PVC cluster needs policy push to flourish further

Infographic: TBS

A little savings and a lone worker was all Chandpur's Nasir Uddin started with to eventually become an owner of a PVC pipe producing factory within only twenty years.

It was the financial crisis that forced him to join a PVC factory in Bangshal, quitting school in 1996 and it is the same industry where he climbed the ladder of success to become financially affluent. 

With a yearly turnover of Tk4-5 crore and a Tk1 crore worth factory establishment that employs 20 workers, Nasir is currently expanding his resources including purchases of lands worth another crore. 

"I produce non-brand PVC pipe. I have no institutional training. Everything I did is from practical experience, which also means the PVC quality is lower than branded ones," said Nasir. 

"However, the price is also half in comparison and our customer base is also low, middle-earners," he added.  

Nasir is one of many success stories in the PVC cluster based in Old Dhaka's Bangshal, where PVC pipe manufacturing began during the late eighties at the initiative of a handful of local entrepreneurs.  

Like Nasir, Mujibur Rahman also started small – with only 3 workers and few lakhs cash and now owns a factory that contributes to a yearly turnover of Tk4-6 crore.   

According to the Bangladesh PVC Pipe Manufacturers Association, about 70-80 non-brand PVC pipe factories have sprung up in Demra, Jatrabari, Chittagong Road, Rayerbagh, Kamrangirchar, Bangshal, English Road, Nazirabazar and Siddiqbazar areas.

Factories owners, who have seen significant growth, have shifted their production hub to Narayanganj and are using their Old Dhaka space as their warehouses.  

Inspired by the Old Dhaka PVC cluster, entrepreneurs have established factories elsewhere in the country taking the total number to over 200.   

The cluster, as a whole, employs 15-20 thousand people, mostly men and the total annual turnover stands over Tk150 crore.

The raw materials – PVC resins, calcium and dyes – are mainly imported from China or Korea and sourced from Bangshal and nearby Old Dhaka areas.

Thanks to easy availability of raw materials, proximity to the wholesale market and easy availability of labour, the cluster has potential to grow into an export oriented industry. 

However, the lack of skilled manpower, financing, land for factories and absence of modern technology and latest machineries are hindering the cluster to enter the competitive market that is way ahead riding on technology-driven investments and aggressive marketing.

"We have been asking the government for plots in BSCIC for a long time, but we have not received any response yet," said Abul Khair, president of Bangladesh PVC Pipe Manufacturers Association.

"We have been also demanding to lower VAT from 15% to 3%," said Khair and added that entrepreneurs in the sector need loans on easy terms.

He further said that policy support from the government towards the addition of the latest machinery and training for owners and workers can help the cluster become an export-oriented sector. 

Jahidur Rahman, who sells PVC pipe after sourcing from factories, said the branded pipes are made in automated machineries and naturally the non-brand PVC pipes are lagging behind in comparison.

SME Foundation Managing Director Dr Md Mufizur Rahman said, "We have conducted an assessment study on the cluster in 2017, and there are plans to provide various training to the workers.

He also said that they have recommended banks to provide low interest loans to the entrepreneurs on easy terms.

It is learned that the use of PVC pipes instead of GI pipes for irrigation and drainage is increasing.