Jutex Bangladesh

LETTER OF TRANSMITTAL

13 January, 2016
Dr. A.K.M Saiful Majid
Professor
Institute of Business Administration,
University of Dhaka

Sir,
Enclosed is a business plan on “Jute Diversifying Product Manufacturing plant” that we prepared as the take home final business assignment for the Entrepreneurship course. we decided to conduct the plan on ‘Jute Diversifying Product Manufacturing plant’ keeping in mind the importance of market potential in Bangladesh. You approved our topic on January 10, 2016. The date of submission was set on January 13, 2016.
This plan was conducted with proper authorization. The authenticity of the sources used in the report can be guaranteed. We are grateful to you for your overall cooperation throughout. We tried our best to live up to your expectation and hope that the business plan fulfills all the requirements.

Sincerely yours,
Nabid Hassan Kafi_______________________

Ahmed Muntasir Mahin___________________

Md. Al – Amin___________________________

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Jutex Bangladesh
ACKNOWLEDGEMENT

We take the privilege to extend our acknowledgement and heartfelt gratitude to our respected course instructor, Professor Dr. A.K.M Saiful Majid, who encouraged us to undertake this difficult endeavor and who has helped us all the way to the successful completion of this report with his able guidance, support and counseling. We have tried to incorporate his constructive suggestions and knowledgeable opinions in the best possible way in this report to enhance its qualitative worth.
We also would like to sincerely thank all the respondents who took the time and patience to assist us with valuable input and led to the success of my report.
Finally our sincere thanks go to each and every one of those who have helped and supported us in any way possible during the course of conducting this research.

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Jutex Bangladesh
SECTION I: EXECUTIVE SUMMARY
Traditionally jute has been used to manufacture packaging materials like hessian, sacking, ropes, twines, carpet backing cloth etc. In order to overcome the declining market of these conventional products of jute, new technologies have been evolved for bulk use of jute, as a raw material in the production of high value added and price competitive intermediaries or final products. A host of innovative new products have been developed with high value-addition such as home textiles, jute composites, jute geo-textiles, paper pulp, technical textiles, chemical products, handicrafts and fashion accessories etc. These products for new, alternative and non-traditional use of jute are generally termed as Jute Diversified Products (JDP).
The existing Bangladesh’s export basket focuses on raw jute and jute goods export (of which 80% is focused on raw jute and jute yarn). However, given shrinking market in the middle-east (Egypt, Syria) and Turkey coupled with the advent of JDP demand especially in developed markets, it makes more sense to diversify into a more value added product. Both China and India are major players in the jute goods market, commanding almost 70% of the international jute goods segment (data source:
Trade). Interestingly the raw material source for both China and India is Bangladesh (80% plus share of the global raw jute market); hence if Bangladesh is already producing the jute logically producing a more value added product will result in higher economic benefits
The international market as depicted is growing at a rapid pace of 20 percent plus per year. The star markets come out to be US, UK and MENA countries. However EU demand is catching up with even
Asian counterparts like Malaysia and Australasia quickly becoming prospective markets. The top priority products in the existing market are Jure Bags and Floor Coverings. However, more innovative uses like gardening products, venetian blinds, accessories, geo-textiles are coming up and covering
6%+ of the current jute goods market. Moreover, since a worldwide ban on usage of plastic bags will be adopted by developed countries by 2015, a huge surge of opportunities for low end jute bags will be created (estimated at 5000 bn pieces/annum).
Domestically, the market is still at its nascence, currently valued at BDT 308M/FY. However given the right lubrication the industry is expected to expand up to 300% its current size (Innovision Research).
Bags (both low end shopping amenities and life-style accessories) and Rugs (including floor coverings) make up almost 75% of the pie. The rest is contributed by Décor, Stationary Items, Paper and Pulp, Home Furnishings, Footwear, Gardening Products and other accessories.

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Jutex Bangladesh
To successfully capture the market the business has to simultaneously develop both forward market and backward linkage. The product categories should be divided into two segments- “High Value” and “High Volume”. The High Volume orders will be catered by streamlined SME sub-contracting who will be closely mentored plus will have access to working capital and capacity building support.
High Value products will be manufactured in house within fully owned plant. Raw material price and quality will be hedged via raw materials bank, commodity exchange and buyers coalitions.
The international forward market will be developed in collaboration with INGOs, government, RMG sector and other JDP players. Focus should be given on branding JDP as “Life Style” products – with set-up of off-shore reach out centers (preferably in US, UK, Norway and UAE). The main push would come via periodic Expos, with government embassies and INGO international offices acting as reach out centers. Here the firm should also take advantage of the world carbon trade exchanges.
The domestic market will initially focus on institutional buying (e.g. Pharmaceutical companies,
Financial Institutions), Retail Fashion Stores (Aarong, Rong, Kay Kraft) and Super Retailers (Agora,
Unimart, Nandon, Shwapno). Lastly a flagship store will also promote the brand personality.
Lastly, the firm will house an state of the art design & innovation center, quality control unit and
Market & Business Analytics division. This will create a continuous innovation and quality driven business model.

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Jutex Bangladesh

TABLE OF CONTENTS
Letter of Transmittal ................................................................................................................................ i
Acknowledgement .................................................................................................................................. ii
Section I: Executive Summary ................................................................................................................ iii
Section II: Business Description .............................................................................................................. 1
1.1

General description of business: Introducting jutex bangladesh ........................................... 1

1.2

Jutex as a social entrepreneurship: ........................................................................................ 1

1.3

Industry background ............................................................................................................... 2

1.4

Domestic Market..................................................................................................................... 4

1.5

International Market............................................................................................................... 5

1.5.1

EPI: .................................................................................................................................. 5

1.5.2

Analysis of Target markets .............................................................................................. 5

Section III: Marketing .............................................................................................................................. 8
2.1

Research and analysis ............................................................................................................. 8

2.1.1

customer insight.............................................................................................................. 8

2.1.2

Target Customer Profile .................................................................................................. 8

2.1.3

Competition .................................................................................................................... 9

2.2

Marketing plan ...................................................................................................................... 12

2.2.1
2.2.2

Pricing policy ................................................................................................................. 12

2.2.3
3

Market strategy—sales and distribution ...................................................................... 12

Advertising and promotions plans ................................................................................ 13

Section V: Management................................................................................................................ 14
3.1

Management team—key personnel ..................................................................................... 14

3.2

Organogram of the Organization .......................................................................................... 14

3.3

Legal structure—and employment agreements, and ownership ......................................... 15

3.3.1
3.3.2

Capital and division of Profit: ........................................................................................ 15

3.3.3

Partners Responsibilities: .............................................................................................. 16

3.3.4

Other Details in the Partnership Agreement: ............................................................... 16

3.3.5
4

Type of Ownership: ....................................................................................................... 15

Human Resource: .......................................................................................................... 17

Section VI: Financial ...................................................................................................................... 18
4.1

Cash Flow Estimates.............................................................................................................. 18

4.2

Financial Highlights ............................................................................................................... 18

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SECTION II: BUSINESS DESCRIPTION
1.1

GENERAL DESCRIPTION OF BUSINESS: INTRODUCTING JUTEX BANGLADESH

Revival of the ‘golden fiber’ of Bangladesh and enhancement of bottom of the pyramid JDP producers- having these two slogans as core highlight of its business vision; X Limited has started its business venture. X wants to be the leader in local and international trade of environmentally sustainable products produced in Bangladesh through an inclusive business model. Though there are many SMEs operating from Bangladesh in Jute Diversified product segment, in terms of international exposure, they lag behind their Indian competitors. Owing to the lack of a streamlined business value chain and proper knowledge of the target market’s demand/supply scenario; almost all of these SMEs fail to cope up with the global business environment. Moreover, grass root level
JDP producers fall victim to the profit centric Intermediaries who want to maximize their own wealth by exploiting the illiterate and unaware BoP producers. X Limited wants to intervene in this vicious cycle of inefficiency-loss-poverty as a knowledgeable market player who not only serves the best interest of all the supply chain participants, but also maximize the profit by competing strategically with the global players.
1.2

JUTEX AS A SOCIAL EN TREPRENEURSHIP:

Social entrepreneurship is the attempt to draw upon business techniques to find solutions to social problems. This concept may be applied to a variety of organizations with different sizes, aims, and beliefs. Conventional entrepreneurs typically measure performance in profit and return, but social entrepreneurs also take into account a positive return to society. Social entrepreneurship typically attempts to further broad social, cultural, and environmental goals often associated with the voluntary sector. At times, profit also may be a consideration for certain companies or other social enterprises.
The social problem that Jutex is trying to address is Poverty and lower living standard of poor people of Bangladesh. Jutex aims at integrating the rural jute farmers and unemployed youth in the business. This will create employment for a huge number of unemployed populations of our country.
This in turn will help to alleviate poverty at least to a minimum level. We shall ensure that the jute farmers get the price they deserve for their products rather than the usual way of underpayment.

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Jutex Bangladesh

Jutex will also be responsible for creating jobs indirectly as this business will result in many side businesses such as supplier chains, retail shops etc. We plan on rebuilding the brand name of
Bangladesh as the top manufacturer of Jute products in the international market. This in turn, will bring FDI flow towards the jute sector creating more and more job opportunities for the unemployed rural youth of Bangladesh.

1.3

INDUSTRY BACKGROUND

According to leading fiber innovation firm Lenzing, Around 83.5 mill. tons 1 of fibers were manufactured in 2012. Synthetic fibers (such as polyester) accounted for the largest share (60.9%) and other natural fiber accounted for the rest. If we compare this particular scenario with that of
2000, we see a huge difference with regards to global synthetic fiber consumption. It has been decreasing while, natural fiber usage is increasing. Figure below reflects the comparison
Essentially, the usage of Jute fiber has been increasing over the last decade. If we analyze the usage pattern of jute fiber as a final jute good, we can speculate which product line/category has the higher demand in comparison with others. The below pie chart gives a representative demand of the global Jute Goods Sector (inclusive of JDP):

Notes: Major Countries included in demand calculation- USA, Belgium, Egypt, Turkey, UK, Saudi Arabia,
Germany, UAE, Syria, Netherlands, Italy, Ghana, Japan, Iran, Australia, Canada, Syria, Italy, Japan, Iran
Australia, Canada, South Africa, Japan, Iran, Australia, Canada, Syria, Italy, Japan, Iran Australia, Canada, South
Africa

1

Lenzing Market Research:http://report2012.lenzing.com/en/management-report/general-market-environment.html

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Jutex Bangladesh
As the diagram depicts a large percentage of the jute goods market still consists of either yarn or traditional jute products like CBC, Hessian or sacking. However, interesting fact is that almost 25% of the pie belongs to JDP products like floor coverings and shopping bags, plus there is another 5% belonging to other innovative “Life Style” products. This 30% is of high value and expected to grow at 20% per year.
The top priority products in the existing market are Jure Bags and Floor Coverings. However, more innovative uses like gardening products, venetian blinds, accessories, geo-textiles are coming up and covering 6%+ of the current jute goods market. Moreover, since a worldwide ban on usage of plastic bags will be adopted by developed countries by 2015, a huge surge of opportunities for low end jute bags will be created (estimated at 5000 bn pieces/annum). Low end jute bags are usually those perceived as ‘replacement products’ of current ‘polythene bags’. While High fashion jute bags are fashion signature of the user and representatives of premium life style, low end jute bags are mere substitution for non-biodegradable plastic bags. At present UAE, USA and other EU countries (with a ban on plastic polymer) are importing low end jute bags from Bangladesh and India. Detailed of market-product mix will be covered in the product strategy section.

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1.4

DOMESTIC MARKET

JDPC research estimates total turnover of JDP sector at BDT 1,540 M as of 2011-12, with export contributing BDT 1,232M. So the domestic market is currently hovering at around 20% of the total production basket, BDT 308 M/FY. However, given the right strategies and lubrication the potential growth of JDP sector domestically can be up to 300% of its current size (Source: Innovision Research).
Bags (both low end shopping amenities and life-style accessories) and Rugs (including floor coverings) make up almost 75% of the pie. The rest is contributed by Décor, Stationary Items, Paper and Pulp, Home Furnishings, Footwear, Gardening Products and other accessories.
Currently, JDPs are geared towards consumers mainly through retail chains like Agora and Rong.
However, more B2B focused channeling centered towards institutional buyers is needed to develop the domestic market. Below Product-Buyer Matrix captures the prospective market.

Figure 1: Innovision Research

Analogous to the international market, the biggest market lies in the Jute Merchandizing and
Shopping Bags category. Direct marketing to the respective industry verticals is required to create and boost demand. The key business drivers for JDP in the domestic market depend to 3 key characteristics: 

Strong growth in the boutiques and retail industry which has triggered the demand for new retail products like JDPs



Increasing expenditure on corporate and mass market promotions has triggered the need for new promotional products



Increasing corporate interest on environmental friendly products

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Jutex Bangladesh
1.5

INTERNATIONAL MARKET

1.5.1 EPI 2:
Environmental Performance Index is a measure of a country’s overall performance in terms of adopting ecofriendly behavior and green living. Country’s having higher EPI scoring means the citizens are more oriented towards eco-friendly products. An EPI score is awarded by two bodies, the CIESIN (Center for International Earth Science Information Network) and the YCELP (Yale Center for Environmental Law & Policy). The 2012 Environmental Performance Index and Pilot Trend EPI
(Trend EPI) rank 132 countries on 22 performance indicators. We have considered the top EPI scored countries to be the probable destinations for JDP penetration. All the countries having high
EPI in the table below, are low risk markets. But depending on other factors’ variability,
Opportunities might seem narrow. Country’ having average EPI might seem risky in terms of JDP adoption, but opportunities might be wider there. Analyses will follow the table below:

Table 1: EPI Indexing as per CIESIN

1.5.2 ANALYSIS OF TARGET MARKETS
Based on our analysis, we have selected the following role out plan for Jutex-

Short Term coverage (within 3 years) Mid Term Coverage
(within 5 years)

Long term Coverage
(within 10 years)

1. Canada

1. Bangladesh

2. Other Nordic countries i.e.
Sweden , Denmark

6. Few other
Eurozone countries
(Italy, Spain)

2.USA
3.Norway
4.Hon Kong

3. Thailand,
Malaysia
4.Australia

2

EPI Index: http://en.wikipedia.org/wiki/Environmental_Performance_Index

5

7. Qatar, Dubai

Jutex Bangladesh foFigure 2: Destination Countries

The Key foreign markets in the short run are described below:
USA: Diversified jute products have significant potential in the U.S. marketplace. The environmental friendliness of jute is an important selling point for American consumers, one that should help to sell jute goods and products in the United States. The market for environmentally friendly products has been growing substantially in the United States. According to Mintel International, “The ‘green’ marketplace is one of the fastest growing, most dynamic sectors of the US economy. The market isn’t small: $230 billion a year is spent on goods considered sustainable products and services,” notes MarketResearch.com. “Research shows 36 million consumers, or 12 percent of the US population, happily embrace the green market.” These dynamics are true, too, for American shoppers in electronic commerce. “When choosing between two similar products, 83 percent of consumers are extremely or very likely to choose the environmentally friendly option,” says
DoubleClick Performics. “The vast majority of Americans who make online purchases say it is important to them that an online company is environmentally-conscious, including 60 percent who say it is extremely or very important.” Adding to these researches, We are seeing a modest counterreaction in the United States against paper and synthetic bags at supermarkets and other retailers.
San Francisco, for example, has banned grocery stores from using single-use plastic bags. Other U.S. cities are looking to follow San Francisco’s lead in this regard. Even in the absence of such laws, there is a growing trend for American supermarkets and other retailers to offer reusable shopping bags to consumers. Stylish, competitively priced jute bags could be very appealing to this market sector. Given the USA consumer inclination towards eco-friendly products, Jutex whould look into it as a High opportunity low risk country.
Norway: Value addition of jute and trading of jute products are one of business prospects area identified by NORAD in the publication “Private Sector Development Program in Bangladesh
Assessment of Business Conditions and Sector Potentials”. Innovation Norway's Business
Matchmaking Program in Bangladesh was launched in 2010, and has proved to be a win-win program for Norwegian and Bangladeshi companies can utilize this opportunity as well. According to
IJSG report, Norway contributed a total of about 1 million USD to development of the jute industry in 2012. Moreover, they have a strategic geo-graphical location beside the Sea Port which connects all the Scandinavian countries. Given, Norway has policy level support from Norwegian government and a potential target group; it’s a High opportunity Low risk market.
Hon Kong: Hong Kong has positioned itself to become the world city of Asia. Its open door policy has enabled it to become one of the world's largest trading economies and an international financial and
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Jutex Bangladesh commercial center serving the Asia-Pacific region and the Mainland of China. Hong Kong does not charge tariff on importation or exportation of goods. Import and export licensing is also kept to a minimum. HKTDC organizes nearly 30 world-class international trade fairs in Hong Kong every year, attracting some 460,000 buyers. . Hence Hon Kong is strategically important for Easy shipment /sea way connection with important destinations of Asia. For Jutex, this is indeed a great opportunity to showcase its products to a wider domain of international market participants. It too is a high opportunity low risk market.

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Jutex Bangladesh

SECTION III: MARKETING
2.1

RESEARCH AND ANALYSIS

2.1.1 CUSTOMER INSIGHT
With the consumers in the developed world becoming more environmentally conscious (EU, US,
Japan) along with government legislation either banning or limiting usage of synthetic goods (mainly plastic bags), businesses in general have adopted a “go green” culture. Jute with its high carbon absorption capabilities, bio-degradability, and recyclability features is in the perfect position to take advantage of this opportunity, especially since jute can be utilized to produce a variety of innovative
“Life Style” accessories at competitive pricing which are in high demand.
2.1.2 TARGET CUSTOMER PROFILE
Below is the B2C segmentation of the customers:

Some of the key characteristics of the target market is shared below.


95% of EU citizens feel that protecting the environment is important to them personally(Data source: SPECIAL EUROBAROMETER 365 , Attitudes of European citizens towards the environment
:Published by EU)



81% population of the Nordic and Scandinavian countries support environmentally-focused alternative product lines i.e. products made of natural fiber ((Data source: SPECIAL

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Jutex Bangladesh
EUROBAROMETER 365 , Attitudes of European citizens towards the environment :Published by
EU)


Eco-tourism

is increasing at an annual rate between 10%-30%(Data source: Eco-tourism

statistical fact sheet 2009, published by Active Tourism)


Eco-tourists are willing to spend more than general tourists ($1,001-$1,500 per trip on an average), and their expenditure rises up to 35% if the product is beneficial for the environment
(Data source: Eco-tourism statistical fact sheet 2009, published by Active Tourism)



60% of Millennial generation think eco-friendly products are cool and smart (Data source:
Teenage consumer spending stat, published by StatBrain.com)



There is a strong correlation between wealth and a high overall ranking on the green lifestyle index. Nine of the top 10 cities in EU Green City index have a GDP per head (measured at purchasing power parity, PPP) of more than €31,000 (Data Source: EU Green City Index 2012)

2.1.3 COMPETITION
Status Quo: Although Bangladesh remains a major player in export of raw and semi-processed jute, its standing for jute diversified product export is less impressive. This is largely due to fragmented composition of the sector as a whole which hinder accelerated growth. Bangladesh JDP sector is composed of 400 SMEs with 10 to 15 players leading the way with export ranging between BDT1015 crore. (Source: JDPC research)Bangladesh Jute Mills Corporation (BJMC), Suchili Jute Multi
Products (BD) Limited, Creation Private Limited, The Source, Corr – The Jute Works, Peerless
Enterprise, Bengal Braided Rugs Limited, Union Trading Co. Ltd., Shohag Jute & Handicrafts and
Evan’s Products Pvt. Limited are front line exporters.
Jutex’s Competitors: The potential competitors are selected from a holistic analysis of their production capacity, export network and distribution channel, manufacturing flexibility and different other performance factors of the supply chain. On the basis of a comparative analysis of the above mentioned factors, we can divide the market competitors of Jutex into 3 categories
1.

Category A: (High economies of scale, high JDP export)

2.

Category B: (High economies of scale, low JDP export)

3.

Category C: (Low economies of sclae, variable JDP export)

Category A: These companies have high manufacturing capacity and are the leading eco friendly JDP exporters of Bangladesh in the international domain. The companies can maintain high product variety along with efficiency owing to economies of scale. They have a strong supply chain network
9

Jutex Bangladesh with the export markets owing to their exposure in the international domain for a long time. The major players of this category are: Creation (Pvt) Ltd, Corr the Jute works etc.
Category B: These companies have high manufacturing capacity of raw jute and a wide range of traditional jute goods like Hessian Cloth, Hessian Bag, Sacking Bag, Jute Tape, Jute Webbing, and Jute
Net. However, their export of Jute diversified products is low compared to Category A players, primarily owing to the lack of proper identification of export markets, and market access in the international markets. The major players of this category are: Madina Jute Industries Ltd, Bengal
Braided Rugs Ltd & Shohag Jute Industries. Besides, companies like Janata Jute Mills & Pubali Jute
Mills Ltd started have recently started diversifying their portfolio into the JDP category, and as a result their export is still quite low.
Category C: Lastly there are local competitors like Jutex itself, which produce JDP products at a variable amount and their export ratio depends on product order size, dependability and time. These are mostly SME’s which depend on a close network of local manufacturers and designers and sell a huge portion of their products to local intermediaries. The companies of this category are: Skyland and Farms Limited & Arku Indsutries manufacturing limited.
Based on preliminary research, we have organized a list of JDP SMEs which hold significant sway within the market.
PLAYERS

PRODUCT PORTFOLIO

Export Destinations

Comparative Advantage

Creation (Pvt.)
Ltd

Shopping Bags , Hand bags, carry bags, shoulder bags,
Wine bag, Vanity bags, fancy bags etc.

Corr the Jute
Works

Jute toys, Jute mats, show piece, Handicraft items, shopping bags, carry bags,
Jute Wine bags, Vanity Bags etc. Reliable and Responsive delivery within the right time due to strong supply chain. Ongoing participation in in Frankfurt
International Trade Fair for the last 8 years.
Huge manpower and capacity with production carried out in as many as 23 areas of the country.

Eshana Jute
Products Ltd

Fancy bags, Vanity bags,
Hand bags, Carry bags, shoulder bags, Bottle/Wine bags, House slipper etc.

Europe, especially in
Germany, Italy, Sweden,
Denmark, Norway,
Netherlands, Greece,
Switzerland, Russia,
Hungary, and also in Japan,
Saudi Arab, UK and USA
Italy, USA, UK, France, New
Zealand, Japan, Australia,
Canada, Finland, Germany,
Denmark, Austria, Belgium,
Sweden, Ireland,
Switzerland
China, Vietnam, Russia,
Australia, Indonesia, Iran,
Turkey, Belgium, UK, USA,
UAE, Germany

USA, Western Europe

Proficient and expert in the use of latest technologies

Category A

Efficient production process, on going management review and continuous improvement based on customer feedback. Category B
Bengal Braided
Rugs Ltd

Carpets, Jute rugs, Jute
Laundry bags

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Australia, Belgium, C.I.S. countries, Egypt, France,
Germany, Italy, Iran,
Indonesia, Japan, North
Korea, Latvia, Lebanon,
Moldova, The Netherlands,
Spain
USA, Germany, Norway

to produce customized international quality standard products of various ranges.
A concern of Jahan Group of Companies-reputed manufacturer of jute products for over two decades. Madina Jute
Industries Ltd.

Jute Canvas, Geo Jute - Soil
Saver, Shopping bags, Bottle
Wine bags, Cees bags

Pubali Jute
Mills Ltd.

Home Textiles and Interior
Decor

Janata Jute
Mills Ltd

Bags, Slippers, Geo Textile,
Tissue box, Gift items, Wall mat, shopping bag, bottle bag, kitchen ware holder, various types of bags etc. etc.

USA, Finland, Switzerland,
Australia, UK, Iran,
Indonesia, Japan, North
Korea

Shohag Jute
Industries

Shopping Bags, Jute Rug, Dry
Flower, Showpiece, handlooms USA, Canada. Spain, Italy,
Japan, Malaysia

Jute Tape/Ribbons,
Triangular sheet, shopping and carrying bags
Jute Braid, Jute sole, Shoes,
Sandals, Jute Espadrilles

England, Canada, China,
Australia, Sweden

Strong network of foreign institutional buyers.

Japan,Dubai,Malaysia,Russia

High quality seeds and efficient manufacturing process. R&D and unique machineries bringing rapid product development.
Association with Van de
Wiele since 1980’s leading to high quality product development center.
Renowned for social inclusive business model.
Competitive pricing, long term & consistent communication strategy with the clients.

Category C
Skyland & Fam
Ltd
Arku Industries
Manufacturing
Ltd

Source: JDP Catalogue - published by JDPC

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2.2

MARKETING PLAN

2.2.1 MARKET STRATEGY—SALES AND DISTRIBUTION
International Market:–Public private partnerships and coalition with INGOs will play a crucial role here. Apart from periodic showcasing at Expos and buyer meets, Bangladesh embassies in the market can act as product branding outposts. INGOs like Traidcraft and Care, how are working to develop the jute sector can also utilize their international offices to boost the JDP market as well.
Apart from this online export-import marketplace platforms like “go4worldbusiness” and “trade key” should be leveraged to create direct linkages to the market.
Domestic Market: The initial target market is the fashion retailers like Aarong, Rong, Kay Kraft and
Ecstasy. Proliferation here would mean consumers will increasingly start viewing JDPs as a “Life
Style” product. The second touch points can be in super retailers market like Agora, Shwapno,
Unimart and Nandon.Shwapno already has a fashion accessories corner and Unimart is looking to establish the same. These super retailers attract the right demographic and partnerships with them can result in significant leverage.
2.2.2 PRICING POLICY
The following table provides a basic idea of the wholesale price of retail products. However, depending on product enhancement, retail chain and export destinations this will become 3+ times higher. Item
Shopping Bags
Fancy Bags
Purse/Pouch
Laptop Bags
Wine Bags
Sataranji
Floor Coverings
Shika
Toys
Tissue Box
Wall Décor
Paper
Home Décor
Shoes

BDT
50-300
150-600
20-130
1400
50-70
200-2,500
160-700
12-40
30-500
300-350
100-500
4,000
700-1,500
50-350

12

Unit
/pc
/pc
/pc
/pc
/pc
/pc
/pc
/pc
/pc
/pc
/pc
/packet of sheets
/pc
/pc

Jutex Bangladesh
2.2.3 ADVERTISING AND PROMOTIONS PLANS
Specific promotional tools that can be used are as follows-



Launch Events: This is the “big bang” event inclusive of gala dinner with all major stakeholders and popular figures invited. This would serve as a PR event on top of generating social media buzz



PR Events: Expos, Road Shows, Actve Showcasing



Pamphlets/Booklets/Leaflets/Posters/Catalogues: To be distributed in B2C and B2B channels for the domestic market. Samples of new products should be made along with a catalogue for distribution to institutional buyers.



Brand Ambassador:

A well-known public figure should be employed to act as brand

evangelist for the company and also for JDP category as a whole. This will seek to change the mind-set amongst the majority of consumers in domestic market. Concerted campaign may also be undertaken under the umbrella of the Diversified Jute Product Association (DJPA).


Website and the Social Media: Both the online hub and the social media will be leveraged to augment reach and generate snowballing



News Paper Features and Publications: Articles about JDP, along with advertisements /press releases 

Corporate Partnerships: Direct marketing with corporate houses and develop partnerships



Valued and Key Partnerships: Key partnerships will be formed with government, JDP firms,
Institutional Buyers, INGOs, DOs, Super Retailers

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Jutex Bangladesh
3
3.1

SECTION V: MANAGEMENT
MANAGEMENT TEAM—KEY PERSONNEL

Initially the founder of the company will occupy the key management roles. Professor Doctor Saiful
Majid sir has been proposed to act as the Chief Executive officer to guide the young entrepreneurs as well as the organization as a whole to success.
3.2

ORGANOGRAM OF THE ORGANIZATION

Chief Executive Officer

Chief Operations Officer

Chief Financial Officer

Head Facility Operator

Accounts Division

Production manager

Chief Marketing Officer

Marketing and PR Team

Head of Transportation &

Machine operators
Porters
Packaging Employees
Drivers
Quality controllers
Sales person
Other Employees

Executives

Executives

14
Office Staffs

Office staffs

Jutex Bangladesh
Mr. Nabid Hassan Kafi will act as the operations officer, Mr. Al – Amin will act as the chief financial officer and Mr. Ahmed Muntasir Mahin will manage the marketing division as the chief marketing officer. 3.3

LEGAL STRUCTURE—AND EMPLOYMENT AGREEMENTS, AND OWNERSHIP

3.3.1 TYPE OF OWNERSHIP:
The form of ownership for our business is “Partnership” consisting of three founders primarily who are: Md. Al - Amin

Nabid Hassan Kafi,

140, IBA Hostel, Green Road

F/207, Sher E Bangla Nagar, Dhaka- 1215,

Dhaka-1215, Bangladesh.

Bangladesh.

Ahmed Muntasir Mahin,
140, IBA Hostel, Green Road
Dhaka-1215, Bangladesh.

The partners– Al Amin, Mahin and Nabid would enter into a partnership agreement and obtain trade license. The partnership store will be registered from The Registrar of Joint Stock Companies and
Firms (RJSC) working under the ministry of commerce which deals registration and guarantees legal administration of the entities under the provisions of applicable act as under Partnership Act, 1932.
The name of the Partnership shall be ‘Jutex Bangladesh and/or such other name or names as the
Partners may from time to time agree upon in writing and no party shall carry on business under such name except as a Partner of the Partnership.
3.3.2 CAPITAL AND DIVISION OF PROFIT:
As per the agreement, the initial capital of BDT. 500,000 contributed in equal share by each cofounder will be credited to the “Capital Account” of each of the partners. The terms of partnership are mentioned in the partnership agreement stating all the partners will share capital, profit and loss

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Jutex Bangladesh equally. No Partner shall be entitled to interest on the amount of its capital contribution to the
Partnership. As far as drawing is concerned, each of the partners may draw out of the partnership, from time to time, on account of its share of the net profits for the current year, a sum not exceeding their respective Capital Accounts. Any sums drawn out by any Partner in excess of its share of the net profits for any such year shall be repaid in full to the Partnership unless otherwise unanimously agreed by the Partners.
Partners will receive equal share after disbursing the investor’s profit. The profit sharing ratio between investors and partners is 30:70 which leaves each of the partners 33.33% of the total net profit. 3.3.3 PARTNERS RESPONSIBILITIES:
Three of the partners will be active partners resting the final decision-taking authority to Professor
Dr. Saiful Majid when any conflict arises. The management team also consists of the co-owners, each with different roles-, Al Amin as Chief Financial Officer, Mahin as Chief Marketing Officer and Nabid as Chief Operations Officer. All of them are business graduates from, University of Dhaka with each having specialties in their respective fields. There is no provision for salaries or bonuses or other forms of payments in cases of the members of the management team who are also the partners in this business. The only form of monetary gain is the profit that will be equally shared among the members. 3.3.4 OTHER DETAILS IN THE PARTNERSHIP AGREEMENT:
Conditions under which a partner can sell an interest in the company: A partner is not entitled to sell his equity to outsides without consent from all of the partners. At first if all the partners agree to let him sell his share then it would first be offered among the existing partners, if they cannot afford to take it then external party can buy it, provided that the existing partners are satisfied with it.
Conditions for dissolving the partnership: If the business becomes bankrupt or goes into legal problems that force it to close down, then only the partnership can be dissolved. Otherwise, if all the partners agree to withdraw themselves then partnership can be dissolved. Upon the death of one or more partners, the remaining partners can decide whether to continue the business operations, or to bring new partners or to dissolve the partnership.
Conditions for settling disputes: Whenever there will be a dispute, a third party will be brought it as a dispute settles. The costs of the third party will have to be borne by the two parties in disputes and

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Jutex Bangladesh will not be borne by the company. Only if the dispute is between the company and an external party then the costs will be borne by the business.

3.3.5 HUMAN RESOURCE:
Initially, the partners have decided to start the business with 91 employees including 3 owners, 58 factory workers who will be engaged in the whole production process, 15 drivers, porters and sales person for the vehicles who would be in charge of delivering the orders at the required destinations.
For maintaining official works, there will be 14 helping hands among which at least 4 will be skilled in computer operating. The workers and office will be recruited by the basis of their relevant experience, will be trained if needed and will be paid a justified salary.
Name of the post

Number of Employees

Chief executive officer

1

Chief Marketing Officer

1

Chief Operations Officer

1

Chief Financial Officer

1

Production Manager

1

Head of Delivery and Transportation

1

Machine operators/ Production workers

32

Packaging

14

Quality Controllers

2

Other factory workers

8

Porters

5

Drivers

5

Sales person

5

Office Staffs/Clerk/Computers Operators

6

Executives

4

Other Office Staffs

4

Total

91

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Jutex Bangladesh
4
4.1

SECTION VI: FINANCIAL
CASH FLOW ESTIMATES

Net Cash Inflow (in BDT)
6,295,196
4,708,758
3,469,489
2,502,749

Yr0

Yr1

`

Yr2

(4,226,021)

Yr0

4.2

Yr4

Yr5

Yr1
2,502,750

Yr2
3,469,489

Yr3
4,708,757

Yr4
6,295,196

Yr5
8,323,256

94,000

81,800

71,335

62,350

54,626

(6,822,771)

(1,048,540)

(1,310,604)

(1,648,788)

(2,082,687)

Net Income
Add
Depreciation
Change in
Working Cap

Yr3

(4,250,000)

FINANCIAL HIGHLIGHTS

Financial Ratio Analysis

Yr1

Yr2

Yr3

Yr4

Yr5

Current Ratio

10.1

11.9

11.6

9.3

10.3

Acid Test Ratio

5.8

7.6

7.9

6.6

7.5

Inventory days ratio

88.2

67.1

55.3

49.3

43.4

Account Receivable Days

72.0

72.0

79.2

79.2

79.2

GP Margin

25%

25%

25%

25%

25%

15.5%

17.0%

18.2%

19.3%

20.1%

Profitability Ratio

- IRR: 24%, over the first 5 years
- Breakeven in the 4th year of operations

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