Gloster Ltd, a Kolkata-based jute bags and jute products manufacturer who has two business units in West Bengal with an annual capacity of producing 50,000 tonnes of jute textiles and products is looking to set up a manufacturing unit in Bangladesh investing around Rs500 crore.
Some of the key reasons for the company looking at setting up its manufacturing unit in Bangladesh are the easy availability of the fibre â€“ raw jute â€“ and a â€˜conduciveâ€™ land and labour policy.
Inflexible land and labour policy pose major hurdles for expanding business in India. On the other hand, in Bangladesh, the fibre is easily available, government policy is more conducive and cost of doing business is also lower.
Hemant Bangur, Executive Chairman said that the work on the project is likely to commence in the next six to eight months, while commercial operations could begin within the next two years. The Bangladesh unit, once operational, will be able to employ nearly 3,200 people.
The company has already appointed consultants to prepare a project report on its proposed expansion plan and they will be submitting their project report soon. They could look at taking over an existing unit and turning it around or setting up a new manufacturing unit with a capacity of producing 150 tonnes a day of jute textiles and products, Bangur said.
The demand for jute products has been robust particularly from international markets and the company has been facing difficulties in supplying its order on time with an order book running into three to four months.
The company fear that it may lose markets if they are unable to supply on time, so they are looking at expanding their capacity in Bangladesh to cater to these markets.
Gloster imports nearly 7-8 percent of its total raw jute requirement of 50,000 tonnes a year from Bangladesh. These are some special quality fibre which is not available in India. They need these special fibres for their export market.
The company expects its top line to grow by 5-7 percent during this fiscal, the bottomline will grow by 10-12 percent on the back of improved efficiency and increase in value addition.
Glosterâ€™s exports â€“ both direct and indirect â€” account for nearly 35 percent of the companyâ€™s turnover, which was approximately â‚¹500 crore as on March 31, 2017. The company caters to markets in Europe, Canada, the US and Japan.
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