 0.93
48
Payout ratios
Coverage ratios
Component ratios
Selling cost Component 6.69 6.48 6.41 7.52 9.24
Exports as percent of total sales 13.39 16.00 14.31 17.39 23.83
Import comp. in raw mat. Consumed 61.00 59.49 58.39 55.62 62.40
FINANCIAL ANALYSIS
CURRENT RATIO:
. Current ratio may be defined as the relationship between current assets and current
liabilities. This ratio is also known as "working capital ratio". It is a measure of general
liquidity and is most widely used to make the analysis for short term financial position or
liquidity of a firm. It is calculated by dividing the total of the current assets by total of the
current liabilities
FORMULA: CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILTIES
CURRENT RATIO
YEAR 2005 2006 2007 2008 2009
GLOSTER JUTE MIL LTD 3.68 3.82 2.75 3.67 3.89
JANATA JUTE MIL LTD 5.52 4.63 4.53 4.88 4.99
SADAFT JUTE MIL LTD 4.84 3.41 4.22 3.37 4.37
49
INTERPRETATION:
GLOSTER JUTE MIL LTD: This ratio has increased from 3.68 in 2005 to 3.89in 2009.
JANATA JUTE MIL LTD: This ratio has increased in both 2005 & 2006, but decreased
in 2007 & 2008 i.e. 4.53, 4.88 and increased in 2009 to 4.99.
SADATH JUTE MIL LTD: This ratio has continuously decreased from 4.84 in 2005 to
0.4.33 in 2009.
Debt-Equity Ratio:
This ratio establishes a relationship between total long-tern Debts and share holders
funds.
Formula: Debt-Equity Ratio = Total long term debts / share holders funds
EQUITY RATIO
YEAR 2005 2006 2007 2008 2009
SADAT JUTE MIL LTD 1.21 0.75 0.91 0.71 0.36
50
INTERPRETATION
GLOSTER JUTE MIL LTD: This ratio has increased from 1.24 in 2005 to 1.59 in 2009.
JANATA JUTE MIL LTD: This ratio has increased from 4.13 in 2005 to 4.37 in 2006, but it
has decreased in 2008&2009TO 2.74&2.36.
SADAT JUTE MIL LTD: This ratio has increased from 1.24 in 2005 to 1.59 in 2009
The reason for fluctuations in the debt equity ratio is depending upon risk and returns
taken by various companies.
Net Profit Ratio:
The ratio indicates that margin of sales which s available to share holders in the farm of
dividend its shows the efficiency and profitability to a limited extent.
Formula; Net Profit Ratio = Net Profit after Tax / Sales
NET PROFIT RATIO

YEAR 2005 2006 20007 2008 2009
GLOSTER JUTE MIL LTD 3.21 318 3.25 6.21 5.29
51
INTERPRETATION:
GLOSTER JUTE MIL LTD: This ratio has increased from in 2005 to 3.21 in 2006, it
decreased from 3.18 in 2007 to 31.07and in 2008 increased to 3.25 again increased in
2009 to 5.21
JANATA JUTE MIL LTD: This ratio has decreased from 8.25 in 2005 to 8.18 in 2006, it
has decreased from 8.12 in 2008 to 7.52 in 2009 and again decreased in 2009 to 7.19.
SADAT JUTE MIL LTD: This ratio has continuously decreased from 6.97 in 2005 to 2.83
in 2009.
The reason for fluctuations in the Net profit ratio is management expenses and resource
utilization.
OPERATING PROFIT RATIO:
This Ratio indicates that margin of sales. It is a measure of operating efficiency which
indicates net margin.
Formula: Operating Profit Ratio = Operating Profit / Net Sales
OPERATING RATIO
YEAR 2005 2006 20007 2008 2009
52
INTERPRETATION:
GLOSTER JUTE MIL LTD: This ratio has increased from in 2005 to 8.14 in 2006, it
increased from 9.21 in 2007 to 10.68 and in 2008 increased to 16.45 again increased in
2009 to 11.92.
JANATA JUTE MIL LTD: This ratio has decreased from 24.74 in 2005 to 24.47 in 2006, it
has decreased from 21.37 in 2008 to 7.52 in 2009 and again decreased in 2009 to 19.51
SADAT JUTE MIL LTD: This ratio has continuously increased from 11.76 in 2005 to
16.21 in 2009.
The reason for fluctuations in the operating profit ratio is operating expenses incurred by
management of above companies.
RETURN ON INVESTMENT:
This is most important test of profitability of a business. Its measures the overall
profitability. It is ascertained by comparing profit earned and capital employed to earn.
Formula: ROI = PBIT / Capital employed
COMPANIES 2005 2006 2007 2008 2009

GLOSTER JUTE MIL
LTD 11.25 13.58 14.13 12.16 11.42
JANATA JUTE MIL 6.71 8.69 7.21 7.43 7.52
53
LTD
SADAT JUTE MIL
LTD 7.81 6.46 6.96 6.97 7.26
INTERPRETATION:
GLOSTER JUTE MIL LTD: Under this company above Ratio increased from 11.25 in
2005 to 13.58 in 2006 and it has decreased from 12.16 in 2008 to 11.49 in 2009.
JANATA JUTE MIL LTD: Under this company above Ratio decreased from 8.69 in 2005
to 6.71 in 2007 and if increased from 7.21 i n 2008 to 7.52 in 2009.
SADAT JUTE MIL LTD: Under this company above Ratio has decreased from 7.81 in
2005 to 7.26 in 2009.
The reason for the fluctuations in the Return on investment is the efficiencies of
management of different companies.
CONCLUSION
CONCLUSION ON JUTE INDUSTRY ANALYSIS
BASED ON THE ABOVE REPORT,THE FOLLOWING CONCLUSION IS

DRAWN :
54
Human Resource in jute industry is mainly increased by manpower strength
is increased in 2009 as compared to 2008.
Production of Jute Goods is increased in jute industry.
Turnover of jute industry is increased to 6,500 corers as compared to previous
year of 5,500.
Total demand and total supply of jute goods are also so increased.
Export growth of jute Products
Labor Wages are increased in the jute industry due to good profits.
Market strategies have created new opportunities for new entrepreneurs to
enter into the jute industry.
Net profit is also increased.
Current period of jute industry is in increasing order and profits are also
increased.
Yield on investments and funds are improved.
Net interest income increased in 2009.
Business growth of jute industry is increased.
THE FINANCIAL POSITION OF JUTE INDUSTRY GROWTH IS

INCREASING YEAR TO YEAR.NET PROFIT IS INCREASED
JUTE INDUSTRY GROWTH IS HIGH.
FINDINGS
At present the supply chain management is poor and it is making its

impact to improve in future.
At present production cost of jute industry is high; cost of production
should be decreased.
55
As the jute products are eco-friendly to the nature and, these
products does not harm to the environment. So, these products have
good demand in current period and future.
BIBILOGRAPHY
WWW.JUTE-INDUSTRY.COM/
WWW.JUTE-INDUSTRY.COM/JUTE-INDUSTRY-INDIA/JUTE-TRADE-ASSOCIATIONS.HTML.
WWW.JUTE.COM/HTML/OTHER_ORG.HTM.
WWW.WORLDJUTE.COM/JUTE_NEWS/NEWS_INDUSTRY_01.HTML.
WWW.JUTE-INDUSTRY.COM/JUTE-INDUSTRY-INDIA.
WWW.ARTICLESBASE.COM/BUSINESS.../JUTE-INDUSTRY-IN-FAVOUR-OF-DIVERSIFICATION-
1492985.HTML - UNITED STATES - CACHED.

EN.WIKIPEDIA.ORG/WIKI/JUTE
WWW.JUTE.COM/HTML/CITIZENS%20CHARTER
W.FINANCIALEXPRESS.COM/...JUTE-INDUSTRY
WWW.WORLDJUTE.COM/ABOUT_JUTE/JUTHIST.HTML
56

Jute Industry Analysis

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Jute Industry Analysis

Uploaded by

Copyright:

Available Formats

A REPORT ON

ANALYSIS OF JUTE INDUSTRY IN INDIA

MASTER OF BUSINESS ADMINISTRATION

MBA III SEMESTER

Under the esteemed guidance of

SRI KOTTAM TULASI REDDY MEMORIAL COLLEGE OF ENGINEERING

KONDAIR, ITIKYALA MANDAL,

MAHABOOB NAGAR- DISTRICT-519125 (AP)

DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION

SRI KOTTAM TULASI REDDY MEMORIALCOLLEGE OF ENGINEERING

KONDAIR, ITIKYALA (MANDAL)

This is to certify that the industry analysis report on Software Industry

Internal guide Head of the department

suggestions, which made me to correct my faults and improve myself.

I express my deep sense of gratitude and thanks to B.PARIMALADEVI (Head of

me find and overcome many problems faced during the period.

I am very much obliged to SRI KOTTAM TULASI REDDY MEMORIAL

premises.I feel privileged to thank wholeheartedly our Director Dr.K.S.NAYANTHARA

for giving me this opportunity.

I here by declare that this project entitled A STUDY OF REPORT ON JUTE

INDUSTRY IN INDIA is a bonafied work carried out by me under the guidance of

P.GUNA SHEELA Assistant professor, Dept. of Management SKTRMC, Kondair. I

the award of any degree / Diploma.

Signature of the student.

S.NO TITLE PAGE NUMBER

JUTE INDUSTRY ANALYSIS

HISTORY OF JUTE INDUSTRY

Indian Jute Industry

Jute Technology Mission

National Centre for Jute diversification, Kolkata

Acts and Rules

Jute & Jute Textiles Control Order, 2000

Advantages of Indian Jute Industry

Largest production of raw jute in the world

Demerits of Indian Jute Industry

mports of cheap and alternative textiles from other Asian countries

2) Facilitate the Jute Sector to attain and sustain a pre-eminent global

JUTE INDUSTRY STRUCTURE

Jute Cushion Covers

Jute Fashion Accessories

JUTE BANGLES AND CLIBS

PRODUCTION OF JUTE GOODS

1998 99 413.9 676.3 30.5 5312.3 1433 8290

1999 00 368.7 666.6 25.2 340.4 1400.9 8023

2000 01 392.4 864.6 19.8 401.6 1678.4 9598

2001 02 344.1 903.3 18.5 330.3 1596.2 9068

2002 03 344.5 909.2 8 328.5 1590.2 9087

2003 04 337.9 952.9 6.6 327.5 1624.9 9280

2004 05 275.3 1034.3 5 286.2 1600.8 9142

2006 08 338.3 1000 5.4 278.1 1621.8 9262

2008 09 305.2 979.3 5.7 281.1 1571.3

Jute company sales are increased year_by_year.

TOTAL DEMAND AND SUPPLY OF JUTE INDUSTRY

for jute producers.

Barua, Marketing Manager Jute Corporation of India (JCI). Demand of various

which was around 1.5 million bales before 2 years.

global trend in support of natural fibre.

exploited the benefits of the technology up-gradation funds scheme, he added

. Under the Jute Packaging Materials Act, 1987

of jute packaging material in the supply and distribution of certain commodities in

the production thereof and for matters connected therewith.

Certain commodities for packaging in jute.

Promoting arrangements for better marketing and sale of jute.

Sponsoring and co-ordinating technilogical and economic research on matters directly