If given policy support, plastic sector can achieve RMG-like feat

The plastic industry has the potential to become a major export earner after the readymade garment industry, businesspeople said at a webinar Saturday, adding that if the sector gets proper policy support, it can export products worth billions of dollars.

Addressing the online seminar as chief guest, Principal Secretary to the Prime Minister Ahmad Kaikaus suggested forming a national task force with participation from public and private sectors for the development of the plastics sector, identifying various prospects and challenges in the sector.

For sustainable development of the plastic sector after the post-LDC era, speakers at the webinar urged for easing duty structure on import of plastic raw materials, modernisation of respective policies, encouraging uses of bio-plastic, increasing negotiation skills, and signing FTAs or PTAs with potential countries. 

They also recommended product diversification, innovative designs, world-class testing lab facilities, development of a plastic waste management system, a central bonded warehouse facility, tax incentives, coordination among government agencies, easy access to finance and investment in research and development. 

Dhaka Chamber of Commerce and Industry (DCCI) President Rizwan Rahman chaired the webinar, "Sustainable Export Growth in Post-LDC World: Strategies for the Plastic Sector", organised by the DCCI. 

FBCCI President Md Jashim Uddin attended the event as a special guest.   

Ahmad Kaikaus said, "We should have our certification agency and for establishing it, the PPP model can be the best option. At present, we are spending a lot of money for certification." 

In today's world, we cannot avoid using plastics, rather we should go for 100% recycling to minimise pollution, he added. 

Echoing other speakers, he also said freight charge and logistic cost for export of the plastics goods are high and need to be decreased. 

FBCCI President Md Jashim Uddin said the plastic sector is a billion-dollar export earning sector, but it is treated as a million-dollar industry because a large part is exported as deemed export, which has the potential to do better. 

He called upon authorities concerned to declare the plastic sector as a green industry, arguing that it does not pollute the environment as it reuses the wastes. 

To facilitate 100% recycling of used plastic goods, he suggested an extensive waste collection mechanism/system under the guidance of city corporations. 

The FBCCI president also demanded an equal corporate tax rate for all exporters, at present which is 30% for the plastic industry. 

"We need to expand backward linkage and sub-contracting industry in this sector so that small producers can provide thousands of components to the large industries," he added. 

DCCI President Rizwan Rahman in his opening remarks said that the plastic sector witnessed rapid commercialisation and became an important export item for Bangladesh. The export of plastic goods contributes 0.33% to the GDP. Around 5,110 companies are operational in the sector and 98% of them are SMEs. 

To ensure sustainable industrial growth, a draft Plastic Policy was prepared by the government. Since many preferences will not exist in the post-LDC era, FTA and RTAs can be signed with the potential countries. On the other hand, an enabling tariff regime is needed to support raw material import in the post-LDC time, he added. 

"Moreover, a specific incentive plan is needed in the new policy to promote bio-plastic. Ensuring a sustainable export market requires competitiveness by improving efficiency in production and market access," Rizwan added.

He said, "We need to replicate the RMG success model to other export-led manufacturing sectors as well. Product diversification is essential as well as changing raw materials to recycled plastic waste as a viable alternative."

Bangladesh Plastic Goods Manufacturers and Exporters Association President Shamim Ahmed presented the keynote at the webinar.

He said in FY2020-21, the total export by the plastic sector, including direct and deemed, was more than $1 billion, while the domestic market size of this sector is worth $3 billion with a 4.5% annual growth. 

Access to finance, a central bonded warehouse, a skilled workforce, a credible testing facility, diversity, and plastic waste management are some of the major challenges for this sector, he added. 

National Board of Revenue Member (Customs) Md Shahidul Islam emphasised re-using single-use plastic items to reduce pollution and cost. He also stressed more value addition, diversification and quality assurance of products and establishing innovative design houses. 

PRAN RFL Group Chief Executive Officer Ahsan Khan Chowdhury said, "At present, our recycling capacity is growing at a faster pace. Our plastic products are being exported to Germany, Australia and USA but we should work on reducing freight charges or shipping costs to be more competitive."

He also requested to slash duty on the import of plastic raw materials to help increase export and take necessary measures to safeguard the domestic plastic market as well.  

Ijaz Hossain, a former professor in the chemical engineering department of the Bangladesh University of Engineering Technology, said plastic waste management, recycling and re-use are crucial for this sector. "We should have a standardisation and certification lab as well as a skilled workforce to increase plastic export."