Around 12 lakh people are now directly and indirectly employed in about 5,000 small, medium and large plastic goods manufacturing units. Annual sale of plastic products is estimated to be around Tk 17,000 crore in the local market, which has grown at an average 16 per cent per year over the past several years. -Jashim Uddin President of BPGMEA

Plastic products

A promising forex earner

Till recently, Bangladesh’s plastic sector was more like a cottage industry restricted to manufacturing household items. However, with innovative entrepreneurship and diversification, plastic products have now joined the league of textiles, apparel, leather and jute goods, which contribute towards export diversification, although on a limited scale.

According to Export Promotion Bureau (EPB) data, Bangladesh earned $100.5m from the plastic sector, posting a 17.35 per cent growth in the last fiscal.
However, Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) President, Jashim Uddin, said that this is the amount earned from direct export alone. “If you consider indirect export, the amount is around $800 million”, he told The Independent.
Jashim said that as part of backward linkage to the Readymade Garments (RMG) industry, Bangladesh mainly exports intermediate products like film plastic and garment accessories made of plastic. That apart, major manufactured products of the local plastic industry include PVC pipes, shopping bags, injection moulding products, woven bags, PET/PE bottles, laminated packages, rigid sheets, garment accessories, some household products, cosmetics and medicine packs.
“The best part of Bangladesh’s plastic industry is that despite all sort of hindrances, the product range of plastic is always increasing and that has been able to grab attention of the world market,” said the BPGMEA President.
Recently, BPGMEA, in association with exhibition organiser Chan Chao International Co. Ltd. organised the 11th International Plastic Fair (IPF) 2016 to showcase Bangladesh’s success in the plastic industry. A total 350 booths, including 200 foreign stalls, were set up, all of which received overwhelming response from general visitors, industrial buyers and potential entrepreneurs.
Sales Executive (Corporate) of Hatim Polymar Ltd, Mahfuzur Rahman, said that the fair offers a chance to meet local as well as foreign buyers. “The industry is growing. As a company, we are growing at the rate of 30 per cent in the last few years”, he said.
RFL, which exports to 36 countries, had a number of foreigners at its stall when this correspondent dropped by. Many of them were seen talking to sales executives present at the stall. “We have over 700 new items at our stall and both local and foreign customers appreciate our diversified products’ range,” said Sr Sales Executive, Mohammad Kamal Hossain.
RFL produces around 2,100 items across its six factories, including pure plastic and semi-plastic products. “We are now making all types of plastic products. They include kitchen items, furniture, medical equipment and PVC products,” said a RFL official.
Asked why plastic products are increasingly becoming popular among consumers, Hossain said that people want innovative and durable products, but at a competitive price and plastic goods have these attributes.
Managing Partner of IMB International BD Engr Md Imam Hossain said that in the past few years, one of their maximum profit-earning products is PVC pipes. “The real estate market is ever increasing in Bangladesh and along with it, demand for PVC pipes is also on the rise,” said Imam. He added that they have earned around Tk 15 crore annually just by selling PVC pipes.
Business Development Manager of Danawi Corporation, Nuruzzaman Masud, who imports raw plastic chips and supplies to all large plastic manufacturers including Bengal, RFL, Partex and Hamako, said that the supply rate is increasing at over 50 per cent for the past few years.
“We import raw plastic chips from Aramco Chemicals of Saudi Arabia, Polytech Masterbatch of Dubai, and Tasnee Polytech of Dubai, and supply those to all large plastic factories. The demand for raw plastic chips is increasing rapidly in the last couple of years and we anticipate that the curve will stay upward in the coming years,” said Masud.
Jashim told The Independent that though the sector started small in the 1960s, it has now reached a self-sufficient stage. Around 12 lakh people are now directly and indirectly employed in about 5,000 small, medium and large plastic goods manufacturing units, he said.
Annual sale of plastic products is estimated to be around Tk 17,000 crore in the local market, which has grown at an average 16 per cent per year over the past several years, Jashim said. He added that household items account for nearly Tk 3,000 crore of total domestic sales. The plastic sector is also witnessing new investments of about Tk 100 to Tk 150 crore every year, he said. “We are bringing innovations and adding newer products to the basket regularly in a bid to increase the use of plastic products,” said Jashim, adding that the local plastic goods makers are continually improving their product quality as well.
Jashim, who is also the owner of Bengal Group, one of the largest plastic goods producer in the country, said that per capita use of plastic goods in Bangladesh is still very low i.e. 5kg a year. On the other hand, Asian countries use 17kg, compared to around 30kg in the rest of the world, he said.
Former President of BPGMEA and Chief Organiser of the latest plastic summit, ASM Kamaluddin, said, “We operate in an environment where many believe that the local products are not of good quality. But that is not true; we are producing quality products.” Kamaluddin added that the local plastic industry has the potential to become a major foreign currency earner after the garment industry. He however said that the export-oriented plastic sector does not enjoy similar kinds of facilities enjoyed by other major export-oriented products. “Plastic exporters do not receive any additional incentives/benefits like garment exporters,” he said.
For example, garment exporters enjoy 0.30 per cent tax as final settlement; 3 per cent cash incentives for export to non-traditional markets; and 3 per cent case incentives for backward linkage textile sector, said Kamaluddin. He added that the plastic sector enjoys no such facility.
Referencing a United Nations report, he said that Bangladesh has the opportunity to raise its turnover to $4 billion by 2020 if it addresses issues such as infrastructure, waste management, recycling and skills’ development.
“We believe, with proper policy support, we will be able to earn that amount by the mentioned time,” said Kamaluddin.

 

Around 12 lakh people are now directly and indirectly employed in about 5,000 small, medium and large plastic goods manufacturing units. Annual sale of plastic products is estimated to be around Tk 17,000 crore in the local market, which has grown at an average 16 per cent per year over the past several years. -Jashim Uddin President of BPGMEA

Plastic products

A promising forex earner

Till recently, Bangladeshs plastic sector was more like a cottage industry restricted to manufacturing household items. However, with innovative entrepreneurship and diversification, plastic products have now joined the league of textiles, apparel, leather and jute goods, which contribute towards export diversification, although on a limited scale. According to Export Promotion Bureau (EPB) data, Bangladesh earned $100.5m from the plastic sector, posting a 17.35 per cent growth in the last fiscal. However, Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) President, Jashim Uddin, said that this is the amount earned from direct export alone. If you consider indirect export, the amount is around $800 million, he told The Independent. Jashim said that as part of backward linkage to the Readymade Garments (RMG) industry, Bangladesh mainly exports intermediate products like film plastic and garment accessories made of plastic. That apart, major manufactured products of the local plastic industry include PVC pipes, shopping bags, injection moulding products, woven bags, PET/PE bottles, laminated packages, rigid sheets, garment accessories, some household products, cosmetics and medicine packs. The best part of Bangladeshs plastic industry is that despite all sort of hindrances, the product range of plastic is always increasing and that has been able to grab attention of the world market, said the BPGMEA President. Recently, BPGMEA, in association with exhibition organiser Chan Chao International Co. Ltd. organised the 11th International Plastic Fair (IPF) 2016 to showcase Bangladeshs success in the plastic industry. A total 350 booths, including 200 foreign stalls, were set up, all of which received overwhelming response from general visitors, industrial buyers and potential entrepreneurs. Sales Executive (Corporate) of Hatim Polymar Ltd, Mahfuzur Rahman, said that the fair offers a chance to meet local as well as foreign buyers. The industry is growing. As a company, we are growing at the rate of 30 per cent in the last few years, he said. RFL, which exports to 36 countries, had a number of foreigners at its stall when this correspondent dropped by. Many of them were seen talking to sales executives present at the stall. We have over 700 new items at our stall and both local and foreign customers appreciate our diversified products range, said Sr Sales Executive, Mohammad Kamal Hossain. RFL produces around 2,100 items across its six factories, including pure plastic and semi-plastic products. We are now making all types of plastic products. They include kitchen items, furniture, medical equipment and PVC products, said a RFL official. Asked why plastic products are increasingly becoming popular among consumers, Hossain said that people want innovative and durable products, but at a competitive price and plastic goods have these attributes. Managing Partner of IMB International BD Engr Md Imam Hossain said that in the past few years, one of their maximum profit-earning products is PVC pipes. The real estate market is ever increasing in Bangladesh and along with it, demand for PVC pipes is also on the rise, said Imam. He added that they have earned around Tk 15 crore annually just by selling PVC pipes. Business Development Manager of Danawi Corporation, Nuruzzaman Masud, who imports raw plastic chips and supplies to all large plastic manufacturers including Bengal, RFL, Partex and Hamako, said that the supply rate is increasing at over 50 per cent for the past few years. We import raw plastic chips from Aramco Chemicals of Saudi Arabia, Polytech Masterbatch of Dubai, and Tasnee Polytech of Dubai, and supply those to all large plastic factories. The demand for raw plastic chips is increasing rapidly in the last couple of years and we anticipate that the curve will stay upward in the coming years, said Masud. Jashim told The Independent that though the sector started small in the 1960s, it has now reached a self-sufficient stage. Around 12 lakh people are now directly and indirectly employed in about 5,000 small, medium and large plastic goods manufacturing units, he said. Annual sale of plastic products is estimated to be around Tk 17,000 crore in the local market, which has grown at an average 16 per cent per year over the past several years, Jashim said. He added that household items account for nearly Tk 3,000 crore of total domestic sales. The plastic sector is also witnessing new investments of about Tk 100 to Tk 150 crore every year, he said. We are bringing innovations and adding newer products to the basket regularly in a bid to increase the use of plastic products, said Jashim, adding that the local plastic goods makers are continually improving their product quality as well. Jashim, who is also the owner of Bengal Group, one of the largest plastic goods producer in the country, said that per capita use of plastic goods in Bangladesh is still very low i.e. 5kg a year. On the other hand, Asian countries use 17kg, compared to around 30kg in the rest of the world, he said. Former President of BPGMEA and Chief Organiser of the latest plastic summit, ASM Kamaluddin, said, We operate in an environment where many believe that the local products are not of good quality. But that is not true; we are producing quality products. Kamaluddin added that the local plastic industry has the potential to become a major foreign currency earner after the garment industry. He however said that the export-oriented plastic sector does not enjoy similar kinds of facilities enjoyed by other major export-oriented products. Plastic exporters do not receive any additional incentives/benefits like garment exporters, he said. For example, garment exporters enjoy 0.30 per cent tax as final settlement; 3 per cent cash incentives for export to non-traditional markets; and 3 per cent case incentives for backward linkage textile sector, said Kamaluddin. He added that the plastic sector enjoys no such facility. Referencing a United Nations report, he said that Bangladesh has the opportunity to raise its turnover to $4 billion by 2020 if it addresses issues such as infrastructure, waste management, recycling and skills development. We believe, with proper policy support, we will be able to earn that amount by the mentioned time, said Kamaluddin.