Domestic production of paper has increased substantially in the last few years due to setting up of new factories, sector insiders have said, which has helped mitigate the country's import dependence.
At present, according to their estimate, around 60 per cent of the annual demand -- half a million tonnes -- is being met by the local factories. Some 18 to 20 new units commenced production in last five years, strengthening the sector.
Five years ago, the local factories were able to meet half of the then demand.
"Our import dependency declined gradually with the new manufacturers entering into the market," Hasnat Mohammad Abu Obaida, President of Bangladesh Paper Mills Association, told the FE.
He, however, pointed out that local manufacturers produce only white or news print papers -- some more than the annual demand for 0.4 million tones -- leaving the country almost entirely dependent on import of high-end papers like art papers, art cards, Swedish boards, duplex boards and brown papers etc. to meet the rest of the demand.
He suggested local manufacturers to focus on high-quality products to tap the full potential of the growing sector and lessen the import dependency.
"We always encourage our members to focus on the products not being manufactured here yet," said the association president, adding that two to three companies have already started producing such high quality papers while three to four more companies would start very soon.
He stressed the need for policy supports like reducing import duty on raw materials and chemicals, and ensuring uninterrupted supply of gas and electricity to motivate the companies to go for the high-end products. "It will obviously help unveil some unique opportunities for the country."
Around 20 years ago, the paper factories under Bangladesh Chemical Industries Corporation (BCIC) used to produce about 90 per cent of the total production in the country.
Only Karnaphuli Paper Mills (KPM) of the BCIC enterprises is in production now, contributing only 5 per cent of the total domestic production.
There are 72 paper mills in the country at present and four to five new ones are expected to enter the sector very soon.
The lead manufacturers in the private sector include mills of Basundhara Group, Partex Group and T.K. Group, Sonali Paper Mill, Meghna Pulp & Paper Mills Ltd, Creative Paper Mill, Capital Paper Mills Limited, Hakkani Paper Mills and Hossain Pulp & Paper Mills.
Price per metric ton paper produced by the local companies is around Tk 78,000 to Tk 82,000 as compared to around Tk 72,000 to Tk 75,000 two-three years back.
However, Secretary of Bangladesh Paper Importers Association Md. Shafiqul Islam Vorosha said that various kinds of official papers, art papers, art cards, Swedish boards, duplex boards and other distinct quality papers are largely imported items.
"Import of these items increased more than 30 per cent over the last five years," he added.
Shafiqul Islam said around 70 per cent papers is being imported from China and the remaining from India, Indonesia, Japan and Korea.
He said price of the imported items has increased slightly over the last two to three years. "The price depends on international market and the tax rate. Now we have to pay up to 60 per cent tax on all kinds of imported items," he added.
Now the price of art papers, art cards, Swedish boards and duplex boards is Tk 90,000, Tk 70,000, Tk 82,000 and Tk 60,000 per metric ton respectively as compared to Tk 87,000, Tk 68,000, Tk 80,000 and Tk 58,000 respectively two to three years back.
However, industry insiders said, the country's local companies need to address some challenges for manufacturing quality papers. It needs to ensure availability of main fibrous raw materials including bamboo and wood, sufficient recycled fibre, foreign pulps and chemicals, modern technology/technique, prompt importing mechanism for foreign chemicals and necessary experts.
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