Country’s ceramic industry has seen exponential growth over the last decade with growing export earnings even after meeting a major portion of domestic demand as well as export in international markets.
The industry is poised to be doubled in size by 2023, supported by the growing domestic demand from real estate industry, rising demand for products in the export markets.
Recent USAID report made a the forecast, saying the ceramic industry of Bangladesh would attain a value worth $1.56 billion by 2023 with similar growth trend.
The industry started it’s journey back in 1958, the sector has flourished tremendously in last ten years with the industry’s production growth rose by almost 200%. At present the industry caters to 85% of local demands which is worth of $668.5 million.
According to Bangladesh Ceramics Manufacturers and Exporters Association (BCMEA), a total of 66 ceramic manufactures are operating in the country, producing mainly tableware, tiles and sanitary ware.
Of these factories, 20 are making tableware, 28 tiles, while 18 are producing sanitary ware. Investment of all the factories amounts to a total of Tk 8,616 crore, while about 50,000 people are directly involved in the industry, including 40 percent female, according to BCMEA.
The USAID report, however, showed that the sector is operated mostly by unskilled people, 92.50 percent.
The yearly production capacity of the local ceramics industry is 25 crore pieces tableware, 20 crore square metre tiles and 90 lakh pieces of sanitary ware and value addition in ceramics stands at 65%.
As per BCMEA data, total domestic market consumption of ceramic products was around Tk 5,450 crore in FY2017-18, of which locally produced ceramic products were worth nearly Tk 4,340 crore, while imports hit Tk 1,110 crore.
In case of tableware, a 92.87% market demand is met with locally produced goods, while the remaining 7.13% with imported products.
As regards tiles, local companies occupy 76.18% of the total market share and imported products hold the rest 23.82% while 88.32% market demand of sanitary ware is met with locally produced products and the rest 11.68% with imported goods.
Of the local market, Shinepukur Ceramics holds the highest 18% share, Monno Ceramics 15%, Farr Ceramics14%, Paragon Ceramics 12% and Protik Ceramics has 8% share in the local market.
Regarding the sanitary ware products, RAK ceramics has the large market share of 33% while Abul Khair Ceramics holds 18% share and Excellent ceramics 7% in the local market.
In case of tiles market share, RAK ceramics and Star ceramics have taken the leading position as both have 15% share in the total tiles market. Besides, Great Wall ceramics, Akij and Mir ceramics have 14%, 11% , and 8% market shares respectively.
The country can cater 96 percent of tableware, 77 percent of tiles and 89 percent of the sanitary ware demand through local production.
According to the Export Promotion Bureau (EPB), the country earned $68.97 million through exporting ceramic products in the last fiscal year (FY 2018-19), registering 32.79 percent growth against $ 51.94 million in last FY.
Local ceramic manufacturers are now exporting tiles, sanitary and tableware to more than 50 countries including USA, Canada, UK, Germany, France, Italy, Sweden, Switzerland, Norway, Greece, Ireland, Netherlands, Spain, Austria, Belgium, Denmark, Finland, Poland, Australia, Japan, New Zealand, UAE and others.
Industry insiders said that more than a dozen of new ceramic manufacturing units are in the pipeline to cater for the growing demands both in and outside the country.
The USAID report, however, pointed out major challenges like disruption in gas supply and inefficient transportation and shipment facilities that increase the lead time and results in the inefficient production process.
Large import dependency for key raw materials has also been identified as another barrier to the future growth of the industry.
The USAID report stressed the need for policy advocacy to ensure uninterrupted power and gas supply to the factories.
The report’s other recommendations included launching a central platform for product designing and innovation, supporting research and development for catalyzing the production of advanced ceramic products like ultra-lightweight, heat-insulating ceramic fibre to help the sector grow further.
“Real estate industry is the main growth fuel of domestic market while the US-China trade war and rising European demand are bringing growth in the export market,” the report said.
Due to the US-China trade war, in the shadow of extensive tariff rate, countries like Bangladesh has become a suitable choice for investors to expand their ceramic businesses, it said.
Even China’s ceramic products are paying 12 percent tax to operate in the European market, while Bangladesh enjoying duty-free access to the EU market.
Recently, the government has declared 10 percent cash incentives on export of ceramic items. The Govt. also declared the sector as priority sector in accordance with the 2018-21 export policy.
All major Bangladeshi ceramic companies have been expanding their plants and operations with actively exploring advanced ceramic products such as industrial ceramics for spinning and textile factories, medical ceramics, ceramic plate for bulletproof jackets, according to BCMEA.