FF Reporter: Many entrepreneurs are now investing rapidly on protective items (PPE, masks, hand gloves, etc.) as demand is growing high due to the Corona pandemic. Do we- have any forecast and study about its future demand as the investment can be sustainable?
Rubana Huq: As per various online reports, the global market for personal protective equipment is worth US$ 50 billion which may grow up to US$ 80+ billion by 2027. And Bangladesh exported PPEs worth of US$501 million in FY2019-20, which means we have only a 1% share of the global market, so we have a clear perspective to tap further into the global PPE market. Since the COVID-19 pandemic has hit, the demand for PPEs grown exponentially; and it may not be an overstatement to speculate a global PPE market of US$ 100 billion by the year 2030.
FF Reporter: Already Vietnam and other competitor countries are doing good in this business segment amid this pandemic. So, what should be the marketing strategy to penetrate this business robustly?
Rubana Huq: Considering the PPE items which were allowed duty-free imports of raw materials as well as exemption from VAT, AIT and other taxes by NBR recently, for the items covered within the HS chapters 62 and 63 (i.e. HS 621010, 621040, 621050, 621133, 621139, 621143, 621149, 630790) China exported US$ 10.48 billion and Vietnam exported US$ 2.37 billion worth of PPEs in 2019 (source: ITC), whereas Bangladesh exported US$484 million only as per EPB in FY2019-20.
There are many more items treated as PPEs beyond the mentioned HS codes, which are not accounted for in this analysis. So the market is huge and there is a significant gap between us and the immediate competitors.
FF Reporter: What can be the sustainable strategy to utilize the new demand that emerged for protective items?
Rubana Huq: The masks and other PPEs manufactured by China would come at a cheaper price since China has been leading this market for decades. The economy of scale, efficiency achieved through a long learning curve, technologies being used and automation, availability of raw materials and access to the global market have put them in a unique position to deliver the quality at optimum price.
This is a huge sector where Bangladesh has untapped opportunities since PPEs of medical and non-medical grades have a significant global market. I think it would not be an optimistic stance to compete with China at this stage, rather we can be China Plus, and for this, several policy interventions are required.
We sincerely appreciate the Government of Bangladesh for lifting all duties and taxes on the import of raw materials to manufacture PPEs which has been the great first step.
If the sector can be provided with additional fiscal and non-fiscal incentives, it would be helpful for our products to compete in the global market, for example – special cash incentive on exports of PPEs, 10 years’ tax holiday for new investments (local and joint venture), special incentive and tax holiday for FDIs/JVs/local investments in the backward linkage required for these items, and an integrated zone may be established for PPEs to derive the synergic benefit.
At the same time, special supports in terms of project financing, fast track support from different licensing authorities of the government, and the supports of the government to get expedited approvals from the medial/drug administration of the foreign governments would help.
Most of all we need trained human resources since PPEs are sensitive items and need to maintain the highest standard of hygiene practices in the manufacturing processes, so a trained pool of workers and technicians are of great importance to have a competitive footing in the world market.