Dr. Nasim Ahmed :
Bangladesh’s plastics products market is thriving rapidlydue to increasing domestic and global demand.
The plastic industry works as forward and backward linkages to many other sectors in the country.
Products are used in infrastructure, construction, agriculture, consumer goods, telecom, and packaging.
Major manufactured plastic products are PVC pipe, garments accessories, hangers, poly bags, polythene bags, plastic household products, jute and textile spares, toys, crockery items, plastic waste recycling, computer accessories, plastic furniture, poly propylene woven, flexible packaging, medical clinical accessories.
Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) claims the production and marketing of plastic products are worth around Tk. 40,000 crore domestically.
The country’s overall plastic product market is worth around USD 4 billion, of which 83.4 percent is manufactured domestically while the remaining 16.6 percent is imported.
This sector provides revenue of approximately Tk. 3500 crore annually to the treasury.
Plastic sector exports (direct and indirect) equal to 1.2 billion US dollars. About 6000 plastic industries have been in operation in the country including big, medium, and small scale.
Over 1.2 million people are dependent on this sector. The BPGMEA has set a target to capture 3 percent of the global market by 2030.
According to the data of Statista Inc., USA (published on Nov 15, 2023), the global plastics market was valued at USD 712 billion in 2023.
The plastics market is projected to reach a value of more than 1,050 billion US dollars by 2033, registering a Compound Annual Growth Rate (CAGR) of four percent from 2023 to 2033.
Industry insider speculates that if Bangladesh captures 1% of the market, it will be possible to export products worth more than Tk. 6,000 crore every year.
The annual growth rate is expected to reach 25% soon. Plastic use in the agriculture sector, automobile, electric, and electronics are booming.
Import of plastic resin is increasing by 10% per annum and the domestic demand is also growing by 20%. The 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. The per capita consumption of plastic in Bangladesh is only 9 kg.
Hence, there is a huge potential in this market. Europe and other countries are reducing dependency on China and shifting to countries like Bangladesh, which is an encouraging factor for the industry.
The plastic sector is the 12th highest-earning export sector in Bangladesh.
The country exported plastic products worth USD 209.86 million in the financial year 2022-23 showing an upper growth trend and has set a target of USD 275 million for the Financial Year 2023-24 (EPB).
Bangladesh currently produces 142 plastic items and is exporting to 126 countries including the USA, UK, Canada, EU, China, Poland, India, Sri Lanka, and Nepal.
The prospect of the plastic sector is growing further with government support. Since 2016, the government has been giving a 10% cash incentive for the export of plastic products.
The ministry of commerce has formulated a plastic sector export roadmap to achieve the vision of putting Bangladesh among the top 43rd largest exporters of plastic goods including plastic toys and related articles by 2030.
The Plastic Industry Development Policy 2023 of Bangladesh has set a target to increase the plastics and packaging industry market from around $4 billion to $10 billion by 2028 to increase the contribution of the plastics sector to GDP by at least two percent by 2028. Currently, it is below one percent.
The policy aspires to provide demand-based training to 10,000 individuals by 2028 to create skilled manpower while also aiming to create 500,000 new employment opportunities in this sector by 2028.
Under the policy, the government will provide an exemption from income tax for the first 10 years in plastic parks and backward linkage industries and duty-free imports of capital equipment, spare parts, and accessories.
The government will also create industrial parks or special economic zones.
Nine strategies have been outlined in this plan with emphasis on increasing local industries, building capacity, increasing access to international markets, and skill development for the sustainable development of the sector.
The policy aims to ensure adequate financial support for domestic industries by providing loans to small and medium enterprises in the plastic sector at 3% interest from a special fund.
Besides, the industry will get duty exemption on imported capital equipment, spare parts or accessories, and tax credit on glass materials and supplies. Necessary tax concessions will also be provided for the basic infrastructure development work required by the industry.
In addition, the government will provide VAT reduction and bonded warehouse facilities to the plastics industry in purchasing local goods and services including telecommunications, electricity, and utilities.
A twenty-seven-member National Industry Development Council on the plastics industry headed by the Industries Minister shall supervise and monitor the implementation of the policy at the national level.
The council will be responsible for facilitating policy coherence between national development policies and their integration with other national policies.
According to the industry insider, the major challenge is the energy crisis, including gas and electricity. Despite the enormous potential of the plastics industry, the shortage of quality control testing facilities, innovative technologies, proper management of plastic waste, less business-friendly tax and customs facilities, etc. are major bottlenecks for the industry. Augmented recycling of used plastics will reduce the import volume of raw materials, increase the net profit of the entrepreneurs, and become environment-friendly.
Plastic industries need to diversify and innovate new brands of products learning from Chinese and Taiwanese experiences to capture a sizable proportion of the global plastic market.
They should adopt updated and new technologies with an adequate amount of investment to thrive in the competitive and expanding market.
(The writer holds a PhD in Public Policy from Ulster University in the UK, and is currently working as an Associate Professor at the Bangladesh Institute of Governance and Management, Dhaka. mail: [email protected])
