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The growing ceramic sector that made a sustainable footing in local market based on three key elements – availability of gas, cheap labour and tariff advantage – are now struggling to keep up its rising trend.
The industry people have said that the availability of low-cost energy which was one of the driving forces is now hitting the industry hard due to its ongoing crisis along with supplementary duty on local production.
‘We have made the country self-sufficient in terms of ceramic products including tiles, sanitary ware and tableware meeting more than 85 per cent local demand over the past 10 years,’ Bangladesh Ceramic Manufacturers and Exporters Association president Md Shirajul Islam Chowdhury told New Age on Tuesday.
Due to energy crisis, factories have been running below their capacity and production cost has been increasing in line with the price hike of raw materials in the global market, he said.
Besides gas crisis, the BCMEA president identified 15 per cent supplementary duty on local production as one of the key challenges to further growth of the ceramic sector.
The total investment in the sector stood at nearly $2 billion and the local market size is more than Tk 7,000 crore.
According to the BCMEA, there are 71 ceramic industries in operation and more than 10 industries are in the pipeline to set foothold.
Of the 71 industries, 33 are producing tiles, 20 are tableware and 18 are producing sanitary ware.
An international standard is being maintained in most manufacturing units of ceramic products and the government declared the sector child labor-free in 2020, according to the sector people.
A total of five lakh people are directly and indirectly involved in the sector.
Shinepukur Ceramics Limited chief executive officer Humayun Kabir also termed energy crisis a big challenge facing the sector for the past 15 months when production and quality of products are declining.
‘Our products are mostly export-oriented and export orders have declined in recent months due to economic slowdown in Europe caused by the Russia-Ukraine war,’ he added.
Shinepukur is the biggest exporter of tableware in the country exporting 60 per cent of its production.
Humayun Kabir expressed his disappointment over some budgetary measures, terming fiscal laws including value added tax and source tax on exports not export-friendly.
He suggested that the government should go for bilateral and multilateral trade arrangements to get tariff benefit in the export markets like Vietnam, India, Thailand and Indonesia that were the competitors of Bangladesh in overseas markets.
Irfan Uddin, general secretary of the BCMEA, said, ‘It is a big development for us as we can now meet local demand when we had to depend on import.’
The business leader underscored a huge potential of the ceramics industry in Bangladesh as the country is developing.
Irfan sees no threat except gas crisis to the growth of ceramic sector in the next 10-15 years.
Recalling its inception he said that the country’s first ceramics industry came into being in 1958 with the establishment of a tableware factory namely Tajma Ceramic Industries in Bogura. In the same year, Mirpur Ceramic Works Ltd began its journey as a manufacturer of structural clay products.
In 1980s, Monno Ceramics kicked off its journey with procaine tableware focusing on export market and then Shinepukur grew with bone China technology, Irfan said.
According to the sector leaders, Shinepukur, Monno and FAAR Ceramics are leading local and international tableware exporters in terms of volume while RAK Ceramics, Abul Khair, Akij Ceramics and Excellent Ceramics lead the local sanitary ware market.
The major export markets are the European Union, North America, UK, Turkey, UAE, Thailand and India.
The BCMEA data shows that the local sales of tiles, tableware and sanitary were Tk 5,349 crore, Tk 582 crore and Tk 898 crore respectively in the financial year 2021-22.
As per the statistics, the sector meets about 86.53 per cent of local demand for tableware, 59.77 per cent for sanitary ware and 86.74 per cent for tiles.
According to the Export Promotion Bureau data, export earnings from ceramics products in the financial year 2021-22 grew by 32.95 per cent to 41.36 million from $31.11 million in FY21.
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