Plastics
Snapshot
Overview
Low per capita consumption of Plastic indicative of huge growth potential in Domestic market.
Duty/ Quota free market access to key export destinations with growing export market with plastic products being exported to over 70 countries
Opportunity to grab global market share due to China’s shifts in industrial structure
Bangladesh
Advantages of Bangladesh
The demand for plastic products is expected to grow as plastic consumption is growing rapidly in Bangladesh.
Large Domestic Market
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.
Growing Export 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.
Consumer product
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.
Plastic Toys
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.
Automotive and Electronic Parts
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.
Construction Materials
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.
Packaging industry
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.
Plastic waste recycling
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.
Consumer product
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.
Plastic Toys
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.
Automotive and Electronic Parts
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.
Construction Materials
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.
Packaging industry
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.
Plastic waste recycling
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.
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