Bangladesh Jute Mills Corporation (BJMC) has designed a Tk 568 crore plan to establish a composite jute textile plant to make fabrics, particularly denim.
The denim fabrics will be made by mixing jute and cotton to meet the rising demand, both at the domestic and global markets.
The state-run corporation said it has already received the approval from the project evaluation committee of the planning ministry.
The project is now awaiting the final approval from the Executive Committee of the National Economic Council.
“We have found that this project will be profitable,” said Mahmudul Hassan, chairman of BJMC, which operates 26 jute mills.
Over the years, hessian fabrics and jute sacks have been dominating BJMC's annual production basket. The latest step was taken to diversify the production basket and expand market opportunities for the natural fibre, officials said.
BJMC, which accounted for one-fifth of total production of jute goods of 9.63 lakh tonnes in fiscal 2015-16, has also taken an initiative to set up new production units to make more diversified products including viscose, said Babul Chandra Roy, an adviser of BJMC.
Home textiles will also be produced at the composite jute garment factory, which will be set up on seven acres of land in Demra, Roy said.
“Globally, there is a huge demand for denim. Our aim is to cater to the demand,” he said.
The global denim market is expected to hit $64 billion by 2020, according to Bangladesh Denim Expo that takes place twice a year. In 2014, the size of the global denim market was $56.20 billion.
Currently, Bangladesh has 30 denim mills whose collective production capacity is 435 million yards a year against the demand for 800 million yards a year, according to Bangladesh Denim Expo.
“There is a huge supply gap for denim fabrics,” Roy said, adding that an estimate on fabric production from jute and cotton is yet to be prepared.
The price of a kilogram of jute is now Tk 50, but value addition will bring higher prices for the state mills, he added. The prime minister has already given consent in principle to the project, said Hassan of BJMC. “We want to start work for the venture from this year,” he added.
Between fiscal years 2007-08 and 2015-16, BJMC has incurred losses in all years except in fiscal 2010-11, when it posted Tk 17.5 crore profit.
BJMC's unaudited losses stood at Tk 619 crore in 2015-16, down from Tk 726 crore the previous year, according to its annual report.