Tiling Dreams

Staff Correspondent
Wednesday, August 30th, 2017


Ceramic products step into global market


The country’s market of ceramic items was entirely dependent on imports only two decades back. Today, varieties of ceramic items made in Bangladesh are capturing markets worldwide. Crocks and tiles made of ceramics have been recognised as major industrial products and also added as key items to the export basket. Entrepreneurs of the sector said most of the manufacturers are not in a position to take fresh orders for production in the next one year.


Currently, the sector has an aggregate investment of Tk. 5,000 crore or so, according to the industry insiders. Investments of another Tk. 2,000 crore are in the process of implementation. The industry is said to have employed about 500,000 people, directly and indirectly. The market of the Bangladeshi ceramic products is worth around Tk. 700 crore including export market valued Tk. 300 crore.


The market of only tiles and sanitary wares that rose to 60 crore (600 million) square feet from 50 lakh (5 million)square feet in a decade is expected to increase to a size of more than 100 crore (one billion) square feet in next few years. The investment in this particular segment, amounting to Tk. 1600 crore at present, is expected to double in five years.


Cashing in on comparative advantage


Global market of crockery items was once dominated by China, which had enjoyed a monopoly in the European market. Bangladesh is now taking its share in that market. Following upward revision of duty by European Union, for exporting ceramic items to EU market, China has to pay up to 50% duty, which made Chinese products dearer. As Bangladesh enjoys duty-free market access, European buyers are now looking at the Bangladesh industry for relatively cheaper ceramic items. Bangladeshi manufacturers have good prospects of exporting ceramic items in the EU market in the foreseeable future.


The country exported ceramic products worth US$37.69 million in the 2015-16 fiscal year, according to Export Promotion Bureau. The export target for the current financial year has been fixed at $42 million.


The ceramic sector started its journey in Bangladesh with the public sector. The first private plant – Monno Ceremics – was set up by Harun-ur-Rashid Khan Monno in 1985 and mainly tableware was produced in those days. The sector grew remarkably in the 1990s when a number of players such as Bengal, Shinepukur and Standard came to the market. They were joined by China-Bangla Ceramics, Artisan Ceramics, Sunflower Ceramics, FARR Ceramics, Meer Ceramics, Great-wall Ceramics, Madhumoti Tiles Ltd, Dhaka-Shanghai Ceramics, Xceramics and Paragon Ceramics. Six new players in the sector include Padma Ceramics, Aftab and Khaled Corporation, Akij Ceramics and others.


A total of 15 companies are now in operation in the ceramic sector, of those, 12 are private units, two joint venture companies and the remaining one is in public sector. Fourteen companies are exporting their products and they have as many as 48 destinations including the US, China, Japan, Russia, Spain, Italy, New Zealand and Australia. The ceramic exports increased by 695% since 1991.


Industry people said the sector has much higher growth potential than the achievement. They have pointed out a deficiency in up-to-date technology, a lack of research facilities, higher duties (15-30%) on imports of raw materials, high rate of interest and power outage and costs involved as major barriers to their growth.


Near self-sufficiency in tiles, sanitary wares


This market grew by 120 times in a span of 20 years, according to the industry insiders. They mentioned that only 20% of the demand of tiles and sanitary wares is met by imported items despite the jump in the demand. Among the local manufacturers, RAK Ceramics tops the list that produces 150,000 square feet of tiles and sanitary wares every day. The entrepreneurs said the growth of the ceramic sector has been supported by the growth of readymade garments and housing sectors. However, they cannot go for an increase in output due to the shortage of gas supply.


The tiles and sanitary wares produced at home are cheaper than the imported ones. Because of this price competitiveness, Bangladeshi tiles and sanitary wares have demand in India, Nepal and the United Arab Emirates. If initiatives to increase their production are taken, entrepreneurs say, these items can also be exported to the European market.


“Uninterrupted energy supply key to growth” Rizvi Ul Kabir, General Secretary – Bangladesh Ceramic Ware Manufacturers’ Association and Chief Operating Officer – Shinepukur Ceramics Ltd


The General Secretary of Bangladesh Ceramic Ware Manufacturers’ Association and Chief Operating Officer of Shinepukur Ceramics Ltd, Rizvi Ul Kabir, told Dhaka Courier that despite the slight impact of stagnation in the housing sector on the ceramic sector, the demand for ceramic products are still encouraging for the industry. Rather, he pointed out, the ceramic units have not been able deliver properly due largely to the crises of gas and electricity. ‘The supply of gas and electricity must be enhanced to ensure higher production and productivity of the ceramic industry,’ he said. ‘Uninterrupted supply is a must for  healthy growth of the ceramic sector.’


In the global market, the sector had faced a crisis during the financial slowdown in 2010. ‘That is now over and we are now in a better position than our main competitor China in the international market,’ said Rizvi Ul Kabir. ‘We are rather struggling with higher number of orders from abroad and deadlines of delivery,’ he pointed out.


The business executive expressed his views that if the country is to tap the full potential of the ceramic sector at home and abroad, ‘we must attract more investments’. Because, he said, only 14-15 Bangladeshi companies could not meet the increasing global demand. Shinepukur Ceramics he runs is opening new units with this end in view. Apart from constraints such as energy crisis, he said the government should revise downward the import duty and value added tax to give fiscal incentives to enable further growth of this promising sector.

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