Plastic goods makers badly hurt by NA, ME crisis

The country's plastic goods makers have been hit hard as prices of raw materials have been increasing by leaps and bounds since the beginning of the crisis in northern Africa (NA) and Middle East early this year, industry insiders said. They said the country's woven, poly and large-size bag producers as well as export-oriented hanger manufacturers might have to bear the brunt as they are struggling hard to adjust to the price hike of raw materials. Industry people said the prices of TPMC (thermo plastic moulding component) in primary form or resins have increased by at least 30 per cent since January. "We're now purchasing resins at a cost of 1800 dollars a tonne against 1400 dollars earlier," said Sahedul Islam Helal, president of Bangladesh Plastic Goods Manufacturers and Exporters Association. Mr Sahedul said the prices of the raw materials have been rising in proportion to the oil prices since the political crisis began in Egypt. Many plastic bag makers, however, have reduced production failing to cope with the growing prices of resins, the prime raw material needed to manufacture plastic goods, in the international market. Md Ziaul Haque, director of Shovon Woven Bag Manufacturing Industry Ltd., told the FE: "We've reduced the volume of production of bags as we've a limited scope to serve the present market." Woven bags are used to carry sugar, rice, cement, fertilisers and grains and poultry feeds. The director Shovon Woven Bag Manufacturing company which exports its goods to many countries including India, said they are facing working capital crunch due to the price hike. Md Jashim Uddin, vice chairman of Bengal plastics, said: "Export-oriented hanger makers are also badly affected as their foreign buyers are unwilling to adjust to their higher prices leading to huge financial losses." Mr Jashim, also first vice president of FBCCI, said export-oriented companies take orders for a certain span of time adding: "We've limited scopes to review the prices for the foreign buyers." Bengal Hangers is the biggest in Bangladesh with per day production capacity of 2.0 million pieces and the third largest in Asia. Bangladesh has around 3000 plastic goods manufacturing companies with nearly 400 export-oriented enterprises. It imports around 300,000 tonnes of TPMC annually worth Tk 40 billion. The annual sales turnover of plastic goods is worth Tk 100 billion.