Jagannath UniversityDhaka

AssignmentOn

“The Economic Impact of Waste Management Plant on Factories in Bangladesh”

“The assignment submitted in partial fulfillment of the requirement for the course- Resource Economics”

Submitted To :Tabassum Zaman

LecturerDepartment of Economics

Jagannath UniversityDhaka.

WasteManagement

Industry Wastes

RawMaterials

This Assignment Prepared By…

Name of the Group Members Roll No.

1. Md. Saiduzzaman Pulak* 05071250

2. Sadiatul Fatema. 05071219

3. Md. Emtieaj Ahmed. 05071221

4. Farzana Rahman. 05071238

5. Md. Ibrahim Kholil 05071251

6. Md. Saiful Islam. 05071302

7. Shafiqul Islam. 05071366

*Group Leader

Letter of Transmittal

July 30, 2009

Tabassum ZamanDepartment of EconomicsJagannath University, Dhaka.

Dear Madam,

It’s our pleasure to submit you our Report on “The Economic Impact of establishing Waste Management Plant on the Factories in Bangladesh”.

We have prepared this report based on the data gathered from various industries, related organizations and internet. For the preparation of the report we have focused on the information that was found to be reliable and valid.

We truly appreciate our topic to be an important and significant one to enhance knowledge without which we would be surely in vague position. And we deeply regret for any inconvenience located in this report and I shall always be available for any clarification required.

Sincerely yours,

Md. Saiduzzaman Pulak.(On behalf of the group- )

Roll: 05071250Batch: 1st 5th semesterDepartment of economics.Jagannath University, Dhaka.

Objectives:

The objectives of our task are to reveal out- the impact of waste management procedure of

a company on its goal. And some other specific objectives are as follows…

Why a company should manage its effluents to the treatment,

How it manages to do the task,

Whether the task is environmentally significant or not,

How much the company is benefited

How much the society is benefited,

And globally what will be the outcome of it in return.

Executive Summery:

This report prepared as a requirement of the course of Resource Economics, Department of

Economics, Jagannath University, Dhaka. This report focuses on the economic impact of

waste management plant on the factories in Bangladesh. It contains several parts, the

introduction part, focuses on the over all idea of waste management and about the background

of the matter. In recent times, the world is so much concern on the Global Warming

resulting from discharge of wastes from industries. Different sectors emit different types of

wastes. Our observing sectors are three. These are Tanneries, textiles and pharmaceuticals.

We have discussed the companies’ cost- benefit, social cost & benefit, for having or not

having waste management plant.

Contents:

1. Introduction------------------------------------------------------------------------------------ 6

2. Definition & Classification of waste -------------------------------------------------------7

3. Waste management & ETP ------------------------------------------------------------------8

4. Preface of the topic ---------------------------------------------------------------------------8

5. Introduction to Leather industry --------------------------------------------------------8-11

i. Facts related to the establishment of ETP

ii. Impact on employee

iii. Impact on production

iv. Impact on market

v. External Impact

vi. Steps Taken By GOB

vii. Suggestion

6. Introduction to Textile ------------------------------------------------------------------12-14

i. Reason for the establishment

ii. Cost-Benefit Analysis

iii. Process of ETP

iv. Cost for the ETP

v. Impact on production

vi. Impact on market

vii. Suggestion

7. Introduction to Pharmaceuticals -------------------------------------------------------15-17

i. Establishment Facts

ii. Cost Benefit analysis

iii. Capacity of the ETP

iv. Operation of the plant

v. Impact on labor production & market

vi. Environmental Impact

8. Concluding Remarks. -----------------------------------------------------------------------18

9. Questionnaires--------------------------------------------------------------------------------19

10. References ------------------------------------------------------------------------------------20

IntroductionReality is, the earth is a planet with dirty seas and rivers, denuded forests and smog covered

cities, home of seven billion people and thousands of species of biota which are on the brink

of a cataclysm. The global environment change that human kind has brought about in the

short span of may be a century, has gone its own interest and the well-being of other species

inhabiting the planet. Whatever the views may be, the hard truth is, mankind is now living in

a habitat with degraded environment and depleted resources. To improve his material well-

being man has depleted the earth’s resources and degraded its environment. With the advent

of science and technology he has begun to enjoy all amenities of life. His demand begins to

increase. He has come across the need to establish the industry. Thus comes the industrial

period and man has started depleting resources and degrading environment. The developed

nations firstly practiced all kinds of industry but now they are much conscious of the social

cost of primary industries which are nothing but most essential for life. Developed countries

then deemed the developing country as the producer of primary goods. Thus developing

nations begin to face industrialization but in exchange with big social cost. Although, in

Bangladesh, industrialization goes with its small extent, the unplanned proliferation of

industrial units and their encroachment on fertile agricultural land is a cause for concern.

Wastes from these industries have polluted the environment in and around these

establishments. Industrial wastes originate from various types of manufacturing and

processing units. There are many ways of discharging these wastes, the easiest and the

cheapest mode being dumping the untreated wastes on the land around the industrial unit

producing these. This is the practice adopted in developing countries like Bangladesh

disregarding its negative impact. But now the processes are being changed though in a little

extent, by degrees, in discharging wastes. Basically there two types of wastes- solid and

liquid. In most of the cases the solid wastes are recycled so it has not any major impact on the

companies and that’s why our matter of concern is the liquid wastes (effluents) which have a

long impact on the environment as well as on the company. Effluents are treated by a

treatment plant named ETP (Effluent Treatment Plant). Some public and private companies

now have ETP s for discharging their emitted effluents after treatment so that they cannot do

any harm to the environment. The main among the polluting industries are: chemical

manufacturing, plastic, cement, tannery industries, fertilizers, distilleries, textile weaving and

dying, steel mills, paper pulp, pesticide, pharmaceuticals etc.

For our observation on Waste Management Plant we have selected three different sectors:

Tanneries, Textiles and Pharmaceuticals. Now some details about the whole matters.

Waste: Definition:

The European Union defines waste as an object the holder discards, intends to discard or is

required to discard is waste under the Waste Framework Directive. Once a substance or

object has become waste, it will remain waste until it has been fully recovered and no

longer poses a potential threat to the environment or to human health.

Classification of Waste:

According to European Union classification of waste are as follows. From where our

matter of concern is the industrial waste. This can be two types, solid and liquid. But in

most of the cases the solid wastes are re-used in various ways that’s why it should be called

residual not waste. But the liquid or effluents are so much harmful for the environment. So

it needs to be treated.

Waste Management:

Efficient waste management involves: considering the amount of waste being disposed

of considering the type of waste being disposed of customizing a waste management

solution taking both the amount and type of waste being disposed of into consideration.

Industrial wastewater treatment covers the mechanisms and processes used to treat waters

that have been contaminated in some way by anthropogenic industrial or commercial

activities prior to its release into the environment or its re-use. ETP stands for Effluent

Treatment Plant. The factories which discharge toxic chemicals as effuenlt needs to setup

ETP and ETP reduce the toxic chemicals from the water fully or maintain the normal water

standards Effluent treatment plants (ETP) are broadly used in industries recently to treat the

industrial wastewater.

The Economic Impact of Waste Management Plant on the Factories in

Bangladesh: We have made our assignment in three segments. Three different sectors are in

there. Tanneries, Textiles, and pharmaceuticals. Among them the tannery industries are

most hazardous for the environment of Dhaka city. In our first segment we will explain the

present condition of waste mismanagement in that industry.

Leather or Tanneries

The tannery industry is the forth in earning foreign exchange, cause phenomenal

environmental pollution to the soil, ecology and the human body. Of the 270 tanneries in

the whole country 90 % are located in Hazaribagh, a densely populated residential area of

Dhaka (WB 1993:128). Left units are in Chittagong, Jessore, Dhamray and Savar.

According to a report of UN-FAO (1991), everyday the tannery units all over the country

generate 8.47 million litter liquid wastes and 98 MT solid wastes of these Hazaribagh alone

generate 7.70million liter liquid waste and 88 MT solid wastes. The treatment facility of

waste management has not yet developed in tannery industries in Bangladesh. Only two

industries in Bangladesh who have ETP. They are Apex and Bata located in Dhamray and

Saver. But in Hazaribagh it’s not available yet.

Facts related to the Establishment of ETP:

We were introduced a leading leather industry Bay Tanneries Ltd which is a bonded wear

house of GOB. But they have not yet establish any types of waste management plant. But

why? - “Installing individual treatment facility is an expensive venture.” Said N. Karim

Biswas, Manager Admin, Bay Tanneries Ltd. According to him, there company would

enlarge their business instead of setting up an ETP. By which they can get profit. Though

GOB have taken some initiative to force the factories for setting up ETP in recent times, by

the power of there association they can protect themselves from the GOB pressure. But the

new comers of the industry are so much obliged to set up ETP for getting the registration.

.

This toxic waste ultimately goes into the Buriganga River and to the adjacent crop fields.

Impact on employee:

Bay Tannery has planned to set up ETP after their shifting to Saver. In which they are

supposed to cut their labor wages, to maintain the high cost of ETP operation. But there is a

possibility to a little portion of there labor force since the plant needs around three men to

run.

Impact on Production:

Effluent Treatment Plant (ETP) does not directly relate to the production but to the

environment. So by setting up an ETP there is no possibility to increase production. Like

this, in the case of tannery Industry, establishment of an ETP is not mandatory to attract

foreign market. That’s why there has no major impact on production, but can reduce a little

portion for the high cost of ETP establishment.

Impact on Market :

In the context of tannery industry the foreign buyers only want the quality of the product

and they even not interested to know any other external factor. The factories are dependent

on local market get low prices for their product. So they don’t go to maintain the high cost

of establishment of effluent treatment plant on their factory.

External Impact:

The outsiders of tannery industry in Hazaribagh are being so much usual with that

environment. The liquid tannery wastes carried by the City Corporations drains deposit in

the low land, west of Hazaribagh. The solid wastes including tiny piece of leather, excess

fat flesh hair, are piled up at roadsides in front the tanneries. Later, these are also thrown

into the same low land and ultimately they make their own way to Buriganga River.

Steps Taken by GOB :

In recent days Bangladesh government have taken the environmental issue as an important

concern. As a result, State Minister for Environment and Forests Mostafizur Rahman at a

workshop in Dhaka has said that “setting up of any new factory will not be allowed without

its own wastage recycling or effluent treatment plants (ETP)”. He also pointed out that a

clean development mechanism (CDM) is necessary for Bangladesh, as many countries

have adopted this eco-friendly industrialization technology. But what about the older?

Setting up ETP is too costly for smaller industries to bear and only a few large groups can

manage to afford it. The polluted air of that area is often causes diarrhea, stomach problems

and nausea when it gets into human body.

Suggestions :

Whatever was our suggestion, the govt. have done that already, that was transfer of

tanneries from Hazaribagh. In Hazaribagh, there has not only the problem of capital but the

land is also a big obstacle to establish ETP. Under the CDM (Clean Development

Mechanism) project govt. should consider highly the tannery industry and have to inspire

them for Carbon credit. In order to expedite installation of ETP the government should

provide loans at lower interest rates to those kinds of industries.

Textile Industries:The textile and apparel industry in Bangladesh occupies a prominent position within the

country’s industrial structure. It is the largest manufacturing sector, providing jobs for

some 50% of the total industrial workforce and contributing 9.5% of the country’s GDP.

Also, it accounts for almost 77% of total exports, making it Bangladesh’s leading foreign

exchange earner. With such a high benefit the industry was not concern about the

environment. But in recent times, its being mandatory for them to establish effluent

treatment plants (ETP) on there factories to grasp the foreign market. Most of the export

oriented textile industries in Bangladesh have established effluent treatment plant (ETP).

According to Engineer Ahmed Ali, Vice President of BTMA. “Approximately 50 textile

industries already have ETP, 25 industries are in construction and another 25 are

planning to set up ETP”. For our observation we have visited a leading textile industry in

our country, named PADMA Group of Textile, located at Bhulta, Narayangonj.

Reason for Establishing ETP:

The company started its journey in 1985 and now it has been a leading industry in

Bangladesh. It has been going with its ETP since 2002 and performing better than any

other companies in our country. Social responsibility is the main reason for establishing an

ETP. Though being very late, PADMA has established its ETP in line with that

responsibility. PADMA emits 2 tones of toxic wastes daily. It concerned with the matter

that if it would discharge all the effluents into the environment then it would be nothing but

a great threat for the extinction of the species surrounded it. That was the primary reason

for establishing ETP. According to their Managing Director, Engr. Ahmed Ali, “We did the

plant from our social responsibility, because we need to survive first, then economic

development will come automatically”

Cost-benefit analysis:

The effluents emitted from PADMA contain much alkaline types of materials, pH of which

are 12-14. No doubt, it is much harmful for land. It damages the fertility of land. It is the

ETP by which TDS (total dissolved solids) level of those elements in water can be reduced

by 930 mg /L where the sustainable level is up to 2000mg /L. Soil contamination may

occur from the disposal of sludge containing chromium. Chromium in its hexavalent form

is toxic to humans. It may cause gastro-intestinal ulcer. Particulate matter containing lead

settles down on land contaminating the soil. Vegetables such as lettuce, potatoes, beans,

and spinach may absorb lead from the soil. Lead is toxic to the nervous system and also

cause anemia. Mercury may accumulate in body tissues and cause irreversible brain

damage. These are the cost for society which may cost near about TK.1 billion per month.

On the other hand, for PADMA it took only TK.1crore to establish its ETP and its monthly

operating cost is only TK.2 lacks. So, how can we evaluate social benefit against

company’s cost?

The Process of ETP:

There are three types of ETP- Biological, Bio-chemical and Chemical. PADMA is using

the second category, which is not able to remove the Bacteria. The effluents emitted from

PADMA contain much alkaline types of materials which are sodium hydroxide,

potasiumhydroxide, etc. along with Chromium, Lead, Mercury, Chlor-alkali, and Sulfur-

dioxide. These hydroxide elements are severe bases pH of which are 12-14. For the purpose

of treating this effluent, first Evaporation, then Crystallization of Salts and thereafter

centrifuging is done to dewater the salt output from crystallizer. A combination of

Industrial Evaporators like Falling film Evaporator, Forced Circulation Evaporator and the

Industrial Dryers like Agitated Thin Film Dryer, Fluid Bed Dryer etc are used. Other

auxiliary techniques such as centrifuging are also employed. Following is the plant design

of the ETP of PADMA.

Structure of ETP

Cost for the ETP:

All sorts of investment for the ETP taken from their own fund. The initial set up cost was

approximately TK1 crore. In which only machineries needed taka 70 lack. And other

charges including purchase of land, charges for setting up etc meet the remaining. The

companies per day production are 30.2 yards of clothes, and the emission of effluents per

day is around 2 tons. To treat the effluents it has to count only 6/7 thousand taka per day.

Impact on Employee:

For a corporation, it is very easy to run an ETP, since it takes a little cost of their total cost.

It does no matter while the social benefit is in concern. By observing the ETP of Padma

Textile, we came to know that it has nearly to spend Tk15 thousand per month as wage for

it needs only three men to run this. Is it too much? No. While our social benefit is highly

profitable, in line with this. It facilitates those men to earn and support their family. It

cannot be negligible in any way.

Impact on Production:

ETP has an indirect relation to the production. Having ETP is a matter of social awareness.

The company which considers the social benefit may certainly be considered as reliable to

the masses. So it can certain have the global demand for its product. That has been

happened to our concern PADMA group of Textile.

Impact on Market:

The companies’ main goal is to grasp the market. And to hold the foreign market, they

have some mechanism, establishing ETP is one of them. By having ETP they can attract

foreign buyers. Because their products demand the most reliability. That’s why a company

can demand high prices against their product and thus they can make more profit by having

than not having ETP.

Suggestions :

Though the export oriented large industries have established ETP, the small industries also

need to do that. For that purpose GOB can provide loans with low interest rate under the

supervision of Central Bank. That’s a matter the sector demands for a long time. Here also

they can be attracted by the reward of Carbon Credit. Another steps GOB can take that is it

can establish a central ETP for the small industries by which govt. itself can earn Carbon

Credit.

The Pharmaceutical Industry

Pharmaceuticals sector is one of the fastest growing sectors of the country's economy,

which has the opportunity to grow further. Now it is the second largest sector after

agriculture. Average growth rate of the sector is around 12.5 per cent. Local industries

fulfill 97 per cent demand of the domestic market of about US $ 700 million. The local

pharmaceutical companies are now exporting to 68 counties all over the world. Some

leading pharmaceuticals companies are producing world-class products that are acceptable

in the global market as quality product and the prices of the products are also competitive

both in local and foreign markets. There are 239 registered pharmaceuticals industries, of

which 161 are in operation. For our purpose, we were introduced one of the fastest growing

pharmaceutical industries in Bangladesh named BEACON Pharmaceuticals

Establishment Facts:.

The company is committed to its products, customers, management, employees, and other

associates as well as to the environment that surrounds the company. The company has

invested a huge amount of money on the state of the art Effluent Treatment Plant (ETP) in

order to ensure clean and green atmosphere at the plant which ensures the safety and health

of the employees and communities where they operate.

Cost Benefit analysis:

Cost-benefit analysis of having waste management plant and not having is a task to be

concerned. Because it’s surely true that social benefit is much more valuable than the

economic benefit. Not only that, but also establishing ETP can increase reliability of a

farms product that’s why an industry can go forward. In the context of our concern,

BEACON pharmaceuticals, they have invested only around 1.3crore taka for the ETP. But

after having that their foreign market reliability have raised. So ultimately they are

benefited by the waste management plant-ETP.

Capacity of the ETP:

The most advanced state of the art Effluent Treatment Plant (ETP) has a capacity of 2,

00,000 Lts / day. The effluents generated are treated at very high temperatures and are

thermally oxidized and the treated effluents are utilized for the green belt development in

the company premises. This is the first high capacity ETP in Bangladesh, which is

commissioned with the full European regulatory requirements.They have introduced full

sorts of ETP for waste water disposal and its management.

BEACON is treating its effluents by this plant.

Operation of The Plant:

The effluent from the ETP of BEACON consists of high organic content thereby making

the effluent as high COD effluent. For the purpose of treating this effluent, Evaporation

and Drying methods are used. A combination of Industrial Evaporators like Flash

Evaporator, Falling film Evaporator, Forced Circulation Evaporator and the Industrial

Dryers like Agitated Thin Film Dryer, Fluid Bed Dryer etc are used. Other auxiliary

techniques such as centrifuging, filtration, incineration are also employed. But the

condensate water generated after condensation of the vapors formed in evaporation process

of this particular effluent tends to carry the volatile organic compounds thereby increasing

the COD of condensate water and making it unfit for use/disposal. The COD of the

condensate water can be brought down by rectification/ carbon treatment or aeration with a

high pressure blower for prolonged periods.

Structure of Pharmaceuticals ETP

Impact on labor, production and market:

On the ETP of BEACON, there works only 5 men and there average salary is 5 thousand

taka. It does not matter for such a large corporation. Moreover they are being reliable for

having ETP which increase their products demand as well as production. That helps

marketing strategy for the foreign market.

Environmental Impact:

BEACON has done well with its effluents. That is, the output liquid stream from the

flashing chamber enters the multiple effects falling film evaporator for further

concentration. And finally, whole of the effluent is converted into solid/sludge form so that

it can be disposed using various ways like land filling. So it doesn’t have any negative

impact on the environment.

Concluding Remarks:

More the earth is yielding to industrialization, more it is contributing to make itself as a

habitat of hazard for all the flora and fauna live in it. But the international communities

now are being much concerned about the matter. This community including developed and

developing world is working well for saving all and sundry of the environment from a great

catastrophe resulting from discharging toxic wastes from industrial units. For an instance,

to reduce the emission of access carbon dioxide to the environment CDM offers carbon

credit to the industries. The industries can be facilitated by the govt. in many ways.

Governments make sure that they reduce the export duties of that industries which have

well waste management plant.

Methodology

For completing our task we have followed both primary and secondary method of

collecting data. In method, we have had questionnaires. We had prepared different

questionnaires for different sectors. Which we asked them to get our desired information.

We studied on three different sectors- Tanneries, Textiles and Pharmaceuticals. Questions

for the industries having ETP and not having ETP were different. That’s why two types of

questions are shown below….

Having ETP

1. Why you established the ETP on

your factory? Was there any

pressure from GOB?

2. How much the cost was and

what were the sources of that

investment?

3. How much portion of your

factories wastes is refined? What

is the capacity of your ETP?

4. Have there any economical

benefit or not, if have, what are

they?

5. What are the impacts on labor

force?

6. Have any change in cost of

production as well as market?

7. Were there any types of GOB

enforcement/help/monitoring in

the time of establishing ETP?

Not having ETP

1. What are the main causes for not

establishing waste management plant?

Have you any plan to set up ETP in

coming future?

2. If you establish an ETP then what

kinds of impact you would expect on

your production or cost?

3. Will any major change occur on labor

for the establishment of a new ETP?

4. Are the foreign buyers want to know

any sorts of information about your

factories waste management?

5. What kinds of steps GOB have taken

to monitor the waste management?

And how you manage GOB for the

long time?

Refferences:

A. Books & Journal:

1. Banglapedia.

2. Environmental Analysis.—Pradyot Patnaik. (Ed-2004: p-455).

3. Environmental Pollution. ---Yogendro N. Srivastava. (Ed-1997)

4. Environmental Economics & Development.-Jiwitesh Kumar Shingh & Debendra

Kumar Das. (Ed-2004: Ch-20).

5. Leather Industry: Environmental Pollution and Mitigation Measures.

6. Municipal Solid Waste Management: Bangladesh Perspective.

7. World Bank Survey Report.(1997).

B. Organizations:

1. Department of Environment (DOE), Bangladesh.

2. Public Information center (PIC), World Bank.

3. Public Information center (PIC), ADB.

4. Waste Concern, Banani, Dhaka.

5. Prism Bangladesh, Dhanmondi, Dhaka.

6. Key on Engineers (Suppliers of ETP equipments & Chemicals).

Bijay Nagor, Dhaka.

7. Bangladesh Textile Mills Association (BTMA).

8. Bangladesh Tanners Association (BTA).

9. Bangladesh Association of Pharmaceutical Industries (BAPI).

C.Factories Visited:

1. Apex Tanneries Ltd.

2. Bay Tanneries Ltd.

3. Padma Group of Textile.

4. Beacon Pharmaceuticals.

D. Web Sites:1. www.ohi-international.com 2. www.daic-corp.com 3. www.iges.ov.jp 4. www.un-bd.org/undp 5. www.adb.org 6. www.worldbank.org/bd