The Financial Express

Relocation of plastic units

Relocation of plastic units

The spread of plastic in our lives is perhaps unlike any other manufactured products. Globally, plastic predominates as an indispensable item, despite the many harms it often causes to the environment. Currently, there are efforts towards cutting down the ill-effects, and one hopes these succeed to the benefit of billions of people dependent on plastic products all over the world. Thus while one speaks about plastic, there are other things that come up. One such is the poor or inadequate recycling of plastic waste. This is a scene common to most developing countries, and Bangladesh is no exception.

While pollution caused by plastic waste is tormenting for the environment including aquatic resources necessitating urgent action, the reason why this manufacturing sector needs better management is increasingly felt at home and abroad.

The country's export of plastic goods is growing. However, the figures are not big enough to inspire great optimism. The fact remains that in Bangladesh, plastic plants have only recently opted for modern technology in producing various food and non-food grade products. With more technology back up, and accompanying diversification, the industry -- though scattered and even disorganised -- has the potential to grow extensively if provided with the right facilities. This may open up a new vista for exporting.

It may be noted that exporting was far from the targeted goal of the industry even a decade back, though there were few enterprises which were exporting in small volumes. Mainly it is the local demand that motivated factories-medium, small and very small-to produce plastic products.

Annual sales of plastic products in Bangladesh are currently estimated at around Tk 150 billion in the local market, in which household items account for nearly Tk 20 billion. Increase in domestic supplies reportedly grew at 15 per cent a year over the last several years. Industry insiders, quoted in recent newspaper reports, said the sector is experiencing fresh investment to the tune of Tk 1-1.5 billion each year. The country's plastic sector is said to employ around 1.2 million people directly and indirectly in well over 4,500 small, medium and large manufacturing units. Value addition in manufacturing is also commendably high, ranging between 50 and 70 per cent. Earnings from plastic exports stood at $85.70 million in fiscal 2013-14. At present, around 5,000 factories are producing plastic products in more than a dozen categories. 

Use of plastic products in the country has grown manifold thanks to the dynamic improvements in recycling technology-- a key stimulus in increased production on the one hand and growing consumer preference on the other. However, lack of an upgrade in quality and diversification in product range is commonly attributed as the main impediment to the sector's growth to a far higher level. This holds true to domestic consumption but more so, when it comes to exporting.

Global market of plastic is essentially demand-driven. Price structure of plastic products is highly wide-ranging, able to absorb immensely diversified products by the low, middle and up-end market segments.

Despite the progress reported in the media recently, the concerned quarters consider this far from what it actually should have been in view of the overwhelming surge in global demand. Major improvements in infrastructure, waste management, recycling and skill development are some of the critical areas in need of urgent attention to push the growth momentum to the desired level. In addition to these basics, product development and product adaptation should be attended to as a matter of priority. This, unfortunately, is an area many of the manufacturers miss out resulting in less than expected success in accessing overseas markets.

Now, the potential and prospects of growth can only be expected to be realised once the industry is shifted to a suitable location -- a plastic hub, preferably on the outskirts of the capital.  This newspaper, not long ago, had pointed out the need for a plastic hub in the country so that attempts for improvement of the sector could be taken up in a planned manner besides providing opportunities for the factories to operate hazard-free and attract overseas investment. Industry leaders have also been demanding a dedicated location which besides providing hazard-free production process will also help meet various compliance needs of overseas buyers. The concerned quarters feel that a plastic hub with modern recycling plant, waste management facility, properly trained workers and necessary infrastructure will be able to manufacture products at competitive prices for exports even after a reasonable raise in the present wage structure.

The country needs a plastic policy in the first place. The policy among other things should provide strict guidelines for manufacturing-- away from the traditional methods prone to cause harmful effects, and also envisage enforceable measures to take care of waste recycling. Also the policy should envisage a well thought-out plan for relocation of the numerous plants, mostly small and spread out all over the country, to a suitable place.

It is heartening to learn that the government and the World Bank Group are now well set to provide matching grant facilities to plastic production under a project, Export Readiness Fund. Relocation of the plastic producing units to a suitable place would provide ample opportunity for technological upgrade and meeting compliance needs under the project.  

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