Ali Trading And Engineering Company: History

Plastic is an engineered material used to manufacture a wide variety of products to meet the domestic demand in Bangladesh as well as some products are exported. The plastic industry has emerged as an important industrial sector in the country during the last two decades. At present there are 3000 plastic -

manufacturing units, 98% of which belong to

the Small-Medium Enterprises (SMEs). Domestic market size is Tk 7,000 crore.

Per capita consumption of plastics in Bangladesh is 5 kg per year.

The plastic sector constitutes 1.0 of GDP and provides employment for half a million people. Total export earning for both direct and deem (RMG accessories) exports is about US $ 337 million.

An in-depth study of the plastic sector reveals multi-dimensional constraints and an excellent prospect for future growth. Major constraint in the plastic sector is the lack of an institutional arrangement dedicated to this sector, in order to provide supporting services such as skilled manpower, testing facilities for quality control, innovative technology and consultancy services. The availability of cheap labor and the fast developing plastic wastes recycling industry due to rising cost of petroleum (raw material of polymers) provide Bangladesh potential advantage of competitiveness in the global market.

An expert ATEC-BD entrepreneurship in the plastic sector have developed the plastic industries with their own initiative and finance. Now, considering huge potential of this sector and the multi-dimensional nature of the constraints, the government must provide supportive policy and institutional arrangements.

EMERGENCE OF PLASTIC INDUSTRIES IN BANGLADESH

The plastic industry in Bangladesh is relatively new compared with the textile and leather industries. The plastic industry began its journey as a small industry in 1960’s. Since early 1960’s the plastic industry witnessed rapid growth due to introduction of free market economy.

SALIENT FEATURES OF PLASTIC INDUSTRIES IN BANGLADESH

The plastic industry in Bangladesh uses imported polymer granules. During the period 1989 to 2007, the import of polymers increased from 10,000 tonnes to 289,000 tonnes per year. At present total consumption of polymers including imported polymers and recycled plastic wastes is 750,000 tonnes in FY 2010-2011. This corresponds to the per capita consumption of plastics in Bangladesh 5 kg per year against the world average 30 kg. Per capita consumption in India and ASEAN countries are 8kg and 17kg respectively. At present plastic consumption is a measure of per capita GDP in a country, now it can be seen that per capita consumption of plastics in Bangladesh lags behind China and India. There are about 3000 manufacturing units in the plastic sector of which 98% belongs to the Small and Medium Enterprises (SMEs). The plastic sector contributes 1.0 percent of GDP and provides employment for half a million people.

MILESTONES OF DEVELOPMENT OF PLASTIC

INDUSTRIES IN BANGLADESH

YEAR	TECHNOLOGY AND PRODUCTS
1960’s	Small products such as toys, bangles and photo frame were made using hand made molds. Plastic spare parts for jute mills.
1970’s	Automatic machines were installed to manufacture household utensils such as plastic jugs and plate
1980’s	Film blowing machines to manufacture plastic bags
1991’s	Plastic accessories especially hangers for exportable garments
2000’s	Molded plastic chairs and tables. Water tank made by rotation molding. Locally developed machines (shredder, extruder and pelletizer) for recycling plastic wastes.

BANGLADESH PLASTIC SECTOR AT A GLANCE

Domestic Market	Tk. 7,000 Crore (US $950 million)
Per Capita Plastic Consumption	About 5 kg/Year
Direct Export Earning	Tk. 500 Crore (US $ 69 million)
Deem Export : RMG Accessories	Tk. 2000 Crore (US $286 million)
Manufacturing Units	About 3,000 small, medium and large plastic manufacturing units operate across the country
Recycling Sector	There are 300 small units in Dhaka City which recycle about 138 tonnes/day
Growth	20 percent per annum During the 1990’s .
Employment	Half a million workers are employed in the sector.

Plastic Products : Some of the products for local consumption and export are given below. Applications of plastic products include Packaging, Healthcare/Pharmaceutical and Construction, Consumer Products, Agriculture and other Industrial uses.

PLASTIC PRODUCTS AND ITS APPLICATIONS IN BANGLADESH

APPLICATIONS	PRODUCTS
Accessories for RMG	Packaging material, bags, hanger etc.
Household, Tableware & Kitchenware	Bucket, jug, plate, glass, containers etc.
Furniture ware	Chair, Table, furniture etc.
Packaging	All kinds of food and non-food packaging
Healthcare	Toiletries (Soap case, tooth brush), Medical Accessories (blood bag, saline bag, injection, medicine container)
Building and construction	Plastic pipe, door, toilet flush etc.
Electrical and Electronic Equipment	Electrical cables and wires, switches, regulator, computer accessories, telecommunication equipment etc.
Agricultural products	Plastic pipes for irrigation, and plastic films for shedding crops
Industrial Applications	Engineering parts

PROSPECTS OF PLASTIC INDUSTRIES IN BANGLADESH

Shift of Manufacturing Industries : Manufacturing is a sun set industry in the west. Plastic consumption there is the highest on a per capita basis. A shift in manufacturing from the west to a region with low labor cost, high knowledge and technology base can be expected (Ambani- 1998). Bangladesh has a competitive advantage in the case of labor cost. Other qualities are to be acquired in order to be competitive in the international market.

Bangladesh is making an effort to diversify its expert items. Among the many items of export RMG, knitwear, frozen food, jute and leather constitute the major export of over 85% Export of plastic goods in 2009-2010 was about US $ 337 million. It includes both direct export and deems (RMG accessories) export. Study indicates that the direct export of plastic goods has been on the increase every year. In 2010-2012 the target is US $ 84 million . There is no production of polymers in Bangladesh. The plastic industry uses imported raw materials of polymer granules. However, this not a disadvantage for industry.

Competitiveness : The availability of cheap labor and the fast developing recycling industry of postconsumer plastic wastes in Bangladesh are potential advantages to provide competitiveness in the global market ( 2005 ).

SECTOR WISE EXPORT EARNINGS OF BANGLADESH IN 2009-2010.

Sector	Export in Million USD	Sectoral Share (%)
RMG & Knitwear	12,496.72	77.12
Jute & Jute Goods	736.44	4.54
Tea	5.65	0.03
Leather & Footwear	434.61	2.68
Frozen Foods	437.40	2.70
Agricultural Products	242.35	1.50
Engineering Products	311.09	1.92
Plastic Goods	336.60	2.08
Ceramic Products	30.78	0.19
Others	1,173.01	7.24
Total export	16,204.65	100.00

DIRECT EXPORT OF PLASTIC GOODS IN BANGLADESH

Financial Year	Million USD	Growth Rate %
2003-2004	22.0
2004-2005	38.8	76.4
2005-2006	44.4	14.0
2006-2007	48.0	7.5
2007-2008	54.1	12.7
2008-2009	52.3	-3.0
2009-2010	50.6	-3.0
2010-2011	68.7	35.0
2011-2012	84.2	22.0
Average 20.2% Source : Export Promotion Bureau ( Prothom Alo, October 15, 2011)

Market Size Potential : If we look back, in 1990 the consumption of plastics in Bangladesh was 15,000 tonnes. It took 20 years to reach the 750,000 tonnes, an increase of 50 times. At present the per capita consumption of plastics in Bangladesh is 5 kg/year as compared to world average of 20 kg. Thus, there is a huge potential for the growth of plastic industry in the country.

CHALLENCE ’ S

First and foremost challenge for the plastic industry in Bangladesh is to be competitive in the global market. Some of the large-scale plastic industries have demonstrated a capability to be world class in terms of technology, quality and costs. However, there are 3000 plastic manufacturing units of which 98% belong to the small-medium sector (SMEs). The major challenge facing this sector is to make the SMEs competitive in the global market by upgrading them in terms of innovative technology, products diversity and operation costs. It is to be emphasized that technology is changing rapidly and the life cycle is short.

Recognizing this reality, the SME foundation organized a day-long Expert Development, Acquisition and Transfer in Plastic S sub-sectors on April 24, 2008. The meeting on plastic subsector was attended by experts from BUET, BCSIR, BITAC and BPGMEA (Bangladesh Plastic Goods Manufactures and Exporters Association). The author was the keynote speaker. The following paragraphs describe the constraints and recommendations.

Major constraints are the lack of institutional arrangement dedicated to the plastic sector. As a result there is no supporting service available for the following .

Skilled manpower development
Mold design mold making
Testing facilities for quality control services
Technical consultancy services
Trouble shooting in operation of processing machine
Proper management of plastic wastes
Negative environmental image of plastic industries

For an environmentally sustainable growth of the plastic sector the above mentioned constraints need government policy support and intervention by the SME Foundation. The Environmental issue related to the plastic industries is discussed briefly.

Environmental Issue and Recycling of Plastic Wastes : Plastic products manufacturing is relatively environmentally sound. During manufacturing process the rejects and machine spares are usually recycled in the factory premises. Use of plastic chair, table and door save the forests with positive impact on the environment.

However, management of post consumer plastic wastes is a challenging problem in every country. The plastic waste management of thin polyethylene (PE) bags has been a serious environmental problem in Bangladesh during the past decade . In the late 1990’s the littering of thin polyethylene bags had created such an unmanageable situation throughout the country that in April 2002 the parliament passed a bill banning the thin plastic bags. More than eight years has passed since the passing of the bill, the problem has not yet been fully solved. Lack of proper management of thin plastic bags is one of the reasons for the existing negative image of the plastic industry in the country. This affects export of plastic goods due to noncompliance of environmental standards by the plastic sector. The entrepreneurs in the plastic sector and the policy makers must create public awareness and provide alternative to plastic shopping bags.

RECOMMENDATIONS FOR CAPACITY BUILDING FOR PLASTIC INDUSTRY

A critical analysis of issues and policy related to the plastic sector revealed that the absence of an institutional arrangement is the main obstacle to the technological capacity building for self-reliance. Major areas of promotional activities by the SME Foundation in short, medium and longterms should include the following .

SHORT TERM	Survey of plastic industries to create a data base. Multi-instructional linkages (BCSIR, BUET, BITAC, BAEC, ATEC-BD) and other private indenting and trading organization. Up gradation of mold/die making. Quality control services. Training of technical manpower. Up gradation of technology in recycling factories.
MEDIUM TERM	Access to APCTT networking through the proposed NTTC. Relocation of plastic recycling factories from old Dhaka to outside Dhaka.
LONG TERM	Setup Bangladesh Institute of Plastic Engineering and Technology (BIPET) and Stablish more and more Indenting and Trading company like ATEC - BD (Polymer & Petrochemical Agent) in Bangladesh.

APCTT : Asian Pacific Centre for Transfer of Technology
NTTC : National Technology Transfer Centre (Proposed)
BITAC : The Plastic Division in BITAC was established with UN division lags well behind the current needs of plastic industries in Bangladesh. However, mold making experience of BITAC may be useful to upgrade this technology.

ATEC - BD : Ali Trading & Engineering Company .

AIMS AND AREA OF ACTIVITIES OF ATEC - BD :

ALI TRADING & ENGINEERING COMPANY.

The aims of ATEC - BD is to conduct research and develop system for optimal processing of polymers including plastic postconsumer wastes. The Company will act as a Manufacturer/Agent’s/Trader and Supplier of various Polymer & Petrochemical Raw materials for domistics use and Internation trading. Provide training and consultancy services

for Plastic’s Machinery.