Ceramic Industries

Bangladesh a huge investment potential in ceramic sector

With the growing demand for different type of ceramic products in local and international markets, investors are leaning towards big investment in the industry that has a huge potential. Since 1995, six foreign companies have jointly invested worth Tk 1950.07 crore in Bangladesh’s ceramic sector. Production of the ceramic items grew 200 per cent in the past 10 years. However, there is a total investment of around $ 1.70 billion in the country. Industry insiders said nowadays the demand for ceramic tableware, pottery, tiles, sanitary ware, insulators and others products got popular, thanks to changing taste and lifestyle of people. Once people wanted to construct only a simple building but now they try to add materials like tiles. These products are now used in residential and commercial buildings, mosques, educational institutions and hospitals. Foreign investment rising gradually Foreign companies are keen to invest in the sector. So, the industry is awaiting huge investment, thanks to the government’s policy support, and availability of low cost labour. Fu-wang Ceramic industry Ltd, RAK Ceramics (BD) Ltd, BHL Ceramic Co. Ltd, Star Porcelain Ltd, South East Union Ceramic Ind. Ltd, and Sun Power Ceramics Co. Ltd have already invested in joint venture projects in Bangladesh. Most of companies came from China and the UAE that invested in Gazipur, Habiganj and Khulna. Ceramic tableware, tiles and sanitary ware are being produced by these companies, according to Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA). Talking to this scribe, RAK Ceramics Company Secretary Muhammad Shahidul Islam said the ceramic products are being used in residential and commercial buildings, mosques, educational institutions and hospitals. Now the items turned as essential products. “Most of our buyers are middle and upper middle class people. We produce over 1,000 types of products including high valued ones. There is no difference between our manufactured products and imported ones considering quality but we sell our products at 20-30 percent less,” he said Why is the ceramic sector perfect for investment? Bangladesh is one of the fastest growing economies in the world that has a big domestic market of around 163.8 million people. Cheap labour, skilled manpower, government policy support, political stability and perfect geographical position for producing and supplying all ceramics products made it an attractive sector for investment. BCMEA findings say that the ceramic sector offers a good number of facilities including lead and cadmium-free glaze as well as pigments; Sulfur-free natural gas supply; and flexibility in minimum order quantity. Capable of exporting bulk quantity, Bangladesh also enjoys GSP (Generalised System of Preference) facilities for exporting ceramic products. Now Bangladesh is exporting the ceramic products to more than 50 countries including the USA, Canada, the UK, Germany, France, Italy, Sweden, Switzerland, Norway, Greece, Ireland, the Netherlands, Spain, Austria, Australia, New Zealand, Japan, Russian, the UAE, Saudi Arabia, Kuwait, Egypt, Turkey, India, Pakistan, Singapore, and Brazil. BCMEA President Md. Shirajul Islam Mollah said the ceramic is an emerging sector. Bangladesh is an investment-friendly country for foreign investors so, he added, the ceramic sector has a bright prospect. Domestic ceramic market booming The country’s first ceramic factory named Tajma Ceramic Industries was established in Bogura in 1958 for manufacturing porcelain tableware. Primarily, the small company started with 3-4 types of cups but now the factory produces around 70 types of tableware. Later, Pakistan Ceramic Industries (now Peoples Ceramic Industries) started production in 1962. Monno Ceramics was established in 1985, Bengal Fine Ceramics in 1986 and Shinepukur Ceramics in 1997. Foreign investment came to this sector in Bangladesh through Fu-Wang Ceramic Industry Limited in 1995. RAK Ceramics was incorporated in 1998 and its commercial production started in 2000. BCMEA data showed that the demand for ceramic products increased at least 22 per cent in the last five years. However, a total of 71 companies invested Tk 15,356.50 crore in 2021-22 f iscal year. Of them, 20 tableware companies invested Tk 3,174.25 while 33 tiles companies invested Tk 10,151.86 crore and 18 sanitary ware companies invested Tk 2,030.39 crore. The country earned Tk 385.21 crore through export during the period. It gave revenue to the exchequer amounting to Tk 3500 crore. Value addition was 65 per cent. More than 500,000 people are directly and indirectly involved in the sector. Its production growth increased 200 per cent in last 10 years. According to a report of the business research company, the global ceramics market went up $114.11 billion in 2022 which was $107.72 billion the previous year. The company also projected that the global ceramics market size would reach $145.93 billion in 2026 at a compound annual growth rate of 6.34 per cent. Industrial Challenges There are some temporarily problems including gas supply in the country. Policymakers said these will be resolved soon. The BCMEA president said there is a gas crisis in the industry that was triggered by the Russia-Ukraine war. Bangladesh can attract more foreign investment in the ceramic sector ensuring an uninterrupted supply of gas and electricity. “Besides, we need a 20 per cent cash incentive, instead of the present 10 per cent, on the export of all types of ceramic products to boost the sector further,” he pointed out Ceramic Expo Bangladesh 2022 BCMEA is going to organize a three-day-long biggest international exhibition at International Convention City Bashundhara (ICCB) in Dhaka on November 24-26 to bring local and international manufacturers, exporters and suppliers of ceramics into a single platform. The RAK Ceramics Company’s secretary said, “The exhibition is a better place to promote a company’s products. So, we will take part in the ceramic expo to market our products.” BCMEA President Mr. Md. Shirajul Islam Mollah stated that the exhibition is expected to be attended by representatives of more than 300 global brands, manufacturers and suppliers of ceramic raw materials and machineries from 20 countries. “The expo will create ample scope for foreign ceramic manufacturers, buyers and investors to explore and invest in the emerging ceramic industry of Bangladesh,” he added Written by Rafikul Islam