The demand for plastic products is expected to grow as plastic consumption is
growing rapidly in Bangladesh.
Per Capita consumption of plastic grew from 5.56kg in 2005 to 17.24 kg in 2017 and is
still below the global average of 80kg per person which is indicative of potential
for further growth. In addition to increasing demand for consumer items such as
plastic furniture and kitchenware, double digit growth among established industries
such as RMG, pharmaceutical, healthcare, motorcycle assembly and electronics
industry is expected to drive the demand for plastic products in the domestic
market.
Plastic exports from Bangladesh have been growing at a rate of 4.5 % per annum since
2014. Bangladesh exports a variety of plastic products among which packaging items
make up the largest share followed by consumer products such as tableware and
kitchenware. Exports of household items have been particularly promising with a
growth rate of 25% per year since 2014. PVC pipes, polythene sheets, plastic wastes,
garment accessories items such as bags, plastic hangers, PET/PE bottles are also
some of the other significant plastic products exported by Bangladesh. The primary
export destination includes the USA, Canada, EU, China, India and Nepal. The global
market for plastic products is expected to grow at an annual rate of 4% and reach
USD 721.14 billion by 2025 driven by an increase in application of plastic in
automotive, construction and packaging industries providing ample opportunity to
raise exports from Bangladesh.
- Designated as Priority Sector by the National
Industrial Policy - 2016
- Reduced CIT for 5 to 10 years depending on
location for newly established “plastic recycling business”.
- Reduced import duty on raw materials & Import
duty exemption on capital machineries
- 50% tax exemption for income derived from
export
- No VAT imposition on export goods
- 10% cash incentive on export value of plastics
products, PET bottles
- Export subsidy of 10 percent on polyester
staple fibre plastic produced from pet bottle flex.
- Export subsidy of 5 percent on PET bottle
- Plastics Industry Development Policy 2020, aims
to establish a competitive plastic/packaging hub in South
Asia and internationally accepted brands
- The “National Industry Policy 2016” recognized
plastic products as one of the priority sectors and it is
also one of the highest priority sectors in the Export
Policy
- Plastic products from Bangladesh has Duty free
export to EU, Quota free duty-free access to 8,256 products
to China
- Bangladesh avails trade preference and
concession under GSP, SAFTA, APTA, BIMSTEC trade frameworks.
Supporting Ministry/Institution
Industry Associations
Household goods such as kitchenware, furniture and home decoration items made of
plastic has gained popularity as a cheaper and durable alternative to other
materials. The domestic plastic consumer market was valued at USD 238 million in
2015 and grew at a rate of 20% per annum. With the rapid growth in purchasing power
combined with increasing urbanization, demand for convenient plastic furniture is
expected to grow further. In addition, exports of tableware and kitchenware from
Bangladesh have been growing at a rate of around 22% since 2014 albeit from a
smaller base. With the global trade of consumer plastic items accounting for USD
76.38 billion in 2019, Bangladesh has plenty of opportunities to increase its
exports of plastic household items further.
PThe plastic toy segment has recently made entry in the national export basket,
demonstrating tremendous growth in export value. The domestic market as well has
steadily grown to a USD 1 billion segment. The demand is being increasingly met by
local industry owing to skills enhancement by local producers and reduced duty for
imported materials. The key challenge for local industry is maintaining compliance
with the safety standards upon exportation to the EU market.
Demand for component parts for the assembly and manufacturing of automotive and
electronic products has increased considerably as local and foreign companies in
these sectors saw phenomenal growth. These assembly industries face increased
competition and need to reduce production costs through local parts sourcing,
plastic parts to begin with. Foreign suppliers of plastic parts are welcome to meet
such untapped demands, preferably in partnership with local plastics industries.
Application of plastic products such as PVC pipes have been increasing in
construction due to its light weight and corrosion resistance qualities. The demand
for construction related plastic items is expected to increase further due to rising
infrastructure projects in the country. Furthermore, Bangladesh has opportunities to
increase its export of plastic based construction products to take advantage of the
rise in infrastructure projects globally particularly in Asia Pacific.
The Plastics industry is serving as a backward linkage industry for many growing
industries especially in the RMG, pharmaceuticals & FMCG which has created a lot of
opportunities for value addition within the country. The plastic packaging industry
is expected to experience robust growth due to emerging sectors such as food
processing, agriculture and healthcare. Furthermore, driven by high demand from
consumers in emerging economies, the packaging industry is estimated to be one of
the most prominent application segments in the plastics market globally.
Bangladeshi government intends to develop a plastic recycle base through reduced
income tax measures. Bangladesh generates around 380 tons of plastic waste every
day, about 30% of which are said to be recycled currently. Bangladesh at the same
time imports a large volume of plastic/PET resin. FDI is expected to help Bangladesh
to augment plastic recycling plants with state-of-art and energy-efficient
technologies.
