Published in Dhaka Tribune on Tuesday, 1 July 2014.
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Plastic sector fails to take full advantage of export market preference
Tribune Report
‘Bangladesh has not yet emerged as an exporter of plastic products with considerable share as it has only 0.01% share against the global demands of US$590bn’
Bangladesh has failed to take full advantage of preferential market access in case of plastic goods export due to the supply-side related constraints and lack of skilled manpower, trade analysts said in Dhaka yesterday.
“Bangladesh has not yet emerged as an exporter of plastic products with considerable share as it has only 0.01% share against the global demands of US$590bn,” observed Khondakar Golam Moazzam, an additional research director of Center for Policy Dialogue (CPD), while presenting a key-note paper on “Export-Oriented Plastic Industry of Bangladesh Challenges and opportunities” at a seminar in the capital.
Bangladesh Export Promotion Bureau (EPB) and Bangladesh Plastic Manufacturers and Exporters Association (BPMEA) jointly organised the seminar to address problems and prospects of this sector at its Karwan Bazaar office. Urging the government to take measures for establishing a plastic industry park, BPMEA president Jasim Uddin said: “Compliance is a big concern for this sector as the global buyers are concentrating on this issue before placing any orders.”
He also said Bangladesh would be able to earn $2bn by 2012 if the all the constraints were removed.
According to BPMEA, there are 5000 plastic factories in the country with an employment of 12 lakh people. Out of the 5000 factories, 65% located in Dhaka, especial in the old part of the city, 20% in Chittagong, 10% in Narayanganj and rest 5% in other parts of the country.
“To make this sector compliant, the relocation of these factories to environmentally compliant area is needed,” said Moazzem. He also urged the government to provide necessary funds needed for establishing a plastic Palli.
“As the country’s export items are very few, we have to increase export items to maintain the export growths,” opined EPB vice-chairman Shubhashish Bose. He also put emphasis on introducing courses in the private and public universities to generate skill manpower for the plastic sector.
“Despite global recession, Bangladesh’s economy remained stable as the country exports basic products,” reminded Bose.
Bangladesh will witness more FDI in this sector as the production cost of China and Thailand has been increased while this factory will be relocated in Bangladesh, he added.
Withdrawal of Generalized System of Preferences (GSP) put pressures partially on competitiveness as Bangladeshi products face duty from 3-15% depending on the products.
During his presentation of the study, Moazzem identified some challenges that include lack of machinery use in a proper way, skilled manpower, testing laboratory, technological efficiency, mold manufacturing, proper management of waste, and also shortage of gas and electricity supply.
He also stressed the need for attracting more local and foreign investments for the development of this potential sector.
The plastic sector people urged the EPB to separate plastic export from the deemed export to understand the contribution of this sector. Currently, deemed export is accounted for more than 75% of the total export.
Currently, Bangladesh manufactures products worth $1.2bn of which $330m are of high-quality products.
In July-May 2013-14, Bangladesh earned $76.50m exporting plastic products, which is 2.14% less compared to $78.17m of the same period of last fiscal year. In the last fiscal Bangladesh’s export earnings from the sector was $84.51m.