Sherpa Hossainy's Blog

Govt incentives could bolster PET flakes exports to $140m

Posted in Bangladesh, Business, Dhaka, Export and Import by Sherpa Hossainy on June 1, 2011

Published in The Independent on 1 June, 2011

Read the article on The Independent website

Digital print version

Bangladesh could rev up its export earnings from Polyethylene Terephthalate (PET) bottle flakes up to $140 million by 2014 if the government allows imports of PET wastes.

Currently Bangladesh exports on an average nearly 30,000 tonnes of PET bottle flakes a year, worth $14 million (Tk 100 crore), mainly to China, South Korea and Taiwan.

“Our existing capacity is 60,000 tonnes a year, and we do not have enough PET wastes as raw materials to go for full-scale production,” Sarwar Wadud Chowdhury, president of Bangladesh PET Flakes Manufacturers and Exporters Association (BPFMEA), told the Independent on Sunday.

“There are many investors waiting to set up new manufacturing units. If imports of PET wastes are allowed then production capacity will reach 300,000 tonnes by 2014,” Chowdhury said.

PET bottle flakes are produced from plastic bottle wastes and primarily used to produce Polyester Staple Fibre (PSF), which is used as synthetic fibre in spinning
mills.

Currently the government is denying permission to import used bottles, citing its adverse affects on the environment.

Chowdhury played down the fears of the government saying that the waste will only be used as raw materials and it will not have any adverse affect on the environment because they have the appropriate manufacturing technology.

“India, China, Malaysia and Indonesia are permitted to import used PET bottles, whereas we continue to run from one ministry to another, without any success,” the BPFMEA president said.

“Few sections of the society blame us for polluting the atmosphere on the contrary we contribute to conservation of nature by recycling wastes, cleaning up the rivers and creating job opportunities,” he added.

Chowdhury said currently there are about 3,000 PET waste flakes producing factories in Bangladesh, which employs almost 8 to 9 lakh people directly and indirectly.
“We are providing more than 50 per cent import substitution for the PET bottles made in Bangladesh,” he added.

Chowdhury also suggested setting up more manufacturing units to tap the growing PET flakes market worldwide.

In 2003, PET flakes cost $400 per tonne, which is now $1,000 per tonne, while the exports have also gone up to 30,000 tonnes from 500 tonnes in 2003.

“It only takes Tk 8-10 lakh and small machinery as primary investments to start PET flakes production,” he said.

Chowdhury pointed out that the erratic VAT collection procedure is acting as a hindrance to the growth of this industry. “There is too much of paperwork, which gives the VAT collection officers an opportunity to create troubles for us,” he said.

He also urged the government to reduce the source tax on exports from 0.5 to 0.25 per cent, provide duty-free bonded warehouse facility and increase the cash incentives from 10 to 20 per cent.

“We laud the Export Promotion Bureau’s efforts as it is soon starting an advertisement campaign to promote PET as a valuable asset for our country,” Chowdhury said.

He hoped government will take initiatives in the next budget to transform this labour-intensive industry into a major source for exports earnings.

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One Response

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  1. frochaw said, on April 8, 2013 at 8:22 pm

    that’s our business 🙂


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