Million-dollar industry awaits nudge

Arifur Rahman Rabbi

Bangladesh’s plastic waste recycling industry can help cut the country’s dependence on imported raw material for plastic goods and create jobs for thousands with proper support from the government, traders say.

Discarded plastic goods, such as bottles, are shredded and turned into flakes and granules, raw materials used to make a range of products.

Bangladeshi plastic goods manufacturers say they are mainly dependent on the import of PET flakes and granules though there is no available data on the import of the items.

Polyethylene terephthalate (PET) refers to a thermoplastic polymer resin of the polyester family which is widely used for manufacturing plastic bottles. The global PET bottle market reached a volume of 13.1 million tonnes in 2020, according to estimates by IMARC Group, a market research company.

Traders involved in the local plastic recycling industry say there are around 400 to 500 factories in Dhaka and surrounding areas.

They claimed that more than a million people are directly or indirectly associated with the sector but the market size is unclear. Some of the traders claimed that the local market size could be as big as Tk 1,000 crore.

Blessing in disguise

According to Export Promotion Bureau, Bangladesh exported plastic waste worth Tk 102.83 crore in July-May 2020-21.

Mohammad Nurul Alam, director of Bangladesh PET Flakes Manufacturers & Exporters Association (BPFMEA), said that Japan is the world leader in producing PET flakes followed by Thailand.

“We can say that Bangladesh is in third position. We produce better quality PET flakes compared to India, Pakistan, Sri Lanka or other countries around us,” he said, adding: “We’re making products, such as yarn and cloth, using recycled plastic and exporting them.”

Alam said the country currently exports 8,000 to 9,000 tonnes of PET flakes every month and earns around Tk 250 crore to Tk 300 crore annually.

Alam noted that a rise in ship fare from $1,000 to up to $4,000 and the pandemic have reduced their profit margin.

Bangladesh used to export PET flakes to China. But in September 2017, China stopped importing the item. Bangladeshi exporters then tapped the Indian market but India, too, stopped importing it from September 2019, he claimed.

The situation forced the manufacturers and exporters to pay more attention to quality and venture into the global market, he added.

“A huge quantity of PET flakes is being exported to Dubai, Vietnam, some European countries and even the US and Brazil from Bangladesh,” Alam said.

The global plastic recycling market was estimated to be $42.3 billion in 2020 and is expected to reach $60.7 billion by 2025, growing at a compound annual growth rate of 7.5 per cent, according to a report by Chicago-based Cision PR Newswire.

How the plastic recycling industry works

Some people pick up discarded plastic items from households, road side or waste dumping sites. They sell these to scrap shops, locally known as ‘Bhangari’. The small traders sort the plastic items according to their quality and type, and resell them to large Bhangari shops.

The plastic is cleaned before being turned into granules or flakes and sold to factories producing plastic products including bottles, toys, jugs, mugs, baskets, and buckets.

Muktar Hossain of Mollah Enterprise, a plastic waste trader in Dhaka’s Dhalpur, said he buys plastic from waste collectors for Tk 5 to Tk 20 per kg. On average, he can buy around 200kg of plastic per day and sell around 150kg daily.

The plastic waste is usually bought by traders in Chawkbazar’s Islambagh where they are turned into raw materials.

Shipon Mia, an Islambagh trader who buys plastic waste from scrap traders, said that they buy plastic bottles for around Tk 20 to Tk 22 per kg and resell them for Tk 25 to Tk 26 per kg.

He said they now buy and sell 300kg to 400kg per day on average. “When I started the business 22 years ago, I could buy 10kg to 20kg of plastic a day,” he said.

Billal Sheikh, owner of a plastic cutting factory in Hazirbagh Ali’s Ghat area, said he charges Tk 2-3 to turn one kilogram of plastic into flakes.

Mohammad Wasim, owner of a plastic goods factory in Hazirbagh, said that a 25kg bag of granules costs Tk 1,200 to Tk 4,500 depending on the quality.

There is no specific data on how much plastic waste is generated in Dhaka or in Bangladesh as a whole. 

According to the Condor Ferries – Marine & Ocean Pollution Statistics & Facts 2020-2021 – the world produces 381 million tonnes of plastic waste yearly and it is set to double by 2034.

Plastics recycling business in Bangladesh started in 1960.

Traders say a ‘Bhangari’ business can be started by investing as little as Tk 50,000 and setting up a recycling factory costs between Tk 5 lakh and Tk 10 lakh.

Apart from creating jobs for the low-income group, the sector is also contributing to keeping the environment clean.

BPFMEA’s Alam said that they get VAT exemption facility as exporters. But plastic waste traders and resellers are unaware of the government facilities.

Abdul Mannan Shikder, member of VAT Implementation and IT wing of the National Board of Revenue, clarified that there’s no VAT on plastic waste suppliers. “They are covered under the VAT exemption facility,” he told The Business post.

Addressing environmental concern

There are now 5.25 trillion macro and micro pieces of plastic in our oceans and 46,000 pieces in every square mile of ocean, weighing up to 2,69,000 tonnes. Every day around 8 million pieces of plastic make their way into the oceans.

More than 1 million seabirds and 1,00,000 marine animals die from plastic pollution every year, said the Condor Ferries. 

Abu Naser Khan, chairman of Poribesh Bachao Andolon, said that many poor people make a living by collecting plastic waste and are contributing to keeping our environment clean.

He said that the city corporations and municipalities need to work extensively on waste management.

Dhaka North City Corporation’s Additional Chief Waste Management Officer SM Shafiqur Rahman and Dhaka South City Corporation’s Chief Waste Management Officer Air Commodore Md Badrul Amin admitted that there is no arrangement for segregating waste from home.

All sorts of waste are collected together. The city corporation officials told The Business Post that they are working on an ‘Intermediate Treatment System’ (ITS) to segregate household waste to ease the waste collection system.

They did not specify any time frame for the ITS implementation.

Naser said that during plastic recycling, we should pay attention to where the water, used to clean plastic waste, is going to ensure that they don’t pollute water bodies.

Room to grow

Traders associated with plastic recycling said that the sector will grow further and contribute to the economy on a larger scale if the government pays attention to it.

Alam claimed that they find it hard to obtain bank loans due to various complexities.

Bangladesh Bank spokesperson Serajul Islam noted that the central bank has formed a Tk 3,000 crore stimulus fund during the coronavirus emergency. Farmers, underprivileged women and micro enterprises are eligible to get loans.

Banks and microfinance institutes are disbursing the loans. So far, 60 per cent loans have been disbursed.

On allegations of not providing loans, he explained that if loan seekers fail to submit required documents, then the microfinance institutes or banks look into it. “We’ve told the banks to assist (the loan seekers) as much as possible during this pandemic,” he told The Business Post.

State Minister for Industries Kamal Ahmed Mojumder said that the government was giving thoughts to plastic recycling business. “We’re working for the plastic village in Munshiganj. Plastic is being exported too,” he said.

Mojumder said he was not sure if there was a specific policy regarding plastic recycling sector.

“But we are considering ways to improve the sector and help it flourish,” he told The Business Post.