LSMAB urges government action to unlock potential of local chemical industry
Despite having the capacity to meet 100% of the domestic demand for Sodium Lauryl Ether Sulphate (SLES)—a key ingredient in hand wash, shampoo, and dishwashing liquid—Bangladesh continues to rely heavily on imports from India and China. A similar trend is seen with Linear Alkyl Benzene Sulphonic Acid (LABSA), the main raw material used in the production of detergent powder, soap, and dishwashing bars, half of which is still imported.
Five domestic companies currently manufacture LABSA and SLES—Rhymer Chemicals Ltd, Crescent Chemicals Ltd, United Sulpho Chemicals Ltd, Liberty Chemicals Ltd, and Wata Chemicals Ltd. All are members of the LABSA and SLES Manufacturing Association of Bangladesh (LSMAB).
LSMAB has called for government intervention to protect and promote the local industry, emphasising that local manufacturers have the full capacity to meet the country's annual requirements—approximately 55,000 metric tonnes of LABSA and 10,000 metric tonnes of SLES.
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The association attributes the current import dependency to an unfavourable duty structure. While the customs duty (CD) for importing finished LABSA and SLES is just 10%, the duty on their raw materials stands at 5%, creating a mere 5% differential. LSMAB argues that this narrow gap does not sufficiently incentivise local production, especially when India imposes a 20% CD to protect its own industries.
The excessive reliance on imports has not only resulted in underutilisation of domestic manufacturing capacity but also contributed to an outflow of valuable foreign exchange and missed opportunities for local value addition.
LSMAB urged the government to adopt a similar protective approach as it has for other sectors, such as dairy, electronics, food products, beverages, FMCGs, basic textile chemicals, and pharmaceuticals—where increased duties and support have led to self-reliance and industrial growth.
To safeguard the domestic LABSA and SLES sector and unlock its full potential, LSMAB has proposed three key policy measures: Continue the exemption of 5% VAT for the LABSA and SLES industry until 2030, Allow duty-free import of raw materials for LABSA and SLES for the next five years and Increase the customs duty on imported LABSA and SLES from 10% to 15%.
The association believes these steps will encourage new local and foreign investments, improve government revenue through VAT and tax collections, strengthen supply chains by reducing lead times, and enable export opportunities—ultimately contributing to sustainable growth in the national economy.
