Power crisis hits hard plastic industries

Adequate power supply can boost int'l market share of plastic items

30 April 2010, 18:00 PM

Unb, Dhaka

Adequate power supply can boost to a great extent the country's domestic and international market share of plastic products, which can play an important role in the growth of economy. But the country's plastic industries are now facing serious setbacks due to severe power crisis, said Ferdous Wahed, president of Bangladesh Plastic Goods Manufacturers & Exporters Association (BPGMEA). Talking to UNB, he said that power is a big factor for the plastic industry -- a high energy-consuming industry. “Loadshedding has really been disastrous for the plastic industry and still there is no sign of improvement,” Ferdous said, adding that they often had to incur loss of production due to power outages. After the major export-earning readymade garment (RMG) sector, the plastic sector has similar potential, as its value addition is very high, he said. “There is no labour unrest and complaints about salary, as the workers are getting good salary. It's a growing industrial sector having growth rate of 20-30 percent a year.” He, however, said that the expected growth in the current fiscal could not be achieved due to power crisis. Ferdous said that the BPGMEA in its recent budget proposal to the NBR suggested inclusion of the plastic industry in the highest priority export sector, as there has been an international market of around Tk 1600 crore, including Tk 400 crore in direct form and Tk 1200 crore in deemed form (indirect export). Besides, the domestic market size of plastic goods is around Tk 4,000 crore. He also demanded withdrawal of the NBR circular on 'Import Under Bond, Not For Sale', as he thinks this is an obstacle to the growth of the plastic sector. He said that as the multinational petrochemical companies like BASF, SCG, Chevron, Basell and Remex refused to supply raw materials as per the NBR circular, “we had to give 100 percent bank guaranty for which a bulk of our working capital remains blocked with the customs.” The BPGMEA president also emphasised promoting recycling of plastic wastes, so that it could reach 100 percent compared to existing recycling rate of 60 percent in the country. “Even with 60 percent recycling, we could make a savings of US$ 400 million in 2005 by avoiding import of virgin resins,” he said. Ferdous said entrepreneurs from India, China, Taiwan and Thailand are keen to invest in Bangladesh's plastic sector, but these investments would come only if uninterrupted power supply is ensured. The export of plastic items began in the 1980s in the form of indirect export (deemed export) mainly as backward linkage for RMG sector, he said. According to statistics provided by the Export Promotion Bureau (EPB), the export earnings of plastic items totalled US$ 56.78 million in 2008-09 fiscal and US$ 54.14 million in 2007-08 fiscal. The major export destinations for the Bangladeshi plastic items are China, Poland, UK, Belgium, France, Germany, USA, Canada, Spain, India, Nepal, Bhutan, Australia, Sri Lanka, Japan, Malaysia, UAE, Hong Kong, Bahrain, Italy, New Zealand and the Netherlands. Some one million workforces are now directly and indirectly employed in some 3,000 small, medium and large plastic goods manufacturing units. Although plastic goods are exported in direct and deemed way, some directly exported plastic items are PVC Pipes, PVC bags, insulator (rubber), polythene sheet, plastic hanger, hand gloves (rubber), synthetic ropes, plastic waste, V belt, polyester thread, computer accessories, and video and audio cassettes.