Interviewed By Akhlaqur Rahman Sachee, Team MBR

With over 24 years of experience at the helm of Partex Star Group, Mr. Syed Kaium Hasan has played an instrumental role in developing the particle board industry in Bangladesh. His impressive leadership and vision have led him to become one of the key executives at his company within a time span of three decades. Currently, he works as the Head of Business at Star Particle Board Mills Limited, Star Gypsum Board Mills Limited, and Partex Laminates Limited. Team MBR was in a conversation with Mr. Hasan regarding the particle board industry in Bangladesh and was fortunate enough to receive his take on the prospects of this sector.

Akhlaqur Rahman Sachee: According to a recently published news report, the particle board market has been growing at 18% to 20% per year on average since 2015. What are the factors, you think, that are contributing to this phenomenal growth of the industry?

Syed Kaium Hasan: The development of our particle board industry is directly correlated to the economic development of our country. Due to the overall economic development of the country, we have experienced a rise in demand for interior design, furniture, doors, and so on. Besides, the purchasing power of individuals has increased a lot over the years all over the country. Particle boards were once used mostly in urban areas but now cater to a much wider consumer base, even in rural areas. Nowadays, in rural areas, it is not very surprising to see a reading table or a dressing table made of particle boards. Due to this growing adoption of particle boards, I believe that we can sustain this 20% annual growth of this industry for the next 10 years. However, the government’s industry-friendly initiatives are required to unlock promising opportunities and further navigate the export markets.

Akhlaqur Rahman Sachee: Partex Star Group pioneered the production of particle board in Bangladesh in 1962. However, many of the renowned large conglomerates and more than 300 manufacturers and suppliers have entered the particle board manufacturing business in the latter period. What are the factors that have motivated these participants in the industry to explore the particle board business, in your opinion?

Syed Kaium Hasan: It is a very good question. Actually, in order to support the particle board industry in Bangladesh, many sub-sectors have been created. Even though there are particle board manufacturers that operate on a large scale, some small market players have entered the market. For example, the plywood industry exists on a much smaller scale, with around 42 manufacturers operating in different parts of Bangladesh. In the case of particle boards, only 10 manufacturers exist that can operate on a large scale. In a bid to support these large concerns, several cottage concerns have started to appear on the market. Since particle boards have a lot of varieties and a high number of SKUs, a lot of these concerns have achieved success catering to diverse customer segments. Finally, as I mentioned earlier, since the growth and development of Bangladesh have escalated over the years, it has had a direct impact on the country’s particle board industry.

Also, previously, the board industry was import dependent, with almost 50% of the boards coming from abroad. Now, not only can we meet the local demand for particle boards, but we are also exporting boards on a large scale, especially to India. In order to meet these local and foreign demands, we have seen an uprising of particle board businesses in recent times.

Akhlaqur Rahman Sachee: Particle boards have often been reported as an environment friendly alternative to timber. Would you kindly explain the environment-friendly aspects of the particle boards?

Syed Kaium Hasan: It is a very important question. Boards, especially particle boards, are undoubtedly very good alternatives to timber. As trees play a crucial role in protecting the environment, we have focused on reducing the cutting down of trees in a bid to preserve the environment. This is why we want to raise awareness among the mass population regarding the benefits of particle boards in terms of environmental friendliness. Every year, almost 10 million pieces of particle boards and 8.5 million pieces of plywoods are used. In order to manufacture an 8 feet by 4 feet particle board, almost 40 kg of particle chips are required depending on size and thickness. If we had cut down trees to manufacture that amount of particle board, we would have caused great harm to the environment.

Besides, the particle boards possess a lot of advantages. Like, an 8 feet by 4 feet, 8 feet by 6 feet, or 8 feet by 8 feet tree cannot be found everywhere. In the case of particle boards, these obstacles do not act as issues.

Akhlaqur Rahman Sachee: As it has been reported, the local particle board industry is capable of meeting 80% of the local demand. Would you kindly discuss the roadblocks that are hindering the industry from fulfilling the local demand completely?

Syed Kaium Hasan: Currently, even though the total manufacturing capacity of the country’s particle board industry is sufficient, as evident by the exports of particle boards, there are several varieties of boards that need to be imported. The technological capacities of overseas countries vary hugely from Bangladesh, enabling them to manufacture much more diverse particle boards while ensuring superior quality. Some of those boards are imported from abroad to Bangladesh, as there has not been much development in the manufacturing of those boards locally. Our neighbouring country, India, boasts a huge production capacity for plywood, which is imported to Bangladesh through land ports. Nowadays, particle boards are not imported to Bangladesh much, and even if they are, it is due to the features or technologies used in those boards, which cannot be replicated here. If we take the example of MDF boards, different types of layers are placed on the surface of the boards to create different variants. We have seen that some of the imported boards contain the same materials inside, but the quality of the outer layers on the boards is better than those produced locally. However, imports have decreased quite a lot as the local industry has flourished over the years.

Besides, there are charcoal factories which burn around 8 lakh maund of jute sticks every year, hindering the growth of particle board industry to a large extent. The government has not mentioned anything about it yet but we hope to overcome the existing challenges in the near future.

Akhlaqur Rahman Sachee: Nearly 55% of the production of the particle board industry is being utilised in the furniture industry. Where does the furniture made of particle boards stand in terms of durability and aesthetics in comparison to solid wood furniture, in your opinion?

Syed Kaium Hasan: It is a very vital question. Definitely, there is no doubt that board furniture is much better than solid wood furniture, given the fact that solid wood becomes impacted by changes in weather. Due to changes in weather, the dimensions of solid wood become distorted. If we look at flush doors, about 5 lakh flush doors are being used in Bangladesh currently. So, if all of these 5 lakh flush doors were manufactured with solid wood, they would have been impacted by the variations in seasons, and the distortions in dimensions would have made them unusable. Particle boards do not have this issue. Also, in the case of furniture, every design can be executed on particle boards, just as it can be done on solid wood. Thirdly, all sorts of particle boards are much cheaper than solid wood. Another disadvantage of solid wood is that each tree possesses unique kinds of fibres as well as unique colors. When solid wood from different trees goes into the manufacturing of one piece of furniture, it creates multiple issues. On the other hand, all the particle boards have similar characteristics and features, with no changes in colour or texture due to variations in weather. So, it is clearly evident that furniture made of particle boards stands in a superior position in terms of durability and aesthetics.

Akhlaqur Rahman Sachee: Though plain particle boards, veneered boards, plywood boards, and melamine boards are being manufactured in Bangladesh, the country has to rely on imports mostly for MediumDensity Fiberboard (MDF). Would you kindly explain why the country is lagging behind in the production of MDF?

Syed Kaium Hasan: Actually, I cannot agree with the question completely, as MDF boards used to be imported previously. Now, there are 4 companies that manufacture MDF boards, meaning that there is sufficient capacity to produce MDF boards in the country. So, the import of raw MDF boards is not something very necessary these days. Certain MDF boards are brought from many countries including Austria, where the only differentiating factor from the local particle boards is the surface/ lamination of the boards. But if we compare the cores of the boards from Austria and Bangladesh, the quality and density are almost the same. The problem is that we do not have the technology required to produce the surface used on the MDF boards.

Akhlaqur Rahman Sachee: The main raw materials for particle boards, such as waste timbers, jute sticks, tree branches, etc., are sourced locally. However, adhesives and other chemicals that go into the production process are mostly imported. Would you kindly share with us how the particle board industry is being affected amidst the ongoing dollar crisis? Is there any scope for establishing local backward linkages to make the industry completely self-sufficient?

Syed Kaium Hasan: In terms of the chemicals that go into the manufacturing of particle boards, we are fully import-dependent. Currently, there is no production of chemicals required to produce resins. Even though we have local resin factories, the chemicals required for its production have to be imported. It is not that this problem cannot be solved. There have been some developments recently. The production of resins requires paraformaldehyde, which used to be imported before. In order to produce paraformaldehyde, methanol is required. In recent times, we are now importing methanol as opposed to paraformaldehyde, meaning that we have now become more advanced by moving further back in the supply chain. Imported methanol is now used to produce paraformaldehyde locally, which is then used to produce resins. The basic raw materials are not being manufactured yet in Bangladesh, and as per my understanding, there have not been signs of development in this area.

Akhlaqur Rahman Sachee: Considering the quality of particle boards the manufacturers in the country are producing and the capacity of the industry to fulfil the major portion of the local demand, how do you envision the industry’s potential to be one of the significant contributors to the country’s export basket?

Syed Kaium Hasan: Obviously, I am very confident about the growth of this industry, given the size of the market and the rate at which it is expanding every year. The local demand has already been met, and I also believe that there are export opportunities lying ahead. But the government’s policy support is required to make this industry flourish. If the government patronises the industry in terms of tax and other facilities, I believe the industry will reach new heights. Also, going back to the dollar crisis situation, it is not just the chemicals but also the machinery that has to be imported. This crisis has made the opening of LCs very difficult. The frequent fluctuation in the price of the dollar has affected us a lot, as we have to open LCs for large volumes with the same margin, which is not possible all the time. This has affected the industry’s growth to a large extent in recent times.