International Journal of SME Development

Volume 01 | Issue 01 | April 2014

control, certification, innovative technology and consultancy services is needed. This
paper recommends the setting up of Bangladesh Institute of Plastic Engineering and
Technology (BIPET) in this regard. The structure and objectives of the proposed
Prospects and Challenges of institute is in the light of Indian experience.
Plastic Industries in Bangladesh Non-availability of good quality molds is a big constraint in plastic sector. The country
lacks both the required machineries and skilled man-power in this regard. Upgradation
M. Serajul Islam, PhD*1 of mold design facilities of BITAC is recommended. BCSIR can upgrade its Polymer
Division for international certification of plastic products.

Abstract 1.0 Global Plastic Industry

Plastics are versatile materials. They have good physical properties and economic Plastic replace other common materials such as metals and wood in numerous
features such as light weight, attractive color, ease of processing, non-rusting property applications because of their low cost and characteristics. Plastics offer several
and low cost. As a result, many house hold and technical items which were used to be advantages in production as they are easily softened or melted, and can be
made of metal, wood, clay, etc. are now being made of plastics. Although the per capita molded into any shape. Manufacture of plastic goods has been increasing due to
consumption of plastic in Bangladesh is 5 kg per year which is quite low compared to low production costs and energy efficient production processes. As a result the
the world average of 30 kg per year, it is expected to increase to 17 kg per year in 2020 global production of plastic goods has increased from a mere 1.5 million MT in
current average in ASEAN countries. 1950 to 230 million MT in 2009. Fig. 1 illustrates this exponential growth over
The plastic industry has emerged as a vibrant industrial sector in Bangladesh during the the past 60 years.
last two decades. At present there are 3000 plastic manufacturing units, 98% of which
250
belong to Small and Medium Enterprises (SME’s). The plastic sector is also one of the
thrust sectors in the Industrial Policy - 2010. Present domestic market size is Tk. 7,000
crore. The plastic sector provides employment of half a million people and constitutes 200

1.0 percent of the national GDP. A number of plastic items are directly exported to
different countries and total earning for both direct and deem (RMG accessories) 150

Million (MT)
exports is about US $ 337 million.
100
Recycling of used plastics is very important form both environment conservation and
resource sustainability reasons. Availability of cheap labor has enabled this sector to
use recycling quite extensively in Bangladesh. Even then, more extensive recycling 50

particularly for mixed plastics using modern techniques is highly recommended.

0
Although the future growth of plastic sector is very promising, an in-depth study reveals 1940 1950 1960 1970 1980 1990 2000 2010 2020
multi-dimensional constraints. Lack of trained and skilled man-power, testing facilities Year
for operation, maintenance and mold making and international certification are the
major constraints in this sector. An institutional arrangement dedicated to plastic sector Fig. 1: Global production of plastic products
to provide supporting services such as skilled manpower, testing facilities for quality
Sources: Plastic Europe-2010 and UN-ESCAP Report-2012

* Former Associate Professor of Chemical Engineering, Bangladesh University of Engineering

Global production of plastic products is dominated by developed countries of
& Technology, Dhaka. E-mail: [email protected] North America and Europe (47%). China is the largest producer of plastic

International Journal of SME Development 77 78 Prospects and Challenges of Plastic Industries in Bangladesh
products (15%) among developing countries. Fig. 2 shows the global market and film grade machines in 1980’s. Since early 1990’s the plastics industry
share in 2009 of plastic production for different countries. witnessed a rapid growth due to introduction of free market economy. Since the
country does not have polymers production, required polymers are imported.
Rest of Asia,
Europe (WE + 16.5% Table-1 shows the growth trend of imported polymers, the basic raw materials
CE), 24.0%
for plastic goods production. Over the period of last 20 years, the polymers
import increased from around 14,000 MT in FY 1990 to 696,500 MT in FY
2011.
China, 15.0% Polymers import data in Table-1 are depicted in Fig. 4 showing an exponential
CIS, 3.0% 230 Million MT
growth. A growth rate curve of 20% (base year 1990) is also depicted in this
figure. As can be seen from this figure, import data of polymers for the period
Middle East,
Africa, 8.0% FY 1990-2011 fit well with the 20% growth curve. The project demand of
Japan, 5.5%
polymers in 2020 is 3.4 million tons which is quit high. For a reasonable growth
Latin America, rate of 15% after 2011, the projected demand of polymers in 2020 will be 2.4
4.0%
NAFTA, 23.0% million tons. This value is in agreement with the estimated quantity based on
current per capita consumption of 17 kg/yr polymers in ASEAN countries.
Fig. 2: Market share of global plastic production in 2009
Sources: Plastic Europe-2010 and UN-ESCAP Report-2012 Table 1: Import of Polymers in Bangladesh, Period FY 1990-2011
Import Quantity (metric ton)
At present plastic/polymer consumption is a measure of per capita GDP in a Financial Bonded category Non-Bonded category Total
country, Fig.3. From this figure it can be seen that per capita consumption in Year
India, lags well behind China and Brazil. The position of Bangladesh will be 1989-1990 14,021
discussed in next section. 1990-1991 15,262
1991-1992 22,165
1992-1993 39,880
1993-1994 66,421
1994-1995 11,981
1995-1996 103,454
1996-1997 51,384
1997-1998 86,318
1998-1999 59,515
1999-2000 --
2000-2001 --
2001-2002 74,637 121,532 196,169
2002-2003 60,606 126,571 187,177
2003-2004 57,477 157,053 214,530
Fig.3: Per capita polymer consumption vs. per capita GDP of selected countries (2009) 2004-2005 85,365 295,168 380,532
(Ref. Chemical and Petrochemical Manufacturers’ Association, India) 2005-2006 80,628 193,246 273,874
2006-2007 103,853 184,611 288,464
2.0 Growth of Plastic Industry in Bangladesh 2007-2008 97,772 199,005 296,777
2008-2009 98,708 250,416 349,124
The plastic industry is relatively new compared with the textile and leather 2009-2010 179,688 414,152 593,840
industries. The plastic industry began its journey as a small industry in 1960’s. 2010-2011 215,644 480,896 696,540
The industry experienced an important growth with the introduction of injection Sources: FY 1990 - FY 1999 (BBS), FY 2002-2011 (NBR, BPGMEA)

International Journal of SME Development 79 80 Prospects and Challenges of Plastic Industries in Bangladesh
Note: Apparent per capita consumption of imported polymers is 4.6 kg/yr. 3.0 Prospects of Plastic Industry
Recycled plastic granules used in plastic industries is 20%. Per capita
The plastics industry is a dynamic industrial sector in the country. At present
consumption of imported and recycled polymers is about 5 kg/yr.
domestic market is Tk 9,000 crore and export market including direct export of
3500 plastic goods and deemed export of RMG accessories is Tk 2,700 crore. This
Actual d ata Pro jected sector constitutes 1.0 percent of GDP and provides employment to half a million
3000
people.
2500 Export Earnings: Bangladesh is making an effort to diversify its export items.
Plastic products have a large potential for export diversification. The direct
Thousand MT

2000
20% Growth export of plastic goods has been on the increase every year during the last
1500 decade as depicted in Fig.6. An average growth rate is 20 percent per year.
20 % GROWTH

1000 100
88.7
90
500
80
68.7
70
0

US$ (Million)
1990 1995 2000 2005 2010 2015 2020 2025 60 54.1 52.3
48 50.6
Financial Year 50 44.4
38.8
40
Fig. 4: Statistical data on import of polymers. 30 22
Sources: FY 1990 – FY 1999 (BBS), FY 2002 – FY 2011 (NBR, BPGMEA) 20
10
Per capita apparent consumption of polymers including bonded and non-bonded 0

2003-04

2004-05

2005-06

2008-09

2009-10

2010-11
2006-07

2007-08

2011-12
categories in FY 2011 was about 5.0 kg/year. This data along with per capita
consumption of polymers for selected countries, including ASEAN and world
Financial Year
are illustrated in Fig. 5. Per capita consumption of Bangladesh lags well behind
world average of 30 kg.
Fig. 6: Growth of direct export of plastic goods during FY 2004-FY 2012.
120

100 Source: Export Promotion Bureau.

Per Capita Consumption (Kg/Year)

100

80 Raw Materials: There is no production of polymers in Bangladesh. The plastic

industry uses imported raw materials of polymer granules. However, this is not
60
a disadvantage.
40
30 30

17
Competitiveness: The availability of cheap labor and the fast developing
20
5
8 recycling industry of post-consumption plastic wastes in Bangladesh are
0
Bangladesh India Asean China World USA
potential advantages to provide competitiveness in the global market (Katalyst-
2005)
Fig. 5: Per capita consumption of polymers: Bangladesh vs Global
Sources: Kapur and Shashikant-2011, Bangladesh: Estimated using NBR data.

International Journal of SME Development 81 82 Prospects and Challenges of Plastic Industries in Bangladesh
Access to Market in Developed Countries: Recently developed countries have  Mold/Die design and manufacture
opened their market for plastic products from developing countries, like  Testing laboratories for quality control services
Bangladesh. This shift is due to the low cost of production in developing
countries with cheap labor and low transportation costs (Jahan and Khan-2012). Other Issues:

Market Size Potential: As Bangladesh is moving towards industrialization, the  Lack of an Institute of Plastic for training skilled workers and
plastic sector will become important for manufacturing sector. At present per technicians, and products diversification.
capita consumption of polymers in Bangladesh is 5 kg/year as compared with  Uninterrupted power supply in plastic industries
the global average of 30 kg/year. The per capita consumption of ASEAN  A plastic industrial park for relocating small plastic factories of old
countries is 17 kg/year, (Fig.5). If we aspire to become a middle income country Dhaka City.
by 2021 and attain per capita consumption of 17 kg/year for ASEAN countries,  Infrastructure development to set up plastic wastes recycling industry.
then the size of the plastic industry will be 2.5 million tons/year compared with  Lack of long-term planning
0.7 million tons/year in 2011 (Table-2), an increase of 3.6 times. The UN-  Establishing national brands
ESCAP Report-2012 also forecasts that the present turn over of the plastic  Government policy must be consistent
sector US $ 1 billion will become US $ 4 billion in 2020.
5.0 Recommendation to set up an Institute of Plastic (Bipet)
Table-2: Market size Potential for Plastic Sector of Bangladesh in 2021.
Lack of technical support services mentioned above is due to the absence of an
Year Polymer Consumption (tons/yr)
institute of plastic in the country. BPGMEA recognized the need for such an
1990 14,000
institute as early as in 2002. In that year, Export Wing Chairman of BPGMEA
2011 700,000
stated that:
2021 2,500,000 (Present per capita consumption of 17
kg/yr for ASEAN countries) “Bangladesh does not have a proper school for plastic. To attain efficiency and
support our industry we need to have a proper polymer institute and a modern
4.0 Challenges testing laboratory for quality test” (Shahedul Islam, Plastic Fair-2002).”
Some of the large-scale plastic industries have demonstrated capability to be The author of this paper presented the idea of establishing an institute of plastic
world class in terms of technology, product quality and costs in the country. named as the “Bangladesh Institute of Plastic Engineering and Technology”
However, there are 3000 plastic manufacturing units of which 98% belong to (BIPET), in a day-long seminar of the SME Foundation attended by experts
the Small and Medium Enterprises (SMEs). The major challenge facing this from BPGMEA, BUET, BCSIR and BITAC in 2008. This idea to set up BIPET
sector is to make the SMEs competitive in the global market by upgrading them was finalized in a consultation meeting of the stakeholders on October 11, 2012.
in terms of innovative technology, products diversification and operation costs. The SME Foundation has already initiated the feasibility study for the
development of Project Proposal (PP) of BIPET through Chemical Engineering
Recently, the SME Foundation has conducted a study on the “Challenges and
Department, BUET.
Opportunities of Plastic Sector in Bangladesh” (Islam-2012). The findings of
this study was presented by the author in a “National Consultation Meeting on The structure of the proposed BIPET will be in line with the Indian experience
SME Development: Plastic Sector” on July 11, 2012 in SME Foundation. The of CIPET (Central Institute of Plastic Engineering and Technology). The CIPET
problems and recommendations are described below. has over 40 years experience with 15 full-fledged regional centres in India.
Major activities of BIPET will include but not limited to:
Major Problems: Technical Support Services  Academic Programs
 Skilled manpower development  Technology Support Services
 Trouble shooting in operation of processing machines  Research & Development

International Journal of SME Development 83 84 Prospects and Challenges of Plastic Industries in Bangladesh
Academic programs will include short-term certificate courses, diploma and  Establishment of an Institute of Plastic (BIPET): SMEF and
postgraduate degree in plastic engineering and technology. Technological BPGMEA have initiated the preparation of Feasibility Study/Project
support services will provide the mold/die design and manufacture, CAD/CAM Proposal (PP) of BIPET through Chemical Engineering Department,
services, testing of raw materials and plastic products for quality control, BUET.
technology upgrading and consultancy services. R & D activities are to be
conducted for products diversification, waste management and environmental
aspects of plastics for sustainable development.
The plastic industry is relatively new in the country compared with the textile References
and leather sectors which have well established institutional arrangements.
Hence the plan to set up BIPET is an ambitious project. It is proposed to set up
BIPET in two phases: Helal, S. I. (2012), Public Private Dialogue of “Promoting Development of the Plastic
Sector of Bangladesh”, BFCCI-FNF, Dhaka.
Phase-1: Small institute in a rental building
Helal, S. I. (2002), “Concepts of Plastic in Bangladesh”, Souvenir of Plastic Fair,
Phase-2: Full-fledged institute in own campus BPGMEA, Dhaka.
The establishment of BIPET would require a close cooperation between SMEF Islam, M.S. (2012), Study on the Plastic Sector for SME Foundation, Bangladesh.
(Ministry of Industries) and BPGMEA.
Islam M.S. (2012), “Necessity for an Institute of Plastic”, Souvenir of International
Plastic Fair, BPGMEA, Dhaka.
Islam, M.S. (2008), Expert Consultation Meeting on “Technology, Development,
6.0 Conclusion Acquisition and Transfer: Plastic Sub-sector”, SME Foundation, Bangladesh.
 This paper has presented an overview of the plastic industry: Jahan, S.M. and M.S.N. Khan (2012), “Country Study on Bangladesh using Global
Bangladesh vs Global. Value Chain Analysis: The Plastic Industry”, Annex-I in UN-ESCAP Report.
 The compilation of statistical data on the import of polymers in KATALYST - Bangladesh (2005), Market Briefs: Plastics.
Bangladesh during the period FY 1990 - FY 2011 showed that the
import of polymers was mere 14,000 tons in FY 1990 which has
increased to 697,000 tons in FY 2011. Thus current per capita
consumption of virgin polymers is about 5 kg/yr against world average
30 kg/yr.
 Market size potential of plastic industry in Bangladesh in 2020 is
estimated as 2.5-3.3 millions tons. The average increase is 4.2 times
compared with 0.7 million tons in FY 2011. UN-ESCAP Report-2012
predicts that the current turn over of US $ 1 billion would be US $ 4
billion in 2020, that is, an increase of 4 times. This information will be
useful for the long-term planning of the plastic industries in the country.

International Journal of SME Development 85 86 Prospects and Challenges of Plastic Industries in Bangladesh