Bangladesh Reaches New Heights in Plastics Export - No Polyolefin Factory Required

Bangladesh: Polyolefin, the essential raw material in creating plastic products, is obtained through the refining of crude oil and distillation of natural gas liquids. Despite having no polyolefin manufacturing facility, Bangladesh has seen a surge in plastic exports due to their production of 142 different types of plastics. Riad Mahmud, Managing Director at National Polymer Group, an exporter of plastic materials, notes that Europe and other countries are turning away from China and towards countries like Bangladesh. This has evidently been beneficial for Bangladeshi trade as it has driven up their plastic exports.

Polyolefin exports from Bangladesh are expected to rise in the second half of this fiscal year, as buyers have placed more orders than before. The domestic market saw an increase in plastic sales from Tk 35,000 crore to Tk 40,000 crore over the past three years. KM Iqbal Hossain, Chairman at Thai Delux Plastic Industries, believes that the sector could benefit from its growing number of orders from China - if it weren't for the current dollar crunch and lack of cooperation from customs departments.

Entrepreneurs have reported various difficulties, including needing to spend a lot of time to have their raw materials released from ports. This delay in delivering products to buyers has been highlighted by the Time Release Study 2022 of the National Board of Revenue, which found that businesses had to wait 11 days and six hours for cargo to be released after arrival at seaports. KM Iqbal Hossain, Chairman at Thai Delux Plastic Industries, believes that if the customs department can ensure timely release of raw materials and capital machinery, the export volume could easily double in a year.

The war between Russia and Ukraine has resulted in a widespread increase in commodity prices, causing Bangladesh's currency reserves to deplete as the country needs to pay more for essential imports. This lack of US dollars in banks has thwarted their ability to open new letters of credit for importers, hindering trade activity. Meanwhile, plastics exports have been on the rise due to their competitive pricing and an uptick in orders post-pandemic. Shamim Ahmed, President of the Bangladesh Plastic Goods Manufacturers and Exporters Association, puts this growth down to these two primary factors.

As global demand for plastic products slumped during the pandemic, exports of plastic goods from Bangladesh took a hit. However, buyers have shifted their preferences to Bangladeshi products due to their competitive prices, leading to an improvement in the industry's prospects. Riad Mahmud of the Bangladesh Plastic Goods Manufacturers and Exporters Association is calling on the government to support this potential sector by increasing liquidity and access to credit. According to EPB data, exports of plastic items brought home $166.25 million in the last fiscal year - a significant increase of 44.21 per cent from the preceding period - and the government has set a goal to earn $200 million from these products.

Total global sales of plastic products reached an estimated $ 103.4 billion in 2021, China led the way followed by Germany, the United States, Italy, France, Poland, the Netherlands, Japan and Mexico - the top nine exporting nations for items made from plastic.