Jute spinners cut work hours as yarn piles up

Jute spinners have decided to cut their six-day work week to five days from November 1 to avoid stockpiling of the exportable yarn amid falling international demand.

Bangladesh Jute Spinners Association (BJSA), which represents the spinning sector, took the decision earlier last week.

Due to the closure, production at the nearly 75 active jute spinning mills will go down by 70 percent, sector leaders said. Spinners account for about 65 percent of the receipts from jute exports.

In 2013-14, yarn exports brought home $532.81 million.

In the July-September period, the first quarter of the current fiscal year, their growth came down to 1.22 percent as compared to the same period a year ago, according to Export Promotion Bureau data.

The nearly 100-member association had kept its mills open seven days a week until April and brought down the number of work days to six in the following months, as some big entrants boosted the industry's production capacity sharply, causing supply to outpace demand.

The expectation of making a quick buck enticed some new players into the industry, spinners said.

The latest move to cut working days aims to rationalise production and get fair prices from international buyers, said Mahmudul Huq, managing director of Sadat Jute Industries Ltd, one of the largest yarn exporters of the country.

He said they don't know how long the five-day work schedule would continue. "But our idea is not to make any loss. It is better than continuing on with maximum production and then making loss."

"We think it would be better if we cut the production and still make profit," he told The Daily Star yesterday.

The association has talked to the workers union, which has accepted the proposal.

"The workers will be compensated for the lost wages so that they don't suffer," said Huq.

He said if the mills cut their production they will be able to run the factories smoothly, repay bank loans, pay regular salaries to workers and suffer no backlog.

In a meeting yesterday, the BJSA increased the benchmark price by of yarn by a $100 per tonne to $900, to compensate for losses.

The new move also aims to rein in the soaring prices of raw jute, which have gone up by 25 percent since this August amid a nearly 30 percent fall in production this year.

"If the prices of jute go up further and the international buyers don't raise prices of yarn, exporters will die out," said Huq, also the deputy managing director of Janata Jute Mills Ltd.  

Bangladesh exports 5.80 lakh tonnes of yarn to 150 countries, with the trouble-hit Middle East accounting for 60 percent.

fazlur.rahman@thedailystar.net