Ludlow Jute & Specialities Ltd Management Discussions

Industry Structure and Developments

The Jute Industry is among the oldest and most prominent industries in India. The Jute industry occupies an important place in the national economy of India, particularly in West Bengal where nearly 75 Jute Mills operate. It supports 40 Lakh farm families and provides livelihood to Lakhs of workmen.

The compulsory packing norms for food grains and sugar under Jute Packaging Materials (Compulsory use for Packing Commodities) Act, 1987 (JPMA) stands at the 100% & 20% of production of food grains & sugar respectively and the said notification was valid up to 30th April 2025 which is now extended upto 30th June,2025 by government vide notification dated 22nd April, 2025.

Movement towards jute-based consumer goods aided by increasing environment awareness and lifestyle changes is perceptible.

Rising concerns for reducing carbon footprints opens doors for use of more bio degradable & sustainable products made from natural fibres. Disposal concerns related to use of plastic has led to accelerated acceptance of Jute products which are biodegradable as well as ecofriendly.

Demand for Companys industrial products like Hessian & Sacking and promotional Jute goods like lifestyle products & other made ups in particular have grown over the years and is expected to see further growth.

Jute is versatile and has application in lifestyle and promotional bags, decoratives, geo-textiles, apparels, composites, upholstery furnishings, and also non-wovens for both technical and non-technical purposes. Research and Developments is continuing to find newer uses for jute. The industry would do well to take advantage of such developments. Also, the Government is promoting use of jute in Geo Textiles under PMGSY Pradhan Mantri Gram Sadak Yojana (PMGSY). Usage of eco-friendly jute sacks for packaging food grains under JPM Act 1987 is in sync with the government adopted UN sustainability goals of alleviating poverty, zero hunger, responsible consumption/production and climate change. Hence, continued compulsory jute packaging for food grains is likely to continue to be an environmental necessity.

Some major areas of risk and concerns: a) Availability of quality Raw Jute at optimal price. b) Stiff competition from Bangladesh Jute goods and synthetic packaging materials. c) Climate change poses long term risks to jute cultivation. d) Despite modernization of the industry, there is still need of new technology which will automate manual processes. Unfortunately, there is little or no research in technical advancement.

The Company is engaged in single segment product that is, manufacturing and sale of Jute Goods, therefore, Ind AS 108 regarding ‘segment reporting stands complied.

The future outlook of the jute industry is promising, driven by increasing global demand for sustainable and biodegradable materials. The global jute market was valued at approximately USD 2.8 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of over 12.5% from 2025 to 2029.

For the financial year 2025–26 Raw Jute season, the Cabinet Committee on Economic Affairs (CCEA) approved an MSP of 5,650 per quintal for raw jute (TD-3 grade). This marks an increase of 315 per quintal from the previous seasons MSP of 5,335 per quintal. As per the recent circular issued by the Office of the Jute Commissioner, in respect of the supply of B-Twill jute bags on Government account, the jute industry is expected to receive a lump-sum amount as arrears. This payout has been necessitated in view of the retrospective calculation of prices, as determined under the revised policy framework.

Your management is continuously putting efforts to improve efficiency and productivity for achieving better performance.

The Company has adequate internal control procedures, which provide reasonable assurance with regard to safeguarding the Companys assets, preventing revenue leakages, promoting operational efficiency by cost control and compliance with various statutory provisions. Audit reports are placed before the Audit Committee on a periodical basis, for review. The Committee actively reviews the adequacy and effectiveness of the internal control systems which are well supplemented by surveillance of Internal Auditors. The Companys Internal Financial Controls have been diligently studied and the required systems are in place.

Your Company has tried to maintain good industrial relations during the year under review. In addition to various staff welfare schemes, there was a renewed focus on sanitation and hygiene.

During the year under review, the Companys sales were 298.29 crores (including exports of 50.53 crores) against sales of 473.25 crores (including exports of 66.67 crores) during the previous year. The production was lower at 25573 M.T. against 45043 M.T.

There have been changes in Net Capital Turnover it has improved dramatically, Trade Receivables & Inventory Turnover declined significantly.

Statements made in this section of the report are based on the prevailing position in the jute industry and market conditions. Actual results might differ from what we perceive with respect to Companys outlook and performance. Important factors that could make a difference include finished goods prices, raw material cost and its availability, change in Government regulations, tax laws, economic developments within the country,currency fluctuation and other factors such as litigation.