Bangladesh plastics aim at global market pie

The plastic industry sees huge potentials for growth in sales both in local and global markets, attracting new investments even during the pandemic. 

In recent months, at least two companies either invested or announced plans to put over Tk650 crore into the plastic industry that hopes to secure 3% of the global market by 2030.  

Entrepreneurs in the sector now cater to more than 80% of the local demand with annual domestic sales of over Tk28,000 crore. 

The current size of the global plastic market is $570 billion (Tk47,88,000 crore) and is growing at an average annual rate of 20%.

Industry insiders said Bangladesh's yearly earnings from the export of plastic products has already surpassed Tk1,000 crore, although the country currently holds a paltry 0.5% share in the global market. They, however, have expressed optimism that the annual growth in exports earnings will soon cross 25%. 

Citing Grand View Research, Shamim Ahmed, president of the Bangladesh Plastic Goods Manufacturers and Export Association (BPGMEA), said the global plastic market is poised to reach $721 billion in 2025.

"If Bangladesh can capture 1% of the market, it is possible to export products worth more than Tk6,000 crore every year," he added.

Plastic products manufactured in the country include packets of life-saving drugs, injection syringes, blood collection bags, hangers and packets in readymade garments industry, different crockeries products, doors, windows, sanitary products, electrical appliances, computer parts, telephone sets and varieties of toys.

China is currently the leading player in the global plastic market with 26.8% share and earning $21.4 billion, followed by Germany that holds 12% of the global market share, according to a report of World's Top Exports.

Shamim Ahmed said, "Demand for our products is rising in the international market as many countries are now trying to decrease dependency on China."

"We have around 250 export-oriented-factories," he said, adding, "Many other small factories have full potential but cannot export due to a lack of capacity, and the BPGMEA is working to address the issue."

Alongside increasing exports, the BPGMEA is also expecting a 20% yearly growth in domestic sales. The trade body hopes the per capita consumption of plastic goods in the country will reach 35 kg by 2030, which currently stands at 9 kg.

"There was some misinformation about plastic and the government took different whimsical decisions several times on plastic restriction which made our path tougher," said Shamim Ahmed.

About sustainability, he said, relocating all the factories to a cluster is crucial for achieving our goal.

"Although, earlier the government had planned to set up a chemical zone where we might be given 100 acres of land," said the BPGMEA president.

Plastic industry in Bangladesh

According to the sector insiders, modern plastic products made in Bangladesh are of international standard. The use of plastic is increasing in Bangladesh in line with the international market.

According to government data, global demand for plastic products has been growing at a rate of 20% since 2007. Average global use of plastic is 50 kg per capita. In the United States, the rate is 109 kg per capita, in China 38 kg and in India 11 kg. Per capita consumption of plastic in Bangladesh is only 9 kg. As a result, there is a huge potential in this market.

Chowdhury Kamruzzaman Kamal, director (marketing) of Pran RFL Group, a big name in the plastics sector in the country, said, "The global experience suggests that the use of plastic products is increasing parallelly with the development of the country. The use of plastic in household products grew by 10% and in general products by more than 20%."

He said, "The country's GDP is increasing as well as our purchasing power. The use of plastic and packaging materials is also increasing. The plastic industry as a whole is an environmentally friendly industry considering the production and recycling process. As a result, the market for this product will also increase."

Currently, there are 5,030 plastic factories in the country and 98% of them belong to the small and medium entrepreneurs, according to Bangladesh Investment Development Authority (BIDA).

Industry insiders said that the total investment in this sector is around Tk20,550 crore.

The annual sales of plastic products is around Tk28,000 crore in the local market, in which the sales of PVC pipe is more than Tk6,000 crore and household items account nearly Tk3,000 crore, BIDA reported.

Besides, currently, this sector contributes around 1% of the GDP and the industry provides around Tk3,500 crore in tax annually. Around 15 lakh people are involved in this sector.

Jasim Uddin, former president of BPGMEA, said, "We are not getting skilled manpower as there is no institution for human resource development in the plastic industry."

New investments

Pran RFL Group, the country's top plastic manufacturer, has announced new investments in the plastic sector amid the Covid-19 pandemic.

In September 2020, the company announced an investment of Tk154 crore in the export of personal protective equipment, medical equipment and toys made of plastic.

Banga Plastic International, a subsidiary of the group, in a new factory set up in the Adamjee Export Processing Zone will produce 850 tonnes of medical safety equipment including surgical face mask, KN95 mask, N95 mask, surgical gloves, shoe covers, MOP caps, sanitary napkins, diapers and hand sanitisers along with 9,000 tonnes of toys annually.

N Mohammad Plastic Industry has announced a bigger investment than RFL. In early August, they signed an agreement with the Bangladesh Economic Zones Authority (BEZA) announcing an investment of Tk500 crore.

Mohammad Nazrul Hoque, managing director of N Mohammad Plastic Industry, said that their factory set up in Bangabandhu Industrial City will create employment opportunities for around 1,600 people.

People concerned said some other companies are also awaiting investment in this sector.

Industry friendly policy

The ministry of industry has published National Plastic Industry Development Policy 2020 (7th draft) to develop the country's plastic sector.

According to the ministry officials, the government is formulating the policy considering the existing obstacles and adversities in the development of the plastic industry. In the context of the Fourth Industrial Revolution, the policy has considered both local and international markets in its commitment to build an environmentally friendly plastic industry.

The authorities have started to discuss with organisations concerned on developing skilled manpower, attracting foreign investment, ensuring technological advancement and the overall development of the industry, the officials said.

Md Golam Yahia, additional secretary (planning) of the ministry of industry, said, "The policy aims at the development of the plastic industry. It has emphasised on environmental and other compliances for the overall development of the sector."