Pandemic leaves plastic goods exporters in a bind
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Shipments of plastic products from Bangladesh fell 16 % year-on-year to $101 million in fiscal year 2019-20 following outbreak of coronavirus across the world.
Over 142 plastic items are made in Bangladesh and the united states mainly exports intermediate products like film plastic, household items and garment accessories to the united states, Canada, the EU, China, India and Nepal.
Manufacturers achieved 22 % year-on-year growth in exports to hit $120 million in fiscal 2018-19. They even set a target to send goods worth about $150 million abroad in the next year.
But exports fell when buyers, especially from Germany and Italy, drastically reduced their orders within the last quarter of previous fiscal year because of the ongoing pandemic, said Md Jashim Uddin, president of the Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA).
Germany and Italy are still two of the hardest hit Europe by Covid-19. By July 14, Germany has 198,963 confirmed coronavirus cases and the quantity is even higher for Italy -- 243,230.
German buyers used to put orders with Chinese manufacturers, however they started sourcing from Bangladesh to avail cheaper, quality products, he said earlier.
New buyers began to result from Europe, particularly Germany-based supermarkets, which source household plastic products from Bangladesh, aiding in the rise of exports in fiscal 2018-19.
The orders fell as Europe went for the wholesale closure of shops and supermarkets to stop the spread of the deadly pathogen, he added.
In fiscal 2017-18, exports had seen a 16 % year-on-year drop when China stopped importing PET (polyethylene terephthalate) bottle scraps, according to the Export Promotion Bureau.
Bangladesh has only a 0.6 % share of the global plastic market worth $546 billion and the BPGMEA aims to occupy 3 per cent of the global market by 2030.
The south Asian nation produces various kinds extrusion material, moulding, thermosetting conversion like manufacturing of PVC pipes, shopping bags, injection moulding products, garment bags, woven bags, PET/PE bottle, laminated packages, making of profile, rigid sheets, garment accessories, household products, cosmetics, medicine packs etc.
The government offers 10 % cash incentive to exporters. As of this moment, total investment in Bangladesh's 12th highest export earning sector is around Tk 21,000 crore.
The plastic makers have created at least 12 lakh jobs in a complete of 5,030 small, medium and big factories in the united states.
Some 175,500 persons are doing job in small units, 444,000 in 1,480 medium units and 10,000 in big units.
Currently, there remain 100 plastic product manufacturers, who also aid export earnings of almost $800 million annually through direct and indirect backward linkage supplies to different sectors, especially the apparel sector, Jashim Uddin noted.
The plastic sector was quite dependent on raw material imports, that global competitiveness had an influence on their business, he said.
The primary raw material for creating plastic goods is polyolefin, which is derived through the refining of crude oil and cracking or distillation of gas liquids.
Despite having no polyolefin manufacturing unit, Bangladeshi businesses expected the plastic sector to create 25 % growth every year.
In line with the BPGMEA, the sector's sales keeps growing by about 20 % every year on the trunk of spiralling demand from domestic and export markets.
The association estimated, domestic market sales hit Tk 30,000 crore in fiscal 2018-19, up from Tk 25,000 crore in the last year.
Pran-RFL Group, which sends plastic goods to 60 countries, including Australia and EU nations, have failed to have the expected amount of export orders because of global impact of coronavirus, said Kamruzzaman Kamal, director for marketing of the group.
Bangladesh produces world-class household plastic products and RFL exports different items, including household items, bathroom fittings, drain and medical kit, he said.
He said he's hopeful that the sector are certain to get back again to its growing momentum as soon as the pandemic ends.
Source: https://www.thedailystar.net