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Tuesday, Aug. 18, 2009

Third World potential seen in jute bag biz


Staff writer

Eriko Yamaguchi, founder of Motherhouse Co., which has manufactured and imported bags and other goods made of jute in Bangladesh since 2006, is determined to help developing countries out of poverty.

News photo
Talking jute: Eriko Yamaguchi, founder of Motherhouse Co., talks to factory workers in Bangladesh in April. MOTHERHOUSE

With the bags made of locally produced jute, Yamaguchi, 27, believes her mission is to show the world that developing countries have "superb resources and potential" for growth.

"Our products will be the choice of developed countries when their economies mature. People will choose our products for the story behind them."

Yamaguchi said she and her employees work together to bring to customers a "brand made in a developing country."

The bags made and marketed by the firm are priced between ¥8,000 and ¥42,000. Most buyers are women ranging in age from their 20s and 50s who support the firm's concept.

Sales have been rising steadily. The company expects ¥140 million in sales in the 12 months ending in September, up from about ¥100 million a year earlier.

Yamaguchi's road to where she is today was built on quick actions.

While attending Tokyo's Keio University, Yamaguchi interned at an international developmental organization in Washington that focuses on Central and South America. The main lesson she learned: "I know nothing unless I see what really goes on."

Yamaguchi was soon on a plane to Bangladesh, which an Internet search listed as the "poorest country, Asia," in September 2003.

Spending two weeks to literally "see" the country, she was determined to do something. But at that time, she just didn't know what.

"Aid doesn't reach those in need," she said. "Working for an international organization or volunteering may help a small number of people, but not the entire society."

In search for an answer, Yamaguchi moved to Bangladesh after graduating from Keio. While attending graduate school at night in Bangladesh to study development assistance, she interned at the local branch of Mitsui & Co., which exports fibers and fabrics.

Then she found jute, which the locals call "golden fiber." It grows naturally in most of the country's wilderness areas. Bangladesh is the second-largest producer of jute after India and accounts for a quarter of the global market. It typically is used to make bags to carry vegetables and other goods, a role now played by bags made of polyethylene and other resins.

"This is it," her instincts told her. She told Mitsui employees of her idea of a jute business, but the firm, which did not deal with the fiber, was unreceptive.

"That is when I decided to do it myself," she said.

Jute is generally not used as a fashion material because of its difficulty to process. For example, it is hard to smooth its edges. But Yamaguchi's idea was to make designer bags from jute.

She visited jute and bag factories in Bangladesh and eventually began to design and develop bags.

The initial development stage was full of struggles, she recalled. She drew designs of the bags and showed them to factory workers. "But sample products they made were very different from what I imagined. I had to ask them to make another one many times."

One thing she never compromised on was quality.

"I know of products with similar concepts, such as 'fair trade.' In many cases, people buy them but keep them in a closet because they are not cute. That's meaningless," Yamaguchi said.

She brought the first 160 bags to Japan in February 2006 and began marketing them, and founded Motherhouse the following month.

Partly due to her business concept, it was a smooth start. She visited top retailers, including Tokyu Hands. That May, all the initial 160 bags were sold.

But after magazines and television portrayed her company's "brand made in a developing country" concept, retailers buying Motherhouse's bags have surged.

Now Yamaguchi has a sense of discomfort.

"Suddenly our customers became invisible. I didn't hear directly from customers and I felt like they didn't know our philosophy," she said.

Yamaguchi decided to establish Motherhouse shops and dramatically cut the number of retailers and distributors that buy its products.

Her decision has apparently paid off, as Yamaguchi feels she is hearing the voices of customers directly and can deliver feedback on the products to Bangladesh much faster. This also helps to speed up product development, she said. In addition, the profit margin is higher.

The company now has three shops in Tokyo and one in Fukuoka. It plans to open two more in Tokyo and one in Osaka next month.

Costs to open shops are about 10 percent of that for luxury brand boutiques, partly because company staff — shop clerks, designers, those doing clerical work and others — do much of the interior construction themselves instead of hiring contractors, she said.

In the short term, Yamaguchi wants a successful launch next month for products made in Nepal. In the long term, she wants to expand her sales channel to the United States and Europe. She is already in talks with potential distributors.

Yamaguchi said she is blessed with company staff who share her passion. The company has 25 employees in Japan, including two who were transferred to Bangladesh, 20 in the South Asian country and four in Nepal.

They share the pride she takes in the products, a way to let the world know developing countries can establish sustainable brand images.



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