I F. Small Scale Entrepreneurship Development in Diversified Jute Products (CFC/IJSG/18) Project Completion Report

Transcription

1 CO I IT UND OD FOR COMM ES MM ON F Small Scale Entrepreneurship Development in Diversified Jute Products (CFC/IJSG/18) Project Completion Report 30 April 2010

2 Project Period October 2005 April 2010 FUNDING AGENCY THE COMMON FUND FOR COMMODITIES (CFC) Amsterdam, The Netherlands SUPERVISORY BODY INTERNATIONAL JUTE STUDY GROUP (IJSG) Dhaka-1215, Bangladesh PROJECT EXECUTING AGENCY (PEA) MD. FAZLUL HUQ 30 April 2010

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4 COLLABORATING INSTITUTIONS JUTE DIVERSIFICATION PROMOTION CENTRE (JDPC) 145 Monipuripara, Tejgaon, Dhaka-1215, Bangladesh NATIONAL CENTRE FOR JUTE DIVERSIFICATION (NCJD) 75C, Park Street, Unit No. G-2A, Ground Floor, Kolkata , India

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6 CONTENTS Acronyms / Abbreviations vi Foreword vii Acknowledgement ix Synopsis xi Maps xiii I. Project Summary 1 II. Background and Context in which the Project was conceived 3 (a) Project Objectives and Rationale 3 (b) Project Components 3 1. Organization and establishment of production units 3 2. Transfer of Techno-Economically viable small scale technology 4 3. Provision for support services - Raw Material Bank (RMB) 4 4. Provision for support services - Jute Entrepreneurs Service Centre (JESC) 4 5. Provision for Market Support 4 (c) Expected Results 5 (d) Beneficiaries and Extent of Benefits 5 (e) Project Management 6 (f) Coordination 7 (g) Project Supervision 7 (h) Commodity Strategy 7 III. Project Implementation and Results Achieved 9 1. Project Implementation Initial Steps India Part 9 Component 1 : Organization and Establishment of Production Units Component 2 : Transfer of Techno-Economically Feasible Small-Scale Technologies Component 3 : Jute Entrepreneurs Service Centre (JESCs) Component 4 : Raw Material Banks (RMBs) Component 5 : Market and Marketing Support Bangladesh Part 11 Component 1 : Organization and Establishment of Production Units Component 2 : Transfer of Techno-Economically Feasible Small-Scale Technologies Component 3 : Jute Entrepreneurs Service Centre (JESCs) Component 4 : Raw Material Banks (RMBs) Component 5 : Market and Marketing Support Resources Utilization 13 Loan Component Project Results Achieved 14 Important Overall Achievements by the Project 14 India Part 17 Bangladesh Part 17 Comparison between India and Bangladesh 18 Social and Environmental Effects of Project Implementation 19 Sustainability of JESCs and RMBs Dissemination of Project Results 24 Dissemination Workshops 25 India Part Bangladesh Part IV. Lessons Learnt Development Lessons Operational Lessons 31 V. Conclusions and Recommendations 35 Annexure I : Short notes on Important Events during project Implementation 37 Annexure II : (a) Use of Loan Funds 40 Annexure II : (b) Use of Loan Funds 42 Pages

7 Acronyms / Abbreviations AYA BAPU BDT BHB BJRI BSM BSCIC CAD CFC CI DHARTI DJP GDP GOI GOB IED IJT IJIRA IJO IJSG INR JDP JCI JESC JDPC JMDC MURDS NCJD NJB NGO PEA PCR PMU RMB R&D SB SITRA SHGs UNDP USD WEBCON WEAB Association for Youth Advancement Bhabna Association For Peoples Upliftment Bangladesh Taka Bangladesh Handloom Board Bangladesh Jute Research Institute Buyer-Seller Meet Bangladesh Small and Cottage Industries Corporation Computer Aided Desgin Common Fund for Commodities Collaborating Institution Development of Hessian Articles Research and Training Institution Diversified Jute Product Gross Domestic Product Government of India Government of Bangladesh Institute of Entrepreneurship Development Institute of Jute Technology Indian Jute Industries Research Association International Jute Organization International Jute Study Group Indian Rupee Jute Diversified Product Jute Corporation of India Ltd. Jute Entrepreneurs Service Centre Jute Diversification Promotion Centre Jute Manufactures Development Council Murshidabad Rural Development Society National Centre for Jute Diversification National Jute Board Non-Government Organization Project Executing Agency Project Completion Report Project Management Unit Raw Material Bank Research & Development Supervisory Body The South India Textile Research Association Self Help Groups United Nations Development Programme US Dollar West Bengal Consultancy Organization Ltd. Women Entrepreneurs Association of Bangladesh vi

8 FOREWORD Small Scale Entrepreneurship Development in Diversified Jute Products (CFC / IJSG / 18) has been a flag ship project sponsored by the International Jute Study Group (IJSG) and funded by the Common Fund for Commodities (CFC). It was a 3 years project and was expected to be completed by October Due to the successful process of implementation of the project CFC considered a proposal to extend the grant funded activities upto 30 June 2009 and the loan funded activities upto 30 April The grant financed components of the project have been successfully implemented by 30 June The loan funded programmes for setting up of various production units under the transfer of technology component are in the process of completion. In view of the fact that traditional uses of jute fibre for manufacture of packaging products such as sacking, hessian, carpet backing cloth, carpet etc. were facing serious competition from synthetic substitutes, this project aimed at diversifying the use of jute fibre by adopting some improved processing technologies for bleaching, softening, dyeing and printing as well as treatment of chemical effluents developed by an earlier IJO / CFC project through integrated modules with backward linkages to raw material supply and forward linkages to the marketing of jute diversified products. The project was aimed to benefit the very low income groups, especially rural poor and women in Bangladesh and India. It was also expected to increase demand for jute fibre / JDPs and generate additional employment and income for the rural and related urban areas. In spite of the delay in implementation of the loan component, the project has achieved the targeted objectives of development of entrepreneurship, expansion in the production of jute diversified products, finding ways and means of marketing the products, increasing the income of the beneficiaries, empowering women, expanding employment opportunities and creating positive impacts in arresting environmental degradation in India and Bangladesh where the project has been implemented. The project has been able to establish institutions like the Jute Entrepreneurs Service Centres (JESCs) and Raw Material Banks (RMBs) which will continue to help in the development of new entrepreneurs and the results achieved through the implementation of the project will continue to accelerate the process of socio-economic development in the coming years. The total impact of the project on creation of employment opportunities, generation of income, foreign exchange earnings and import substitution of coarse cottons and home textiles will be enhanced after setting up of the production units. The project has successfully developed a large number of entrepreneurs / Self Help Groups (SHGs) who have already consolidated their production and marketing capacities at home and abroad to sustain and further expand the achievements of the project. The governments in India and Bangladesh have also taken over the management of JESCs and RMBs which will ensure their continuation and contribution towards further improving the jute related development scenario in the respective countries. The results of the project have been effectively disseminated through different measures and the dissemination workshops. I sincerely hope that the lessons learnt in the process of implementation of the project will always work as beacons for guiding new and prospective entrepreneurs in the project areas and elsewhere. I would like to take this opportunity to express our deep sense of gratitude to CFC for financing the project and guiding its successful implementation. I would also thank the Collaborating Institutions i.e. National Centre for Jute Diversification (NCJD), India and Jute Diversification Promotion Centre (JDPC), Bangladesh for the hard work and commitment with which they have implemented the project. The Project Executing Agency (PEA) also deserves thanks for effectively monitoring and coordinating the execution of the project. Dhaka, 30 April 2010 Sudripta Roy, IAS Secretary General vii

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10 ACKNOWLEDGEMENT I would like to take this opportunity to express my sincerest thanks and gratitude to Common Fund for Commodities (CFC) for vesting upon me the onerous responsibility to work as the Project Executing Agency. In this context, I would specially thank Mr. T. Nanda Kumar, Mr. A. F. M. Sarwar Kamal and Mr. Sudripta Roy, IAS, Secretary Generals and Dr. Latifa Binte Lutfar, Operations Officer, IJSG and Mr. Sietse van der Werff, Senior Project Manager, CFC for always providing very timely and appropriate directions in the process of the implementation of project activities. I must also offer my heart felt thanks to Mr. Atri Bhattacharya, Executive Director, NCJD, India, Dr. A B M Abdulla, Mr. K. R. Hasan and Khandaker Mokhlesur Rahman, Executive Directors, JDPC, Bangladesh, Mr. Md. Rezaul Haque & Mr. Mainul Hoque, Directors, (Project Monitoring and Implementation), JDPC, Mr. A. K. Khastagir, Project Manager, India Part and Mr. Md. Abdus Salam, Project Manager, Bangladesh Part for their incessant endeavors in implementing the project. For the India Part of the project representatives of the Operating Agencies M/s D. K. Dutta (Berhampore, Murshidabad) Anirudh Singh (Patna, Bihar) and K. Srikanth (Puducherry) and for the Bangladesh Part Centre Managers of the JESCs M/s Ali Azam (Narsingdi), Ishtiaq Ahmed (Dhaka) and Mazidur Rahman Bhuiyan (Rangpur) deserve special thanks for the success achieved by the project at the grassroots level. I heartily thank all others who inspired, cooperated and helped me to execute the project. Most importantly, I would profusely thank hundreds of the highly receptive, hard working and innovative poor artisans / workers / members of SHGs who demonstrated rare agility and commitment in their participation in the project and achievement of sustainable benefits out of it. All the officials and staff of IJSG deserve my sincerest thanks for their very kind and spontaneous co-operation extended to me in the execution of the project. Last but not the least, I would like to record my thanks to the Project Assistant, Mr. Md. Abdul Khaleque for his sincere and efficient work during the tenure of the project. Dhaka, 30 April 2010 Md. Fazlul Huq Project Executing Agency (PEA) ix

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12 SYNOPSIS OF THE SMALL SCALE ENTREPRENURSHIP DEVELOPMENT IN DIVERSIFIED JUTE PRODUCTS i. 3 JESCs and 3 RMBs have been set up both in India and Bangladesh. The JESCs have developed data banks and design banks. Websites have been set up by both NCJD and JDPC. ii. iii. iv and 1420 small entrepreneurs developed under the project have started production of JDPs in India and Bangladesh respectively. The project has expanded the base of JDPs, introduced jute based niche products, popularized many existing JDPs, encouraged mixing of different other fibres / materials with jute to produce a large variety of innovative JDPs and come up with attractive designs to cater to the ever changing demands in the domestic and international markets. Entrepreneurs producing JDPs use jute, yarn and fabrics in natural, bleached and coloured form. The increase in the volume of JDPs has led to an overall increase in utilization of jute in different forms which will impact positively on the production of raw jute. v. The production and sales of JDPs by the entrepreneurs of the project in India and Bangladesh have increased progressively from year to year. For the India Part the sale of JDPs by the project beneficiaries was INR 16,70,000 / USD 37,266 for Project Year 1, INR 3,100,000 / USD 68,888 for Project Year 2 and INR 12,200,000 / USD 271,111 for Project Year 3. During the period from 15 October 2008 to June 2009 the sales figure of JDPs was INR 2,2000,000 / USD 440,000. In Bangladesh the sale of JDPs by beneficiaries through exhibitions / BSMs was BDT 50,000 / USD 730 for Project Year 1, BDT 4,175,000 / USD 60,949 for Project Year 2 and BDT 26,275,000 / USD 383,576 for Project Year 3. During the extended period from 15 October 2008 to June 2009 the sales figures of JDPs was BDT 10,300,000 / USD 141,795. vi. vii. viii. ix. Involvement in production of JDPs by the large number of entrepreneurs / beneficiaries has contributed significantly towards creation of employment opportunities, augmentation of income, alleviation of poverty, empowerment of under privileged groups including women. The self sustained process of development initiated by the project would continue to contribute towards such socio-economic development in India and Bangladesh. Average income of small entrepreneurs / artisans producing JDPs who had very little or no income before joining the project recorded improvement at the end of implementation of the grant component in June This was about INR 10,000 to 12,000 (USD ) in India and about BDT 36,000 to 96,000 (USD ) in Bangladesh per year which may be seen as results from the project. There is of course a variation in the level of income depending on whether the beneficiaries work on a full time basis i.e hrs or a few hours per day. The variation in the level of income in some cases also depend on a number of factors including efficiency, quality of the product and volume of output by the beneficiaries. In some cases the beneficiaries earn more than the average sums. Use of diversified jute goods is gradually replacing the use of polythene / plastic / other artificial fibre based products and contributing towards improvement of the environment. The entrepreneurs from India and Bangladesh should accelerate their initiatives to take advantage of the increasing demand for natural products like JDPs in the national and international markets. Measures taken by NCJD and JDPC for dissemination of project results will continue to encourage new entrepreneurs to get involved in production and marketing of JDPs in the coming years. x. The demand from the small entrepreneurs for updated / new training programmes, design development programmes and training programmes on dyeing, bleaching etc., workshops for quality improvement and expansion of market linkages / market support are increasing both in India and Bangladesh. xi

13 xi. xii. xiii. xiv. xv. xvi. xvii. The awareness workshops, skill development programmes, JDP production / marketing activities including BSMs / Exhibitions had been extended to many locations / areas / districts /provinces in India and Bangladesh. These have largely expanded the JDP based activities which will continue to accelerate steadily in future. From the experience of the entrepreneurs who are visiting international fairs or interacting with foreign buyers, it is seen that in many cases they cannot book bulk orders in view of their limited production capacity. The exporting entrepreneurs both in India and Bangladesh should therefore form groups to take the benefit of bulk orders and ensure timely delivery to international buyers. The project helped Bangladesh and India to exchange ideas, experiences, information, brochures, documents, training modules etc. for mutual benefits in the development of small scale entrepreneurship. Perceptible progress has taken place during Project Year 3 and onwards regarding operationalization of the loan component. Signing of loan agreements and selection of prospective entrepreneurs for setting up of production units etc. have been completed by NCJD and JDPC; required loan funds have also been released and disbursement of loans to the entrepreneurs have already started. The feedbacks received from the small entrepreneurs / SHGs make it abundantly clear that the marketing support component of the project specially needs to be vigorously continued even after the project period. NCJD and JDPC should pay special attention to provide marketing support to the entrepreneurs / SHGs for both domestic and foreign markets. Sustainability of the JESCs and RMBs after the project period was a major concern and it was strongly suggested by all concerned that adoption of business plans or other income earning measures by NCJD and JDPC was essential to ensure that. In this context NCJD, India maintained that charging fees for the different skill development training programmes and other services would be against the spirit and policy of grassroots level development by Government as most of the target beneficiaries are very poor rural women. So NCJD did not implement any step to generate any income by the JESCs. NCJD has started to run the JESCs set up under the project from July In Bangladesh different Government departments and NGOs do not charge any fees for skill development training programmes or other auxiliary services in rural based poverty reduction programmes. However, JDPC charged some fees from entrepreneurs for participation in various skill development training programmes / workshops from July 2009 to April JDPC also realized some fees for participation in exhibitions by the entrepreneurs till April This shows that JDPC is gradually expanding necessary measures for implementation of the business plans. The management of the JESCs in Bangladesh has been taken over by JDPC from July It is to be pointed out that effective implementation of the business plans and generation of adequate revenue by the JESCs would ensure their long term sustainability and spontaneous replication. It is felt that NCJD may consider implementing business plans in spite of some policy limitations so that the JESCs themselves can progressively earn some income to help their sustainability. In this respect JDPC may continue to expand the income generating measures by the JESCs. Though the RMBs were operated by private entrepreneurs on commercial basis, the scale of their operations and functional efficiency deserve much to be improved. JDPC and NCJD should furnish detailed reports every year to IJSG and CFC regarding utilization of funds allocated to each of them (USD 100,000) for meeting operational costs (USD 25,000) and Revolving Fund (USD 75,000) for providing interest free loan to RMBs. In view of the concerted initiatives and commitment by CFC, IJSG, NCJD, JDPC, the PEA and all other stakeholders, the project successfully achieved its overall objectives of developing and sustaining a large number of JDP producers who will work as role models for an increasing number of prospective entrepreneurs in India and Bangladesh. The project set in motion a self-sustained process of development activities and socio-economic improvement of rural poor and women based on JDPs which is expected to be progressively strengthened in future. xii

14 The project has been implemented in India and Bangladesh as shown above. xiii

15 1 2 3 In India the project sites are located at (1) Berhampore, Murshidabad, West Bengal, (2) Patna, Bihar and (3) Puducherry (Pondicherry). xiv

16 3 2 1 In Bangladesh project activities have been organized through out the country from the JESCs located at (1) Narsingdhi, (2) Dhaka and (3) Rangpur. xv

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18 CHAPTER I Project Summary 1. Title: Small Scale Entrepreneurship Development in Diversified Jute Products 2. Number: (CFC / IJSG / 18) 3. Project Executing Agency (PEA): Md. Fazlul Huq 4. Location: Bangladesh and India 5. Starting Date: 15 October Completion Date: 14 October 2008 (original) 30 April 2010 (revised) 7. Financing: Original Revised Total Project Cost : USD 3,054,848 USD 2,581,921 CFC Financing : Grant : Bangladesh USD 755,300 USD 635,320 India - USD 740,300 USD 649,753 Grant Total : USD 1,495,600 USD 1,285,073 Loan: Bangladesh USD 577,425 USD 856,150 India - USD 528,450 USD 47,797 Loan Total: USD 1,105,875 USD 903,947 Counterpart contribution: USD 453,373 USD 392,901 Entrepreneurs: USD 368,625 USD 287,152 Bangladesh - USD 192,475 USD 272,050 India - USD 176,150 USD 15,102 Collaborating Institutions: USD 84,748 USD 105,749 (in kind) JDPC - USD 27,999 USD 42,387 NCJD - USD 27,999 USD 34,612 IJSG (SB) - USD 28,750 USD 28,750 1

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20 CHAPTER II Background and Context Small Scale Entrepreneurship Development in Diversified Jute Products (CFC / IJSG / 18) project was initially sponsored by the erstwhile International Jute Organization (IJO) and approved by the Common Fund for Commodities (CFC) for funding in The project was proposed in the backdrop of an earlier IJO / CFC project completed in 1996 which succeeded in improving the physico-chemical properties of jute fibre, yarn and fabrics using improved processing technologies for bleaching, softening, dyeing and proofing as well as treatment of chemical effluent. These technologies were found to be promising for commercial up-take both by the jute mills as well as by the small-scale entrepreneurs. In view of the large number of people who are engaged in processing value-added jute products, the present project with the objective of disseminating the technologies developed and providing needed capital for pilot demonstration of the viability of the integrated production units was proposed. However, due to the reorganization problems faced by IJO, the implementation of the project was delayed. International Jute Study Group (IJSG), the successor organization of IJO which was established in 2002 took initiatives on the basis of which the project was revived, reviewed and the project Appraisal Report in the present form was prepared in February In the original project proposal Grameen Bank, Bangladesh was considered to be the Project Executing Agency (PEA) which did not show interest later on to be associated in that capacity. In view of this, National Centre for Jute Diversification (NCJD), India and Jute Diversification Promotion Centre (JDPC), Bangladesh were proposed to be the Project Executing Agencies for India and Bangladesh parts of the project respectively. Later on CFC decided to appoint one PEA for both the parts of the project. So NCJD and JDPC were re-designated as Collaborating Institutions (CIs) and Mr. Md. Fazlul Huq, a retired senior official, Government of Bangladesh (GOB), who worked as a member of the Executive Board and member / chairman of the Consultative Committee of CFC was selected as the PEA for the project. (a) Project Objectives and Rationale i. To provide a development model this can be rolled out on a wider regional scale in India and Bangladesh following successful implementation. ii. To increase the use of jute fibre in domestic and export markets. iii. To assist in diversification of jute products in the home textiles sector, based upon jute / cotton blended yarns. iv. To introduce novel small-scale technology, training and support services to the rural community. v. To develop a culture of entrepreneurship at the local level. vi. To help alleviate rural poverty by generating employment and raising family incomes, thus contributing to environmental regeneration. (b) Project Components 1. Organisation and establishment of production units: To encourage entrepreneurs to set up small scale production units to produce value added jute products. The vehicle for publicizing and organizing such ventures will be NCJD and JDPC through existing network of NGOs / other Govt. organisations. 03

21 2. Transfer of techno-economically viable small scale technology: To transfer some technologies developed in previous IJO, UNDP and CFC sponsored projects in order to bring these to the entrepreneurs and utilize them in commercial scale. 2.1 Chemical treatment to upgrade jute fibre: To make jute fibre softer, more extensible and compatible for blending with cotton / other fibres to spin finer yarns in the count range 10s to 20s. The result will be cheaper jute / cotton blended yarns to be used for furnishing and home textiles as a replacement for cotton. 2.2 Mini-spinning of jute / cotton blended yarns: Mini-spinning technology developed under a UNDP programme will produce 10s to 20s jute / cotton blended yarns suitable for both handlooms and power looms Wet processing technology: To establish small scale decentralized units as developed by IJT and BJRI for bleaching, dyeing and woollenising jute blended yarns including treatment of the resultant effluent Rural Intensive Handloom production: To establish production units / demonstration centres for value added textiles utilizing ethnic and demonstrated designs based upon jute / cotton blended yarns Model Power Loom production: To optimize the speed of existing power looms to match the jute / cotton blended yarn and / or for weaving union fabrics for use in the manufacture of heavier textiles and such items as bags and soft luggage. 3. Provision for support services - Raw Material Bank (RMB) Based upon the successful Indian model now in existence, the objective has been to set up RMBs to provide support services for the spinning and weaving sectors above. The specific purposes would be:- i. To ensure the supply of required quantity of jute and jute blended dyed yarns at reasonable prices to weavers, artisans and entrepreneurs for handloom, power loom and handicraft / rural craft production. ii. To act as the procurement and supply centre for dyes, chemicals and accessories etc. for the small scale units. iii. To procure handloom fabrics from the Project beneficiaries and help market them downstream. iv. To provide other suitable extension / escort services. 4. Provision for support services - Jute Entrepreneurs Service Centre (JESC) To establish multi-function centres providing: i. Training and production facilities for value added jute products to rural weavers and artisans, particularly women. ii. Technical and marketing information and database. iii. Design support and. iv. Monitoring function for rural entrepreneurs. 5. Provision for Market Support To assist in marketing the value added fabrics and products by means of periodic Buyer-Seller Meets and Exhibitions. 04

22 (c) Expected Results i. Identification of potential entrepreneurs and micro-enterprises. ii. Translation of R&D results from previous projects into commercial ventures. iii. Additional employment generation and increased wages for rural weavers and artisans. iv. Production of value-added diversified jute products. v. Chemical treatment and finishing will add to the market appeal of jute home textiles. vi. General economic benefits are expected to include an increase in consumption of raw jute, more remunerative prices for jute growers, enhanced income generation and employment, and the alleviation of rural poverty. (d) Beneficiaries and Extent of Benefits Expected benefits: i. As the project is being implemented in Bangladesh which is a Least Developed Country and India whose jute producing populations are among the very low income groups, especially poor farmers and women, they were considered to be the direct beneficiaries. ii. Due to increasing demand for jute fibre in rural areas, generating additional employment in rural and urban areas and adding to the incomes for these communities were expected to have a multiplier effect. iii. The project was planned to have positive impact in generating foreign exchange earnings from additional diversified exports and import substitution of short cottons and home textiles. These benefits were considered to multiply over the medium to longer term. iv. The present project was to contribute to meeting the gap between demand and supply of yarn and fabrics. v. Significant development impact was expected due to direct and indirect benefits to the rural weavers, spinners, farmers and traders as well as its possible foreign exchange earnings from exported value-added products. vi. The direct beneficiaries and associated farmers who are expected to supply the raw materials for the production units were to be particularly benefited due to generation of income. vii. The core direct beneficiaries of the project in the two countries (Bangladesh & India) were calculated to be about 660 persons mostly unemployed women in the production and service units. viii. The associated beneficiaries in the handloom, powerloom and handicrafts sectors were estimated to be about 15,500 (11,000 in Bangladesh and 4,500 in India). ix. In addition to these, farmers who supply raw materials to these production units were expected to have a regular and reliable market and improved earnings. Incomes for handloom weavers / artisans and employees were expected to increase by 60 to 100%. Most of these benefits were expected to accrue to rural unemployed and under-employed persons. 05

23 x. The increased incomes generated were expected to have positive impact on larger populations in view of the extended family members of up to an average of 5 persons per employed person. xi. The project incorporated demonstration plants for treating chemical effluents to manage pollution which would be detrimental for human health and the environment. xii. In both India and Bangladesh the cumulative impact of the above benefits were expected to have favourable effect on rural poverty alleviation as well as national economic development. Actual benefits: i. The project has actually benefited the poor entrepreneurs / artisans / workers / members of SHGs who are mostly women and did not have any income before joining the project. The number of such direct beneficiaries in India has been about 1150 and in Bangladesh about ii. The secondary beneficiaries in India have been about 5,750 at the rate of 5 persons per direct beneficiary. In Bangladesh number of such beneficiaries has been 7,100. iii. It has been found that in India the average income per annum per entrepreneur / artisan producing JDPs is INR 10,000 to 12,000 (USD ). The average entrepreneur / artisan in Bangladesh are earning BDT 36,000 to BDT 96,000 (USD 540 to 1440) per year. iv. When the production units under the loan component will be established, varieties of benefits including employment and income generation will accrue to the engineers / technicians, workers, raw material suppliers and sales agents for products etc. v. It is estimated that roughly 20 people will get employment in the 2 Wet Processing Units and 60 people in the 6 Handloom Units in India. About 400 persons at the rate of 5 persons per family will be the indirect beneficiaries. vi. In Bangladesh about 265 people are expected to be directly engaged by the production units viz; Fibre Chemical Treatment Plant (22), Mini Spinning Plant (51), 3 Wet Processing Units (60), 6 Handloom Units (108) and the Powerloom Unit (24). About 1325 persons at the rate of 5 persons per family will be indirect beneficiaries. vii. It is also estimated that a large number of people will be engaged for supply of various raw materials to the production units and at different stages of processing / bleaching / dying / converting the jute fibre, yarn, fabrics etc. into different end products / JDPs and marketing them. (e) Project Management The programmes of the project were managed by National Centre for Jute Diversification (NCJD), India and Jute Diversification Promotion Centre (JDPC), Bangladesh. NCJD, the focal organization for diversification of jute under the Government of India had the previous experience of running Jute Entrepreneurs Service Centres (JESCs) and Raw Material Banks (RMBs) to help the development of small scale entrepreneurship in the production of diversified jute goods. NCJD recruited Mr. A K Khastagir, a former Chairman of the Jute Corporation of India Ltd. (JCI) who had long experience of planning and implementing development activities in jute, which greatly helped the management of the project and its successful implementation. NCJD and the PMU established close and effective linkages with the different levels of administration in the central, provincial, district and local level administration, development agencies, NGOs, self-help groups, small entrepreneurs and potential beneficiaries from the very beginning of the project which was continuously strengthened as implementation of the project progressed. 6

24 In Bangladesh the project was implemented by Jute Diversification Promotion Centre (JDPC) which was created in JDPC faced some initial problems to mobilize necessary coordination, cooperation and infrastructure for implementation of the project. However, these problems were effectively overcome and JDPC was able to speed up the process of project implementation. The top officials of JDPC were experienced technocrats with long experience of jute and entrepreneurships related development activities. The Project Manager for Bangladesh Part of the project Mr. Md. Abdus Salam, a retired senior Civil Servant had a wealth of experience in organizing and managing development activities at the grassroots level who could easily and efficiently enlist the support and cooperation of the administration, NGOs and the private sector in Bangladesh to make the implementation of the project smooth and effective. (f) Coordination The Project was centrally co-ordinated by a Project Executing Agency (PEA) who was under the overall supervision of the IJSG. While NCJD and JDPC, the Collaborating Institutions in India and Bangladesh undertook the major role of project implementation, the PEA had the special responsibility, inter alia, for the administration and control of the grant funds, co-ordinating and consolidating progress reports, consolidated financial reporting, monitoring the project s grant-resource utilization and disbursement of grant funds and ensuring all obligations contained in the Project Agreement (full compliance). The PEA also helped to organise the dissemination workshops and project monitoring meetings in collaboration with NCJD and JDPC. During the whole period the PEA provided necessary support, cooperation and guidance to NCJD and JDPC in the implementation of the project and closely monitored and coordinated their activities to ensure timely and effective implementation. IJSG and CFC provided necessary and timely guidance and support in addressing the problems and constraints in project implementation faced by the Collaborating Institutions and other stakeholders. The Steering Committee of the project in its three Annul Review meetings provided useful suggestions to help successful and timely implementation of the project. The recommendations of the Mid Term Evaluation also helped the process of project implementation and achievement of its goals. In view of the concerted measures taken by CFC, IJSG, PEA and the Collaborating Institutions, all the major steps for operationalization of the Loan Component were taken within 30 April (g) (h) Project Supervision The project s overall operations were supervised by the International Jute Study Group (IJSG) as the Supervisory Body (SB) and the sponsoring ICB in collaboration with the Common Fund for Commodities as the financing institution. The CFC and SB closely monitored progress through the review of progress reports and field visits by their concerned officials to the project sites as and when deemed necessary. A Steering Committee headed by the Secretary General, IJSG and consisting of some representatives of the stakeholders of the project was established to monitor its implementation which met once every year. The Steering Committee reviewed the progress achieved and constraints encountered and made recommendations for improvement of the process of implementation and achievement of the project objectives. The recommendations of the three Annual Review meetings of the Project Steering Committee were duly implemented by NCJD and JDPC. Commodity Strategy Jute, a major natural fibre having significant impact on the economy and life of millions in Bangladesh, India, Nepal, Myanmar, Thailand, China and Vietnam was facing serious competition from synthetic substitutes resulting in decline in its consumption over the decades. The jute sector was also losing markets in terms of conventional packaging products, such as 7

25 sacks and hessian. Use of very old and conventional technologies was also a problem to compete with modern substitutes. The present project aimed to address some of the major problems of jute sector through increase and diversification of the use of jute; expansion of the domestic and international markets for jute diversified products and highlighting the utilization of jute for improvement of the environment. One major proposed goal of the present project was to provide a developmental model for disseminating developed technologies of chemical treatment of jute, small-scale spinning and small-scale supplies of raw materials, weaving, effluent treatment and product marketing. Other objectives included development of small scale entrepreneurship, increase of income of the poor weavers / artisans / entrepreneurs, empowerment of women, increase in the production and use of jute and diversified jute products at home and abroad. These overall objectives are fully in consonance with the strategy of IJSG the sponsoring ICB, which among others, seeks to introduce new jute products and the development of new end-uses; promote trade in the domestic and international markets; provide a forum for the active participation of the private sector in the development of the jute sector; address the issues of poverty alleviation; employment and development of human resources in the jute sector; facilitate the improvement of structural conditions in the jute sector through improvement of productivity and quality and help new processes and technologies; create awareness of the beneficial effects of the use of jute as an environmentally friendly, renewable and biodegradable natural fibre. All these important objectives of IJSG have been effectively addressed in the present project. 8

26 1. Project Implementation: Initial Steps CHAPTER III Project Implementation and Results Achieved The Grant Agreement for the project was signed between CFC and IJSG on 07 March The Project Agreement among CFC, IJSG and PEA was also signed on 07 March The Project Implementation Agreement (PIA) between National Centre for Jute Diversification (NCJD), India and the PEA was signed on 09 April The same Agreement between Jute Diversification Promotion Centre (JDPC), Bangladesh was signed on 26 September The project officially started with effect from 15 October 2005 through CFC s letter dated 06 October The PEA took some initial steps to make the project operational including obtaining binding commitments from Collaborating Institutions (JDPC and NCJD) regarding their in-kind contribution to the project; conclusion of arrangements between the PEA and Collaborating Institutions on the accounting of the project funds and the audit thereof; opening of Project Accounts viz, the PEA Project Account, the Bangladesh Project Account and the India Project Account. The PEA guided the Collaborating Institutions in the preparation of Work Plan and Budget and other documents for release of Authorized Allocation / Grant fund from CFC and also arranged release of grant funds from CFC. Before commencement of every project year detailed Work Plans, Implementation Schedules and Budgets for the PEA, NCJD and JDPC were sent for approval of CFC with the concurrence of IJSG. During the whole project period the PEA arranged preparation of all the reports / statements and submitted them to IJSG and CFC in time as required under the terms of the project documents. India Part Component 1: Organization and Establishment of Production Units In order to set up the Project Management Unit (PMU), selection of the Manager, Project Assistant and Project Accountant were completed by 03 March NCJD provided the office accommodation and other necessary facilities. Preparation of the Project Operating Manual was completed on 08 December 2005 under the guidance of PEA and IJSG. The PMU performed the following important functions: i. Took initial steps to make the project operational. ii. Prepared the yearly Work Plans, Implementation Schedules and Budgets. iii. Submitted the Interim Financial Reports. iv. Submitted proposals for release of funds to the India Project Account. v. Helped conducting the Audits by External Auditors. vi. Submitted yearly Project Implementation Reports. vii. Performed all other activities for implementation of the project. Component 2: Transfer of Techno-Economically Feasible Small-Scale Technologies The project provided a loan component for transfer of technology to set up techno-economically viable small scale production units. For India part these included 1 Fibre Chemical Treatment Plant, 1 Mini Spinning Plant, 2 Wet Processing Plants and 6 Rural Intensive Handloom Units. 9

27 NCJD opted not to set up the Fibre Chemical Treatment Plant since no entrepreneur came forward to implement this technology by availing the loan. The proposal to set up the Mini Spinning Plant was also dropped considering various aspects including lack of experience and expertise by the interested entrepreneurs. So NCJD decided to set up 2 Wet Processing Plants and 6 Handloom Production Units and loan sanction letters were issued to all entrepreneurs. But finally 2 entrepreneurs of handloom units could not offer clear collateral security for which their loans were cancelled. It means that NCJD is setting up 2 wet processing plants and 4 handloom units. The disbursement of loans to the sub-borrowers / entrepreneurs has been Completed. NCJD is directly handling the loan operations i.e. disbursement and recovery of loans. Component 3: Jute Entrepreneurs Service Centre (JESCs) JESC Berhampore started functioning from 15 December 2005 and M/s. West Bengal Consultancy Organisation Ltd (WEBCON) was selected to set up the JESC. JESC Patna started functioning from 01 May 2006 and M/s. Institute of Entrepreneurship Development (IED), Bihar was selected to set up the JESC. JESC Puducherry started functioning from 01 February 2007 and M/s. Development of Hessian Articles Research and Training Institution (DHARTI) was selected to set up the JESC. Major Programmes implemented by JESCs Sl. No. Name of the activity Target Achievement 1. Awareness Workshop Technical Workshop- cum- Demonstration Training cum- Skill Development programme Buyer Seller Meet / Exhibition Design / Product Development Workshop / Input Programme 6. Experience Sharing Workshop Export Marketing Workshop Project Beneficiaries Meet Dissemination Workshop Total No. of events India Part of the project had a total target of organizing 91 different events through the JESCs, while the actual number of events organized / participated was 202, the target exceeding by 101 events. Component - 4: Raw Material Banks (RMBs) RMB Berhampore started functioning from 21 June M/s. Ambica Jute Mills Ltd. was selected for setting up the RMB. RMB Fatuha (Patna) started functioning from 01 January M/s. Bihar Gramin Vikas Sansthan was selected for setting up the RMB. RMB Puducherry started functioning from 15 March M/s. Development of Hessian Articles Research and Training Institution (DHARTI) were selected for setting up the RMB. 10

28 The major Raw materials sold in these RMBs are as under: i. Raw Jute and yarn or jute blended yarn ii. Laminated jute or jute union fabric iii. Bleached or dyed jute / jute union fabric iv. Non-laminated jute union fabric v. Dyes, chemicals and other accessories, e.g. bag handles made of cane / bamboo / plastic, jute or cotton rope for bag handles, bag stitching thread, cotton / synthetic tape etc. Total sales of the RMBs upto 30 June 2009 was as under: RMB Sales Figure in INR Sales Figure in USD Berhampore 1,347,599 29,947 Patna 150,075 3,335 Puducherry 8,693, , Total 10,191, ,477 Component - 5: Market and Marketing Support Major market support activities undertaken include: i. Undertaking 1 domestic survey covering 4 cities in India (Kolkata / Delhi / Chennai / Puducherry) and 1 overseas market (London). ii. Participation in 32 Local Fair and Rural Melas. iii. Participation in 39 State Level Fairs / Exhibitions. iv. Participation in 3 National level Fairs / Buyer-Seller Meets. v. Participation in 8 International level Fairs (3 in India and 5 abroad). vi. Creation of linkage between demand centres with small entrepreneurs for bulk sale. vii. Setting up of exclusive sale outlet for sale of products produced by the project beneficiaries. viii. Formation of 6 marketing groups for concerted marketing effort. ix. Organising 1 Export Marketing Workshop. x. Total sale of JDPs through exhibitions / Buyer-Seller meets and normal sales is INR 2,200,000 / USD 440,000. Bangladesh Part Component 1: Organization and Establishment of Production Units JDPC completed setting up of the Project Management Unit (PMU) by February 2006 with the selection of the Project Manager and the Secretary. JDPC provided the office accommodation and other necessary facilities. Preparation of the Project Operating Manual was completed by October 2006 under the guidance of PEA and IJSG. The PMU performed the following important functions: i. Took initial steps to make the project operational. ii. Prepared the yearly Work Plans, Implementation Schedules and Budgets. iii. Submitted the Interim Financial Reports. iv. Submitted proposals for release of funds to the Bangladesh Project Account. v. Helped conducting the Audits by External Auditors. vi. Submitted yearly Project Implementation Reports. vii. Performed all other activities for implementation of the project. 11

29 Component 2: Transfer of Techno-Economically Feasible Small-Scale Technologies Bangladesh opted to set up all the production units i.e. 1 Fibre Chemical Treatment Plant, 1 Mini Spinning Plant, 3 Wet Processing Plants, 6 Rural Intensive Handloom Units and 1 Model Powerloom Unit. BASIC Bank Ltd. was assigned the job to administer the loan, disburse the loan amounts and also recover the same in due course after 30 April BASIC Bank Ltd. has disbursed loan to 4 sub-borrowers (2 Wet Processing Units and 2 Handloom Units) and sanctioned loan to 1 Fibre Chemical Treatment Plant, 1 Mini Spinning Plant, 1 Wet Processing Plant, 1 Handloom Unit and 1 Powerloom Unit. Loan to 3 Handloom Units will be sanctioned very soon. It is mentioned that 1 Handloom Unit and 1 Wet Processing Unit have already started production from January 2010 and February 2010 respectively. Another Handloom Unit has started production in April After 30 April 2010 JDPC will co-ordinate the loan operations with the concerned sub-borrowers, BASIC Bank Ltd. and ERD, GoB to ensure timely repayment of the loan to CFC. Component 3: Jute Entrepreneurs Service Centre (JESCs) JESC Dhaka started functioning from March JESC Narsingdi started functioning from May JESC Rangpur started functioning from April Major Programmes Implemented by JESCs Sl. No. Name of the activity Target Achievement 1. Awareness Workshop Technical Workshop cum Demonstration Training cum- Skill Development Programme Buyer Seller Meet / Exhibition Design Development Workshop Dissemination Workshop Total No. of events JDPC had a target of organizing 96 different events while the actual number of events organized / participated was 137, the target exceeded by 41 events. Component - 4: Raw Material Banks (RMBs) RMB Narsingdi started functioning from October 2007 and M/s Creative Jute Textile Products was selected as the operating agency. RMB Dhaka started functioning from October 2007 and M/s Dhaka Deco Jute Works Limited was selected as the operating agency. RMB Rangpur started functioning from December 2007 and M/s Suchi Shoily Handicrafts was selected as the operating agency. The major Raw materials sold in these RMBs are as under: Raw jute (natural / dyed) in small quantity, jute yarn, jute / union fabrics (natural, laminated / non-laminated, bleached, dyed), coloured fabrics, natural fabrics, twine, white (natural hessains, JDPs, dyes, chemicals and accessories etc. 12

30 Total sales of the RMBs upto June 2009 was as under: RMB Sales Figure in?bdt Sales Figure in USD Narsingdi 5,609,350 81,769 Dhaka 6,380,116 93,005 Rangpur 841,105 12, Total 12,830, ,035 JDPC extended interest free loans out of the Revolving Fund granted by CFC to make the RMBs self-reliant. Component - 5: Market and Marketing Support Major market support activities undertaken include: i. Conducting 3 market surveys. ii. Participation in 43 exhibitions / BSMs. iii. 17 entrepreneurs operating sales show rooms. iv. 10 entrepreneurs participating in international trade fairs. v. 13 entrepreneurs directly exporting JDPs. vi. 8 entrepreneurs supplying JDPs to posh shopping molls / marketing chains in Dhaka city. vii. Total sale of JDPs through exhibitions / BSMs is BDT 40,800,000 / USD 587,050. Resources Utilization Resource Utilization scenario during the period from 15 October June 2009 is as follows:- Figures in USD Allocation as per Revised Fund received Utilization Appraisal Report PEA Project Account 81, , , , India Project Account 740, , , , (95%) Bangladesh Project Account 755, , , , (93.15%) From the above, it is seen that utilization of resources by the project has been satisfactory. Though the project period was extended by 18.5 months and all the targets of activities were achieved and some were even exceeded, there has been a saving of USD 143,667 in the India project account and USD 148, in the Bangladesh project account compared respectively to the revised allocations. The savings occurred mainly due to the austerity measures in the expenditure. Moreover, fluctuations in the value of local currencies also resulted in the increase of funds in some cases. It is expected that final savings of resources at the end of 30 April 2010 will be more. Loan Component The Loan Agreement between CFC and NCJD was signed on 02 June 2008 and the Loan Guarantee Agreements between CFC and the Guarantor, ICICI Bank, India was completed in June Loan Agreement between CFC and the Government of Bangladesh / JDPC was signed on 14 August The loan released for Bangladesh / JDPC on 05 May 2009 was USD 856,150 and USD 47,797 for India / NCJD was released on 08 June The loan has been provided at the highest concessive rate of 1% service charge. The final rate of interest for the sub-borrowers in Bangladesh will be 8% and for India the same will be 7.25%. The repayment shall have a grace period of 2 years and has to be repaid in 6 equal installments within a period of 5 years including grace period. 13

31 2. Project Results Achieved Important Overall Achievements by the project i. The project has developed a large number of new small entrepreneurs both in India and Bangladesh. In India about 1150 small entrepreneurs have started production and sale of JDPs and are being benefited through their involvement with the project. The number of such entrepreneurs in Bangladesh is about ii. iii. iv. The production and sales of JDPs by the entrepreneurs of the project in India and Bangladesh have increased progressively from year to year. For the India Part the sale of JDPs by the project beneficiaries was INR 16,70,000 / USD 37,266 for Project Year 1, INR 3,100,000 / USD 68,888 for Project Year 2 and INR 12,200,000 / USD 271,111 for Project Year 3. During the extended period from 15 October 2008 to June 2009 the sales figure of JDPs was INR 2,2000,000 / USD 440,000. In Bangladesh the sale of JDPs by beneficiaries through exhibitions / BSMs was BDT 50,000 / USD 730 for Project Year 1, BDT 4,175,000 / USD 60,949 for Project Year 2 and BDT 26,275,000 / USD 383,576 for Project Year 3. During the extended period from 15 October 2008 to June 2009 the sales figures of JDPs was BDT 10,300,000 / USD 141,795. So for the India Part the total sale of JDPs by the project beneficiaries from 15 October June 2009 was INR 16,970,000 / USD 377,265 and for Bangladesh the total sale of JDPs during the same period was BDT 30,500,000 / USD 445,255. The project has increased the average income of the beneficiaries who had very little or no income before joining the project. At the end of the grant component in June 2009 it was found that the average annual income of small entrepreneurs / artisans was about INR 10,000 to 12,000 (USD ) in India and in Bangladesh this was about BDT 36,000 to 96,000 (USD ) per year which can be seen as results from the project. In this context, it is clarified that working situations of the beneficiaries vary in many cases. Some of the beneficiaries work on a full time basis i.e hours, while others work for a few hours per day. Some of them work at the factories / production centres and others work in their homes. A number of the beneficiaries work during their leisure hours after performing domestic chores. These factors sometimes result in differences of remuneration. It may be mentioned that in some cases level of income varies also depending on a number of factors including the grade of the job / skill and quality / volume of output. When the turn over by the SHGs is high and continuous work can be provided, the beneficiaries earn more. With the increase in the demand for natural / environment friendly products like JDPs the production and sales by the entrepreneurs / SHGs is rapidly increasing both in the domestic and international markets. This is resulting in more work and more income for the beneficiaries. There are seasonal variations also in production of JDPs. More BSMs / exhibitions / Melas are normally held during November March period when there is a rush for production and sales of JDPs. The beneficiaries earn more during such occasions. In addition to these, the earnings of the beneficiaries also differ depending on whether they work with hands or machines / tools and what type of products they produce. The compensation also differs if the production process involves a number of stages and whether the operations are simple or complex in nature etc. Entrepreneurs producing JDPs use jute, yarn and fabrics in natural bleached and coloured form. The increase in the volume of JDPs has led to an overall increase in utilization of jute in different forms which will impact positively on the production of jute. 14

32 v. The awareness workshops, skill development programmes, JDP production / marketing activities including BSMs / Exhibitions had been extended to many locations / areas / districts / provinces in India and Bangladesh. These have largely expanded the JDP based activities which will continue to accelerate steadily in future. vi. vii. viii. ix. The project expanded the base of JDPs, introduced jute based niche products, popularized many existing JDPs, encouraged large scale mixing of jute fibres / yarn / fabrics with leather and other materials to produce high quality / innovative JDPs and fashion products and came up with attractive designs to cater to the changing demands in the market. Involvement in production of JDPs by the large number of entrepreneurs / beneficiaries has contributed significantly towards creation of employment opportunities, augmentation of income, alleviation of poverty, empowerment of under privileged groups including women. The self sustained process of development initiated by the project would continue to contribute towards this socio-economic development in India and Bangladesh. Use of diversified jute goods is gradually replacing the use of polythene / plastic / other synthetic fibre based products and contributing towards improvement of the environment. The entrepreneurs from India and Bangladesh are improving their initiatives to take advantage of the increasing demand for natural products like JDPs in the world market. NCJD did not earn any income through the JESCs for offering different services to the beneficiaries. JDPC recovered some fees from the entrepreneurs for participation in the fairs / exhibitions etc. and for skill development programmes / workshops. x. Development of Data Banks and Design Banks has been a notable achievement. xi. xii. xiii. xiv. xv. xvi. The JESCs have set up production and training centres with looms / sewing machines and other small necessary tools which helped in the training of the small entrepreneurs / artisans / weavers / beneficiaries and provided a ready facility to the poor participants in the project to produce different Jute Diversified Products (JDPs). The domestic market of JDPs has expanded both in India and Bangladesh. A large number of entrepreneurs / SHGs are directly and indirectly exporting JDPs to various international markets. Sales outlets have been set up by JESCs / marketing groups / entrepreneurs in many locations within and outside their areas. NCJD has set up a Highspeed Handloom unit at JESC Berhampore and JDPC has set up an improved Handloom for demonstration at JESC Dhaka. Two websites namely and have been set up by NCJD and JDPC respectively. These websites having connections with all the JESCs are also interlinked with the websites of CFC and IJSG. The websites set up in India and Bangladesh by the project focus among others, on important aspects, activities, products, entrepreneurs, success stories of different small entrepreneurs and are instrumental to expose to the outside world what the project has been able to do and what has been its outcome / achievements. 15

33 xvii. xviii. xix. About 95% of the beneficiaries of the project are women. The project has thus worked as a very strong tool for empowerment of women. The project activities have been visited by a large number of important personalities including Amb. Ali Mchumo, Managing Director, CFC, Mr. Sietse van der Werff, Senior Project Manager, CFC, Mr. Charles Njama, Communications Officer, CFC, Mr. A F M Sarwar Kamal, and Mr. Sudripta Roy, Secretary Generals, IJSG, Mr. Enzo Barattini representative of the European Union in the IJSG etc. Different events of the project were inaugurated / visited by the Chief Minister, West Bengal, Lt. Governor, Puducherry, Chief Minister, Puducherry. In Bangladesh a number of Hon ble Ministers / Advisors in-charge of Ministry of Textiles and Jute, Foreign Affairs, Agriculture and Planning etc. and Secretaries of Ministry of Textiles and Jute, Ministry of Agriculture and Labour & Manpower etc. attended different events of the project which included inauguration of exhibitions and workshops etc. Senior Government officials from India and Bangladesh also visited the project activities on many occasions. Printing of operating manuals, training manuals, booklets, catalogues on JDPs and designs developed under the project and exchanging these among the JESCs and between Bangladesh and India have been important aspects of the project. xx. Reports on major events of the project were published in the important national / regional / local news papers in India and Bangladesh. These were also covered by important TV Channels in both the countries. Special features and success stories were also published in the printing and electronic media. xxi. xxii. xxiii. xxiv. xxv. xxvi. Development coordination and cooperation between India and Bangladesh have been strengthened and the project helped Bangladesh and India to exchange ideas, experiences, information, brochures, documents, training modules etc. to mutually benefit in the development of small scale entrepreneurship. IJSG and CFC have become familiar names among the beneficiaries in the remote areas of India and Bangladesh due to the programmes of the project. Utilization of funds received from CFC by NCJD and JDPC has been satisfactory. Though the physical targets of programmes were achieved or even exceeded and the project was extended by a period of 18.5 months, there will be significant saving of resources both in cases of India and Bangladesh. NCJD and JDPC have published profiles of successful entrepreneurs / SHGs which contain pre-project and post-project information regarding the entrepreneurs / SHGs which will encourage prospective entrepreneurs. These will also be helpful to CFC or any other organization in identifying the successful entrepreneurs to evaluate the long term impacts of the project in future. The results of the project have been widely disseminated which will be a source of encouragement and guidance to the prospective entrepreneurs. In view of the concerted initiatives and commitments by CFC, IJSG, NCJD, JDPC, the PEA and all other stakeholders, the project has successfully achieved its overall objectives and has set in motion a self sustained process of development and socio economic improvement of rural poor and women based on JDPs, which is expected to be progressively strengthened in future. 16

34 India Part Major Achievements i. 3 JESCs and 3 RMBs were set up at Berhampore, Patna and Puducherry. ii. iii. iv. 3 Data Banks, 3 Design Banks and 3 Display Galleries have been established by the JESCs. 70 new SHGs were formed and 114 existing SHGs and 5 NGOs were motivated to take up production of JDPs. 920 prospective entrepreneurs have received Skill Development Training. v entrepreneurs have started production of JDPs. vi. 354 entrepreneurs have participated in Buyer-Seller Meets / Exhibitions. vii. 330 entrepreneurs received Design Development Training and 101 entrepreneurs took part in Design Input Programme. viii. 310 designs have been developed. ix. 6 marketing societies / groups have been formed with Brand Names. x. 99 entrepreneurs / SHGs / NGOs have received bank loan. xi. NCJD participated in 4 overseas exhibitions, 2 in London and 1 in Birmingham, UK and 1 in Barcelona, Spain. Bangladesh Part Major Achievements i. 3 JESCs and 3 RMBs were set up at Narsingdi, Dhaka and Rangpur. ii. iii. iv. 3 Display Galleries, 3 Data Banks, 3 Design Banks and have been established by the JESCs. In addition to these the PMU has also set up a Display Gallery, a Data Bank and a Design Bank persons attended the Awareness Workshops. 909 prospective entrepreneurs / artisans / weavers / beneficiaries received skill development training. v. 765 entrepreneurs / artisans / weavers / beneficiaries trained under the project and are producing JDPs. vi entrepreneurs / artisans / weavers / beneficiaries producing JDPs, through the initiative of the project. vii. 300 entrepreneurs who were motivated and assisted under the project to start new enterprises and expansion of the existing production capacity of JDPs. 17

35 viii. 406 entrepreneurs / artisans / weavers / beneficiaries attended the Technical Workshop- Cum-Demonstration. ix. 335 entrepreneurs / artisans / weavers / beneficiaries attended the design workshops. x. 115 designs have been developed. xi. Approximately 1800 number of prospective entrepreneurs / artisans / weavers / stakeholder received information / consultation from PMU / JESCs. xii. 16 entrepreneurs are marketing the products with their own Brand names. xiii. 10 entrepreneurs are regularly participating in international trade fairs in China, India, Nepal, USA, Germany, UK, Turkey, Pakistan, Singapore, Korea, Malaysia, Japan, Russia etc. xiv. 13 entrepreneurs are directly exporting JDPs to China, India, Nepal, USA, Germany, UK, Turkey, Pakistan, Singapore, Korea, Malaysia, Japan, Russia, Italy, Canada, Thailand etc. xv. 8 entrepreneurs are selling their products through a number of posh marketing chains / shopping malls. Comparison between India and Bangladesh i. National Centre for Jute Diversification (NCJD), the Collaborating Institution for India part of the project is an old, large and experienced organization. Compared to this Jute Diversification Promotion Centre (JDPC), Bangladesh is a new and small organization with little manpower at mid / functional level. ii. India had long experience in setting up and running JESCs and RMBs successfully. For Bangladesh this was a new idea and had to overcome initial difficulties. iii. Entrepreneurship development in India was initiated by newly formed SHGs and those existing ones who found better opportunities in production of JDPs. Here 70 new SHGs have been formed and 114 existing SHGs and 5 NGOs have been pursued to join the project and start production of JDPs. The beneficiaries were drawn mainly from poor members of SHGs, though some individuals were also motivated to become successful entrepreneurs. The entrepreneurs in Bangladesh constitute of both new and existing ones who shifted to production of JDPs. The JDP producing enterprises here are normally organized by individual entrepreneurs rather than by the beneficiaries / artisans on group basis. iv. In India 6 marketing groups have been organized by the JESCs through the SHGs / NGOs / individual entrepreneurs who have developed their respective Brand names. In Bangladesh the entrepreneurs have not formed any marketing groups. However, 16 individual entrepreneurs are marketing their products with their own Brand names. v. 42 SHGs, 2 NGOs & 55 entrepreneurs have received loans from Banks / financial institutions / NGOs / different Government Agencies in India. In Bangladesh loans could not be arranged for the beneficiaries. vi. In India 3 SHGs / entrepreneurs have started exports to foreign markets. In Bangladesh 13 entrepreneurs are directly exporting JDPs to international markets and initiatives by successful individual entrepreneurs are resulting in a comparatively more rapid expansion of exports to the international markets. 18

36 vii. NCJD and JDPC in India and Bangladesh respectively have taken over the management of the JESCs established under the project to help their sustainability. viii. In India institutional developments for diversification of jute products started since November The central government and governments of jute producing provinces had been implementing a number of programmes to help the jute sector and diversification. JMDC and NCJD had been organizing pro-jute and pro-diversification measures at different levels in many areas of India since long. In Bangladesh JDPC was created only in 2002 and it has significantly expanded pro-diversification programmes during its first phase ( ) and has also adopted an ambitious programme for promoting diversification during the second phase ( ) with significant focus on the role of JESCs and RMBs. ix. JDPC made some progress in implementing business plans and the JESCs earned some income. NCJD could not generate any income from the JESCs. x. The JESCs in India were operated by experienced organizations like West Bengal Consultancy Organization (WEBCON), Institute of Entrepreneurship Development (IED), Bihar and DHARTI (Puducherry). In Bangladesh no such experienced agency was available to help operation of the JESCs. xi. All the RMBs both in India and Bangladesh were run by private entrepreneurs. The RMBs in Bangladesh availed the interest free loans from JDPC out of the Revolving Fund allocated by CFC to help the RMBs in becoming self-reliant. The RMBs in India did not avail such loans. xii. JESCs in India successfully coordinated and integrated their progammes for entrepreneurship development with those of various local upliftment programmes by Government Departments / NGOs which helped overall improvement of socio-economic condition of the beneficiaries. In Bangladesh JDPC was able to secure very close cooperation from a number of development agencies in the public sector viz. Bangladesh Small and Cottage Industries Corporation (BSCIC), Bangladesh Handloom Board (BHB), Bangladesh Jute Research Institute (BJRI), a number of NGOs including Tarango, Women Entrepreneurs Association of Bangladesh (WEAB) and Association for Youth Advancement (AYA) etc. Development initiatives under the project were thus integrated with the main stream of development in India and Bangladesh. xiii. A good number of entrepreneurs in Bangladesh have phenomenally increased their income after their involvement with the project. A few group leaders of SHGs in India have also been able to increase their earnings remarkably compared to the pre-project period when they had no mentionable economic activities or income. xiv. NCJD has conducted a market survey in 4 major Indian cities and in the UK market. JDPC has also conducted a market survey in Bangladesh through which the prospective buyers have been identified. xv. Both NCJD and JDPC have published a large number of training manuals, information booklets and profiles / success stories of SHGs / entrepreneurs which will be helpful for future SHGs / entrepreneurs / beneficiaries. Social and Environmental Effects of Project Implementation The implementation of this project has greatly improved the socio-economic condition of the beneficiaries, provided them with employment opportunities, raised their income, helped their empowerment, improved their status and living standards, facilitated the education of their children and also opened doors to many socio-economic benefits. In case of India, this created encouraging signs of socio-economic upliftment among the trained men and women and a large 19

37 number of participants in production of Jute Diversified Products (JDPs) have increased their earnings. An average income of INR 10,000 12,000 (USD ) per annum has been observed in case of beneficiaries of the project in India. Most of them engaged themselves in producing different types of JDPs and marketing them profitably with the direct and indirect support from the project, NGOs and other development agencies including Govt. agencies. In Bangladesh the average income of the skilled labours / artisans / poor women is about BDT 36,000-96,000 per year (USD ). The project activities have gradually and steadily created positive socio economic improvements among those involved in the production of JDPs. Both NCJD and JDPC have published a number of profiles of successful entrepreneurs / SHGs which present comparative pictures of their financial conditions before and after getting involved in the production of JDPs. Interaction with the entrepreneurs / members of SHGs show that earnings through production and sale of JDPs have helped them to improve their status in the family and the locality, enabled them to avail better opportunities for the education of their children and to take active parts in and contribute in different social development programmes including education, sanitation, health care, family planning, maternity and child welfare etc. of their respective areas. Use of environment friendly jute goods has started replacing the environmentally harmful products such as shopping bags / travel bags and different house hold articles made of plastic, polythene, etc. in the areas of West Bengal, Bihar and Puducherry where the project activities are being conducted and also in other areas of India. The Government of Puducherry has banned production and use of polythene bags. In case of Bangladesh, production of jute goods are gradually replacing use of polythene and other environmentally harmful products in large areas of Dhaka, Narsingdi, Narayangonj, Gazipur, Tangail, Mymensingh, Rajshahi, Rangpur, Bogra, Jessore, Lalmonirhat, Barisal, Gopalgonj, Dinajpur, Gaibandha, Kushtia, Khulna, Faridpur, Sylhet and Chittagong districts including other areas where project activities have been extended. Both in India and Bangladesh the project has created lot of awareness and enthusiasm among the people to use jute based environment friendly products. Diversified use of jute thus, is expected will also increase cultivation of jute, conserve and increase the soil fertility which will ultimately help the jute growers and the environment. Sustainability of JESCs and RMBs The issue of sustainability of the JESCs and RMBs after the project period was a major concern which was emphasized by CFC, IJSG, the PEA, the Mid Term Evaluation Report and others all along the implementation period. It was strongly felt that a number of steps needed to be taken to ensure sustainability of these institutions after the project period and meet part of the cost of running the JESCs and RMBs by adoption of a business plan or other income earning measures by them. JESCs The Mid-term Evaluation Report of the project mentioned some specific measures to generate revenue by the JESCs. One important suggestion was to adopt the Public Private Partnership (PPP) model which means that the JESCs would offer various services to entrepreneurs towards technology up-gradation / transfer, product / design development, measures for quality assurance of JDPs and providing marketing support etc. The JESCs may also benefit from different types of development programmes by Governments, NGOs and Other organizations at different levels. In this context, NCJD maintained that the target beneficiaries of the JESCs are mostly low income group rural women and charging fees for providing services to them and running the JESCs as business organizations may be counter productive in the way of entrepreneurship 20

38 development in JDP sector. They also pointed out that most of the poverty reduction programmes of various Government agencies and NGOs at the grassroots level in India are done on non-commercial basis and no fees are charged for the skill development or other trainings. In some cases even cash incentives are given to the beneficiaries and trainees. As such charging fees for the different skill development training programmes and other services would be against the spirit and policy of grassroots level development by Government and NGOs. However, NCJD mentioned some avenues or business plans / income yielding measures for the JESCs which included charging some fees while providing training / skill development services, jointly organizing training programmes with other Central / State Government agencies like National Bank for Agriculture and Rural Development (NABARD) / District Industry Centre (DIC) etc.; charging some nominal fees towards the counseling / escort services provided by the JESCs like preparation of project proposal etc; charging Hall / Booth rent from the participants while organizing BSMs / Exhibitions etc. NCJD hoped that per cent of the Operational Cost of the JESCs may be attempted to be earned through the above measures. In practice NCJD did not or could not implement any measure to generate any income by the JESCs in India. National Centre for Jute Diversification (NCJD) has started to run the JESCs set up under the project along with its own JESCs from July JDPC prepared business plans for the JESCs to generate some income mainly through a number of measures including charging fees for higher skill development / up gradation programmes; collecting fees from entrepreneurs for participation in exhibitions; collecting fees for counseling on marketing; selling of design books developed by the project etc. JDPC expected to meet 5-10 percent of the operating cost of JESCs through these measures in the beginning. In Bangladesh different Government departments like Bangladesh Handloom Board, Department of Youth Development, Bangladesh Rural Development Board, Directorate of Social Services, and Department of Co-operatives etc. and NGOs do not charge fees for skill development training programmes or other auxiliary services in rural based poverty reduction programmes. In spite of this JDPC charged some fees from entrepreneurs for participation in various skills development training programmes / workshops. From July 2009 till April 2010 JDPC realized BDT 110, / USD 1, from this source. JDPC also realized BDT 1,718,174 / USD 24,883 on account of participation fee in exhibitions till 30 April This shows that JDPC is gradually expanding necessary measures for implementation of the business plans. The management of the JESCs in Bangladesh has been taken over by JDPC from July 2009 after the end of the Grant Component of the project in June It is pointed out that though the JESCs have been taken over by the Governments in India and Bangladesh and there are some policy limitations in cases of charging different fees by the JESCs, NCJD should gradually consider to adopt business plans so that the JESCs themselves can progressively earn some income to help their sustainability. In this area JDPC may continue to expand its business plan measures. RMBs In the Appraisal Report of the project it was expected that the RMBs which will be set up with financial support of the project will become self reliant after 3 rd year of the project period if they can develop a transaction of about 3 MT of goods per month. The Mid-term Evaluation Report suggested that for better commercial viability the RMBs, may also serve as display-cum-sale centres, on commission basis for different JDPs manufactured by the entrepreneurs / SHGs in addition to supply of raw materials. It has been found that the RMBs have not been able to achieve the expected sales level or become successful as display-cum-sale centres for JDPs. Moreover, for various reasons they could not also fully utilize the adequate Grant and interest free Loan funds provided for them in the project. These facts raise questions regarding RMBs as self sustained commercial institutions. 21

39 RMBs in both in India and Bangladesh were run by private entrepreneurs on commercial basis. The sales figure of the RMBs in both the countries was not very satisfactory during the project period. In case of RMBs in India total sale of raw materials by RMBs at Puducherry, Berhampore and Patna till June 2009 were about INR 8,693,758 / USD 193,195, INR. 1,347,599 / USD 29,947 and INR. 150,075 / USD 3,335 respectively i.e. INR 10,191,432 / USD 226,476 in total. The reason for poor sale by RMB Berhampore and Patna was that the entrepreneurs were producing more braided products based on raw jute which was locally available. The entrepreneurs could also buy jute fabrics from local markets which are cheaper than the premium quality fabrics produced by jute mills sold through the RMBs. The performance of RMB Patna run by Gramin Vikas Sansthan, Fatuha was found to be not satisfactory and IED Bihar, the Operating Agency of JESC Patna was entrusted also to run the RMB at Fatuha, Patna from November, Total sale of raw materials by the JESCs at Dhaka, Narsingdi and Rangpur are BDT 6,380,116 / USD 93,005, BDT 5,609,350 / USD 81,769 and BDT 841,105 / USD 12,261 respectively i.e. BDT 12,830,571 / USD 187,035 in total. The low sales by RMB Rangpur is explained by the low number of entrepreneurs / demand for raw materials. The RMBs in India did not avail any interest free loan facility out of the Revolving Fund granted by CFC to NCJD. Here it is mentioned that as per the conditions of the MoU signed between NCJD and the Operating Agencies of 3 RMBs in India, the Operating Agency has to provide a collateral security to the extent of at least 1.5 times of the loan amounts or may furnish a bank guarantee from a nationalized bank in prescribed format. Other terms and conditions of the loan, though necessary for ensuring timely repayment are not user friendly. The entrepreneurs have pointed out at different fora including the beneficiaries meets / dissemination workshops that raw materials of desired variety / quantity / quality / prices were not available from the RMBs as and when needed by them. They have also pointed out that in many cases prices of raw materials charged by the RMBs are higher than the market prices and that the RMBs do not serve the purpose of one stop service organizations. On investigation it was found that the poor entrepreneurs face genuine difficulties to get the desired raw materials when needed. In cases of RMB Berhampore, India and RMB Dhaka, Bangladesh, the operators have the tendency to treat the RMBs as sales outlets of their own products only. The RMBs have opined that it is very difficult for them to assess the quantity and quality of the raw materials required by the entrepreneurs which is ever changing and to keep pace with their changing need. The procurement of the desired material directly from the manufacturer is also a common problem. The RMBs face losses due to stock piling of raw materials which are not quickly purchased by the entrepreneurs. Moreover, requirement of the raw materials by the entrepreneurs are so diverse depending upon the buyers / market requirement, many a times it is observed that the entrepreneurs are procuring their requirement of raw materials from the open market. In fact, after reaching a certain level, the entrepreneur / marketing group are having their own in-house raw material stocks to meet their need. Use of CFC funds CFC provided USD 100,000 each to NCJD and JDPC to help the growth of RMBs. Out of these amounts USD 25,000 each was given as grant to meet the operational expenditures of RMBs. Another USD 75,000 each was provided as Revolving Fund to extend interest free loan to the RMBs. 22

40 Bangladesh JDPC spent BDT 84,517 / USD 1,224 to meet the operational costs of the RMBs in Bangladesh. JDPC disbursed BDT 1,700,000 / USD 24,781 as interest free loan to the RMBs from the Revolving Fund out of which the RMBs repaid BDT 508,329 / USD 7,399 and BDT 1,191,671 / USD 17,258 is in the process of repayment. At the end of the project BDT 1,641,733 / USD 23,776 out of the fund for operational costs and BDT 4,289,036 / USD 62,115 out of Revolving Fund remain as balance with JDPC. India NCJD spent INR 1,110,630 / USD 24, to meet the operational expenses of the RMBs in India. No fund was disbursed out of the Revolving Fund. A balance of INR 14,370 / USD out of the fund for operational costs and USD 75,000 out of Revolving Fund remain as balance with NCJD at the end of the project. Suggestions for improvement It is important to mention that in the perspective of rapid increase in the demand for JDPs in the domestic and international markets more and more entrepreneurs are joining the production of JDPs resulting in increasing demand for the raw materials. As such in the light of the experiences of the RMBs during the project period which shows that their turn-over is gradually increasing, JDPC and NCJD may consider taking the following measures among others, to see that RMBs can / will develop as profitable institutions: i. To make the RMBs more efficient, cost effective and user friendly the JESC and the RMB may be operated by the same operating agency. In case the same is not possible, the JESC and RMB should be located in the same place and both must work in close unison. ii. iii. iv. The rules and regulations which guide the operation of RMBs are not very congenial to run a fully commercial orgnisation. However, the rules and regulations have some definite justification to make the RMB activities as transparent as possible to ensure that it is being run to meet a specific purpose. In this context the set of rules and regulations may be revised to allow maximum freedom to the RMB operators for achieving optimum commercial benefit. The entrepreneurs should submit requisitions / demands in advance allowing some time to the RMBs for procurement of raw materials. It would help both the RMBs and the entrepreneurs, if the entrepreneurs form groups / networks among themselves and place demands group wise. The number of RMBs is inadequate and in many cases their locations are not within convenient distances from the entrepreneurs. In view of these, it is suggested that more RMBs should be opened by NCJD and JDPC. v. Sales target by the RMBs for reimbursement of operational costs should be made flexible depending on the demand for raw materials in different areas. vi. The terms and conditions for obtaining loan facilities out of the Revolving Fund should be simplified and conditions for providing collateral securities or other guarantees by the existing and prospective RMB operators may be relaxed in consultation with the RMBs while ensuring repayment of loan funds. vii. The operations of the RMBs should be monitored more closely to ensure timely supply of raw materials to the SHGs / entrepreneurs and also facilitate smooth and effective operation by the RMBs. 23

41 viii. The RMBs should sell all necessary raw materials including accessories for production of JDPs by the SHGs / entrepreneurs in addition to the raw materials, if any, manufactured by them. ix. Any existing RMB operator may be allowed to open sub-centres, if so interested to make their scale of operations profitable. x. The RMBs must make all out efforts to run as effective display-cum-sale centres for JDPs. They should maintain regular links with JDP producers and sell their products for mutual benefit. xi. JDPC and NCJD should furnish detailed reports every year to IJSG and CFC regarding utilization of interest free Loan funds earmarked for existing and new RMBs. This report should be accompanied by a statement from respective banks showing the closing and opening balances of separate interest bearing RMB accounts. xii. On the basis of their experiences JDPC and NCJD should regularly seek suggestions from IJSG and CFC for making the RMBs more expanding, self reliant, commercially viable and user friendly institutions. 3. Dissemination of Project Results: The results of the project which were among others, awareness among the people regarding JDPs, expansion of production base, range and volume of JDPs, increase of employment, augmentation of income, alleviation of poverty, empowerment of women, improvement of environment, expansion of domestic markets, export to international markets, blending of jute with other fibres / materials, production of home textiles, production of niche / fashion products, holding jute fairs / exhibitions / Buyer-Seller meets, institutional arrangements for helping diversification, establishment of JESCs and RMBs, development of a large number of small entrepreneurs, formation of marketing groups / brand names etc. have been widely and effectively disseminated both in India and Bangladesh and also among the international community. The dissemination was done by the following measures among others: i. Awareness Workshops. ii. Skill Development and other training programmes. iii. Buyer-Seller Meets / Exhibitions / Fairs. iv. Beneficiaries meet. v. Conferences / meetings with the press and electronic media. vi. Electronic media and newspaper reports on different events of the project. vii. Participation of dignitaries / ministers / high officials and others in different programmes of the project. viii. Visit to project activities by senior officials of CFC, IJSG and other important national and international organizations. ix. Coordination and Cooperation with various Government / Non Government / Private sector organizations. x. Publications / reports / leaflets and other publicity materials by NCJD and JDPC. xi. Visit to foreign markets by the entrepreneurs developed under the project. xii. Websites of the India and Bangladesh parts of the project and also the IJSG / CFC websites. xiii. Participation in the International Trade Fairs by the Entrepreneurs. xiv. Holding of dissemination workshops in India and Bangladesh. 24

42 Dissemination Workshops India Part The Dissemination Workshop for India Part was held on 11 June 2009 in Kolkata which was attended among others, by Mr. Sudripta Roy, IAS, Secretary General, International Jute Study Group (IJSG); Mr. Sietse van der Werff, Senior Project Manager, CFC; Mr. A. B. M. Abdul Howk Chowdhury Secretary, Ministry of Textiles and Jute, Govt. of Bangladesh; Mr. Binod Kispotta, IAS, Jute Commissioner, Ministry of Textiles, Govt. of India; Mr. Md. Fazlul Huq, PEA; Dr. Latifa Binte Lutfar, Operations Officer, IJSG; Dr. A. B. M. Abdullah, Executive Director, Jute Diversification Promotion Centre (JDPC), Dhaka and Mr. Atri Bhattacharya, IAS, Secretary JMDC and ED, NCJD. The workshop was also attended by the representatives of Organized and Decentralized sectors and small entrepreneurs developed under the project in India and Bangladesh. Important conclusions and recommendations of the India Part Dissemination Workshop are the following: Conclusions i. The workshop will help to disseminate the results of the project, to consolidate and further expand them and work as a source of inspiration and guidance for new small entrepreneurs. ii. iii. iv. Exchange of information, opinion and sharing the experience of the entrepreneurs and the Implementing Agencies of the two participating countries of the Project (Bangladesh and India) would be another important output of this workshop. The grant funded programmes of the project have been successfully implemented both in India and Bangladesh. The production units under the loan component will be set up within the extended project period, 30 April The India Part of the project has largely achieved its objectives of increase in the production and use of jute and jute goods including JDPs, augmentation of employment, empowerment of women, poverty alleviation and improvement of the environment etc. v. NCJD would ensure that all the programmes under the project are continued beyond the project period, 30 June 2009, marketing support are strengthened and all the production units / enterprises developed under the project are run successfully not to need any outside help after a period of two years from now on. vi. vii. viii. ix. Though the JESCs in the project were introduced following the example of those established earlier in India by NCJD, most JESCs established under the project have been highly successful in carrying out their programmes and they can be treated as role models for setting up JESCs in future. The dynamism put in place by the achievements of the project would continue to sustain and expand in future and continue to improve the jute related development scenario in India and Bangladesh. The project is social benefit oriented; large numbers of people deserve to be targeted under such projects to make a visible impact for replication of the success. Dissemination of the information / experience / expertise between the successful beneficiaries and partner countries of the project will be helpful in sustaining the results of the project. 25

43 x. Awareness Workshops, Training Programmes, Buyers-Sellers Meets & Exhibitions etc. had a catalytic effect in popularizing the use of JDPs. These also helped scouting new entrepreneurs. Had it been possible to carry on these activities in more numbers throughout the whole country, the result would have been a big lift for JDPs. xi. xii. xiii. xiv. Marketing of JDPs is a major problem and needs to be continuously addressed for some considerable period beyond the project. Adequate marketing exposure to the prospective entrepreneurs is crucial for motivating them to take up production of JDPs. Absence of any provision for financial assistance to small beneficiaries for setting up of household production units was a problem in the progress of the project. The people involved in the project really started the process of diversification and have made a break through in this area. The project has become a model of success among the projects sponsored by IJSG and financed by CFC. Recommendations i. Different training programmes conducted under the project should be continued and updated by NCJD and JDPC along with their programmes. ii. iii. iv. Measures for improvement of designs, adoption of steps for quality assurance, setting up bench marks in quality of JDPs, development of designing capability by the entrepreneurs themselves, expansion and improvement of design banks by JESCs, large scale production and use of designed fabrics in manufacture of bags and other JDPs should continue to further consolidate the achievements of the project. Each JESC should adopt special programmes to attract the entrepreneurs and should highlight how many updated trainings have been introduced by it and what income has been generated. The JESCs should focus on the people s interest, updated training, improvement of skills, quality of products, less cost of JDPs for their continued success. v. Each JESC should record, evaluate and disseminate the factors behind its success. vi. vii. viii. ix. The JESCs should continue to upgrade what they have achieved and realize the full benefits of the programme to the beneficiaries. The JESCs and RMBs should be located in close proximity and should work in unison. Organizing project activities through SHGs / NGOs was found to be very productive and effective. Creation of Brand names and formed Marketing Groups which help in effective bulk marketing should be pursued by the entrepreneurs / SHGs. Performance of the RMBs needs to be improved and more RMBs should be set up. The RMBs must also run as business organizations and there should be exchange of information among them. x. The networking of JESCs and RMBs should be strengthened further so that they can successfully run with their own income and without much assistance from the governments. xi. xii. For the sake of learning from each other, the entrepreneurs should share information among themselves to benefit in the highly competitive and dynamic market situation. There should be regular exchange of information between the JESCs in each country and also between those in India and Bangladesh. 26

44 Bangladesh Part The Dissemination Workshop for Bangladesh Part could not be organized by 30 June 2009 for some unavoidable circumstances and the same was held on 8 July Mr. Abdul Latif Siddique, MP, Hon ble Minster, Ministry of Textiles and Jute, Government of the People s Republic of Bangladesh kindly inaugurated the Workshop. It was also attended by Mr. Md. Ashraful Makbul, Secretary, Ministry of Textiles and Jute, Government of Bangladesh; Mr. Sudripta Roy, Secretary General, IJSG; Mr. T.D. Mitra, Chairman, Bangladesh Jute Mills Corporation; Mr. Md. Imdadul Haque, Joint Secretary and a few other officials of the Ministry of Textiles and Jute, Government of Bangladesh; Project Manager, India Part, Mr. A. K. Khastagir and representatives of the JESCs in India also attended the Workshop. A number of representatives of entrepreneurs and beneficiaries from Bangladesh and India shared their experiences, focused on the problems faced by them and made suggestions for addressing relevant issues and replication of the successes of the project. Important conclusions and recommendations of the Bangladesh Part Dissemination Workshop are the following: Conclusions i. Bangladesh has a limited internal market for JDPs. ii. iii. iv. Continuous supply of information and design support will be essential for the entrepreneurs for success in the domestic and export markets. The qualities of JDPs produced in Bangladesh are of international standard. As such they should not miss the opportunity to export more and more to the rapidly expanding international markets for JDPs. With the implementation and success of the upcoming CFC / IJSG project on Jute geo-textiles, the demand for jute is likely to increase. v. The quality of jute is suffering due to non availability of improved variety of jute seeds and clean and running water or other effective and popular techniques for retting to ensure high quality of jute fibre. vi. vii. viii. ix. The number of JESCs in Bangladesh should be increased to organize the small entrepreneurs and provide them necessary services in the production of JDPs The level and quality of services extended by the RMBs need to be improved. The number of RMBs should also be increased. There is enough scope to help the existing RMBs and set up new RMBs with the interest free loans out of the Revolving Fund provided by CFC. In case of entrepreneurs of Bangladesh, records of internal sales and exports are not available. The contribution of small scale entrepreneurs producing JDPs in the national income cannot therefore be assessed. This needs to be reflected in the Gross Domestic Product (GDP) or the national income. The Dissemination of the activities and outcome of the project will act as a tool for motivating the small entrepreneurs to follow the example of successful entrepreneurs. x. Exchange of information, opinion and experiences would encourage further development in the production and sale of JDPs. xi. Dissemination has helped IJSG and CFC to become familiar names to the beneficiaries of the project in India and Bangladesh. 27

45 Recommendations i. Bangladesh should strengthen initiatives to access the expanding foreign markets for JDPs. ii. iii. iv. The Government of Bangladesh should provide necessary assistance to the exporters of JDPs. Jute policy in Bangladesh should ensure that the farmers get reasonable prices for jute and do not shift to production of other crops which may reduce jute production. The Government of Bangladesh may also consider undertaking a highly pro-active policy to improve the overall situation in jute. v. The banks and other financial institutions should undertake a jute friendly policy for the farmers, producers of JDPs and all other stakeholders in jute. vi. vii. viii. ix. Bangladesh should take steps on urgent basis to increase the supply of improved variety of jute seed and popularize methods of improved retting to maintain the high quality of jute fibre and JDPs. The Government of Bangladesh may consider providing subsidies or incentives for export of JDPs and exemption of sales tax on JDPs, as being done by the Government of India / Puducherry. Steps should be taken to collect normal sales records of JDPs by entrepreneurs and arrangements should be made to reflect their income in the Gross Domestic Product (GDP) or the national income. The JESCs which have been placed under the management of JDPC after completion of the project on 30 June 2009 should continue to provide necessary counseling and other services to the existing and prospective entrepreneurs. x. JDPC should arrange initial loans to the poor artisans / workers after they receive skill development trainings for purchasing handlooms / sewing machines / other tools, raw materials and also for working capital. This would help the poor participants in the project to set up their own production units and become small entrepreneurs rather than work as wage earners only. xi. The number of RMBs in Bangladesh should be increased. JDPC should ensure close supervision of the RMBs and help them in becoming one stop suppliers of all raw materials needed by the small entrepreneurs to produce JDPs. In this respect more and more funds should be utilized for providing interest free loans out of the Revolving Fund provided by CFC to the existing and prospective RMBs. 28

46 CHAPTER IV Lessons Learnt 1. Development Lessons: i. The project concept was designed in an integrated frame work to demonstrate the commercial application of new physico-chemical treatment for jute dying, bleaching etc. through setting up of production units under the loan component and providing support services through establishment of Jute Entrepreneurs Service Centre (JESCs) and Raw Material Banks (RMBs) under the grant component. The integrated concept of the project follows that the chemically treated jute will be supplied to the spinning unit for blending with cotton and other fibres and spun into yarn. The yarn, so spun, will be procured by the wet processing centres for dyeing, bleaching etc. and by the RMBs and handloom and powerloom units for weaving. The yarn so processed will again be supplied to the weavers directly and to the RMBs for onward supply to weavers for production of fabric. The cloth thus woven may be supplied to the processing centres directly and / or procured by RMBs for wet processing and finally delivered to the small production units developed by JESCs for production of value added JDPs. The whole concept was thus designed with major emphasis in the informal sectors in India and Bangladesh and anticipated that setting up of the production / processing units will play the leading role in implementing the project. However, transfer of technology / the loan component could not be implemented simultaneously with or earlier than the grant component. A gap between conceptualization and implementation of the project was thus created. This of course did not create any problem in implementing the grant component activities or development of entrepreneurship and supply of raw materials to the entrepreneurs, because raw materials including jute fibres, fabrics, jute yarn etc. were available in the market both in India and Bangladesh. ii. The project was approved by CFC in July 1998 and the implementation started in October During this time gap, the technology situation changed substantially. This was especially true in cases of the Fibre Chemical Treatment Plant of BJRI and Mini Spinning Plant for Jute / Cotton Blended Yarn by SITRA and a number of alternative options for these processes were available in the market, especially in India which experienced a faster technology transformation. Moreover, these technologies were not tried on commercial scale earlier and so the entrepreneurs did not feel sure about their commercial viability and profitability. The techno-economic feasibility of the production units, therefore, had to be reappraised. What we learnt is that in case of a long time gap between conceptualization and implementation of a project, the technical aspects, costs and profitability aspects should be reappraised before the process of implementation starts. iii. No entrepreneur from India showed any interest to set up Fibre Chemical Treatment Plant and suitable entrepreneurs to set up the Mini Spinning Plant could not be found by NCJD which decided not to set up these units. This resulted in the non-utilization of the major portion of the loan funds for India. The loan amount for India Part was initially USD 528,450, but finally USD 27,622 only was needed (reduced by 94.77%) by NCJD for setting up 2 Wet Processing Plants and 4 Handloom units. In the different perspective in Bangladesh, JDPC opted to set up all the production units for which the original loan fund of USD 577,425 was revised at USD 856,150 (increased by 48.27%). Thus the loan requirements for the project had to be revised involving loss of valuable time in the implementation of the loan component and the project as such. 29

47 iv. Experience of this project has shown that it is not very easy to commercialize new technologies under the loan component. It would have been better to set up model production units under grant funding on a very small scale. v. One of the major objectives of the project was to help the poor, rural based small entrepreneurs and specially women among them. In case of India the trained artisans formed Self Help Groups (SHGs), pulled together their own meager resources and also got loans from banks / financial institutions / NGOs / different Govt. Departments without collateral / security within the shortest possible time. A very healthy competition was observed among the banks to offer loans on very easy terms to the under- privileged rural women. Some of these institutions even dispatched their staff / officers to the villages of the small entrepreneurs to complete the formalities for getting loans easily and within a short period of time. Development of small entrepreneurs in India was therefore greatly encouraged and facilitated. vi. In case of Bangladesh loans could not be arranged from banks / financial institutions / Government agencies / NGOs for the small entrepreneurs / weavers / artisans as they could not offer any collateral and moreover the banks / financial institutions did not have a very positive attitude towards the jute sector entrepreneurs. Due to shortage of funds for purchase of looms / sewing machines / other implements, purchase of raw materials and use as working capital, many poor entrepreneurs could not set up their own production units. This has created problems in the graduation of weavers / artisans into entrepreneurs in a number of cases. In this respect, it is felt that a small grant fund could have been allocated in the budget for offering interest free small loans to the poor artisans / weavers. This is being raised in spite of the fact that CFC is not a micro credit organization. This could have been a noble exception to help the poor beneficiaries of the project and boost up entrepreneurship development under the project. vii. The fund of USD 150,000 (USD 75,000 each) allocated for NCJD and JDPC to be utilized as Revolving Fund to make the RMBs self-reliant under the project and beyond the project period has remained largely unutilized. In case of Bangladesh only a portion of this fund (BDT 1,700,000 / USD 24,781) was disbursed to the 3 operators of the RMBs. In case of India no interest free loan out of the Revolving Fund was granted to the RMBs. Though this project was conceived in the backdrop of a large number of RMBs organized by NCJD, the issue of proper utilization of Revolving Funds should have been considered at the time of preparation of the project document, especially when this was helped by WEBCON, a Government consultancy organization in West Bengal, India. viii. The project broadly aimed to improve the socio-economic condition of the poor target groups which is a time consuming and arduous task especially in under-developed and developing socio-economic situations. The identification of the prospective target groups, their motivation, training and engaging them in production of JDPs and helping them to become small entrepreneurs is a rigorous process of transformation. Projects involving such objectives need a longer time to be successful. In this context, the initial project period of 3 years was not adequate. The success of any socio-economic development needs to be measured both in qualitative and quantitative terms. This should be noticeable for the common people over a large area for their emulation and replication. It is therefore, felt that in future such projects may be planned in the very beginning for a period of at least 5 years to generate a dynamic process of sustained and perceptible impact. 30

48 2. Operational Lessons: i. In the original project proposal NCJD and JDPC were mentioned as Project Executing Agencies. Before starting the implementation, CFC decided that there will be only one Project Executing Agency for the project. NCJD and JDPC were, therefore, re-designated as Collaborating Institutions. In case of NCJD, this change did not take much time to be accepted. However, JDPC took a period of 5.5 months to agree to this change as this had to be taken up and approved by various Government Ministries / Agencies. It is, therefore, imperative that such basic issues are considered and necessary changes made at the very initial stage of project preparation. ii. iii. iv. The implementation of the loan component was delayed for a number of reasons. Much valuable time was lost for reappraisal, cost and technology updating, assessing the commercial viability of the units and determining the final volume of loan. The signing of the loan agreements / loan guarantee agreements also took some time. Completing all necessary steps and formalities the loans for JDPC and NCJD were released on 05 May 2009 and 08 June 2009 respectively i.e. after about 3 and half years from the starting of the project. The terms and conditions of CFC loan are not, for all practical purposes, negotiable by the borrowers, not to speak of the ultimate sub-borrowers. These are, as a matter of fact, given and fixed. The borrower / sub-borrower have either to take them or leave them. The pay back period of 5 years for the loans is also short. The production units which were not commercially tried earlier would normally need a longer period to be commercially viable and earn the capacity to repay the loans. Though CFC granted the loans at the highly concessional rate of 1% service charge, the ultimate sub-borrower in Bangladesh will be charged 8% interest (5% foreign exchange fluctuation, 2% service charge by BASIC Bank Ltd. and 1% CFC service charge) and in case of India it will be 7.25% (3% foreign exchange fluctuation, 2% Bank Guarantee, 0.75% administrative cost, 0.50% risk coverage and 1% CFC service charge). NCJD and JDPC should have tried to reduce domestic charges / interest rates so that the sub-borrowers could have been benefited more by the CFC loan. The pay structure provided in the project for the officials / staff should have been updated keeping in view the compensation packages of earlier IJSG sponsored projects financed by CFC and the price spiral between preparation and implementation of the project. The compensation packages compare poorly to those of earlier projects and even to the remuneration structure of IJSG staff. For future projects this issue need to be taken into due consideration. v. Senior and desk level officials of CFC and IJSG visited the project sites in India and Bangladesh a number of times. Interaction with them during the field visits and subsequent discussions greatly helped NCJD, JDPC and the PEA in improving the status of project implementation. vi. It has been experienced that appointment of competent and experienced Operating Agencies to organize and run the JESCs in India helped in effective and timely implementation of the project. However, no Operating Agency with necessary experience was available to set up and run the JESCs in Bangladesh. This made the job comparatively challenging and time consuming for JDPC, which was created only in 2002 and practically had no officials at the mid level to help implementation of progrmmes at the grassroots level. In spite of these limitations JDPC successfully implemented the programmes of the project. 31

49 vii. viii. ix. The RMB activities were operated by private entrepreneurs on commercial considerations in both in India and Bangladesh. An assessment of their performance at the end of the project shows that much improvement of their operational efficiency and expansion of the scope of their activities are needed to make them successful commercial institutions. Quality and designs play a very important role in expanding and sustaining the market of JDPs. The JESCs have adopted a number of measures to ensure quality and update / improve designs at grassroots level. These steps need to be monitored closely for quality control and production as per the changing demand for designs in the market. The entrepreneurs must be regularly provided with updated marketing information and marketing linkages. They should be encouraged to form marketing groups and adopt brand names which would help market expansion. x. Formulation of business plans and generating incomes through different services is essential to ensure sustainability of the JESCs beyond the project period. Support by the Governments is a welcome move, but not enough in this regard. The RMBs must also take steps to run and sustain fully on commercial basis after the project period when subsidizing of expenditures will not be available from the project. xi. xii. xiii. The entrepreneurs / Self Help Groups could improve their capacity to expand and sustain production of JDPs, if they are provided with upgraded training on existing products and new JDPs after the project period by the JESCs under new managements by NCJD and JDPC. It has been found that many entrepreneurs / SHGs have established their production units with looms / modified looms / sewing machines and other tools to produce jute fabrics / jute-cotton fabrics / mats and different types of hand made JDPs. The facilities of these production units are regularly utilized to impart training to new weavers / artisans. The entrepreneurs / artisans who received skill development trainings from the project organized trainings for a large number of beneficiaries / artisans. The number of skilled beneficiaries / artisans has thus multiplied by 3 / 4 times and will continue to increase further. For example, Suchili, an entrepreneur from Mymensingh, Bangladesh trained 50 of its artisans in 2 training programmes of the project. Within a period of 18 months this entrepreneur has developed a working force consisting of about 350 skilled and about 450 semi skilled artisans. In the same manner Muktir Alo, an organization from Khulna trained 200 skilled artisans from a group of 25 trained artisans through the project. In India, Murshidabad Rural Development Society (MURDS), an enterprise from Berhampore now has developed a group of 90 skilled artisans based on a few trained beneficiaries through the project. Herampur Agrani Mohila Samity, a SHG of Berhampore, Murshidabad trained 25 members under the project and later on trained 65 additional skilled beneficiaries by itself. This shows that the training programmes have a multiplier effect. Moreover, a number of trained beneficiaries are now working as trainers in both India and Bangladesh. In case of implementation of India Part project activities, all out support by the concerned agencies of the Central Government and State Governments, involvement of top level Ministers / members of the Parliament, district administration, related development agencies, banks and other financial institutions etc. helped in creating a very congenial environment for successful implementation of grant funded programmes. This is especially evident in case of Puducherry, India where the project was launched in February In Bangladesh JDPC has been able to mobilize the desired level of co-operation from Govt. agencies, NGOs and other stakeholders especially at the later part of the project. 32

50 xiv. A number of favorable factors contributed to the success of the India Part of the project which were, inter alia, the following: a) The Central Government and the Seven Jute Growing States adopted policies and programmes to rehabilitate and improve the position of jute in a big way. The Jute Technology Mission of the Central Government of India (GOI) which includes setting up of Jute Parks may be mentioned in this respect which would help Research and Development (R&D), production and quality improvement, establishment of market linkages of jute and JDPs, modernization and technological up gradation of jute industries. A resurgence of initiatives and investments continues to be in full play. The domestic and export market for JDPs is expanding rapidly. This conducive environment helped the project. b) Appointment of suitable Operating Agencies by NCJD proved to be a key factor in the timely implementation and success of JESC programmes in India. c) Another factor which has significantly helped implementation of India Part of the project activities is the previous working experience of NCJD in a number of key areas of the present project. When activities of this project started, NCJD already had the experience of setting up and running of 23 (twenty three) JESCs and 29 (twenty nine) RMBs in different parts of India. d) Financial support extended to the trained small scale entrepreneurs at grassroots level in the project areas in India by Government Departments, Banks, and other financial institutions and also by non-government development agencies helped in quick production of JDPs by the small entrepreneurs / SHGs. Continuation and expansion of financial assistance to the beneficiaries is important for strengthening the achievements of the project. e) Long and rich experience of the Project Manager in jute related development programmes, highest level of support, cooperation and decision making authority extended by NCJD to him also expedited the progress of implementation and quality of the activities of India Part of the project. xv. From the experience of implementation of Bangladesh Part of the project, it is felt that the success could have been accomplished more easily and within a shorter period of time if the following factors were more favorable: a) The jute sector in Bangladesh was suffering from an overall unfavorable environment, the public sector jute mills were closing one after another and income and employment was declining when the implementation of the project started in b) The jute related entrepreneurs did not enjoy a favorable response from banks / financial institutions. c) The Government did not have the necessary pro-active policy and programmes for quick recovery of the jute sector from the declining situation. d) Particularly the business as usual attitude of BASIC Bank Limited in processing the loan cases of the sub-borrowers caused unusual delay in the implementation of the loan component. 33

51 xvi. In spite of initial difficulties the ultimate success of Bangladesh Part of the project can be attributed to the following factors, among others: a) JDPC is a specialized organization devoted to diversification activities in the area of jute. The programmes of the project were in full conformity with the objectives of the organization. b) The senior officials of JDPC were top level retired Government Officials having long experience and effective linkages at various levels of the administration. Some of them had rich experience in the field jute also. The expertise and experience of these officials helped successful implementation of the project. c) The programmes / BSMs / exhibitions / press conferences / media coverage created large scale awareness and encouragement among the entrepreneurs to participate in the project. The poor beneficiaries, specially the women who had no employment and income found the participation in the project a very prospective scope for employment and generation of income. Many small entrepreneurs who were not doing well in their existing business and trades enthusiastically shifted to production of JDPs under the project d) Rapidly increasing domestic and foreign demand / markets of high quality JDPs greatly facilitated expansion of business by the small entrepreneurs and consolidation of their position as viable entrepreneurs. e) Cooperation extended by the Government, different statutory bodies, NGOs and private organizations helped JDPC to improve the institutional and functional arrangements for implementation of the project. 34

52 CHAPTER V Conclusions 1. The grant components of the project have been successfully implemented both in India and Bangladesh and the project has largely achieved its objectives. 2. The Small Scale Entrepreneurship Development in Diversified Jute Products (CFC / IJSG / 18) can be considered as a model of successful projects sponsored by IJSG and funded by CFC. 3. The operationalization of the loan component made good progress since the later part of the project and are expected to be completed by April 2010 with the setting up of the production units. 4. Mixing of grant and loan components in the same project makes the implementation process complicated. 5. Though the JESCs under the project were set up following the examples of those set up earlier by NCJD, the success of the JESCs of the project have made them replicable models for both India and Bangladesh. 6. Effective patronization by the governments, political leaders, different development agencies, NGOs, banks / financial institutions etc. were essential conditions for success of the project which addressed socio-economic development and other related grassroots level issues. 7. Integrating development initiatives in this project with planning and overall socio-economic improvement programmes at local levels increased its prospect of success. 8. Organization of SHGs, training programmes, provision of escort services and continuous supervision and monitoring were necessary for development of small scale entrepreneurship and sustaining them. 9. The quality of JDPs in India and Bangladesh is of international standard and vigorous efforts by the entrepreneurs are essential to improve their quality and designs further to increase the sales at home and abroad. 10. Marketing of JDPs is a major problem which needs to be seriously addressed at all levels for some more time to come beyond the project period. 11. Continuous dissemination of results of the project is necessary for their consolidation and expansion. Recommendations 1. While designing projects in an integrated framework in which different components are inter-dependent, the sequence of implementation of different components should be duly considered so that delay in the implementation of any component does not hamper progress of the total project. 2. CFC may consider making the process of signing of the Loan Agreements and Loan Guarantee Agreements simple and user friendly. 3. The loan repayment period may be extended to a minimum of 10 years. 4. The risk elements / costs of delay / defaults in loan repayment should not solely be charged on the Collaborating Institutions and should be shared by all the stakeholders. 5. Due to high on-lending interests / costs, the ultimate borrowers do not get the full benefits of highly concessive CFC loans. It may be considered if CFC can fix a suitable upper limit of interests / costs to be charged by the borrowers on the ultimate sub-borrowers. 35

53 6. As CFC projects are multi-national in nature and as the socio-economic and development infrastructures of various countries differ in many aspects, the implementation strategies, methodologies, manpower requirements and other inputs should be provided commensurate with them respectively rather than the same for all the countries. 7. If there is a long time gap between conceptualization / preparation and implementation of a project the cost and technical aspects should be updated before implementation is started. 8. Projects which aim to improve the socio-economic condition of poor target groups should be planned for a longer period than three years at the very outset to make the implementation process steady and create a sustainable impact. 9. In projects where poverty alleviation and related socio-economic problems are addressed, provision should be made for micro / small loans for the target groups from different sources like banks / financial institutions / NGOs or from counterpart contribution by participating countries, if this cannot be contributed by CFC for genuine reasons. 10. NCJD and JDPC should continue (a) training programmes (b) design development programmes (c) marketing initiatives including buyer-seller meets / exhibitions and (d) quality improvement measures of JDPs etc. Moreover, (a) the display galleries should be regularly expanded and improved by inclusion of better quality JDPs of more variety and designs, (b) the Data banks should be enriched and updated regularly, (c) the designs should be made available to the SHGs / entrepreneurs on easy terms and cost. 11. The information in the websites should be regularly updated which will work as a guidance and help in the development of entrepreneurship in JDPs. 12. NCJD should implement business plans for the JESCs to generate income by them. JDPC should try to expand implementation of income generating measures. More JESCs should be set up both in India and Bangladesh to cover new areas. 13. The activities of the existing RMBs should be monitored more closely, stocks of raw materials by the RMBs should be increased, the RMBs should be made to function as one stop centres for all the raw materials needed by the entrepreneurs and more RMBs should be set up. 14. Operational efficiency and scope of operations of the RMBs should be increased to improve their financial position. Utilization of interest free loans out of the Revolving Fund created by CFC should be increased by NCJD and JDPC and this should be annually reported to CFC. 15. The feedbacks received from the small entrepreneurs / SHGs make it abundantly clear that the marketing support component of the project specially needs to be vigorously continued for sometime more in future. JDPC and NCJD may take special initiatives to provide marketing support to the entrepreneurs / SHGs for both domestic and external markets. 36

54 Annexure - I Short notes on Important Events during project Implementation (i) Meetings of the Project Steering Committee The Steering Committee of the project headed by the SG, IJSG had 3 Annual Review meetings till June The meetings were attended among others, by the members of the committee, senior officials of IJSG, JDPC, NCJD and representatives of the entrepreneurs from India and Bangladesh and also the stakeholders. The 1st meeting was held on 12 November 2006 at IJSG Headquarters, Dhaka, Bangladesh, which recommended a number of important policy guidelines to ensure effective and timely implementation of the project to achieve its objectives. Briefly the Steering Committee suggested taking steps for Reappraisal of the loan component by changing the sources of origins and configuration of the machinery and examination of techno-economic / commercial viability and profitability of the production units, operationalization of the loan component and setting up of production units, completing incomplete activities of Project Year 1, exchanging manuals and other printed materials developed under the project for training / awareness / skill development etc. between NCJD and JDPC, addressing the issues of formulating appropriate business plans to make JESCs and RMBs sustainable beyond the project period, ensuring that the entrepreneurs are ready to take up the technologies and expediting project implementation activities through effectively addressing issues / constraints so as to be able to complete the project activities within the stipulated project period and achieve its objectives. The 2nd meeting of the project Steering Committee was held in Kolkata, India on 15 November The Committee made a number of recommendations to ensure timely completion of the project activities under the grant component, takes steps for sustainability of the JESCs and RMBs after the project period, improve the quality of products and improve the marketing mechanisms for JDPs. The Committee also recommended for submitting a proposal by the PEA for extension of the project beyond October 2008 mainly to help full operationalization of the loan component. The related agencies i.e. CFC, IJSG, PEA, NCJD and JDPC took steps to implement the decisions / recommendations of the 2nd meet of the Steering Committee. Important steps in this regard were, among others signing of loan agreements, finalizing decisions regarding setting up of Production Units under Transfer of Technology component and setting up of websites with links to various JESCs. The 3rd Steering Committee meeting was held on 30 November 2008 at the IJSG Headquarters, Dhaka, Bangladesh under the Chairmanship of the Secretary General of International Jute Study Group (IJSG), Mr. Sudripta Roy. Major recommendations of this meeting included holding Dissemination Workshops in India and Bangladesh, preparation of Final Reports for the project, release of loan funds and setting up of production units under the loan component. Steps were taken by concerned parties to implement the decisions / recommendations of the 3rd meeting of the committee. (ii) Reappraisal of the production units In the light of the decision of the 1st meeting of the project Steering Committee, Reappraisal of the production units was undertaken by a consultant in Bangladesh and by SITRA and IJT in India. The Reappraisals showed that setting up of the production units as per the Reappraisal Reports will be technically feasible and commercially / economically viable and profitable. Both for Bangladesh and India, the reappraisal was based basically on changing the original configurations, origin and generation of machinery and also most of the assumptions provided in the Project Appraisal Report for the production units. JDPC agreed with the Reappraisal Reports and expressed their option to go ahead with the establishment of the production units as per the Reappraisal Reports. NCJD suggested dropping of the transfer of Fibre Chemical 37

55 treatment technology and Mini Spinning technology from the India Part of the project. The Reappraisal Reports were sent to CFC by the PEA on 20 February Reappraisal of the production units helped in rationalization of costs and selection of technologies for setting up of production units under the technology transfer component. (iii) Mid Term Evaluation of the project The Mid Term Evaluation of the project activities for the period of 18 months i.e. 15 October April 2007, was undertaken by Dr. Debanjan Sur, a Consultant appointed by CFC. The main objective of the Mid Term Evaluation was to make an overall assessment of effectiveness and efficiency with which the project was being implemented and provide suggestions for ensuring proper implementation of the project within the remaining period and resources to achieve the overall objectives. The Mid Term Evaluation Report was submitted to CFC and all others concerned in September 2007 which came up with a number of important findings and made some recommendations to help timely implementation of the project within the allocated resources. Some major findings and recommendations of the Mid Term Evaluation included unsuitability of setting up of the Fibre Chemical Treatment Plants and the Mini-Spinning Plants; commercial viability of setting up of Wet Processing plants, Handloom Units and Powerloom Unit; increasing the number of entrepreneurs substantially to have a visible impact of the project; encouraging the production of jute-based Designed Fabrics and developing appealing designs using CAD; establishing Design Banks and improving Data Banks by each JESC; promoting Brand names; operating JESCs as Public Private Partnership (PPP) model ; generating funds by JESCs by charging for their services at some stage; operating RMBs on commercial terms by private agencies / NGOs; arranging financial assistance by Collaborating Institutions to help the entrepreneurs for establishment of a wide JDP manufacturing base. NCJD and JDPC took steps to implement the major recommendations of the Mid Term Evaluation report. (iv) Meetings of the Committee on Projects (COP) of IJSG The status of implementation of the project Small Scale Entrepreneurship Development in Diversified Jute Products (CFC / IJSG / 18) was discussed in the 7 th, 8 th, 9 th and 10 th meetings of the Committee on Projects (COP) of IJSG which were held during November 2006, August 2007 and August 2008 and October 2009 at IJSG Headquarters, Dhaka. The PEA attended all the meetings and made presentations on the status of implementation of the project. Detailed discussions were held in all the meetings on various major issues of the project including the problems of operationalization of the loan component, extension of the project etc. In the 8th meeting the Committee noted the comments of the delegates and requested IJSG to take up with CFC for extension of the project in view of the delay in operationalisation of the loan component of the project. Steps were taken by IJSG as suggested by the Committee. (v) Extension of the Project As per the decision of the 2nd meeting of the Project Steering Committee, the PEA submitted a proposal to CFC for extension of the project on 13 March A revised proposal was submitted to CFC on 22 September 2008 by IJSG after intensive consultation with CFC, PEA, JDPC and NCJD. On 30 September 2008, CFC communicated the approval of the Managing Director of CFC for the revised proposal for extension of the grant component activities up to 30 June 2009 and the loan component up to 30 April This extension of time of the project was CFC budget neutral and no additional fund was needed to complete the project. 38

56 (vi) Reports of External Auditors IJSG appointed M/s A. Qasem & Co., Chartered Accountants, Dhaka, Bangladesh and M/s Ray & Ray, Chartered Accountants, Kolkata, India to audit the PEA Project Account, Bangladesh project Account and the India Project Account respectively for the periods 15 October October 2006, 15 October October 2007 and 15 October June The Reports of the External Auditors were sent to IJSG and CFC in due course. The External Auditors made valuable suggestions to maintain the accounts as per international accounting standards and to improve the quality of keeping the accounts. The major recommendations of the External Auditors include among others, simultaneously emphasizing on all significant activities and incurring necessary expenditures for all project components, ensuring physical verification of cash in hand and collection of bank statements on monthly basis and conciliation with books of accounts regularly, submission of statement of expenditures (SoE) to the PEA on a regular basis, timely submission of reimbursement claims and expenditure reports to Collaborating Institutions by concerned Operating Agencies and printing of separate voucher forms in the name of the project, maintain salary register as key document to ensure better internal control, introduce advance payment policy and keep advance register for better internal control, to ensure proper transacting and recording period for preparing the financial statements etc. NCJD and JDPC have taken steps to improve the status of financial management as per the recommendations and guidelines provided by the External Auditors. It is mentioned in this regard that no case of misuse / defalcation / misappropriation of funds were observed by the auditors. The expenditures were for bonafide purposes and as per CFC s Financial Procedures Manual. 39

57 Small Scale Entrepreneurship Development in Diversified Jute Products (CFC/IJSG/18) Use of Loan Funds India Part Total Loan Fund USD 47, 797 / INR 2,296,885 (approx.). Loan to be disbursed INR 1,243,000 / USD 27,622 (approx.). Sl. No. Name of Production Unit / Technology 1 Wet Processing Plant 2 Rural Intensive Jute Handloom Unit Name & Address of Entrepreneur Bhabna Association for Peoples Upliftment Uttarpara More, P O.Radharghat P.S. Berhampore Dist.-Murshidabad, Pin Bhabna Association for Peoples Upliftment Uttarpara More, P O.Radharghat P.S. Berhampore Dist.-Murshidabad, Pin Smt. Sahanaj Khatun (Bewa) D/o Md. Harez Sk. Amount of Loan Fund Date(s) & Amount(s) disbursed INR. 1,83,000/- INR. 1,06,314/- on and INR. 70,245/- on INR. 1,39,440/- on and INR. 1,90,646/- on Present position of setting up the unit Expected date of production Pump, Motor, Pipe line, Vat dying chamber, waste chamber, Materials for construction of shed, water supply system, Electric connection (commercial) have been set up. Shed to be constructed on discussion with consultant. Vendor for supply of machineries identified. Quotation for purchase of machineries and other papers for release of 2 nd installment of loan to be submitted by INR.3,42,000/- Construction of shed completed. Electric wirings, Date & Amount of First loan Repayment Rs. 37,687/- & Remarks ventilation system set up. Vendor for supply of 3 Wet Processing Plant 4 Rural Intensive Jute Handloom Unit Vill: Natunpara, P.O.Islampur, Dist. Murshidabad, Pin: Smt. Sahanaj Khatun (Bewa) D/o Md. Harez Sk. Vill: Natunpara, P.O.Islampur, Dist.Murshidabad, Pin: machineries identified and quotations collected. Quotation for purchase of machineries and other papers for release of 2 nd installment of loan to be submitted by INR.1,08,000/- Construction of the shed completed. Vendor for supply of INR. 22,913/- on and INR. 84,122/- on machineries identified and quotations collected. Quotation for purchase of machineries and other papers for release of 2 nd installment of loan to be submitted by INR.1,46,000/- Construction of the shed completed. Vendor for supply of INR. 35,250/- on and INR. 1,10,750/- on machineries identified and quotations collected. Quotation for purchase of machineries and other papers for release of 2 nd installment of loan to be submitted by Rs. 70,431/- & Rs. 22,241/- & Rs. 30,067/- & Annexure II (a) Loan sanctioned to Ambia Bibi (INR. 300,000) and Majera Bibi (INR.188,000) for Handloom Units were cancelled as they could not offer clear Collateral Securities. So finally 2 Wet Processing Units and 4 Handloom Units are being set up. 40

58 Sl. No. Name of Production Unit / Technology 5 Rural Intensive Jute Handloom Unit 6 Rural Intensive Jute Handloom Unit Name & Address of Entrepreneur Smt. Hanufa Bibi W/o Siddique Ali, alias Siddik Sk Vill: Huda, P.O.: Huda Herampur Dist: Murshidabad, Pin: Shri Pappan Hamid C/o Rashid Master Netaji Park, P.O. Islampur, Dist: Murshidabad, Pin: Amount of Loan Fund Date(s) & Amount(s) disbursed INR. 35,250/- on and INR. 1,10,750/- on Present position of setting up the unit INR.1,46,000/- Construction of the shed completed. Vendor for supply of INR. 85,991/- on and INR. 2,32,009/- on machineries identified and quotations collected. Quotation for purchase of machineries and other papers for release of 2 nd installment of loan to be submitted by INR.3,18,000/- Construction of the shed completed. Vendor for supply of machineries identified and quotations collected. Quotation for purchase of machineries and other papers for release of 2 nd installment of loan to be submitted by Expected date of production Date & Amount of First loan Repayment Rs. 30,067/- & Rs. 65,488/- & Total INR. 1,243,000/- INR. 1,223,680/- Rs. 2,55,981/- Remarks Loan would be administered by NCJD / newly formed (1 April 2010) National Jute Board. 41

59 Small Scale Entrepreneurship Development in Diversified Jute Products (CFC/IJSG/18) Total Loan Fund USD 856, / BDT 59,101,256 Use of Loan Funds-Bangladesh Part Sl. No. Name of Production Unit/ Technology 01. Fibre Chemical Treatment Plant Name & Address of Entrepreneur Mollah Md. Mizanur Rahman Managing Director Ashulia Jute Industries Ltd. Aragaon, Bashaid, Ashulia, Savar Dhaka Mini Spinning Plant Gazi A. Z. M. Shamim 03. Small Wet Processing Plant 04. Rural Intensive Jute Handloom Unit Proprietor Gazi Jute Spinning Company Kawadi, Charsindur, Polash Narshingdi. Mr. Sarwar Hossain Managing Director Reliance Jute Mills Ltd. 49/1 Imamgonj (2nd floor) Lalbagh, Dhaka. Mr. Ajit Kumar Das Proprietor M/S. Creative Jute Textiles Products Kukurmara, P.O. Narayanpur P.S.: Raipura, Dist: Narsingdi. Mollah Md. Mizanur Rahman Managing Director Ashulia Jute Industries Ltd. Aragaon, Bashaid, Ashulia, Savar Dhaka Mr. Kamal Hossain Proprietor Holy Crafts & Fashion House # 21, Block # F, Road # 4 Kolwalapara, Mirpur, Dhaka. Mr. Shahid Hussain Shamim Director M/S. Prabartana Jute Diversified Fabrics 2/8, Sir Syed Road, Mohammadpur, Dhaka Amount of Loan Fund BDT 1,06,13, USD 153,750 BDT 2,98,20, USD 432,000 BDT 40,00, USD BDT 11,00, USD BDT 42,97, USD 62,250 BDT 2,50, USD BDT 2,58, USD 3,750 Date(s) & Amount(s) disbursed BDT 4,000, USD BDT 1,100, USD BDT 250, USD BDT 258, USD 3,750 Present position of setting up the unit Purchase of necessary machinery and the process of installation in going on. Purchase of necessary machinery and the process of installation in going on. Expected date of production Date & Amount of First loan Repayment Production started from February 2010 Production started from April 2010 Production started from January Annexure II (b) Remarks Loan sanctioned on 29 April Loan sanctioned on 29 April Loan sanctioned on 29 April Loan sanctioned on 29 April

60 Sl. No. Name of Production Unit/ Technology Rural Intensive Jute Handloom Unit 05. Model Powerloom Unit Name & Address of Entrepreneur Mr. A. H. S. Sukarnoo Shawkat Managing Director Bangladesh Jute Diversification Centre SUSAILI House # 09, Road # 04, Sector # 04, Uttara, Dhaka Mr. Md. Abul Hossain Emon Proprietor Bismillah Handicraft & Jute Products Medical North Side, Muslim Nagar Jatrabari, Dhaka Mr. G.M. Tayyebur Rahman Proprietor Rapid Agro Science Telok, Rupsha, Khulns Mr. Md. Abdul Quader Proprietor Nine Star Jute Manufacturing Ltd. Holding # 28, Kabarkhana Road Uttar Kashipur, P.O. Daulatpur Khalishpur, Khulna. Amount of Loan Fund BDT 2,50, USD BDT 2,58, USD 3,750 BDT 2,58, USD 3,750 BDT 2,58, USD 3,750 BDT 14,50, USD Date(s) & Amount(s) disbursed Present position of setting up the unit Expected date of production Date & Amount of First loan Repayment Remarks Loan sanctioned on Loan will be sanctioned shortly Loan will be sanctioned shortly Loan will be sanctioned shortly Loan sanctioned on After 30 April 2010 JDPC will co-ordinate the loan operations with the concerned sub-borrowers, BASIC Bank Ltd. and ERD, GOB to ensure timely repayment of the loan to CFC. Mr. A. H. S. Sukarnoo Shawkat Managing Director Bangladesh Jute Diversification Centre SUSAILI House # 09, Road # 04, Sector # 04, Uttara, Dhaka Total BDT. 5,350,000/- USD. 81,252.53/- 43

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62 Signing ceremony of Project Implemention Agreement (PIA) between Project Executing Agency (PEA) and National Centre for Jute Diversification (NCJD), India dated 09 April Front row (from left) Mr. Md. Golam Mostafa, Joint Secretary, Ministry of Textiles and Jute, Mr. S. K. Das, Executive Director, NCJD, Mr. Md. Fazlul Huq, PEA and Mr. T. Nanda Kumar, Secretary General, JISG. Standing at the back (from left) Mr. Faridul Islam, Assistant Chief, Ministry of Textiles and Jute, Mr. Md. Siddiqur Rahman, Consultant, Dr. Latifa Binte Lutfar, Operations Officer, Mr. Shish Haidar Chowdhury, Finance & Admin. Officer, Mr. Dewan Sayeedul Hassan, Media & Information Officer, JISG. Singning ceremony of Project Implementation Agreement (PIA) between Project Executing Agency (PEA) and Jute Diversification Promotion Centre (JDPC), Bangladesh dated 26 September Front row (from left) Mr. Md. Fazlul Huq, PEA & Mr. Dr. A B M Abdullah, Executive Director, JDPC. Standing at the back (from left) Dr. Latifa Binte Lutfar, Operations Officer, IJSG, Mr. Md. Golam Mostafa, Joint Secretary, Ministry of Textiles and Jute, Mr. Md. Abdur Rashid Sarkar, Secretary, Ministry of Textiles and Jute, Honourable Minister, Ministry of Textiles and Jute, Mr. Shajahan Siraj, MP, Mr. A F M Sarwar Kamal, Secretary General, Mr. Md. Siddiqur Rahman, Consultant, Mr. Shish Haidar Chowdhury, Finance & Admin. Officer, International Jute Study Group (IJSG).