The plastics industry basically emerged in Bangladesh during the 1980s as a backward linkage for supplying items required for readymade garments (RMG) sector, such as plastic hangers and other accessories. By now, the country has a large and diverse but somewhat unsophisticated plastics sector. There are around 5 thousand establishments in the sector engaged in relatively labour-intensive production process by employing about 2 million workers. Apart from RMG accessories, exports from the sector are mostly confined to packaging (PVC bags), scrap plastic, recycled waste, and toys in recent times. Although the size of the global plastics market is quite massive, the rapidly growing domestic market offers huge opportunities to Bangladeshi entrepreneurs. In fact, the sector had been experiencing double digit annual growth before the Covid-19 pandemic struck in 2020, when the exports were expected to reach USD 4 billion. But despite the existence of a domestic plastic recycling industry, the supply chain still remains undeveloped. Consequently, most of the original plastic raw materials have to be imported, as only about 10 per cent of the inputs used in production of plastics in Bangladesh emanate from recycled sources.
Although concerns about plastic pollution are on the rise globally, plastics undoubtedly have some economic cum environmental advantages over comparable alternatives like cement pipes and glass bottles (IFC, 2019). Efforts to address pollution are mainly focused on circularity and recycling of plastics. Studies have shown that when measured by energy, land-water use, application of fertilisers-pesticides, human health effects and carbon dioxide emissions, the environmental impact of polyester is lower than that of natural fibres if circularity is embedded in its life cycle. Besides, at present a major proportion of the plastic wastes collected in the country are shredded and exported to China or India, where these are processed for producing top-grade resins and synthetic polyester fibre (PSF). Ironically, this PSF is later imported by the RMG factories of Bangladesh. Consequently, Bangladeshi entrepreneurs have a unique opportunity to invest in this labour-intensive and complex industry by incorporating plastics circularity solutions (WBG, 2021).
The International Finance Corporation (IFC) carried out a study titled "Market Assessment of Circularity of Plastic Sector in Bangladesh" in 2019. It identified a number of specific opportunities that exist for private investments in the local plastic recycling industry. These include production of high-grade recycled polymers; manufacturing PSF from recycled plastic; and modernization of the construction materials industry. Currently, the supply chain of post-consumption plastic waste collection is quite unorganized and participated mostly by waste-picker children (Tokai) and small-scale dealers of scraps. This informal or unorganized nature of supply chain exposes the workers to environmental and social hazards. Consequently, the manufacture of top-grade recycled polymer and its subsequent utilisation for producing recycled PSF can be facilitated by formalising plastic recycling in the country in an organized manner.
The value of global trade in manmade fibre-based garments in 2017 was USD 150 billion, with Bangladesh having a share of 5 per cent. But domestic production of PSF would put Bangladesh in a strong position and help it move upmarket by producing higher technology-oriented apparels through plastics recycling and circulatory solutions. Commitment by the global RMG brands to enhance the share of recycled polyester as a component of sustainable development strategy across the globe will undoubtedly give a boost to this industry.
The producers of plastic pipes, sheets and frames currently depend on basic mechanical recycling processes for producing recycled powder in the country. But the quality of recycled plastic can be easily improved through the application of modern technology, as the proportion of recycled content can be raised to 50 per cent from the current 10-20 per cent. This could generate significant efficiency gains and help bridge the large gaps in infrastructure and affordable housing in Bangladesh.
The IFC study (2019) has, however identified some constraints to the growth of local plastic recycling industry. These include: lack of recognition as a distinct industry, which deprives it of industrial policy incentives; absence of plastic waste management regulations, which make it tougher for enterprises to comply with international standards; unorganized nature of collection and recycling practices resulting in lower-quality collection cum health risks; dearth of domestic testing facilities, which adversely impact the small-scale manufacturers as they cannot afford to test products at international facilities; scarcity of suitably skilled workers, especially in new technologies; obsolete recycling technology resulting in sub-standard recycled resin leading to poor-quality PSF production; misplaced cash incentive from government, as recycled plastic exports are denied such incentive, although plastic flakes receive it; absence of domestic tool moulds and die-making facilities, which compel SMEs to seek help from international providers thereby escalating lead times and costs.
It may be recalled that the Government of Bangladesh had drafted a 'National Plastic Industry Development Policy' in 2020. According to this draft policy, Bangladesh has only 0.6% share in the US$ 570 billion global plastic market. The present market for Bangladeshi plastic products is about US$2.99 billion - of which 83.4 per cent is linked to local market, while the rest 16.6 per cent to the global market. Despite huge potential, the country still lags far behind in utilising preferential market access for plastic products mainly due to lack of proper policy support and enabling business environment. The government should therefore take immediate steps for finalising and implementing the plastic policy.
In order to take advantage of the opportunities for developing plastics recycling industry, regulatory constraints should also be addressed and environmental cum social risks must be tackled alongside ensuring price competitiveness of recycled materials. Although the current setting of virgin plastic prices posechallenges to investments in recycling, experts hold the view that medium-scale PET (poly-ethylene terephthalate) recycling and PSF manufacturing units could yield strong returns in Bangladesh. Greater adoption of plastic recycling and circularity is also likely to generate positive environmental impacts, improve efficiency of the existing plastics industry, partially substitute plastic goods import (USD 1.7 billion in 2017), and create higher quality cum new technology-based jobs.
Dr Helal Uddin Ahmed is a retired Additional Secretary and former Editor of Bangladesh Quarterly.
