A Chinese company named Jiangu Red Bud Dying Technology Company plans the biggest ever investment in Bangladesh to produce fabrics from jute in the wake of cotton price hike in the international market. The company plans to invest US$ 400 million to set up a plant in Ishwardi Export Processing Zone. The company, according to the proposal, will gradually raise its investment to one billion dollar. The Chinese company would produce 50 types fabrics including denim from jute produced in Pabna and Jessore region.

Few textile industries including Indias Arvind, one of the large denim producers in the world, have been using jute yarn to produce denim in view of the cotton price rise over the last few years. Bangladesh may also emerge as a major denim producer in the world as, being a front ranking jute producing country, it has an edge over others. Local and foreign investment in the denim subsector increased substantially last year.

As per the World Trade Organisation Hong Kong agreement, the developed countries have reduced its subsidy from cotton production which has pushed up the cotton price internationally in the recent years. So textile industries in the world have started considering jute yarn as an alternative to cotton yarn.