Chapter 1

INTRODUCTION

Increased production and expansion of trade is one of the main means of local resource generation. Employment opportunities can be created in a heavily populated country like Bangladesh with the promotion of commerce by strengthening industrial infrastructure, proper industrial development and finally enhancing export. This employment will pave the way for increased savings and investment, ensure capital flow, solve unemployment problems and eradicate poverty. In the past, jute sector was the major foreign exchange earner contributing more than 80 percent of the total foreign exchange of the country. But the share of jute sector towards foreign exchange earning started to decline due to the inroad of various synthetic substitutes and artificial fibers. Regarding the evolving issue special initiatives were taken by the concerned authorities at that time. But subsequently, it was evident that the nationalization attempt did not really help improve the performance of the jute industries. Rather, their performance marked continuous deterioration and bound them to discontinue their production. As a result market opportunity for synthetic fibers was inevitable and its entrance as raw material to the sack manufacturing industry was just a matter of time. Therefore, gani sacks, which were once made only from jute, were fully taken by the polypropylene woven sack manufacturing industry with the commencement of their production. It was the story of early nineties when Miracle Industry Ltd, the first pioneer in Polypropylene woven sack manufacturing industries incorporated as a joint venture Public Limited Company, with Bangladesh Government though its largest corporation, Bangladesh Chemical Industries Corporation (BCIC) to setup their industrial infrastructure. The commercial production was started from 1996. After then the Polypropylene woven sack industries in Bangladesh gradually started to flourish. The cheap price of its products and their demand in the secondary sack market has made it one of the major industrial developments of the country. It is set mostly up by private entrepreneurs, borrowing its

idea, setup machinery and raw materials from various foreign sources. In this regard several policies of the government have provided a better atmosphere to develop the sector. But a probe into its expansion raises several points that show some flaws, which will ultimately hinder its progress and objective. This report tries to opine those invisible flaws by examining the history, present state and activities of Polypropylene industries in Bangladesh with some suggestions to overcome these problems.

Objective of the Research Project

The main objective of the study is to provide a descriptive look on the polypropylene woven sack industries in Bangladesh that has been accomplished by the researcher through anticipated and opportunistic courses of action.

More specifically the objectives are: Reasons behind the development of the Polypropylene Sack Industries Present market scenario of Polypropylene Woven Sack Industries An overview of the market Demand and supply situation A look at the Industries/Manufacturers/Others who are the potential buyers of Polypropylene Woven Sack Understanding the quality of manufactured Polypropylene Woven Sacks in the industries of Bangladesh and the additional measures that can be taken to make it fully eco-friendly Activity performed by the reuse/recycle market of Polypropylene Woven Sacks Finally, existing policies of the government regarding export of Polypropylene woven sack and expansion of the infrastructure of these industries

Benefits from the Research Project

The primary benefit of the research paper is to give a picture of the state of Polypropylene Woven Sack Industries in Bangladesh. The study also tries to present a statistic on Polypropylene Sack Industries in terms of number of industries, cost, Locations and raw materials used. The main benefits, which are intended to earn by this research paper, are to make an overall assessment of the Polypropylene Woven Sack quality regarding its environmental parameters and to suggest further courses of action, which can make this sack environmentally sound. Findings from the survey not only demonstrate the rapid growth of Polypropylene Sack Industries in Bangladesh but also try to suggest essential initiatives required from environmental perspectives to make the sack photo chemically and biologically degradable.

Structure of the Report

Chapter One: Introduction Chapter Two: Methodology Chapter Three: Fundamentals of Polymer Physics and Its Manufacturing Chemistry Chapter Four: Present Market Scenario of Polypropylene Woven Sack in Bangladesh Chapter Five: Possibility of setting up High Quality PP Sack Plant Chapter Six: Truly Green Sack for Sustainable Earth Chapter Seven: Worldwide/Foreign Market Demand of Polypropylene Woven Sack Chapter Eight: Conclusion & Recommendation Bibliography Annex

Chapter Two: Methodology

Sources of Data
Majority of the data used in this report is primary data. Primary Data for this report has been collected through extensive market survey, physical observation, informal interviews and factory visit. The area coverage of the survey was Dhaka, Munshiganj, Naraynganj and some districts from North Bengal. Secondary data, collected mostly from articles found in the Internet, has also been used to enrich the findings of the report.

Sampling Technique & Sample Scope

The sampling model used here is Purposive Sampling. The target was to cover the major companies engaged in the following business areas: Woven Plastic Sack Producers Cement Producers, who either produce or purchase sacks for own consumption Flour Producers, who either produce or purchase sacks for own consumption Animal Food Producers, who either produce or purchase sacks for own consumption Fertilizer producers, who either produce or purchase sacks for own consumption As the sample size was very limited, this approach was deemed to produce the best result as it could cover the majority of the market dimensions.

Data Processing and Analysis

Collected information was processed with the aid of excel software. Detailed analysis is incorporated in the report, also with a suggested course of action for both: (1) Woven Sack Production Machinery, and (2) Polypropylene woven Sack

Table 2.1:Sample Size Covered in the Survey

Category

No. Of Companies

Interviewed PP Sack Producers Woven Plastic Sack producers 09 PP Sack Users/Buyers Cement Producers, either 14 produce or purchase for own consumption. Animal Feed Producers, either 08 producing or purchasing for own consumption. Flour Producers, producing or 02 purchasing consumption Total for own 33

Cement Industry

Animal Feed Industry

Figure 2.1:Ploting of sample size covered in the survey

Flour Industry

Source: BMG BD Source: BMG BD

Limitations
The major limitations of this research project were: 1) Limited time for data collection and analysis 2) Due to the time and resource constraint, the survey area included only the city areas of Dhaka, Naraynganj, Munshiganj and two districts from North Bengal 3) Due to the above mentioned constraints, only a limited number of sample companies could be covered in the field survey 4) Majority of the target companies emphasized on confidentiality and were not much inclined to give information 5) The information in regard to some specific market dimensions is perceived information as per the interviewees, which are not hard facts 6) Secondary data related to polypropylene woven sack industries are very few. Not many quantitative studies have been carried out 7) Finally the major limitations, which hindered my primary data collection process, were lack of fund and slow bureaucratic process during the arrangement of factory visit

Chapter Three: Fundamentals of Polymer Physics and Its Manufacturing Chemistry

Polymer science addresses the chemistry and physics of large, chain-like molecules. As with the molecules themselves, this technical pursuit is diverse and complicated. The following discussion provides an introduction to the Physics and Manufacturing Chemistry of synthetic organic polymers for those with some knowledge of basic science.

What is Polymer?
The term polymer is derived from the Greek poly, meaning many, and mer, meaning parts thus polymers are substances made of many parts. In most cases the parts are small molecules, which react together hundreds, or thousands, or millions of times. A molecule used in producing a polymer is a monomer mono is Greek for single, thus a monomer is a single part. A polymer made entirely from molecules of one monomer is referred to as a homopolymer. Chains that contain two or more different repeating monomers are copolymers.

Polymerization
Polymerization is the process of joining together a large number of small molecules to make a smaller number of very large molecules. The reactants (i.e. the small molecules from which the polymer is constructed) are called Monomers and products of the

polymerization process are called Polymers. There are significant differences between the chemical and physical properties of polymers and those of the monomers from which they are made. This polymerization process can occur by two different mechanisms: by addition polymerization and condensation polymerization

Addition Polymerization
Addition polymerization is the joining together of two or more simple molecules, called Monomers, to form a new compound of the same empirical formula, called a polymer, which has a very high molecular weight. The addition polymerization process can only occur when the monomer molecule is unsaturated (i.e. contain double bonds or triple bonds). Thus, addition polymerization is characteristic of ethene and the other ethenes. The polymers formed by addition polymerization are thermoplastic. These include Polypropylene and Polystyrene.

Condensation polymerization
This may be defined as the process in which the monomer molecules of different compounds combine with the loss of some simple molecules, like water or HCl. Polyesters and nylon are formed by this process.

Isotactic
Isotactic is a term used to describe physical properties of polymer.In this phenomenon chains are defined as having substituent groups aligned in one direction. This enables them to line up close to each other, creating crystalline areas and resulting in highly rigid polymers.

Finally isotactic polymers refer to those polymers formed by branched monomers that have the characteristic of having all the branch groups on the same side of the polymeric

chain. The monomers are all oriented in the same way. If we represent a monomer by AB then an isotactic polymer is AB-AB-AB-AB-AB-etc.

Opaque
Not clear, not transmitting or reflecting light or radiant energy. No light passes through specimen. Some thick specimens, which appear to be opaque, may be seen to be translucent (when light passes through the specimen, but objects cannot be seen through it ) Or even transparent on thin edges when held in front of bright light.

Semicrystalline
Semicrystalline polymers constitute the largest group of commercially useful polymers. These polymers exists as viscous liquids at temperatures above the melting point of the crystals. Upon cooling, crystals nucleate and grow to fill the available volume. The reason these materials are called "semicrystalline" is that some fraction of the polymer remains un-crystallized, or, amorphous when the polymer is cooled to room temperature. The amorphous polymer becomes trapped between the growing crystals. As a result of the highly entangled nature of the polymer chains, the movement of the amorphous polymer becomes restricted.

Oxo-Biodegradation
Ordinary Polypropylenes because of their molecular make-up are not inherently biodegradable even though its molecular structure is simply composed of organic carbon and hydrogen. Polypropylene is relatively large molecule so it is too large to be ingested by microbes. With the use of Prodegradant Additives, Polypropylenes life cycle can be controlled by accelerating the natural oxidative process to fracture these large carbon chains into small ingestible fragments of organic carbon. These additives lie dormant in the manufactured resin until exposed to sufficient UV light, heat or mechanical stress, any one or combination of which will trigger the process.Once triggered it cannot be stopped; and depending on the available oxygen and microbial activity, the process will continue in air or soil. The only by-products from the process are CO2, H2O and biomass there are no
10

harmful residues. So Oxo-Biodegradation is a two steps process in which the polymer resin first disintegrate in to parts and oxidize by the influence of light and oxygen then these small fragments are ingested by microorganism like fungi, bacteria. .

What is Polypropylene?
Polypropylene is a raw material used in manufacturing polypropylene woven sacks for packaging cement, fertilizers, poultry feeds, wheat, rice, sugar and pulses, etc. Polypropylene granules that are a by-product of petroleum, is the main constituent needed to manufacture polypropylene woven sack. Other elements used to manufacture this sack are calcium carbonate and color granules. Polypropylene is basically semicrystalline, white and semi-opaque element, which is usually predominantly isotactic. Polypropylene has well chemical but poor UV resistance. As it has been said earlier polypropylene is a product of Petroleum, created hundreds of millions of years ago when organic matter such as plankton was compressed and trapped in huge carbon reservoirs as petroleum. Petroleum, a naturally occurring mixture that is obtained from wells (crude oil), is a complex mixture of hydrocarbons. Hydrocarbons are crude oils fundamental base consisting of about 85-90% carbon and 9-15% hydrogen. In addition, a various amount of oxygen and sulfur, and minute amounts of nitrogen, metals and other elements are also included in its composition. Carbon, present in the crude oil is characteristically organic. Organic carbon is different from carbon metal in that its origin is primarily organic plant tissues like any organic material in our environment, it is the primary food source for the tens of thousands of different microorganisms (bacteria and fungi) that survive and thrive in our air, soil and water. Like paper that is made from another organic material cellulose, polypropylene is made from the hydrogen and the organic carbon in petroleum, and like paper, polypropylene can also be made biodegradable.

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Picture 3.1:Polypropylene granules

Chapter Four: Present Market Scenario Polypropylene Woven Sack in Bangladesh

Machinery Used in Manufacturing Polypropylene Woven Sack
The categories of users are as follows: Category-1: Woven Plastic Sack Producers who sell to external parties

of

Category-2: Companies that produce Woven Plastic Sack for their own consumption

Nine companies that fall under Category 1 (sack producers only) were interviewed. In general, the interviewees responded/replied well on the topics like Yearly Production Capacity, Unit Selling Price (Tk.) per bag, Bag Size/ Weight, etc. They also disclosed the Manufacturer Company/ Brand of the Plant that they are currently using, and the country of origin of this machinery. The response was very limited when it came to cost aspects of the business. None of the respondents agreed to provide the Plant Setting Cost. Regarding Raw Material Cost per Bag, the respondents gave an idea on the percentage of costs associated with raw materials for bag production, but did not give any specific figures.

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From the survey, it was found out that these producers are predominantly using machinery imported from China. The reason for the popularity of China is the mix of price-quality they offer, with more emphasis on price, rather than quality. The price of Chinese machinery is substantially low compared to other brands. The price of Indian machinery is also low, and one of the companies interviewed is using Indian machinery. It was observed that, while making the machinery purchase decision, companies tend to focus on the price aspect more, rather than the quality. From the quality perspective they are well acquainted to brands like Starlinger which is renowned worldwide. The interviewees commented that they understand the motto -High Quality, High Price- and also know the fact that raw material costs are low in case of such brands but due to the price sensitivity interviewees fear that it would be a bit difficult for Starlinger or others, to sell their machinery at the beginning, in Bangladesh, because of the price sensitivity of the market.

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The table in the following page presents in detail the findings from the survey:
Table 4.1: Findings from the Survey, Polypropylene Woven Sack Producers
Jayson Group Of Compan ies PP Sack Producer Standard

Company Name

GQ Industries Ltd. PP Sack Producer Standard

United Fibre Industries Ltd. PP Sack Producer Both

Sino Bangla Industries Ltd. PP Sack Producer Both

Miracle Industries Limited PP Sack Producer Standard

Alliance Bag Limited PP Sack Producer Both

Hussian Bags Limited PP Sack Producer Standard

Shovan Woven Bag Mfg. Co. Ltd. PP, Paper and also Shopping Bags Producer Both

Business Type Bag Type (AD*STAR& Standard Sack) Production cost per unit Yearly Production Capacity Unit selling price (Tk.) Bag Size Bag Weight Raw Material Cost Per Bag Raw Material Source Plant Setting Cost Plant Manufacturer Company/ Brand

(not disclosed by the respondents) 3,65,000 pcs 11 4,38,00,000 pcs 13 (Double Ply) 10 (Single Ply) 25/50, 22/44 100-110gm 80% - 90% China, India, Saudi Arabia, Malaysia China, India 8,40,000 pcs 13 (Double Ply) 10 (Single Ply) 25/50, 22/44 100-110gm 90% Korea, Thailand, Taiwan, & India, China 3,65,00,000 pcs 11 80% - 90% China, India 1,44,00,000 pcs 13-14 (Double ply) 9.5 11 (Single Ply) W- 25; L- 50 110-115 gm 80% - 90% China, India 1,50,000 kg 12 19*29 &22*38 9.00 tk Australia 1,3500000 Pcs 13-14 (Double ply) 9.5 11 (Single Ply) W- 25; L- 50 110-120 80% - 90% 72,00000 pcs 13 24/44 9-10 tk Korea, Thailand, Taiwan, & India

China, India

(not disclosed by the respondents) Rising GCL LOOM MACHINE Yarn Frang

Source: Sample survey BMG BD 2005

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Table 4.1: Findings from the Survey, Polypropylene Woven Sack Producers (Continued) GQ Industries Ltd. United Fibre Sino Bangla Miracle Industries Industries Industries Ltd. Ltd.* Limited Hussian Alliance Bag Bags Limited Limited China Competitive market Good Prospect Shovon Woven Bag Mfg. Co. Ltd. Taiwan Jayson Group Of Companie s China Competitiv e market

Company Name

Country Of origin, India Taiwan Machinery Man Power 150 Required Interviewee Comments on Competitive Competitive Starlinger market market Machinery Source: Sample survey BMG BD 2005

India (before: Greece China) Competitive market

Competitive market

Good prospect

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Scope and Area of Polypropylene Woven Sack

The users of Polypropylene Woven Sack were interviewed to find out the market mechanism and demand of this item. The users of Polypropylene Woven Sack come from many industries (like: Cement Producers, Animal Feed Producers, Flour Producers, Fertilizer Producers, Sugar Mills, Rice Mills, Salt Producers, Tea Gardens, Cereals Producers, Chemicals Industries, etc.). Of these different categories, PP Sack users of the following three categories were covered in the survey: Cement Producers Animal Feed Producers Flour Producers.

The approach was made in way to cover both of these following aspects: What is the demand of Woven Bags, and how they are procuring it Whether they are interested to set up own plant/unit to meet own demand of sacks? Among the companies interviewed, fourteen are engaged in Cement production, eight in Animal Feed and two in Flour production. The interviewees generally stated that they procure the woven bags from external sources like Shovon Woven Bag Mfg. Co. Ltd., Sino Bangla Industries Ltd., Miracle Industries Limited, etc. In general, they are not interested to set up plants or manufacturing units to produce bags. A remark of one of such interviewees was We are here to produce cement, not bags. They feel that their expertise lies in the core business, and they do not want to deviate from the core business area.

The first exception to this general approach is Shah Cement. Shah Cement has established a P.P. woven sack plant for its own consumption, based on Starlinger

17

machineries (Austrian origin). The second exception in this collective approach is Premier Cement. They are very much interested to setup a 36 million capacity plant to manufacture P.P. woven sack for their own consumption. The prices of the bags used in the cement industry vary according to the types of bags. For double ply bags, the price varies from 12 Tk. 14 Tk per bag. For single ply bags, prices vary from 9.50 Tk. to 11.00 Tk. The weight of bags is more or less constant, which is 110 gm.

Figure 4.1:Comparision of Bags price

Price range of Bags

15.00 10.00 5.00 0.00 Single ply bags Double ply bags 12.00 9.50 14.00 11.00

Taka

From 9.50 12.00

To 11.00 14.00 Double ply bags

Single ply bags

Source: BMG BD

The demand for bags in cement industry is high. These fourteen companies interviewed alone stated a yearly demand of around 110 million bags per year. But, this demand for bags comprises of both paper bags and PP bags. In the rainy seasons, the producers have to use the PP Sacks. But, in other seasons, some producers prefer to use paper

18

bags instead of PP bags. The ratio of PP Bags to Paper Bags consumed in a year is approximately 70:30. Now, to estimate the demand of PP bags in a year in the cement industries , we would have to take 70% of the total demand (110 millions), which comes to around 77 Millions. So, the yearly demand for PP bags of these companies interviewed is estimated to be 77 Millions. The major suppliers of bags for cement industries are: Sinobangla, Simly Industries, Shovon, S.Alam, and Maghna Group. Data could be obtained from only one Flour Producer. Its yearly consumption of bags is 0.80 million. Bag weight is 110 gm, and price is 13 tk. The supplier is Super Thai Plastic Ltd. In case of Animal Feed Producers, the yearly demand of bags (of the 08 companies interviewed) is around 9 million. Bag weight is 110 gm price varies from tk. 13.50 to tk. 15.50. The suppliers for these industries are: Alliance Bags Ltd., Miracle, Sinobangla, Bengal Poly Bags, GQ Industries Ltd. Rails Agro, and Maghna Group. Point to be noted that this demand of PP Bags discussed in this section represents the demand of the thirty-three (33) bag users interviewed in this survey only. Also, note that companies from three sectors (Cement producers, Animal Feed producers, and Flour producers) were interviewed. Demand will also come from various other sectors (like Fertilizer Producers, Sugar Mills, Rice Mills, Salt Producers, Tea Gardens, Cereals Producers, Chemicals Industries, etc.). As it was said earlier for polypropylene woven sack-manufacturing Starlinger is a wellknown brand to these producers. Starlinger has two type of woven sack. One is

AD*STAR (especially for cement) and another is Standard sack (for other materials).
Producers are already aware of the quality aspects of this brand and also the environmental features, which is one of the main focuses of my study area. But none of the manufacturers are interested or concerned about the environmental feature of this

19

sack. What they are interested about is the price and delivery of the sack. One of the interviewee said that if timeliness of delivery can be assured, and price is competitive, these companies will prefer to buy AD*STAR bag to the other choices. As per the interviewee comments, the Key Success Factors for a polypropylene woven sack producer/supplier are as follows: Timeliness of Delivery (very very important) Quality of the Product (very important) Price of the Product (very important)

Regarding the quality aspect, these potential buyers are already aware and are convinced of the better position of AD*STAR bag in respect to its better position over any local product. If delivery schedule can be maintained, and price is competitive, then, all the respondents said that AD*STAR will gain a fantastic market share.

In the words of a respondent, AD*STAR can be as successful as ECONO ball pens if they can supply bags at a good price.

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The table in the following page presents the findings from the survey in details.
Table 4.2: Findings from the Survey Polypropylene Woven Sack Consumer Business Type Cement Producer Cement Producer Cement Producer Cement Producer Yearly Demand (pcs) 73,00,000 72,00,000 60,00,000 Bag Weight 115gm 110gm 110gm Unit Price (Tk.) 12.00 -14.00 11.00 11.00 12.00 12.00 13.00 Interviewee Comments (ADSTAR Bag) Good Prospect Good Prospect Good Prospect Good Prospect

Company Name Russel Industries Ltd. Elephant Brand Cement Crown Cement

Supplier

Bag Size

Sino Bangla, Simly 25/50 Industries, Shovon Maghna Group, 24/44 Sinobangla, Shovon Maghna Group 25/50

Metropolitan Maghna Group, 15,00,000 25/50 110gm Cement Ltd. Shovon Heidelbergceme nt Bangladesh Maghna Group, Cement 22/44 100gm 9.50 Ltd. (Scan 2,92,00,000 Sinobangla, S.Alam, Producer 25/50 160gm 13.00 Cement/Ruby Shovon Cement) Cement Sinobangla, Maghna L- 112 12.00 Nitol Cement 11,50,000 110gm Producer Group W-60 -14.00 Cement Sinobangla, Maghna L- 112 12.00 Niloy Cement 10,00,000 110gm Producer Group W-60 -14.00 Cement Have not started production yet. Will start from September-2005. Lafarge Cement Producer Estimated yearly demand (as per interviewee): 20 million pcs. Confiedence Cement L- 112 48,00,000 Local Market 160gm 13.00 Cement Ltd. Producer W-60 Source: Sample survey BMG BD 2005

Good Prospect

Good Prospect Good Prospect Good Prospect Bad Prospect

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Table 4.2: Findings from the Survey Polypropylene Woven Sack Consumer (Continued) Business Type Yearly Demand (pcs) Bag Weight Unit Price (Tk.) Interviewee Comments (ADSTAR Bag)

Company Name

Supplier

Bag Size

Olympic Cement Cement Shovon, Sinobangla, L- 112 72,00,000 160gm 13.00 Good Prospect Industries Ltd. Producer Seven Rings W-60 Cement Shovon,GQ Industries L- 112 Premier Cement 1,08,00,000 160gm 13.00 Producer Ltd. W-60 Meghna Cement Contacted. Interviewee informed the researcher that he will come back with the answers, after approval of (Basundhara top management. Follow-up done by researcher. Reply not received till date. Group) Unique Cement Cement L- 112 90,00,000 Magna Group 160gm 13.00 Good Prospect Industries Ltd. Producer W-60 Shah Cement Shah Cement Cement L- 112 2,40,00,000 Industries Ltd. (Sack 160gm 13.00 Good Prospect Industries Ltd. Producer W-60 Unit) General Mills Ltd. Nurani Mills Ltd. Flour Flour L- 112 8,00,000 Super Thai Plastic Ltd. 110gm 13.00 Good Prospect Producer W-60 Flour Contacted. Interviewee informed the researcher that he will come back with the answers after approval of top management. Follow-up done by researcher. Reply not received till date.

Source: Sample survey BMG BD 2005

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Table 4.2: Findings from the Survey, Polypropylene Woven Sacks Consumer (Continued) Business Type Animal Feed Producer Animal Feed Producer Animal Feed Producer Animal Feed Producer Animal Feed Producer Animal Feed Producer Animal Feed Producer Yearly Demand (pcs) 24,00,000 24,00,000 Bag Weight Unit Price (Tk.) 9.50 13.50 13.50 8.00 13.00 12.00 13.00 12.00 13.00 15.50 11.20 10.00 12.00 Good Prospect Good Prospect Interviewee Comments (ADSTAR Bag) Good Prospect Good Prospect

Company Name

Supplier

Bag Size

Kazi Farms Ltd. Aftab Bahumukhi Farms Ltd. Quality, Ltd. Feed

Bangla Poly, Ab Oven 22/44 Bag, Sun Yead Alliance Bags ltd., L- 112 Miracle, Sinbangla W-60 25/50 Alliance Bags Limited

100gm 110gm 110gm 7075gm 110gm 110gm 110gm 110gm 85gm 110gm

3,65,000

22/38

Mondal Agro Industries Ltd. Lion Limited Feeds

6,00,000 12,00,000 6,00,000

Bengal Poly Bags, GQ L- 112 Industries Ltd. W-60 Rails Agro Local Market 25/50 25/50

Good Prospect Good Prospect Good Prospect

C.P.Bangladesh

Paragon Group

10,00,000

Saudi Bangla Fish Feed 8,00,000 Fish Feed Ltd. Producer Source: Sample survey BMG BD 2005

Maghna Group, 24/44 Sinobangla, Miracle, Alliance Bags 20/33 Maghna Group, Sinobangla, Miracle, 24/44 Alliance Bags

Good Prospect

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Raw Material Sources of PP Woven Sack

Picture 4.1: Interviewing of P.P. raw material whole-saler at Rudra road of Lalbagh(17 th September 2006) The raw materials of P.P. woven sacks mostly come from Saudi Arabia. Korea, Singapore, Thailand, Taiwan, Australia, China & India are the other countries from where supplies of the raw materials of P.P. woven also sack come to Bangladesh. According to the demography and as one of our neighbor India is the nearest country from where P.P. granules could be collected easily. But for the congestion in landports and for other bureaucratic problem it is easier to bring raw material from Singapore than India said by one of the interviewee who is an importer of P.P. granules. Some manufacturing industries of P.P. woven sacks import P.P. granules by their own self and other collect from the importer. Most of these importers shops are located at Urdu Road (K.B. Rudra Road), Horonath Gosh Road of Lalbagh of old Dhaka. Regarding the price aspect the importers dont want to disclose much. One of the interviewee said that one metric Ton of P.P. granule cost .12 million taka. Also regarding the Duty aspect they are very much evasive. One of the importers told me tentative percent of duty, which was 15% previously and now presently 13% imposed

24

on P.P. granule import. P.P. raw materials are very much price sensitive. Its price fluctuates all over the year. The price volatility of P.P. raw materials depends on several conditions. Which are Organization of Petroleum Exporting Countries (OPEC) output and supply, Terrorism, Weather/storms, War or any other unforeseen geo-political factors that cause supply disruptions, Global demand particularly from emerging nations, Dollar fluctuations, Refinery fires & funds buying etc.

Perceived Brand Value and Market Demand of High Quality Machinery and Sacks
While assessing the present status of PP Woven Sack Industries in Bangladesh, I have found that no standard machinery brand name is known to the users or persons related to this sector. They are using machinery from various sources, but no one was able to affirm the highest quality brand name available in this sector. So, after lots of surveying, talking and searching I found that the highest-ranking brand that provides the best quality machinery for this sector worldwide is Starlinger of Austria. But surprisingly this brand is the least chosen one in Bangladesh.

1. Potential buyers of Polypropylene Woven Sack Manufacturing Machinery Producers of Woven Bags: The existing producers of woven bags already have a set up. The origin of machinery used is predominantly China, because of the price advantage. None of the interviewees expressed and plan of expansion or setting a new production line. So, the possibility of new sales is very low in this segment. The option for replacement machinery is also low, as, the potential customers perceive Starlinger as High Quality, High Value, and the preference of the market is Lower-priced Machinery. Users of Woven Bags: As discussed earlier, the users of woven sack are not interested to set up plants/units to produce bags. They feel that their expertise lies in the core business, and they are unwilling to deviate from the core business areas. So, the prospect of Starlinger or such machinery in Bangladesh can be anticipated as very slow in the beginning.

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2.Potential buyers of Woven Sack As mentioned earlier, AD*STAR bag is a known item to the Cement/Flour/Animal Feed producers of Bangladesh. All of these are potential buyer of the AD*STAR Bag. If timeliness of delivery can be assured, and price is competitive, these companies will prefer to buy AD*STAR bag to the other choices. It may be worth mentioning here that Scan Cement / Ruby Cement was also very interested in the AD*STAR bag and they also want to meet the environmental compliances before manufacturing this sack.

The fourteen companies interviewed alone are consuming around 77 million bags. One point worth noting is, that cement companies are consuming app. 91% of these 120 million bags (around 110 millions). So, from the present state analysis it could be said that the cement industries are the major market for this polypropylene woven sack. All of the interviewees hold AD*STAR Bag in high respect, and they are anticipating very good market for AD*STAR Bag in Bangladesh after considering its qualitative and environmental parameters. Even, while discussing with Lafarge, it was mentioned that Lafarge India can also be a potential client of an AD*STAR Bag producer of Bangladesh, if the price/quality/schedule combination can be met by the producer. Lafarge Bangladesh will promote it to Lafarge India if they are satisfied with the local producer. A more comprehensive picture of total market demand and expected market share of Polypropylene Woven Sack can be drawn after the completion of the countrywide survey. There are potential buyers in various other areas of business. It was not possible to cover the other potential sectors due to the limitations. The potential sectors that can be addressed for woven PP sacks are as follows: Fertilizer Sugar Rice Salt Tea Cereals

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Chemicals

Why High Standard Sack Like AD*STAR?

From Environment Point of View
Ultravioletly Degradable The sack is made from polypropylene, which is broken down by UV when exposed to sun for a long time. Chemically Inert Polypropylene is non-toxic. That means it is not harmful for soil and water when in contact during use or when dumped after use. No Adhesive The sack is the only industrial sack where the patches are fixed by a patented hot welding process. So there is no toxic glue used during the production of the sack. No Broken Sacks The high strength of the sack avoids breakage and spillage. So there is no pollution caused by lost filling goods and broken sacks. No Reproduction No breakage means also that there is no need to reproduce and replace lost goods and sacks. The environmental harm caused by this reproduction process can be avoided.

Recyclable The sack is made of nearly 100% polypropylene and can be remade into granulate after emptying. It is also suitable for "intrusion" - the revolutionary recycling technique for processing mixed household-grade plastic waste into quality molded products. Energy recovering A product made of plastic contains a very high-energy value. So in many countries plastic waste is used to replace primary fuel in the industry. Especially in the cement industry this already saves up to 30% of oil and coal. Long life Product The high strength of the sack makes it suitable for different applications after the first use. In some countries this kind of sack is also sold on markets as a second hand bag.

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Save Raw Materials The low weight of the sack - about 80g compared to a sack of plastic film or paper with a weight of more than 180g and the same characteristics - save a high quantity of raw material.

From Handling Point of View

Fully automatic filling The AD*STAR sack is suitable for all manual and automatic sack placing and filling units. The characteristics of the sack can be adjusted to special demands if necessary. Also the valve can be produced to be suitable for an automatic valve sealing process after filling. Stacking and storage Having the same Shape as sacks of other materials, the AD*STAR sack teams up perfectly with palletising or truck loading equipment, whether manual or fully automatic. The brick-shaped filled sacks require a minimum of storage space, and their high strength allows stacking up to the roof. Transport to end consumers Rough handling, high humidity or rain, which result in high breakage rates with other sacks, are managed well with the AD*STAR sack. Its high strength and water resistance minimize the number of lost sacks. Protected in an AD*STAR sack your goods will reach the end consumer in perfect condition.

From financial Point of View

The price of an AD*STAR sack is very competitive to a comparable paper or plastic film sack. This is because of special characteristic: The strength of the polypropylene woven structure allows light sack weight Low process cost is obtained with specially developed machinery The stability of the AD*STAR sack virtually eliminates costs related to sack breakage: replacement of lost filling goods and sacks as well as cleaning costs. All together this means a huge amount of money saved by using AD*STAR sacks.

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Experience of PP Woven Sack Factory Visit

Picture 4.2:Interviewing Shah Cement Industries P.P. woven sack Unit Incharge (20 th September 2006) Visiting of the manufacturing industries of Polypropylene woven sack was a great and professional experience for me as it was a part of my research work. For the arrangement of Factory visit I had to wait a long time, because the authority of the factory were so much reluctant to give permission of Factory visit as orthodox procedure was maintained for seeking permission from them. At last when I got the permission of Factory visit it was a great relief for me. It was 20 th September of 2006 when I was first scheduled by Shah Cement Industry authority for visiting their Factory. Shah cement Industry is a Unit of Abul Khair Group and they are one of the manufacturing Factory of P.P. woven sacks that are producing sacks for their own consumption. It is located at Mukterpur of Munshiganj District. Their manufacturing Industry of sacks are adjacent to the cement Industry premises. The plant manager (Sack Unit) helped me a lot to understand the Production Line of Sack Unit. The production Line of Sack Unit is completed by the combination of several machineriesTape/Yarn Line (Starex), Loom/Wearing machine, Lamination machine, Printing
29

machine, AD Convertex Machine (for finished sack), Roll slitting/Cutting machine and finally Hydraulic machine. All of these machineries are from Starlinger (Austria). This manufacturing plant is maintaining a higher quality regarding their internal environment and also from product quality perspective. Other two sites, which have been visited, are located at Hosni Dalan of Lalbag of old Dhaka and at Phulbari Thana of Dinajpur District. The site of Hosni Dalan is a small factory involved in the production of small P.P. woven sacks. It was an anonymous factory. The woven sack industry of Phulbari of Dinajpur district is a newly established industry, which hasnt, completed its test production yet. The establishment of P.P. woven sack industries in Phulbari suggests that the number of industries of P.P. woven sack is increasing and from Industry location perspective it is decentralizing because of its prevailing demand in the market of Bangladesh.

Manufacturing Process & Quality Found by Factory Visit

Picture 4.3:Visiting of Shah Cement Industry woven sack unit with the Unit Incharge (20 th September 2006)

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The present states of P.P. woven sack produced in Bangladesh are not up to the level from the quality and degradable perspective. Two or three industries are maintaining optimum quality level but not the parameters regarding biodegradability. Among the raw materials, Calcium Carbonate is especially used in these industries in producing P.P. woven sacks, to disintegrate the sacks in the course of time. After finishing its second hand market use when the sack is disposed as discarded commodities it will take another bunch of years to disintegrate it as parts. As it has been said earlier, P.P. woven sacks disintegrate through Photo degradation process, which starts when the sacks are exposed to UV light for a prolonged time. But the mineralization of these disintegration parts takes another decade or more, which make it partially degradable. In the next section of my report I have tried to suggest one of the useful way by which P.P. woven sack Industries could find a new way to green Bangladesh by greening their product.

Reuse/Recycle of PP Woven Sack

Picture 4.4:Whole-saler shop of used polypropylene woven sack at Khaer-Patti of Nitaiganj of Narayanganj (20th September 2006)

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The Reuse/Recycle of Polypropylene woven sack starts from its source with the selling of the yarn or resin of polypropylene which is leftover during the final shape producing of the sacks, by manufacturing industries to the scavenger of curb-market site of P.P. woven sacks. The scavengers sell it to the small buyers of the reuse market, who finally send it to its final destination- small plastic factories engaged in the manufacturing of jar, mug etc. Another part of the reuse process, which is the major one, is performed by the small operators of these reuse-markets relatively all over the country. They accomplish their job by collecting sacks from various industries that are the primary user of these sacks, for example cement industries, flour industries located in various parts (districts) of the country. The district based retailer then supply those sacks to the whole-salers of the secondary market. The whole-salers then purchase at rate of 9 to 10.5 taka per piece (highest price) or 2.5 to 5 taka per piece (lowest price) based on sacks quality. These whole-saler markets are mostly located in the divisional districts. Among them Chittagong, Dhaka and Naraynganj are the biggest markets of Bangladesh which are involved in the reusing of polypropylene woven sacks. In Dhaka these markets are located in Panghat, Soaryghat, Imamganj, Maulobibazar of old Dhaka and also a big recycling market is located at Tongi. The Khaer-Patti of Nitaiganj of Narayanganj is another big reusemarket of P.P. woven sacks. About seventy to eighty retailer-shops are positioned in this place. For its demographic importance Nitaiganj of Naraynganj has gained more popularity as a recycle-market of Polypropylene woven sack. Moreover the majority of the cement industries that are the key users of these P.P. woven sacks are located close to Naraynganj at East Mukterpur of Munshiganj district from where the highest supply of these sacks come. Last of all, the Kalur-ghat of Chittagong district is another famous recycle market of P.P. woven sacks, which collect most of its supply from the fertilizer industries.

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Chapter Five: Possibility of Setting up High Quality PP Sack Plant

As can be seen from the survey results, the respondents showed keen interest in the finished goods, i.e.: AD*STAR Bag. On the other hand, demand for Starlinger Woven Plastic Sack Manufacturing Machinery is very low, due to the price factor. In this scenario, a business plan can be made to capitalize on the perceived demand of AD*STAR Bags. The mechanism can be setting up an AD*STAR bag production facility by an independent third party, with the technical assistance from Starlinger. If a 24-million capacity production plant is established, it is a high probability that at least 20 million bags out of 24 million can be sold in the first year. To recap, the Key Success Factors for a woven plastic sack producer/supplier are: Timeliness of Delivery Quality of the Product Price of the Product To be successful, the AD*STAR producer Must have excellent performance in regard to these three aspects.

Commercial Models which can be followed

With the progression of time and expansion of businesses, the focus from Direct Payment has shifted to various other modes of payments like deferred payments, cost sharing, joint ventures, etc. From the responses of the interviewees, two commercial models have been identified by the researcher, which are preferred by the potential buyers. These two models are: (1) Deferred Payment (2) Joint Venture.

1. Deferred Payment: In this model, the buyer will take a plant setup from Starlinger. A certain percentage of the total price of the machinery will be paid to Starlinger up front. The rest of the amount will be paid in installment over a time period of 2-3 years.

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2. Joint Venture: This method is proposed and preferred predominantly by the users of the PP bags, like, cement producers, etc. Let us take a cement producer as the local counterpart of Starlinger as an example to elaborate this model. In this model, Starlinger would set up the plant in the premises of the cement (etc.) producer. Then, the cement producer would buy the PP sacks produced in this factory and the sale proceeds of these bags will go to Starlinger. In this model, the cement producer will provide the necessary space (land, building, etc.) for plant setup. The cement producer will provide the labor workforce and operational costs will also be bearded by him. The overall management of the plant will be the responsibility of Starlinger. Starlinger will also provide the Technical persons and Technical Resources necessary to run the plant. The reason for their (cement producers, etc.) preferring this model is that they are not too well versed on running a PP Sack production line. Their competencies lie in their core business, and they do not want to deviate from that. Now, if Starlinger is responsible for the overall management of the PP Sack producing plant, they will be comfortable that the plant is run by the right people with the right capabilities are responsible for operating the plant.

Project Cost:
A)
For 24 million bags per year: 5.4 million Euros (Approximate) For 36 million bags per year: 6.8 million Euros

B) SPACE REQUIRED: For 24 million: 90 m x 42 m = 3780 sq.m For 36 million: 99 m x 42 m = 4138 sq.m C) PRODUCTION COST PER BAG: For 24 million: USD 0.15 0.16 For 36 million: USD 0.14 - 0.15

D) MANPOWER REQUIRED: For 24 million: 102 For 36 million: 120

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E) POWER CONSUMPTION: For 24 million: 620 KW For 36 million: 660 KW F) Sack Dimensions (Maximum) Sack length: 430 to 910 mm. Sack width: 350 to 600mm. Bottom width: 80 to 160mm.

Government Policy Regarding Polypropylene Woven Sack

There is not much to say about the Government Policy regarding P.P. sack and its Industries. The government has considerably brought down the customs duty in the last few years. The duty was imposed fifteen percent previously on polypropylene granule import. Now it is thirteen percent. Government has totally banned the import of polypropylene woven sack from out side of the country to promote local manufacturing and also export of this sack. There are some Fiscal policies those are under consideration of the government, which hasnt been disclosed by the concerning authority.

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Chapter Six: Truly Green Sack for Sustainable Earth

Most woven sacks are manufactured by process involving chain polymerization, polyaddition, or polycondensation reactions. These processes are generally controlled to produce individual polymer molecules with defined

Molecular weight (or molecular weight distribution) Degree of branching, and Composition

Once the initial product of these processes is exposed to further shear stress, heat, light, air, water, radiation or mechanical loading, chemical reactions start in the polymer, which have the net result of changing the chemical composition and the molecular weight of the polymer. These reactions, in turn, lead to a change in the physical and optical properties of the polymer. In practice, any change of the polymer properties relative to the initial, desirable properties is called degradation. In this sense, "degradation" is a generic term for any number of reactions, which are possible in a polymer. Exposure to sunlight and some artificial lights can have adverse effects on the useful life of polymer products. UV radiation can break down the chemical bonds in a polymer. This process is called photodegradation and ultimately causes cracking, chalking, color changes and the loss of physical properties. Photodegradation generally involves sunlight; thermal oxidation takes place in parallel with photooxidation. Photodegradation differs from thermal oxidation in that it can be started by absorption of UV light. Most pure polymers are theoretically incapable of absorbing UV light directly. Trace amounts of other compounds within the polymer, such as degradation products or catalyst residues, impurities can however absorb UV light. For this reason, P.P. woven sack can also absorb UV light, which helps it to degrade by performing Photodegradation. Polymers are remarkable materials that are used in millions of single use applications for consumer, commercial, agricultural and industrial applications. Its volume is increasing gradually worldwide. So the issues of the "wasteful use of diminishing
36

resources" and, "Polymer material as an environmental pollutant" are becoming stronger day by day. These issues are well documented in hundreds of studies and articles. While "Reduce Reuse Recycle" programs will always be vital in the greening of polymer stuffs, the fact is, most of the billions of pounds of polymer that are produced each year end up as garbage in a landfill. Adding to the negative legacy, Poly sacks actually entomb and preserve the naturally biodegradable refuse that makes up more than 40% of all household garbage. For polymer products to achieve the ultimate status as a material in complete harmony with a naturally sustainable environment, the life cycle of polymer has to be reengineered to end its life cycle as a "totally degradable" material.

Oxo-biodegradable Polypropylene Woven Sack

Some world-renowned scientists have focused on the development of additive technologies that work with ordinary polypropylene resin in a two-step process that accelerates oxidation and then biodegrades. This two-step process is commonly referred to as oxo-biodegradation. As it has been said earlier, these woven sacks are produced from oil-based resins, which could be modified by Totally Degradable Polymer Additives (TDPA) developed by Environmental Products Inc (USA) to make them fully biodegradable. This, Totally Degradable Polymer Additives (TDPA) or prodegradant additives control Oxo-biodegradation process in a highly predictable and manageable manner in all conditions whenever it finds a source of oxygen and naturally occurring microorganisms (air, soil, landfill, compost, litter). These Biodegradable Additives are engineered to degrade and totally split the P.P. woven sacks in 90 to 120 days and 60% mineralize / biodegrade in a further 12 to 24 months when disposed of in a commercial compost facility and in subsequent soil application. The prodegradant additives, used in the Polypropylene Woven sacks, have been extensively tested by the scientists for ecotoxicity. It has proved by them that there is no harmful residues exist in these additives that could accumulate in the soil. The Scientists have also undergone full-scale landfill and commercial compost trials. In the compost trials, after sieving, compost that contained bags modified with these
37

same proprietary additives met the highest standard as fertilizer under the Austrian Compost Quality Seal. The good news for our environment is that with the use of degradable / biodegradable additives, in addition to Reduce and Reuse Recycling can take on a whole new meaning as the organic carbon in modified P.P. woven sacks can be safely returned to the natural bio-cycle in predictable and controllable timeframes.

Processability
The prodegradant additives, in pellet form, are added to polypropylene resins at the start of the manufacturing process. There is no special equipment and few adjustments necessary to conventional processing equipment. Output is not compromised in any way. The prodegradant additives are easy to handle from a materials handling point of view and storage practices are normal. Finished products fit within reasonable economic models.

The Biodegradable Sack Solution

This Solution is committed to actively participate within a cross-industry coalition and with environmental groups and legislators to find solutions that avoid the necessity of punitive taxes and total bans on polymer materials based bags. It is my view that the solution for synthetic woven sack as a pollutant must be dealt with it at the source when it is made. It has to be affordable within reasonable business models. The solution depicted here is to deal with the cause of the problem at the point it enters our environment. Bioinert plastics can also be modified with prodegradant additives such as woven sacks of polypropylene to speed oxidization and safely return the carbon to the natural bio-cycle as a food source for microbes. This can be achieved within predictable and controllable time frames, thereby helping to mitigate the need to deal with the problems caused by accumulating Polymer materials as litter.

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Chapter Seven: Worldwide/Foreign Market Demand of Polypropylene Woven Sack

With the expansion of global trade and arrival of new commodities everyday, the demand of PP Woven Sack is increasing day by day through out the world. Data shows that the developed countries are meeting up this demand by importing it from the Eastern Countries. The following tables will provide a clear conception of this increasing demand:

Table 7.1 Western European Trade in Polypropylene Woven Sacks

1975 1980 1985 1998 1999 2001 (............................Thousand Tons.............)

Imports
Belgium France Germany Italy Netherlands United Kingdom Others Total W. Europe 2.4 1.6 1.2 0.4 2.7 0.6 0.8 9.7 4.9 3.1 2.8 1.7 6.3 1.5 1.5 21.8 9.4 2.7 3.0 2.5 9.4 3.1 3.0 33.1 3.9 2.4 2.7 6.1 3.4 4.4 6.0 28.9 4.4 3.6 2.1 4.7 3.1 4.7 6.9 29.6 4.7 3.9 2.6 4.9 3.5 5.0 8.0 32.6

Exports
Belgium France Germany Italy Netherlands United Kingdom Others Total W. Europe 4.1 1.6 1.1 0.5 1.6 -3.5 12.4 4.2 1.4 0.4 0.4 1.3 1.2 5.8 14.7 7.2 0.5 0.9 0.2 3.6 0.2 5.8 18.4 3.9 0.4 0.6 0.4 2.8 1.0 3.8 12.9 3.9 0.3 0.5 0.6 2.9 1.1 2.8 12.1 3.5 0.25 0.35 0.45 1.8 1.2 2.6 10.15

Net Imports
Belgium France Germany Italy Netherlands United Kingdom Others Total W. Europe (1.7) -0.1 (0.1) 1.1 0.6 (2.7) (2.7) 0.7 1.7 2.4 1.3 5.0 0.3 (4.3) 7.1 2.2 2.2 2.1 2.3 5.8 2.9 (2.8) 14.7 -2.0 0.6 5.7 0.6 3.4 2.2 16.0 0.5 3.3 1.6 4.1 0.2 3.6 4.1 17.5 1.2 3.65 2.25 4.45 1.7 3.8 5.4 22.45

Source: Issue no. 18 of Addendum to the Polynews, March 2002 of the European Association for Textile Jute, Polypropylene and Polyolefin

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Western European Trade in Polypropylene Woven Sacks

Figure 7.1:Western European Import trend in Polypropylene Woven Sacks
Import Trends

35 30 25 Thousand Tons 20 15 10 5 0 1975 1980 1985 1998 1999 2001

Belgium France Germany Italy Netherlands United Kingdom Others Total W. Europe
Ye ars

Source: Issue no. 18 of Addendum to the Polynews, March 2002 of the European Association for Textile Jute, Polypropylene and Polyolefin Figure 7.2:Western European Export trend in Polypropylene Woven Sacks
Export Trends

20 18 16 14 12 Thousand Tons 10 8 6 4 2 0 1975 1980 1985 1998 1999 2001

Belgium France Germany Italy Netherlands United Kingdom Others Total W. Europe

Ye ars

Source: Issue no. 18 of Addendum to the Polynews, March 2002 of the European Association for Textile Jute, Polypropylene and Polyolefin

40

Figure 7.3:Western European Net Import trend in Polypropylene Woven Sacks

Net Import Trends
25 20 15 Thousand Tons 10 5 0 1975 1980 1985 1998 1999 2001 Years

Belgium France Germany Italy Netherlands United Kingdom Others Total W. Europe

Source: Issue no. 18 of Addendum to the Polynews, March 2002 of the European Association for Textile Jute, Polypropylene and Polyolefin The above three charts provides data on imports, exports and net imports data of polypropylene woven Sacks for 1975,1980,1985,1998,1999 and finally 2001. Compared with 1998, the statistics show a 2 percent increase in imports, and a 6 percent decrease in exports in 1999. Net imports showed a 9 percent growth. Lastly compared with 1999 the statistics show a 10 percent increase in imports, and a 16 percent decrease in export. Net imports showed a 28 percent growth. So the above three charts make it apparent that demand of PP Woven Sack is increasing rapidly in the West European countries.

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Sources of imports of Polypropylene Woven Sacks into the EU countries

Figure7.4:Import analysis on year 1998 of Polypropylene Woven Sacks in EU countries

1998
16% 38% 13%

India China Indone sia Turkey Philippine s

10% 6% 8% 9%

Vie tnam Manufacture d by own or Imported from other countrie s

Source: Issue no. 18 of Addendum to the Polynews, March 2002 of the European Association for Textile Jute, Polypropylene and Polyolefin

Figure7.5:Import analysis on year 1999 of Polypropylene Woven Sacks in EU countries

1999

India China Indonesia

15% 42% 9%
Turke y Philippine s

12% 7% 7% 8%
Vie tnam Manufactured by own or Importe d from othe r countrie s

Source: Issue no. 18 of Addendum to the Polynews, March 2002 of the European Association for Textile Jute, Polypropylene and Polyolefin

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Figure7.6:Import analysis on year 2001 of Polypropylene Woven Sacks in EU countries

2001
India China

Indone sia

17% 37% 10%

Turke y

8%

13% 7% 8%

Philippine s

Vie tnam

Manufacture d by own or Imported from othe r countries

Source: Issue no. 18 of Addendum to the Polynews, March 2002 of the European Association for Textile Jute, Polypropylene and Polyolefin

The Far East and India are still the main sources of supply of woven polypropylene sacks. Since the last study, India has now replaced China as the largest source for woven PP sacks. The above charts, illustrates the emergence of other Far East countries such as Indonesia, Vietnam and the Philippines. In 1999, imports from Indonesia and Vietnam increased by 20 and 16 percent respectively, whereas imports from China fell by 30 percent. In 2001, import from Indonesia, Vietnam and China increased by 8, 14, and 11 percent respectively. Reasons behind the increase in import from China this time was the improvement of sacks quality regarding environmental parameters. The main reason for a decline in imports from China in 1999 was the imposition of an anti dumping duty of over 100 percent against a conventional duty of 7.2 percent. Anti dumping duties were also imposed on imports from India, Thailand and Indonesia but their levels were much lower compared to those on China ranging from 4-58 percent. So, there is a good chance for Bangladesh in the near future in PP Woven Sack exports if Bangladesh can maintain the parameters from environmental quality perspective to avoid the imposition of an anti dumping duty. As it has revealed from the above charts that most of the countries that are exporting PP Woven Sack are from Asia. Where as being an Asian
43

country, Bangladeshs initiatives regarding PP Woven Sack Export to overseas is not that much impressive. So an in depth assessment is needed from the policy aspect to overcome the prevailing situation. Figure 7.7: Market shares Jute-vs-Polypropylene sacks in volume

700 600 500 Million Tons 400 300 200 100 0 1975 1980 1985 1986 Years 1998 1999 2001 Total Sacks in Million PP Woven Sacks in Million Jute Sacks in Milli on

Source: Issue no. 18 of Addendum to the Polynews, March 2002 of the European Association for Textile Jute, Polypropylene and Polyolefin Figure 7.8: Market shares Jute-vs-Polypropylene sacks in percentage

Pe rce ntage

100 90 80 70 60 50 40 30 20 10 0

Market Share of PP Woven Sacks % Market Share of Jute Sacks % Market Share of Total Sacks %

1975

1985 Ye ars

1998

2001

Source: Issue no. 18 of Addendum to the Polynews, March 2002 of the European Association for Textile Jute, Polypropylene and Polyolefin The above charts have estimated for the total woven sacks market, the market shares for Jute Sacks and PP Woven Sacks in the West European countries. The

44

Jute Sacks share has continued to decline and reached to approximately 15 percent in 2001. Where as PP Woven Sacks share has continued to increase and reached to approximately 80 percent in 2001.

Chapter Eight: Conclusion and Recommendation

From our previous discussions, we can draw the following conclusion:

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Polypropylene Sacks are hugely in demand as they are used for packaging cement, fertilizers, poultry feeds, wheat, rice, sugar and pulses, etc. There is demand for Polypropylene sacks both locally and internationally Polypropylene sacks are environment friendly because of the following features they have: It is Ultraviolately Degradable Production of Polypropylene sack is Energy recovering It is a Long life Product The low weight of the sack saves raw materials It can be recycled Furthermore Polypropylene sack can be made fully eco-friendly by adding Totally Degradable Polymer Additives (TDPA) as well as to promote recycling process in full instance. Recommendation: Now, in view of the above, it can be clearly recommended that Polypropylene sacks could be used in all the industries that need woven sacks. Private entrepreneurs should be encouraged to set up Polypropylene sack production facilities. Polypropylene sacks at the same time deliver better performance and they could be made fully eco-friendly. It should be perceived from another perspective that Polypropylene Industry is becoming large industrial sector in Bangladesh incorporating huge number of manpower and amount of investment. Yet, it is largely directed to meet inland demand up while a sea of foreign market is waiting for Bangladesh to step in. It is time to prepare this industry by assisting it by incorporating Totally Degradable Polymer Additives (TDPA) to make its product more eco-friendly to step in the western market like other Asian countries as far we can. The outcome will surely be a new branch of earning foreign exchange like the Garments sector, which will cover up the gap that we have had due to the declining state of jute market. Moreover the government should come forward with incentives for setting up these types of plants, and in the long run government can take policies to abolish any other types of woven sack that are not environment friendly. To make and sustain our GREEN BANGLADESH, this is the suggested course of action as the logical way of progression.

Bibliography

46

1. Market Study of the Polypropylene Woven Bag Industry in Bangladesh-Joyjit Deb Roy

2. http://www.fao.org/es/esc/common/ecg/51423_en_Environment_Background.
pdf 3. http://environment.nglf.gov.uk/faq.php 4. http://www.deh.gov.au/settlements/publications/waste/degradables/biodegrad able/appendixa.html 5. http://www.draft.biz/web/Environ.nsf/Pages/Environmental Facts 6. http://www.Goodfellow.com/script/web

7. http://www.britannica.com/ebi/article-206797
8. http://www.fibersource.com 9. http://www.polychemistery.com 10. http://www. Antioxidants Center - Basics on degradation.htm 11. http://www.starlinger.com 12. http://www.icis-subs.com/1132

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Annex

Questionnaire

48

When did the commercial production of Polypropylene Woven Sack started in Bangladesh? What were the reasons behind the development of this Industry? What are the available polypropylene woven sack manufacturing machineries (with the name of manufacturer and country of origin)? Do industry owners have any preference on different brands? And why? What is the profile of customers in terms of their need sets? What could be the cost of plant establishment with respect to size of product and sector? What are places, where the industries are located? Available list of P.P.Woven Bag Manufacturers in Bangladesh? Estimated production capacity per day/month/year Estimated cost of setting up plant Estimated cost of machinery Common sources of raw materials? Cost of raw materials (per KG/MT) Estimated manpower Bag size, weight and price for different products such as cement, fertilizer, animal food, sugar, flour, rice, salt, chemicals How far the cost of P.P. granules fluctuates/MT during the price fluctuation in the international market? What is the present state of raw materials availability? Has the Government taken any initiative regarding reduction of custom duty on P.P. raw materials previously? What are the present policies of the Government regarding P.P. Industries? Is there any Reuse/Recycle Market of P.P. Woven Sack? Who are the Operators of this Reuse/Recycle Market? How they are performing this job? Estimated present market demand Projected market demand (Would be estimated through growth rate) Estimated domestic production of P.P. bag in Bangladesh Import of P.P. bag

49

Is the P.P. woven sack eco-friendly? Dose it degrade? What sort of degradation process P.P. woven sack performs? What are the positive features of P.P. woven sack from the environmental perspective?

50

Picture 4.5:Stacking of Standard P.P. woven sacks in sack unit of Shah Cement Industries (20th September 2006)

Picture 4.6:Stacking of AD*STAR P.P. woven sack in sack unit of Shah Cement Industries (20th September 2006)

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Picture 4.7:Interior of Shah Cement Industries sack unit (20 th September 2006)

Picture 4.8:Workers working in the Shah Cement Industries woven sack unit (20 th September 2006)

52

Picture 4.9:Stacking of used P.P. woven sack in a whole-saler shop at Khaer-Patti of Nitaiganj of Naryanganj (20th September 2006)

Picture 4.10:Interviewing of P.P. raw materials saler & woven sack producer at Hosni Dalan of Lalbagh (15th September 2006)

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Picture 4.11:Interviewing a retailer of used P.P. woven sack at Panghat of Lalbagh (17 th September 2006)

Picture 4.12:Panghat of Lalbagh of Old Dhaka (17th September 2006)

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Picture 4.13:Whole-saler shop of used P.P. woven sack at Imamganj of Lalbagh of Old Dhaka (17th September 2006)

Picture 4.14:Visiting of a Whole-saler godown of used P.P. woven sack at Soaryghat of Lalbagh of Old Dhaka (17th September 2006)

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Picture 4.15 Interviewing a Whole-saler of used P.P. woven sack at Imamganj of Lalbagh (17th September 2006)

56