Feb 15: The successful workshop organised by the International Jute Organisation in Calcutta on hydrocarbon-free jute bags is likely to fetch the Indian jute industry a global market of about Rs 260 crore, which is more than 25 per cent of its existing exports. The workshop, which ended on February 10, was attended by cocoa, coffee and jute-producing countries, apart from the consuming nations of Europe and America.The workshop was organised to establish international standard specifications for jute bags used in the packaging of food-grade materials. According to IJO director Henri L Jason, all three sides have now agreed to a final set of specifications.
"This is the first time that the IJO has brought three international parties with different interests together. We have been successful in finalising the set of specifications, which will now be adopted by the respective international councils of jute, cocoa and coffee," Jason said.
However, the obvious winner was the Indian jute industry. Theworkshop has opened a market of more than one lakh tonnes of jute bags, the value of which stands at Rs 260 crore, a whopping 32.5 per cent of its existing exports of Rs 800 crore. In terms of quantity, it will 33.3 per cent of three lakh tonnes.
Although Bangladesh is India's main competitor in jute goods, its industry may not immediately be in a position to compete with the Indians in the area of food-grade jute bags. Sanjay Kajaria, vice-chairman of the Indian Jute Mills Association (IJMA), says that Indian mills are way ahead of their competitors because they have already invested in business of making hydrocarbon-free bags.
"The International Office of Coffee, Cocoa and Confectioners laid down one set of specifications way back in 1995. With that as a guideline, the Indian Jute Industries Research Association (IJIRA), the research and development wing of our association, worked on it and prepared the RBO-II. This is a lubricating oil used to soften coarse raw jute and it is prepared from thenon-edible portion of rice bran oil. Jute bags using this oil perfectly meet all the specifications laid down in this workshop," Kajaria said.
Already 11 mills in West Bengal have started producing hydrocarbon-free jute bags, against one or two in Bangladesh, which are using either rapeseed oil or soyabeen oil to replace the petroleum-based jute batching oil (JBO).
Currently, jute sackings that use JBO are priced around Rs 21,500 a tonne in the Indian market. However, the new set of bags using RBO-II will be priced around Rs 26,000 a tonne. So the value of a one lakh tonne market is Rs 260 crore.
IJIRA, which has already applied for patenting this product and the process of producing RBO-II, is also ready to sell it to jute mills in Bangladesh.
K Jayachandran, director of IJIRA, said: "We are ready to share this technology with the mills in Bangladesh, provided they pay us for the licence. We will educate them on the ways of using this product. This will also help us to earn revenue."
The secretaryof the Jute Manufactures Development Council (JMDC), Sutirtha Bhattacharya, says that the diversification into hydrocarbon-free bags is a kind of diversification from the existing product basket of the industry "JMDC is the official export promotion council of the jute industry. We are always looking for new markets for the industry. For hydrocarbon-free bags we found that there is a ready market and so we advised the industry to bring in the necessary changes. Now everything is materialising.''
Nestle for new bags
The Swiss confectionery giants are eager to pay more and shift to hydrocarbon-free jute bags as early as possible.
Roland Stalder of the Nestle Research Centre told The Financial Express that his company is already using jute bags made with JBO. It is waiting for the jute industry to supply the new quality jute bags.
"We want the jute industry to supply these bags as early as possible because the people in Europe health conscious and they want a replacement," he said. Atpresent, Nestle and other confectioners are mostly using bulk containers and JBO-based jute bags. The new hydrocarbon-free bags will cost them a little more.
Stalder is not worried. "The new bags may cost a bit more but cocoa and coffee producers need not to be worried because this will be passed on to end-consumers. For the cocoa industry, the new jute bags will cost only 0.01 per cent more, which is practically negligible."
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
