Bangladesh Jute Mills Corporation (BJMC) plans to establish a composite jute textile plant to make fabrics, particularly denim which will involve investment to the tune of Tk569 crore. The denim fabrics will be made by mixing jute and cotton to meet the rising demand, both at the domestic and global markets.

The state-run corporation has already received the approval from the project evaluation committee of the planning ministry. The project is now awaiting the final approval from the Executive Committee of the National Economic Council.

Mahmudul Hassan, chairman of BJMC, which operates 26 jute mills said that they have found this project will be profitable.

Over the years, hessian fabrics and jute sacks have been dominating BJMC's annual production basket. The latest step was taken to diversify the production basket and expand market opportunities for the natural fibre, officials said.

BJMC, which accounted for one-fifth of total production of jute goods of 9.63 lakh tonnes in fiscal 2015-16, has also taken an initiative to set up new production units to make more diversified products including viscose, said Babul Chandra Roy, an adviser of BJMC.

Home textiles will also be produced at the composite jute garment factory, which will be set up on seven acres of land in Demra, Roy said.

The price of a kilogram of jute is now Tk 50, but value addition will bring higher prices for the state mills.

Currently, Bangladesh has 30 denim mills whose collective production capacity is 435 million yards a year against the demand for 800 million yards a year. There is a huge supply gap for denim fabrics, according to Bangladesh Denim Expo that takes place twice a year.

In 2014, the size of the global denim market was $56.20 billion which is expected to hit $64 billion by 2020.