Akij Biax Films, the only company in Bangladesh making polyester film used mostly in packaging, labelling and lamination, yesterday sought policy support to compete with foreign products in the local market.

Having the lightest specific gravity among plastic films alongside mechanical properness and chemical resistance, the transparent biaxially oriented polypropylene or BOPP film has a vast range of applications especially in food processing, tobacco and garment industry.

Lower prices of foreign competitors' products have a severe impact on the local industry, which is still in its infancy, said Sk Bashir Uddin, managing director of Akij Biax Films.

“The lower price is made possible for the evasion of import duty and value added tax,” he told a hearing of Bangladesh Tariff Commission on the issue at its auditorium.

Akij Biax Films started commercial operations in 2018 with an investment of Tk 350 crore.

At present, Bangladesh's annual demand for the film is around 25,000 tonnes whereas Akij Biax Films' production capacity is over 42,000 tonnes.

About 26,632 tonnes of the film were imported in 2017-18 while 34,244 tonnes and 26,037 tonnes in the previous respective years, according to data of the National Board of Revenue (NBR).

Md Mahmodul Hasan, the tariff commission's assistant chief, said the film was being imported through the misuse of bonded warehousing facility, leading to duty evasion and comparatively low prices of such films in the local market.

Bonded warehousing facility allows duty free import, albeit for the manufacture of products meant for export only.

Moreover, the import duty on the industry's raw materials ranges from 3 to 25 percent, meaning the industry in the end is not getting any protection, said Hasan while presenting a working paper.

From the film users' section, Mozaharul Haque Shahid, vice president of the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), was present in the hearing.

He said local production came to their benefit. “But their price should be competitive,” he said.

Bashir Uddin cited another reason for the low prices: foreign producers dumping the product in the local market.

“If the government imposes anti-dumping duty on it like many other countries and relaxes duty on raw materials, our price would also turn competitive,” he said.

Mostafa Abid Khan, a commission member, said while they did want to give advantages to local producers, they were careful so as to not spoil the competitive pricing availed by local users.

“So the producer has to try other means of lessening the price,” he said.

Jyotirmoy Dutta, the commission chairman, echoed the same, saying they always want to assist local industries without hampering other aspects so that more jobs could be created and foreign currency could be saved.

“But we have to think about it some more before taking any decision,” he said.

Sheikh Abdul Mannan and Md Abu Raihan Alberuni, the commission members, also spoke.