You are on page 1of 48

Executive Summary

The main purpose of our project is how an industry can create a market a market outside its national territory. By going through this project one will be able to know how the jute industry of Bangladesh can start exporting to a new market and the factors they should consider before venturing into a new arena. For this project we have chosen Turkey as our target market. We have also discussed the internal and external factors of our Jute industry. These factors will play a major role when we will enter the Turkey Jute market. This paper also includes the different modes of entry that can be followed by the Jute industry. We have therefore recommended the modes of entry that is most appropriate for Turkey. Again a new exporting industry should face some sort of problem. As our Jute Industry will move to Turkey, they also have to face competitors. As a whole this project consists of the prospects of Turkey as a new market and the marketing strategy that should be taken by our Jute industry to survive in the challenging environment of the new market.

1|Page

Introduction
Product: Jute
Jute is the most popular natural fiber next to cotton. 90% of world's total production of Jute is harvested in Bangladesh. That's why Jute is called the Golden Fiber of Bangladesh. Jute is totally eco-friendly and very much popular worldwide because of its cost effectiveness. Products made of Bangladeshi Jute could be used years after years as Bangladesh produces strongest and highest quality jute in the world. Hence, through this report, we are very happy to introduce ourselves as GOLDEN JUTE MILL, an exporter of all kinds of jute bags such as bag, Sack, Gunny bag, Sand bag, Hessian cloths, jute burlap, Carpet Backing Cloth (CBC), Jute Nursery cloth, Twine, Rope, Canvas, Shopping bags, Jute Yarn etc and some other PP Woven Bag of various construction to the various countries of the world. It is universally known that the quality of Bangladeshi jute is number one in the world for which most of the buyers or users are being inclined to Bangladesh for sourcing their best quality products and comprehensive price. Hence, we have chosen this industry.

Jute Industry in Bangladesh


In Bangladesh, Jute, once known as the Golden Fiber, was the highest foreign exchange earner of the nation. It used to pocket more than 80% of the countrys foreign exchequer. In fact, back in the 1950s and early 1960s, almost 80% of the worlds jute was produced in Bangladesh. Unfortunately, the introduction of synthetic substitutes and artificial fibers in the 80s saw the decline of jute demand. Eventually, the importance of jute in the international market declined and jute lost its predominant position (in 1980/81, jute constituted 68% of total exports). The spiraling continued and in 1990/91, it constituted only 6% of total exports. The sector continued to limp its way and survived, partly because many farmers had no choice but to go on harvest jute and partly because of jutes environmental friendliness. Luckily for those who never gave up
2|Page

or gave in, their endeavors are finally paying off, as jute demand has been revived in the recent years. Nevertheless, jute, besides being one of the major cash crops is one major heritages of our country. The sector has been in operation since the British regime and still occupies a vital position in our culture. The entire sector employs about 40,000 people, exports nearly 100% of its products. It is one of the largest foreign exchequer earners at present. The recent rise in jute demand is attributed to its multiple eco-friendly uses. The synthetics and natural fibers are gradually becoming expensive and jute can also be recycled easily and put to valuable use from there.

3|Page

Jute Growing Area in Bangladesh


Legend Northern Jute (White and Tossa) Soft District Jute (White and Tossa) Jat Jute (White and Tossa) District Jute (White and Tossa) Hard District Jute (White and Tossa)

Figure 1: Jute Growing Areas (Source: \)

4|Page

Unveiling the Jute Sector


Raw Jute: Jute Yarn and Jute Twine Jute Goods (bags, carpets etc made from jute and jute yarn/twine)

Jute Yarn:
Jute yarn refers to single strand of jute, the thread produced from raw jute. It is a traditional jute product, and is mostly used by the carpet industries around the world. It also has other uses, but its most significant use still remains within the carpet weaving industry. Jute yarns of various dimensions are plied together to make twines as per requirement and use. Example of some yarnbased products is given below: Carpets, floor coverings, tapestries, hammock, shikkas, shoes, shoe uppers and soles, sandals, doormats, belts, tape, lace, braids, braided rugs, door and window screens, sweaters, cardigans, jackets, mufflers, caps, carrying kits, knitted bags, etc.

Statistics of the Yarn Industry (Source: BJSA, 2007): Numbers of Jute Spinning Mills: 51 (private), of which 42 are operational. Number of workers employed in the mills (approximately): 46,500 (32.52% of the total number of employees in the jute mills) Average production: 2, 75,300 Metric Tons (52% of total jute goods produced by all 148 jute mills)
5|Page

Average domestic consumption: 13,000 Metric Tons (the industry is mostly export-based, 90% of its output is dependent on foreign demands). Average yarn export: 2, 56,630 M. Tons. Value of the yarn exported: 1059 Crore Taka (58.61% of total value of jute good exported). Market Size: International demand for yarn is 300,000-350,000 Metric tons per. On average the prices for one metric ton of medium grade jute yarn; CB quality is $650 (for the current fiscal year 2009-2010) per metric tons. Hence, the average market size is = 325,000MT x $650 = $ 211,250,000. Growth rate: The projected growth rate, in terms of value for the base fiscal year 2009-2010 is 22.76%. In the 2006-2007 fiscal year, the Yarn (Jute Spinning) Mills exported 2.61 lacs MT of goods, which were worth 1161.85 Crore Taka. The recorded growth, in terms of quantity, was 3.57% and 21.55% in terms of earnings. The growth rate is based on export figures, as the industry is 100% export orientated; rejections are usually sold in odd lot to local buyers. However, this is rarely recorded on accounts by the Yarn mills.

6|Page

Year

No. Of Mills 11 16 17 24 29 29 31 34 34 34 34 34

Productio n Capacity (MT) 39,673.80 54,379.89 59,228.91 78,797.97 84,503.52 84,503.52 90,741.96 1,01,550.4 2 1,11,480.0 3 1,11,480.0 3 1,18,075.5 9 1,18,075.5 9

Quantity produced (MT) 17,577.00 14,831.64 22,013.10 35,407.89 50,365.08 53,311.32 40,588.92 67,649.13 79,358.76 80,597.52 83,077.83 83,700.00

Quantity exported (MT) 12,888.00 10,874.00 16,139.00 24,100.00 28,000.00 35,631.00 25,322.00 43,859.00 54,904.00 49,456.21 63,369.66 70,279.89

Value In Loca Tk (Crore) l sale s 15.7 14.22 22.24 28.91 51.01 83.62 52.01 87.60 117.60 113.78 168.00 203.79

197980 198081 198182 198283 198384 198485 198586 198687 198788 198889 198990 199091

7|Page

199192 199293 199394 199495 199596 199697 199798 199899 19992000 2001 2002

34 34 34 34 36 39 41 45 47 50

1,30,281.0 0 1,33,159.0 0 1,50,640.0 0 1,60,280.0 0 1,80,350.0 0 1,92,338.0 0 1,95,000.0 0 2,30,000.0 0 2,60,000.0 0 2,92,438.0 0

89,033.67 92,874.97

77,033.67 84,080.25

220.29 233.76 253.95 283.75 318.16 354.32 351.95 358.23 405.52 469.89 557.71

1,01,082.0 92,322.74 0 1,14,169.0 1,03,872.0 0 0 1,12,854.8 1,05,340.8 7 7 1,19,200.0 1,09,668.9 0 7 1,32,192.0 1,16,487.3 0 6 1,47,766.3 1,30,562.7 0 2 1,58,061.0 1,44,440.9 0 2 1,74,179.0 1,60,916.6 0 7 2,05,157.2 1,83,625.9 0 4 2,03,746.3 1,89,679.0 7 8 2,56,523.0 2,19,334.0 0 0 2,62,140.6 2,51,832.0 3 0

50 (6 2,92,438.0 closed 0 ) 47 48 51 2,89,783.0 0 3,03,839.0 0 3,25,000.0 0

2003 2004 2005

583.85 624.81 955.88

16,9 45 20,1 54 19,8 59


8|Page

2006 2007

51 51

3,25,000.0 0 320,000.0 0

2,88,466.7 2,61,437.0 2 0 271,445.9 1 2.54,098.1 5

1,161.85 1108.37

14,0 74 13,8 66

Table 2: The Yarn Industry (Source: BJSA (2008))

Local Jute Traders


Being the major playground of the long history of jute trade and having relatively finer fiber, Bangladesh always had advantage in raw jute trading. Till now Bangladesh is the largest exporter of raw jute in the world. After the liberation of Bangladesh from Pakistan in 1971, the jute trading was not limited to specific groups like India or Pakistan, because after the liberation of Bangladesh, most of the Pakistani owned Jute Mills were taken over by the government of Bangladesh. Later, to control and monitor these Jute mills in Bangladesh, the government incorporated Bangladesh Jute Mills Corporation (BJMC). No other jute mills were allowed to grow in the private sector before 1975. This incident grew many raw jute traders from different corners of Bangladesh who used to supply raw jute to BJMC owned jute mills. This group of traders is called Beparis, who buy raw jute directly from the farmer

Lifecycle:
The industry is in a matured state. The incremental projected growth rate for current period is 5.61% higher over the growth rate for preceding period. New markets, such as Turkey, are keeping the market growing, but at a near-static pace. Hence, we see that the firms are undercutting each others price in order to increase their market share (and retarding the growth rate in the process).
9|Page

Success Factors:
The jute yarn industry is already over saturated with 51 yarn mills, and there is no guarantee that new firms would be entering the fray. The intensity of rivalry is very high and firms need to focus on certain attributes to ensure revenue: 1. Skilled manpower 2. Maintenance 3. Marketing and Promotion 4. Quality (according to Jute Spinner) 5. Performance (according to Jute Spinner)

End uses of Jute goods:


Jute Goods can ideally be used as:

Bags and sacks for packing almost all kinds of agricultural produces, minerals, cement etc. Packs for packing wool and cotton; Wrapping materials / fabrics; Carrier and backing fabric for carpet and linoleum; Cordage and twines; Webbing to cover inner springs in auto-seats and upholster furniture; Cargo separator in ship; Cloth for mine ventilation and partition; Filling material in cable; Roofing and floor covering apparel; Footwear lining; Wall covering and furnishing fabric; m. Fashion accessories;
10 | P a g e

Soil erosion control fabric and many more.

Competitiveness of Jute Goods:


Jute, having been the most environment-friendly natural fiber because of its inherent unique properties has counts of advantages over other man-made artificial polymer fiber products.

Under stress jute extends only 0.5% to its stable form and so gives wonderful dimensional stability. The hairy surface of jute fabric gives it a capacity to grip any surface it comes in contact with. They can, for this reason, be stacked high and wide without any risk of slippage. The ignition temperature of jute is 193c. It thus remains very stable up to near ignition point. Even at boiling temperature, its intact physical properties guard it from undergoing possible distortion.

Jute being hygroscopic and auriferous permits normal breathing and humidity to the contents and so ensures their storage without deterioration. Hooks may be used freely and easily on jute products during handling as its innate properties cover up the pierced holes immediately after. It thus prevents seepage loss of contents during transportation and allows itself to be re-used over and again

Jute being natural is biodegradable. It does not plug the natural pore of the earth soil and surface. When burned, it emits the same fume as a burning wood as we know, is nothing dangerous. It has no adverse effect on human body and the Mother Nature as a whole.

Company Profile: Golden Jute Mills

11 | P a g e

We are Jute Goods Manufacturing Company. We produce any kind of jute yarn, jute bags (Hessian & Sacking), specialized linoleum hessian, jute cuttings etc. Minimum order level is around One 20'feet container.

Company Name: Golden Jute Mills Limited. Country of Origin: Bangladesh Company Details: Golden Jute Mills is locally owned and a private Limited company. It is in the business of manufacturing and exporting a wide variety of jute products which includes bags, jute yarn etc.

Mission Statement: At Golden Jute Mills we strive to enhance the quality of life in both in Bangladesh and wherever else we go in the world by providing best quality jute products.

Vision: To be among the leaders in jute exporting companies, reaching out to other nations with our products, and thus contributing to the Bangladeshi economy.

Objectives:
12 | P a g e

o Our main objective is to gather over 30% market share Turkey within the 3 years. o We shall also keep on our research and development, increasing by at least 1% annually, to further enhance quality jute products. o We will discover better methods to cut down costs and time related to production. o We want to maximize the wealth of our partners through increasing the value of our company with minimizing costs.

Corporate Philosophy: o Our responsibilities - Golden Jute Mills is committed to the development of products and services that further the creation of an ecologically sustainable future. We have been independently audited and adhere to a strict fair trading policy. 2000 employees work at the factory in a vertical production process that guarantees the quality of the product and the principles by which the process takes place.
o

Our principles - Golden Jute Mills recognizes its responsibilities to its workers for the conditions under which its products are made, and that these responsibilities extend to all workers producing products for Golden. The company believes in the following: Employment must be freely chosen Respect for the right to freedom of association and free collective bargaining Child labor must not be used Working conditions must be safe, decent and hygienic Statutory living wages must be paid Working hours are not excessive No discrimination must be practiced

Products/Services that we offer: o Hessian o C.B.C


13 | P a g e

o Twine Business Type: Manufacturer Industry Focus: Yarn, Packaging Bags, Agriculture & By-product Agents, Ladies Geographic Markets: Mostly Worldwide No. of Employees: Above 1000 People Annual Sales Range (USD): US$7 Million - US$12 Million Handbags,

The Marketing Plan

Marketing objectives:

Marketing plays a fundamental role in the entire process because market oriented firms build strategic market plans around company objectives, markets and the competitive international environment. Planning for marketing can be complex because even for the local market but when a firm wants to do business internationally, the problems are multiplied. Our marketing department is responsible for keeping current buyers, making sure that they get the best deals and the highest quality according to their requirements. This sector is also responsible for getting newer buyers for the company. Much of the success of this company lies with the marketing department. This department has to set up sales forecasts, depending on which budgets are set for the following cycle. In order to do so, it must also know the requirements of the buyers and the various seasons. Since we are participating as an international manager, our task becomes more complicating because we have planned to export our product jute to a foreign country. This process gets intricate as well since most of the exports will go the volatile market of Turkey (our target market) where the major carpet manufacturers have shifted from within Europe. At this level, we have to be extra cautious because we must deal with at least two levels of uncontrollable
14 | P a g e

uncertainty instead of one. Uncertainty is created by the uncontrollable elements of all business environments but each foreign country in which a company operates or wants to enter adds its own unique set of uncontrollable elements. Hence, we have planned our marketing objectives by keeping in mind the uncontrollable elements that our company would have to face in Turkey. Prime Objective: Our company Golden Jute Mills strives to enhance and sustain competitive advantage in Bangladesh and wherever else we go in the world by providing best quality jute products. Our vision is to be among the leaders in jute exporting companies, reaching out to other nations with our products, and thus contributing to the Bangladeshi economy. Hence we make efforts to focus on our major marketing objectives which are as follows: Our main objective is to gather over 40% market share Turkey within the 3 years. We shall also keep on our research and development, increasing by at least 5% annually, to further enhance quality jute products. We will discover better methods to cut down costs and time related to production. We want to maximize the wealth of our partners through increasing the value of our company with minimizing costs.

Target market (specific description of the market):

Exporting is an integral part of every international business and goods manufactured in one country must be transported efficiently across borders to enter into the distribution system of another country. In evaluating our target market, we have mainly focused on 3 dimensions of the country which are the size and growth potential, market demand and attractiveness and company fit. Hence, we have chosen Turkey as our target market.

15 | P a g e

Country Profile: Turkey

Figure:Map of Turky

Rationale behind targeting Turkey


Even better, Belgium, the largest previous importer of jute has shifted its facilities to Turkey for lower production costs of their business. So going there, we will able to grab the same customers. So even if we use competitor pricing, we will be able to market our products to the same customers. The cost will also be lower than what Belgian buyers paid, as Turkey is physically closer to us than Belgium, leading to lowering shipment costs. By starting with few firms, we can use our goodwill to increase our list of clientele.

16 | P a g e

With the number of other exporters, and more exporters to follow possibly, we have to enter the market as soon as possible. By doing so, we will build up heavily on goodwill, and use advices or their requests and ideas to further improve the type of products we are supplying. So by the time there will be a larger number of importers, we will be a dominant supplier to the market, and possibly be in the saturation stage, when taking away our market share will be difficult for competitors.

Expected Sales:

Statistics show that the international demand for jute yarn is on an average 300,000-350,000 Metric tons per. If calculated, the average price for one metric ton of medium grade jute is $650 per metric tons. This shows the average market size to be the following: Average market size = 325,000MT x $650 = $ 211,250,000. Hence, to keep up with the market size and to sustain our competitive advantage, our company is expecting to pursue a growth rate of 21%, in accordance with the current industry trend. Golden Jute Mills is also planning to export around 2 lacs MT of goods that would maintain 15 % in terms of earnings. This growth rate is predicted on the base of export figures as the industry is 100 % export oriented. Hence, Golden Jute Mills is targeting for an expected sales of Annual Sales Range (USD): US$5 Million - US$10 Million.

Profit expectations:

We have assumed that the current ratio of Golden Jute Mills to be approximately 1.6% and the debt equity ratio to be 0.76%. Calculations show that the shareholders equity per share equals to taka 588.53.Hence, Golden is expecting return on equity for its shareholders to be around

17 | P a g e

2.17%.Hence, we are expecting a turnover of Taka 2621.09 lacs and a gross profit of Taka 343.82 lacs from our operation at Golden Jute Mills.

Market Penetration and Coverage:


Market Entry Strategy
When any company makes the commitment to go international, it must choose an entry strategy which will act as the guidance for market penetration. In order to make this decision, we have conducted an analysis of the market characteristics of Turkey which includes potential sales, cultural differences, and country restrictions and of course the company capabilities. Depending on our firms objectives and goals, we have decided to opt for export involvement. As our sales revenues will grow in the future, our company will eventually proceed through the series of following steps explained in the following diagram. Exporting can be either Direct or Indirect. But, our company will be involved in Indirect exporting because our company will sell to a buyer i.e. importer or distributor in the home country who in turn will be exporting the product.

Distribution
In the early stages, our method of delivery will be through local importers/merchants in Turkey. We will ship off our products to them, through C&F, who will act as wholesalers and in turn sell those to end customers of our products, mainly manufacturers who will be using our jute to make their final goods. We will also have provision for FOB forms for shipment if agreed on with the buyer. Besides them, we will be using Swiss and German traders, who have warehouses set up in Turkey, to supply to their buyers in Turkey.

Coverage

18 | P a g e

While entering a market, a company needs to achieve a fit between its capacity, reputation and size of the target area. A company having the capacity for making 100 shoes cannot ever fulfill the need of an area with a demand for 100 shoes. Similarly, our company would be considering the fact that we are entering Turkey for the very first time. The focus should e on building a reputation and building two or three long-term business relationships with buyers who can promote us by positive word-of mouth, and provide our distributors with regular buyers. Initially, Selective coverage would be the method used to reach to the Turkish market. Three to four distributors (local importers to Turkey, plus Swiss, German traders with warehouses in Turkey) would be used to cover the regions of Marmara and Eastern Anatolia. Marmara covers the entire European segment of Turkey, and Eastern Anatolia is the largest region.

Product Adaptation and Modification:

A product is said to be multidimensional in nature and the sum of all its features determines the bundle of satisfactions or utilities received by the consumer. In order to identify all the possible manners that a product may be adapted to a new foreign market, we have evaluated our product into 3 specific dimensions as illustrated in the diagram provided below:

19 | P a g e

Figure 4: The product component model

Core component The core benefits of our product i.e. Bangladeshi jute are: o Quality o Luster (the golden tint)
o o o o o o

High tensile strength High density Moderate moisture gain Low extensibility Anti-bacterial and mite resistant Fireproof and non-flammable
20 | P a g e

Jute - Tangible Product


o

Quality: Climate bestowed Bangladesh with the opportunity to become the natural home of the best quality Jute. Research, innovative experimentation towards product development and modernization approaches has contributed for high quality over the years. Clearance of quality achievement will be a prerequisite for shipment of each and every consignment. Besides, buyers will be free to appoint any internationally reputed surveyor for pre-shipment inspection of their goods at their own cost.

Aesthetics: The use of jute fiber in history goes back about 3500 years. Being a natural, human-friendly, as well as a sound and aesthetic product, the jute has been used, not only in weaving, but also in the production of ropes used on ships before the currently used steel ropes began being used. There are two major reasons why jute is widely used in floor recovering: first, it is very sustainable; secondly, it is 100 percent natural,"

Jute- Intangible Product


o

Positioning: Jute can be positioned as an environment friendly product for

which its application in various specified and unspecified fields never poised threat to create natural imbalance. Jute, being purely bio-degradable, perishes naturally after doing its duty superbly. Using jute goods thus means doing the things without making harm to nature. It will help in contributing to this human obligation of the world concern.

21 | P a g e

Country of Origin: Since Bangladesh is known around the world for

providing the best jute products this is going to have ac country of origin effect. As a company we can bank of this renown. Jute- Augmented Product
o

Service: Since we export the products and we cannot change it. Thus we have to provide the top-notch quality in the product which wouldnt require refund or change.

Packaging Component
The packaging component usually includes style features, packaging procedures, labeling, trademarks and also quality and price. Packaging components usually require discretionary and mandatory alterations because different countries have different regulations regarding packaging component. In addition to completing all exporting documentation, special marking and packing must be considered for shipments destined to be transported over water or through air because they are all subjected to excessive handling or destined for parts of the world with extreme climates or unprotected outdoor storage. Sometimes, heavy crating is required to avoid rough handling, temperature extremes and pilferage which might increase the overall cost. Moreover, countries might increase the import duties due to gross weight .Hence, in order to avoid these complex situations; we will consult export brokers, export freight forwarders and other specialists. We as exporters must be careful that all markings on our containers conform exactly to the specific data on the export documents because we must not give custom officials chances to attempt defraud. Hence, we will first understand the export regulations and prepare the necessary documents relating to labeling, marking and packing procedures pertinent to the Turkish Government

Support Services Component

22 | P a g e

The support services component includes repair and maintenance, instructions, installations, warrants, deliveries and the availability of spare parts. As the nature of product already suggests, no specific support services is required for this kind of product. Moreover, since the number of importers is low, support services are not much practiced in this kind of involvement. However, companies can enhance financial and personnel commitments to encourage international distribution through export merchants and jobbers. Sometimes, if interested, marketing department can get involved in After-Sales Service as part of the support services component. The tasks of the marketing department not only end there, but the department also follows up with the buyers. Feedback is crucial in order to determine performance through customer satisfaction. Sometimes the buyers advice on how to further develop the product or prepare the product for them, which helps the company to develop methods to accomplish so. Aside from these, sometimes there are events where the buyer claims that the goods are not right. In such cases, the marketing department negotiates with the buyer to see if a solution can be reached, or else prepares the good for the buyer all over again, while taking responsibility of selling the already shipped goods offshore, or to a nearby wholesaler. However, proper coordination with the marketing and production department has lowered such events to a handful few every year.

Marketing Strategy

23 | P a g e

The market of Turkey has been expanding rapidly. If we look at our estimates, we see that the market size is doubling. As a result, this should be a good market to enter. Since import of jute has been increasing exponentially, other competitors will follow as well. We will be entering the market right now so that we will be there before more others can enter.

This way we will grab a chunk of market share in the early stages. For that, with the market rapidly expanding, the value of our market share will also grow. By staying for some while, we will also gain customer confidence as well develop goodwill. We will use this later to promote even further export of our products, and if possibly, even more diverging range of our products that we might produce in the longer run.

Product:

What we will be exporting to Turkey is mainly weft yarn. This is an industrial raw material, the backbone of carpets. Others include jute bags, carpet-backing cloth, jute yarn, etc. Weft yarn is highly in demand by the growing large number of carpet manufacturers in Turkey, and so we will be selling it as a raw material. For such, customizations would not be needed much, except maybe the thickness and the quality and color of the product, which will be specified by the importer in Turkey or other places selling to Turkey.

Pricing:

As for the pricing, we would definitely like to use skimming pricing, but there would be many drawbacks to it. One, for instance, is that our products and technology in making them are not much unique from that of our competitors. Neither are we the only exporter or source of jute for Turkish people. So if we apply high prices to our products, then maybe there would not be any
24 | P a g e

demand of our products. Even if there will be demand, that will only be in the unlikely case that all competitors have stopped supplying for some reason at the same time, and even such would be highly temporary. If we use penetration pricing, then our prices would be really low. This would be very useful in the case that we want to penetrate fast in the market. However, to be successful in using penetration pricing, we have to depend on volume sales, and our manufacturing facilities may not yield sufficient levels of production to have large volume production for exports. Then again, it would be highly unwise to divert exports to other countries to a country where we are just entering. So usage of penetration pricing will not be a good idea as for now. Hence we will use competitor pricing. This will be highly competitive with other competitors. With the fast growing market, any share we will be able to grab now should multiply in a little while. And since we will be concentrating on only very high quality jute yarn, the market will definitely grow, at least for another decade. It should grow even faster as soon as Turkey becomes a part of the European Union. Therefore, using this price will have no adverse effects whatsoever.

Opportunities for Jute Export


The major opportunity started after Turkey has started to join the European Union. Turkey has a moderate supply of cheap labor in Europe. In saying such, it can be termed that Turkey is the China of Europe. Even though Turkey is not yet a complete member of the European Union, it gets access to many facilities that members of the European Union receive, such as duty relaxation while Turkish products are imported to European Union countries. Many factors, including others, have led to many factories, including the automobile industry, to outsource to Turkey. Along with such, major carpet producers in Europe have also moved to Turkey. They are our main target segment. They need jute yarn, a kind of thread that is more broadly known as weft yarn. This is the backbone of carpets and compromises 15% of the main

25 | P a g e

internal part. Fortunately, Bangladeshi jute products are of really high quality and we can produce high quality weft yarn. As major carpet manufacturers, especially from Belgium, have shifted to Turkey, they have also acquired more new and better, but highly sensitive, equipments for their production. If they do not receive high quality yarn, then this might cause a fault in the machine, forcing them to shut down complete operations for hours even, leading to fatal losses. Therefore, they cannot take a chance on lower quality weft yarn. India and the other competitors cannot produce such high quality jute product, so we are left to fill in the blanks, and that is why we see a doubling to exports to Turkey in the last year. This puts us in a competitive advantage, and we hardly face any competition, except those from other Bangladeshi jute products supplier. As the Turkish market expands, more and more industries are coming in. As economy grows, so does this carpet manufacturing segments, where each of them are buying equipments worth around US$ 100,000 or more each. This means, the demand of our product will also keep growing, leading to higher level of sales and profit. And luckily, there are no substitutes for weft yarn. Besides, most households in cold countries where Turkey exports need well carpeted floors to keep home warmer. Another important factor is the geographical location of Turkey. It is situated in between Asia and Europe, so the region is bound to prosper with given infrastructure and development programs. It can also act as a central hub for trade between Asia and Europe, and by being present there we might get access to further European countries.

PROMOTION MIX
The jute yarn industry lacks one the most dynamic tools of modern business: marketing tools and/or promotional activities. They rarely or never put up ads in the various media available (and easily accessible); do not try to promote the beneficial characteristics of natural yarn.
26 | P a g e

Furthermore, many firms are satisfied to do their selling via Trading Houses, where personal communication with the buyers could have fetched them better prices. The secretary of BJSA, Shahidul Karim, stated that firms should visit their buyers in their home/base. Negotiate for better prices, since our jute is the best in the world. Shahidul Karim, the honorable secretary of BJSA, mentioned the above three success factors. Yarn mill executives stated the following two. Quality: The high demand for our yarn is because of the high quality raw jute growing here. The yarn developed is expected to be of best possible quality possessing the high spin ability, strength, and luster.

Performance: Performance has two aspects: Punctuality Flexibility

Advertising / Promotional Objectives:

As for promotion, since the number of importers present there are low, there will not be any extreme need for promotion. However, we will be actively participating in trade fairs to introduce ourselves to manufacturers as well as other potential importers and merchants. We will also enlist our name in their local directories and other possible places where possible, so that it will be easier for them to find us.

Sales Promotion
Objective
27 | P a g e

Not much promotional activities are performed. However, our strategy will be to locate the buyers of the importers. We will be gradually trying to contact them. To do so, we will first need the names of the end customers manufacturers by finding where our exports are going. Then we will observe how much they will be buying and what types, so that we can verify their business position and amount they use every month. If we think that the manufacturer is a good one, meaning it is quite powerful and booming with his business, we will consider that firm a potential customer. After observing its procurement, and if we think we can match its requirements without limiting or constraining our capacity, we will contact that firm, so that the firm can directly import from us, and at the same time avail a lower price as intermediaries will be eliminated. Direct selling would save the firms money and also we would be more involved with the firm, tailoring to their requirements better, bringing us further goodwill.

Distribution: From Origin to Destination


1. Port Selection:
(a) Port of Origin The commercial transactions between Bangladesh and Turkey will be carried out in accordance with the general import and export regulations in force from time to time within the countries. Our shipping lines are also quite fast, as we are located beside a river and have a small barge of our own to carry our goods to the Chittagong port for further shipment in a quicker while. This though does not save much, but at least a good couple of hours. We maintain a special contract with two ships outbound for Europe which give us special deals and preferences, making sure that our containers are intact and unharmed. After the final goods are produced, they are packed and sent in to the finished goods warehouse. Here, the goods are all stored according to the different products and their distinctive qualities. Usually, the products lie there up a maximum of one and a half month. From there, the goods are
28 | P a g e

shipped by trucks to either the nearby Mongla port or to the far off Chittagong port. This again depends on the buyers choices of ships. The company has their C&F agent, who deals with clearing and loading the goods on to the ships, in return for which the company pays a certain commission to the agent. In case the goods are produced for the local buyers, they are trucked off to their designated destinations as soon as they are finished. (b) Port of Destination For goods shipped from either Party, after the coming into force of the present Agreement each contracting party will have the right to request certificate of origin as per attached specimen to be issued by responsible authorities in the exporting country, in this case Turkey. Declaration of destination port or ports and full shipping instructions must be dispatched by cable or telex and by post to the Seller not later than the first day of the shipment month failing which the Seller shall not be responsible for late shipment and shall be entitled to charge interest at 15 percent per annum from contract shipment date to bill of lading date. Should shipping instructions not be received within one month after contract shipment time, the Seller shall have the option to cancel the contract and claim damages. Ordered goods are shipped off to Mersin, the prime Turkish port from where they have to be cleared off through export merchants and jobbers. Three to four distributors (local importers to Turkey, plus Swiss, German traders with warehouses in Turkey) would be used to cover the regions of Marmara and Eastern Anatolia. Marmara covers the entire European segment of Turkey, and Eastern Anatolia is the largest region.

2. Mode Selection:
Formulating, implementing, and maintaining a well-positioned, integrated logistics strategy increasingly represents one of the most critical elements in meeting the competitive challenges of todays business world. One of the key strategic elements is the inventory transportation pipelines that link the supply of our jute, its manufacturing, distribution and sales/customer locations of our firm's logistics network. In particular, hence we as manufacturers and our
29 | P a g e

distributors intensify our focuses on the system-wide inventories, the trade-offs between using ocean inventory pipelines and the impact of modal and carrier selection on the entire distribution network has come under closer scrutiny. The process of mode selection is of much significance for evaluating the basic trade-offs between inventory carrying costs, inventory investment costs and transport costs (which are inherent in the transport mode decision-making process). For our purpose, we will basically use ocean carriers as we intend to carry our jute products to Turkey as we believe sea is the best means to deliver such a product.

Packaging
The packaging of jute products must meet certain requirements for shipments as jute articles are perishable goods and can easily get damaged by moisture. Usually jute products are packed using packaging materials made of jute, such as jute sacks. Clear polythene packaging is also used for jute handicrafts and rugs made of jute. Jute bags and yards are packed in fiber board boxes (carton boxes).

Marking and Labeling Regulations:

It is required to declare the correct country of origin of each item imported in to Turkey on the Customs entry. The importance of the origin of an article derives from a variety of regulations governing the importation of merchandise. Products may have restrictions or additional duties based on the products origin or manufacturer. An incorrect designation of origin could result in the loss of duty benefits, improper imposition of duty, detention or exclusion of merchandise. It is the Companys policy to assure that all merchandise is properly marked in accordance with Turkish regulatory requirements. The Company provides each vendor with detailed shipping, documentation and marking instructions. However, each Company employee must work with the Company to assure the vendors are shipping merchandise that is properly marked.

30 | P a g e

Generally, every article (and its outermost container) imported into Turkey is required to be individually marked with its country of origin. This marking must be as legible, indelible, and permanent, as the nature of the article or container will permit. The marking must be conspicuous, i.e., easily readable and visible upon casual inspection. The marking must state Product of (Country) or Made In (Country) in English. Use of other terminology must be approved by the Government. If an item is found not to be properly marked, the item could be detained in Customs, and may be required to return the items or face a 10% marking duty. If offered for retail sale in a package, the individual articles and the package must also be marked with the country of origin of the product or products contained in the package.

Insurance Claims
The insurance policy or certificate of insurance is considered a key document in export trade. The importer chooses the insurance policy and the insurance claim depends on the policy bought by the importer. In Bangladesh, cost of insurance is very low compared to the international price of insurance policies.

Freight Forwarder
Golden Jute Mills has its own in-house specialists for handling documentation, but still a forwarder is useful as a shipment coordinator at the destination port. The foreign freight forwarder arranges for the shipment of goods as the agent for an exporter. Besides arranging for complete shipping documentation, the full-service foreign freight forwarder provides information and advice on routing and scheduling, rates and related charges, consular and licensing requirements, labeling requirements, and export restrictions. The agent also offers shipping insurance, warehouse storage, packing and containerization, and ocean cargo space.

31 | P a g e

Channels of Distribution
As one of the 4 aspects of marketing, a distributor is the middleman between the manufacturer and retailer. After a product is manufactured it is typically shipped (and usually sold) to a distributor. The distributor then sells the product to retailers or customers. As in for our case, our goods will be delivered mainly through the local importers / merchants in Turkey.

1. Retailers As we will be entering Turkey as a new company with a product that has quite a demand over there and from a country that has some sort of reputation of coming up with superior quality especially for this product, it is likely that individual retailers might show interest to have our products and their number might be more than that of the wholesalers that is likely to go up in the future. As mentioned earlier, if we use any direct retailers for our goods to reach the end consumers, we can go for some extensive background checking such as the reputation of the retailer, the scale of operation, number of retail store one has, the capability of reach and such. And then we can sell our products specifically to those who we think will be better able to market our products effectively and maintain the standard. While short listing, we must keep such things in mind that even if a retailers scale of operation is small but is located in such a place from where they can reach a very important end consumers, these types of retailers must be included in the channel. Our markup for selling our goods right after releasing them from the dock at the port of Mersin to these retailers must be higher than the price wed charge to the wholesalers. The method of payment should be on cash for the preliminary basis and after some transactions, if we find that these retailers are doing good and certain rapport has been established, then we can start operating on credit-basis.
32 | P a g e

2. Wholesalers As mentioned previously, we plan to use three to four distributors who will be carrying our goods to the end consumers, who are the manufacturers of jute-made products. These distributors will consist of local importers to Turkey, plus Swiss, German traders with warehouses in Turkey. The selection criteria will be similar to the one used for the retailers. The manufacturers of jutemade products usually buy directly from these wholesalers in large quantities as they will be using our products as their raw materials. Therefore, each time these wholesalers come to us to buy our products, those amounts are also huge in number. In many cases, important deals might be required to be made beforehand and mutual trust should be there as both the parties are part of it sometime before the transaction takes place. Therefore, the means of operation can be cash / credit. 3. Import / Export Agents We can always use import/export agents to ensure that our product is carried on towards the right direction. These agents can procure our products from the port or they can have specific contract with our regular wholesalers and collect it from them. 4. Warehousing: Its not possible to complete the transaction as soon as our products get released from the dock right away. Most of the time, we shall need warehouses in order to store our goods and sell them afterwards. We can get hold of building plants in the industrial areas of cities and towns as most of the governments these days have specific regulations for warehouses to be established in these sort of areas. Warehouses being close to the wholesalers setup would work as a bonus for us. Our warehouses should be equipped with loading docks to load and unload trucks; or sometimes can be loaded directly from the seaport. We might have cranes and forklifts for moving goods. Gradually as wed be able to settle down a bit in Turkey, we can go for apply various inventory management techniques in our warehouses such as: WMS (Warehouse Management System), JiT (Just-in-time) and such.
33 | P a g e

PRICE DETERMINATION
Among the many responsibilities of us as an exporter of jute to Turkey is that of determining the best price for our goods. Price is the measure of value for a unit of a commodity or service that expresses its worth relative to other goods or services. It can be termed as the value of any item expressed in monetary terms, money. The function of obtaining the best price for the greatest value is an important element in the purchasing cycle. While determining the price, we must keep it in our mind that the best price or correct price is not necessarily the lowest price, for price is only one of the variables a buyer must consider before making the decision to purchase. As a jute company, up to 60 percent of the companys income is spent on incoming goods. We have the duty and responsibility to see that these funds are expended to obtain the full measure of value in what is received. This responsibility of ours is discharged when all prices are carefully reviewed, be they from the past, present or potential suppliers. Above all, we must remain cautious about not to become just a price buyer by separating price from the considerations of quality and service. While setting the price, we must take the following issues into consideration:
Meeting of the minds: As a supplier of jute in Turkey, our primary aim is not only to remain

in business but to make a profit that will permit expansion and increase profits. It has been assumed that the seller has the privilege of establishing the price at which he is willing to shell his product or service. Our price must be attractive to the buyer to result in any transaction. Otherwise, there is no market for the goods or services, no business transaction and no one makes money. Neither can our customers will be able to establish the price at which they are willing to buy. We should avoid the risks associated to sell at a price that does not include a reasonable profit. Thus, to have a business transaction, there must be a meeting of the minds to establish a price that is mutually agreeable to both parties.

34 | P a g e

Low price: There is a tendency to exaggerate the importance of a low price in the purchasing

function. The experienced purchasing agent will always avoid quick decisions to buy simply because the seller is quoting a price below the prevailing price. It must be remembered that the quality of our jute is as important as the price. During any recession or depressed market conditions, we should focus more on just to continue operation and offer low prices for that purpose. The short-term goal for these periods should be survival, with the long-term goal that improved economic conditions will enable us to again operate at a profit. After all, the primary goal of all enterprises is to operate at a profit, thus ensuring continuing and expanding ventures. If the profit is reasonable and fair for us, then the price would be reasonable and fair for our customers as well. Goodwill and cooperation between the customers and us makes for a good relationship, which includes reasonable and fair prices for both. After a certain period of time when we shall be quite experienced in operating in Turkey, there might be situations where we might consider quoting a low price in order to unload excess inventory that is costing us carrying charges and thus tying up capital and reducing cash flow. This can be caused by the cancellation of an order by any of our customers or can be caused by an overstock resulting from anticipation of increased sales that did not materialize. This may be a genuine good buy.
Fair and reasonable price: One method of determining what is a fair and reasonable price is

by securing quotations from several potential suppliers. We must quote a price high enough to recover fixed and variable costs plus a profit, sometimes fair and reasonable, sometimes maximized, in order to grow in our business venture. Our profit portion of the price contains what we believe our superior manufacturing capabilities are worth for our product.
Competition price: When there is a demand for a product or service at a definite price, it is

competition that helps determine the price. We should never forget to take note of the various discounts offered by potential suppliers of jute in Turkey. Discounts are offered as an inducement to purchasing agents to increase their purchase quantities or to meet competition. There are trade discounts and quantity discounts in addition to the usual cash discount.
35 | P a g e

I. Cost of shipment of goods and transportation cost : While estimating our transportation and shipment costs to Turkey, we have to keep an eye on the order of our product mix that utilizes cargo space more effectively, the cargo rates and how they work, how the containers actually move along with their travels, how to go for an appropriate insurance and how to handle the order once it reaches the port.

Item Freight & Carrier Charges Clearing & Forwarding Documentation Charges Port Dues & Container Charges Marine Insurance Handling & Shipping Charges Traveling & Conveyance Expenses Miscellaneous Expenses

Projected Annual Cost 24,27,750 10,38,157 7,67,544 3,76,467 3,58,211 3,44,977 2,42,178

II. Insurance Cost: Insurance for our shipment can be purchased in Turkey from our cargo company -- for a relatively reasonable price. It should not be more than 5% of the total transportation cost. But, more importantly, collecting a claim from a carrier or insurance company sometimes can be a life-long event and in general, not worth the hassle. If a customer wants to insure their shipment, our advice should be to go to the local casualty agent and ask the agent to sell a policy that insures his shipment. That should be the safest and most cost-effective way to go.

36 | P a g e

III. Customs Duties: Turkey is a member of the World Trade Organization and aligns its customs policies with WTO regulations. Turkish customs duties are assessed on an ad valorem basis only. Present customs classification conforms to standardized international nomenclature. Duty-free entry is provided for many types of imports. In 1996, Turkey aligned its tariffs with the EU's common external tariff system. Importers no longer need an import license and import authorization from a bank. Other charges include a value-added tax (VAT) ranging from 026%, a 15% municipal tax and a 10% stamp tax. We must take note of all these charges and calculate how much we need to spend on custom duties. We can also use customs brokers and once we have one, it's his or her job to handle all the paperwork that we send, clear your shipment through your customs, settle any duties necessary and so on.

IV. Import Taxes and Value-added Taxes: As we are supplying our goods to Turkish entrepreneurs, according to Turkish regulations, we do not normally have to deal with VAT, because the levy of VAT is often transferred to the buyer of the goods. As we are a non-resident entrepreneur, we make supplies in Turkey and are liable for VAT on these supplies (for example, because the buyer is either a private individual or another entrepreneur who is not established in Turkey), we must, in any event register, with the Turkish Tax. V. Wholesale & Retail Markups and Discounts: The percentage that is added to the cost to get the wholesale/retail selling price should be our markup. The markup should be such that it is realistic and relevant to our overall profit. Discounts are a natural part of doing business. Discounting can include coupons, rebates, buying clubs, markdowns or seasonal prices. We can give discounts to our potential customers in different occasions such as: Eids, Christmas and such. The decision of when and what type of

37 | P a g e

discounting will vary greatly with the type of the Jute, the amount of competition and the stock on hand. VI. Gross Margin: We can consider using an important tool in analyzing inventory, sales and profitability such as GMROI (also known as GMROII) which stands for Gross Margin Return On Inventory Investment. The GMROI calculations assist buyers in evaluating whether a sufficient gross margin is being earned by the products purchased, compared to the investment in inventory required to generate those gross margin dollars. First we find our average inventory at cost and calculate the gross margin of the Jute items. Then we divide the gross margin by the average cost of inventory to get ratio indicating the margin is earned investment. vii) Retail Price: many factors that profitability of our the right retail making towards While there would be will be affecting the business at Turkey, setting price is a major step profit. The following chart retail pricing: GMROI. The result is a number of times gross from the inventory

can be used for our

38 | P a g e

Note: These quotations are purely assumption-basis and will entirely based on market trend.

PRODUCTION CAPACITY
Infrastructure The current infrastructure of the company is highly efficient. Members from all the various departments come across each other very often. They regularly discuss how to be more efficient, and help each other in solving problems. For example, procurement department joins with finance, administration and marketing department to develop targets, budgets, and other necessary resources to achieve them. They get together to set prices, determine costs, value addition, etc. at various levels. For instance, the rate of inputs (per quintal) has to be approved by the management after approval from related departments. The management ensures that quality control and just-in-time inventory is maintained at all the various activities. Electrical and mechanical people are always ready, and on the alert, and reside in the plant quarters to properly maintain the equipments and take immediate corrective action in case of a breakdown. Maintenance

39 | P a g e

As the most of the equipments (if not all) are quite old, they need regular tending to. Any fault or breakdown should be attended at once to ensure their longevity and performance. Slowdown in production might result in lost sales, reimbursing the buyer(s), or even order cancellation. Processing Departments There are various stages involved in processing the raw materials and convert them into finished products as ordered by the buyer. Each of the stages is dealt by the various departments set by the company. These departments are responsible in maintaining the processes without them, notify of any bottlenecks or problems, and make sure that the various departments are linked for free of goods.

Batching Department: This department clears its task in about five days. In this department, the raw materials start getting processed. As soon as the raw materials are brought in to the plant facility to begin with the orders, the batching department sorts the raw materials again making sure only the correct raw materials are taken into. Different kinds of raw materials also need different storage. This department sorts the inputs, adds chemicals if required, then stores it again differently within the plant, so that they are completely ready to go into production. Doing this guarantees that the buyer gets the right materials and quality. Preparing Department: Jute is primarily like hay, but of tighter quality. There are three machines in this department, known as drawing machines. Once the raw material is brought in from the batching department, the input is fed into the drawing machines, which rolls the jute into a thick tape like substance

40 | P a g e

and make rolls of those. These rolls will be used and refined further in the further parts of the production. This process takes just over a day.

Spinning Department:
The rolled jute (in thick tape form) is now brought in and fed into the spinning frame. This is a machine like those seen in many textiles, with around a 100 spindles, each of them spinning continuously. At this point, the tape form ceases, and the spindles separate the tape, or strips the tape, into thinner tapes, almost like many strings of thread. By doing this, the jute can be sewn into various other types of goods. Sometimes, some of the buyers request just threads. This is known as twine, where only the thread is rolled and then shipped to the buyer. This can be used to make materials such as rope. Winding Department: After the thread is separated, they are moved in to the winding department. This department simply takes the thread and rolls or winds them, a process known is spooling, the outcome of which is spool, or like thread wrapped around. Beaming Department: This is where the main product starts getting processed. The spool from the previous department is separated and then they are starched to make it tougher. The starch process involved the use to tamarind seed. Doing this also makes the thread harder, durable and resistant to tear and wear. Hardening this also allows for further development into various shapes as ordered by the buyer. Weaving Department: Various types of products are produced here from the inputs from the beaming department. This is also an intensive part of the production process. The final products are almost produced here. The starched jute is taken from the rolls and then weaved together, similar to garments, to make materials such as sacks and carpet backings (the tough brown net like part underneath carpet). For example, CBC (carpet backing cloth) is a fine material which is used as the backbone of high
41 | P a g e

quality carpets and has no other substitute, is mainly made for exporting to European countries like Turkey. Then, Hessian is also produced which is a fine very-thick cloth like material, used mainly for the purpose of packing fine particles like sugar. However, the qualities of each of these vary, depending on the buyers, and their requirements. If the buyers want a little lower quality for a lower price, then some amounts of lower grade jute are mixed. Then again, if they are willing to buy higher quality, for instance CBC for Turkish carpet industry, the company and personnel make sure only the highest quality inputs are used. Finishing Department: As the name suggest, the final product or the outcome from the weaving department. Since the products are already brought into a usable shape, all which is left is to iron the products, also known as chord. The chor is put through a machine known as the calendar machine, where the heat irons the chor. As soon each of the pieces are done with the calendar machine, they are fed to the pressing machine, which presses the materials to make it flatter, and more compact, so that the products can be packed and stored in a smaller amount of space.

The above illustrate the seven stages to prepare the final product as per the buyers requirements to make sure they get exactly what they wanted and to avoid damage or inappropriate claims. However, in some cases different chemicals are also added to the finished products, sometime before and sometimes after finishing, so that the product stays fresh and gets the desired color. This company also pioneered in wrapping the products in large polythene bags and vacuums the air out, which however is mainly used for twine. On average, it takes about over two weeks to complete the process all together.

Technology:
The headquarter of our company Golden Jute Mills is in Dhaka, while the plant is in Khulna. Therefore communication is utmost important for proper coordination. Currently, much technology is not being used within the plant, even though there are phone lines and fax
42 | P a g e

machines in use. A computer network is not yet set, but will soon be established (according to management). Right now, under contract with courier service, all papers are prepared at late night (around office closing hours) at headquarter and plant, which are bagged in one large envelope and swapped by every morning. The usage of a computer network will allow immediate communication and save costs. However, managers from Dhaka as well as Directors often travel between the two places. Aside from communication, the plant has quite up to date machines. Most of the machines currently in use are below 20 years of age, and some old ones have already been replaced with newer ones. All the machines are of foreign origin, including UK. Then, five years ago a polythene wrapping machine was purchased, which nicely packed and vacuumed the jute, ready to be shipped out.

SWOT ANALYSIS of GOLDEN JUTE MILL

S = Strength, W = Weakness, O = Opportunity, T = Threat


Strength:
43 | P a g e

Our manufacture products are made from raw jute thus it is eco friendly biodegradable. Huge workgroup of 1000 people. Huge Production capacity that can lead to economies of scale Lower cost of production as the raw material is highly available naturally in Bangladesh. Low Labor cost Being export-oriented, so wider market opportunity.

Weakness: - Take a little time to deliver (for new establishment). - Low brand awareness - Lack of experience - Need to adapt to technological changes frequently to compete in the international market, so existing plant and machinery might become obsolete within near future

Opportunity: Worldwide the demand for jute manufactured goods is increasing as jute is biodegradable and eco-friendly. 90% of world's total production of Jute is harvested in Bangladesh so raw material acquisition will be highly convenient. International market for jute has a growth rate of above 20%.

44 | P a g e

Increasing trend of jute export from Bangladesh, which implies that the demand for Bangladeshi jute products is increasing in the international market.

Threats: -

The international market is becoming more competitive due to the market acquisition by China and India. The government policies are not as helpful and effective for entrepreneurs as it is in China and India. C&F hassle in the Chittagong port. Red tape barriers faced by exporters. Bureaucratic corruption. Lack of good working environment. Political unrest. Foreign competitor aggression (like China, India)

45 | P a g e

Recommendation
Jute Product is already very successful in all over the world. But they can improve more by concentrating on some other issues. Bangladesh has main problem its need more time to delivery the product other country by shipment but if it is go through the other way than it will be more efficient then the other way like if Bangladesh government start to railroads between Bangladesh and Turkey and other European country where the most export and import happen. Jute is one of those conservative Industry who do not spend much on promotion. Their present market penetration policy is ok but if they spend more on the promotion, they could expend more worldwide. So we recommend them to emphasize more on promotional activities. Golden Jute mill management should motivate their employees with proper compensation system and achieve continuous improvement over time in each and every sense respecting its true culture and vision. Moreover, the people should be regularly trained and developed to attain the global need. Last but not the least, jute product along with its operation in Bangladesh should grow more globally that would help the country to earn more foreign currency simultaneously to accomplish the vision into a true one.

Conclusion
Jute, the "golden Fiber", carries a glorious history in the packaging sector as well as in the economy. Over the years jute has been stretching its field to wide and diverse areas and thus has acquired a multi-dimensional role on consumer market despite facing strong competition from the synthetic sector. Today, jute can be defined as an eco-friendly natural fiber with versatile application prospects ranging from law value geo-textiles, hand/shopping bags to high value carpet, apparel,
46 | P a g e

composites, decorative, upholstery, furnishings, fancy non-woven for new products, decorative, upholstery, furnishings, fancy non-woven for new products, decorative color boards, and many more such jute diversified products . Jute is the most popular natural fiber next to cotton. 90% of world's total production of Jute is harvested in Bangladesh. That's why Jute is called the Golden Fiber of Bangladesh. Jute is totally eco-friendly and very much popular worldwide because of its cost effectiveness. Products made of Bangladeshi Jute could be used years after years as Bangladesh produces strongest and highest quality jute in the world. As a sequel to this process, Jute diversified industry, particularly in the informal sector, has been growing significantly due to change in tastes and preferences of people for environment friendly biodegradable and non-toxic products like Jute. W can conclude by saying that for Bangladesh, jute is a prime earner of foreign currency. Therefore, this product should be promoted around the globe. That is exactly what we have attempted to do through this report. Jute contributes highly to the GDP of Bangladesh and so this product industry needs to be highly subsidized by the government of Bangladesh. This way the industry would have incentives to grow. At the same time, the Chittagong port needs to be outside of any blockade, politics and complications of that sort that exporting the products doesnt get affected and Bangladeshi goodwill stays intact. Finally, through this report we have tried to establish the fact that Turkey is a very lucrative jute market for our company.

Reference:
1. www.worldjute.com/jute_news/news_industry_0108.html 2 .www.tradeturkey.com/ 3. www.fibre2fashion.com/news/textile-news/jute.../bangladesh

47 | P a g e

4. en.wikipedia.org/wiki/Jute_trade 5. www.discoverybangladesh.com/meetbangladesh/commerce_industry.html

48 | P a g e

You might also like