[🇧🇩] Ceramic Industry in Bangladesh

[Saif]

Ceramic industry in deep trouble

The ceramic industry is a deeply fossil-fuel driven industry, i.e. gas-dependent. It cannot be run on solar power. In fact, no heavy industrial production unit can for that matter. And while the government keeps harping about renewable energy as being the next big thing, industry suffers in silence

thefinancialexpress.com.bd

Ceramic industry in deep trouble
SYED MANSUR HASHIM
Published :
Jul 05, 2024 21:47
Updated :
Jul 05, 2024 21:47

The ceramic industry is a deeply fossil-fuel driven industry, i.e. gas-dependent. It cannot be run on solar power. In fact, no heavy industrial production unit can for that matter. And while the government keeps harping about renewable energy as being the next big thing, industry suffers in silence or in mute protest that falls on deaf ears. The fact of the matter is that ceramic-making factories in key areas of Dhaka, Gazipur and Narsingdi have been "struggling to continue production as they have been suffering from a severe gas crisis in recent times" according to a recent report published in this newspaper.

The ceramic industry's apex body, the Bangladesh Ceramic Manufacturers & Exporters' Association (BCMEA) has every right to feel indignant at the situation. Ceramic making is largely concentrated on gas-fired kilns but due to not only a crisis of gas but the hike in gas prices too. Indeed, the recent increase in gas prices was opposed by the industry, but at that time, the concerned ministry had promised uninterrupted supply of gas which turned out to be a fallacy. Moving to the present situation, industry experts state that some 25 factories in this area have been suffering a "production loss of estimated Tk200 million every day for the last one month due to the supply crunch of natural gas." It is only natural that ceramic manufacturers have been clamouring for sufficient gas supply in the areas of Mirpur-12, Dhamrai of Dhaka district, Tongi, Kashimpur, Bhabanipur, Bhawal, Mirzapur, Sreepur, Mawna (of Gazipur), Panchdona (of Narsingdi), Bhaluka and Trishal (of Mymensingh).

Today, the ceramic industry is an important sector with about 70 factories in operation. Only a handful of factories in Habiganj and Bhola get the require gas pressure for production. As stated by BCMEA, manufacturing units need gas supply pressure at 15 PSI (pound per square inch) but affected factories are getting at best, 3 PSI, which is hardly conducive to production. Products include tableware, tiles, sanitary ware and bricks. For normal operation, factories need kilns to have access to gas 24 hours a day that burn at 1,200 centrigrade at the required PSI. Since a constant pressure is required, what happens when the PSI goes down? Wastage of all material inside the kiln. This is unsustainable from a production point of view. Because when production comes to a halt due to this wastage happening from lower PSI, a factory must wait 48 to 72 hours before resuming production.

There is another matter that cannot be overlooked. The depreciation of the Taka against the US dollar, prices of inputs (particularly raw materials), i.e. a lot of the material that has to be imported has also shot up.

Getting back to the price of gas, price per cubic meter had been raised from Tk 13 to 30 on the promise of uninterrupted gas supply. And this turned out to be a mirage. So, not only is industry paying more than double the price per unit, it isn't getting it at the required pressure level - resulting in unsustainability of production. Is the domestic market for ceramic ware to be left to importers in that case? What is to happen to the workforce engaged in this industry and what is to happen to the estimated Tk170 billion in investments that have gone into making this industry that has been touted as one of a handful of industry capable of competing in foreign markets in the near future?

One cannot overlook the fact that domestic manufacturers cater to over 90 per cent of the domestic demand for the items produced by these factories and hence, its concerns for reliable primary energy supply cannot be ignored. There is literally no short-term solution to a problem that has been over a decade in the making. Recapping the folly of policymakers cannot be overstated with the emergence of the all-powerful import lobby for fossil fuel rose through the ranks of policymaking to convince the government that there was no need to explore domestic resources of natural gas (in what geologists have stated umpteen number of times as a natural gas-rich country).

Today, the ceramic industry is finding out to its dismay what it means when the country doesn't have enough foreign exchange to buy natural gas from foreign markets. Industrialisation in the country is in danger of stopping in its tracks- not just for domestic producers but for foreign investors too because there simply enough gas to go around. In the midst of this crisis, active foot-dragging efforts are in play to arrest energy wastage in a number of gas-guzzling plants that have outlived their operational lives and are grossly energy-inefficient.What other proof does the State need to enact measures to improve energy efficiency across the board? Ample studies exist on what needs to be done to save gas, so that it may be diverted to industries that are starving of it, but does the political will exist to save industry? That is the question.​

 

[Saif]

Ceramics industry reeling from three-pronged assault

The ceramics industry has been desperately seeking respite from a spate of crises in recent months, but their woes have only deepened due to a worsening gas crisis.

www.thedailystar.net

Ceramics industry reeling from three-pronged assault

The ceramics industry has been desperately seeking respite from a spate of crises in recent months, but their woes have only deepened due to a worsening gas crisis.

One of the major problems facing the industry has been brought on by inflationary pressures, which have eaten away at local demand for ceramics. Annual inflation rose to a 12-year high of 9.73 percent in fiscal year (FY) 2023-24, the highest since 2011-12, according to the Bangladesh Bureau of Statistics.

According to industry insiders, this has caused sales of ceramic products to plunge by 15 to 20 percent over the past four to five months.

Furthermore, there has been no relief from international buyers. On the contrary, exports of ceramic products declined by around 25 percent, according to the latest data.

Further exacerbating the situation over the past two months is the fact that ceramic industries in four districts have been contending with massive productivity losses due to a gas crisis. Industry insiders said they were counting production losses amounting to Tk 20 crore per day.

Exports of ceramic products fell to $30 million during the July-May period of FY24 compared to $39.86 million the prior year, showed data from the Export Promotion Bureau.

Further exacerbating the situation over the past two months is the fact that ceramic industries in four districts have been contending with massive productivity losses due to a gas crisis.

Industry insiders said they were counting production losses amounting to Tk 20 crore per day.

"Around 25 ceramic factories, located in Dhaka, Gazipur, Mymensingh and Narsingdi, have been getting insufficient gas pressure for the past two months," said Md Mamunur Rashid, senior vice president of the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA).

He said ceramics-makers normally require 15 pounds per square inch (PSI) of pressure to maintain product quality but they are getting only 7 to 8 PSI.

As a result, around 7 percent of products did not pass the quality inspection previously, but that number has ballooned to 20 percent due to the crisis, he said, adding: "Our profit declined by at least 25 percent due to production being hampered."

He also highlighted that production had dropped by as much as 40 percent in some factories due to inadequate gas supply, which comes from the Titas Gas Transmission and Distribution.

Rashid also pointed to a number of other factors that were keeping the industry from thriving, such as import duty on raw materials ranging from 5 to 25 percent, value-added tax of 15 percent on produced goods, and supplementary duty of 15 percent.

Besides, high interest on working capital and on credit for the procurement of capital machineries pushed the industry into further difficulties.

Against this backdrop, the BCMEA requested the government to take urgent steps to ensure normal supply of gas.

Md Sirajul Islam Mollah, president of the BCMEA, wrote to the Ministry of Power, Energy and Mineral Resources about the gas crisis that has been plaguing the ceramics industry since May.

Mentioning that production was being disrupted, he added that the gas pressure sometimes drops from 2 to 3 PSI to near zero.

Mollah explained that ceramics is a gas-dependent industry and natural gas is one of the primary raw materials. It is used as fuel and accounts for 10-12 percent of the total cost of production.

He also said kilns or furnaces need uninterrupted gas supply for 24 hours to prepare ceramics products since firing is done at 1,200 degrees Celsius.

"Without a certain level of pressure, it is not possible to continue production processes."

When the pressure reduces, all the products inside kilns are immediately destroyed, he stated. Additionally, it takes a minimum of 48 hours to 72 hours to restart the kiln once it shuts down. Sometimes, valuable equipment is destroyed, causing huge financial losses, he added.

Irfan Uddin, director of FARR Ceramics Ltd, said production losses had contributed to lower exports.

"If we do not gas as required, we can't ensure quality of production. It is not possible to export substandard products as it is a matter of the industry's image," he said.

So, the volume of exports reduced substantially this year.

Irfan Uddin, also general secretary of the BCMEA, added that it was unfeasible to use alternative fuel sources like liquefied natural gas or compressed natural gas because it would increase the cost of production by over 25 percent.​

 

[Bilal9]

LEGACY, LUSTRE, LUXURY​

With a 40-year legacy, Monno Ceramic has become a household name and an international brand, celebrated for its exquisite design and global recognition.

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Monno Ceramic is one of the largest pioneering ceramic tableware manufacturers in Bangladesh. Starting its journey in 1984 to produce porcelain tableware, Monno Ceramic secured its first export order the following year. Monno’s premium quality tableware has garnered attention on a global scale which has been directly reflected by the continuous market demand from international retailers, hotel groups, distributors, and wholesalers. What sets Monno Ceramic apart in this highly competitive ceramic tableware market is its utilisation of modern technology to produce high-quality, creative, and artistic designs in every Monno Ceramic tableware.



Founder Harunur Rashid Khan Monno’s dream was to manufacture world-class quality products – a principle that has continued to be reflected in every Monno product – bone china, porcelain, and high alumina hotel ware. Each body composition is made from the finest raw materials sourced internationally to ensure superior quality. The products are meticulously crafted and transformed into an exquisite tabletop, mirroring a unique blend of eye-catching shapes, enviable translucency, and durability. These are strengthened by a highly calibrated test protocol for metal release, thermal shock resistance, chemical resistance, scratch resistance, chip resistance and dishwasher and freezer safety. Lead and cadmium-free colour pigments from Germany produce the finest in-glaze and on-glaze decals that bring any designer’s artwork to life.



Colour-glazed and spray-coloured porcelain and bone china are Monno Ceramic’s greatest strengths. The exclusive line of lustre colours epitomises luxury and sophistication with its mirror-like finish and vibrant colours.

The promise of uncompromised quality and commitment to excellence means Monno Ceramic is constantly upgrading its machinery and technology to meet world-class standards. Monno’s modern production line, with its advanced machinery and expert workmanship, ensures low operating costs and the finest quality. It is this advanced production facility that has made Monno Ceramic one of the best outsourcing destinations in the world for ceramic tableware.



Monno Ceramic collaborates with renowned designers such as Queensberry Hunt, Nick Holland, and Billy Lloyd for the Western market. These influential voices, accompanied by several other famous brands, vouch for Monno Ceramic’s design and quality.

Recently, ‘Monno Design’, the company’s London-based design studio was launched with a focus on developing in-house tableware collections for the global market and promoting Monno Ceramic worldwide.

To showcase its exquisite designs, Monno Ceramic has participated in ‘Ambiente’, the world’s leading lifestyle exhibition for the last 36 years in Frankfurt, Germany. Monno Ceramic also regularly participates in lifestyle exhibitions in Japan, Qatar, and India.



The artistry and creativity of Monno Ceramic tableware have created a prominent global presence for Monno Ceramic, complemented by its robust export portfolio, earning them global recognition. Monno Ceramic has been awarded the ‘National Export Trophy’ a record twelve times by the Government of Bangladesh. Monno Ceramic is also one of the few companies in the world that complies with all kinds of international standards. An ISO 9001:2015 certified company, Monno Ceramic has certification of Sedex, BSCI for social compliance, and C-TPAT for global security.



From the beginning, Monno Ceramic has prioritised quality by focusing on innovation, investing in new technologies and prioritising the trust of its customers. Embarking on its 40th year in 2024, Monno Ceramic continues to be a leader in the ceramic tableware industry by staying true to its five core brand values – respect, leadership, accountability, teamwork and growth. The ethos of these core values is reflected in the fine and intricate design of each and every Monno Ceramic product, making it one of the biggest household names in the industry.



Photographs: Courtesy of Monno Ceramic

 

[Saif]

Ceramics face double blow: gas crisis and tax burden

The country’s ceramic industry is facing a severe crisis due to an ongoing gas shortage and the recent imposition of supplementary duty (SD) on the sale of ceramic tiles and sanitary ware, according to industry leaders.

www.thedailystar.net

Ceramics face double blow: gas crisis and tax burden

The country's ceramic industry is facing a severe crisis due to an ongoing gas shortage and the recent imposition of supplementary duty (SD) on the sale of ceramic tiles and sanitary ware, according to industry leaders.

"The government should ensure a stable gas supply," urged Moynul Islam, acting president of the Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA), yesterday.

"…and withdraw the supplementary duty on ceramic tiles and sanitary ware to support the industry's continued growth during this crisis," he told a press conference at Dhaka Reporters Unity (DRU).

The BCMEA leader stated that the ongoing gas shortage and high production costs are major problems for the industry.

He called for urgent government intervention to recognise ceramics as a "priority industry," which they believe is essential for maintaining local production, retaining employment, and ensuring global competitiveness.

The ceramics sector, which generates Tk 500 crore in annual export earnings and provides employment to over 500,000 people, is struggling due to inconsistent gas supplies and escalating costs, he said.

In spite of ensuring a 150 percent growth in production and investment over the past decade, many manufacturers are now facing operational uncertainties, said Islam.

Islam said the ceramic industry has become a significant alternative to imports, saving approximately $2 billion annually for the local economy.

He added that more than 80 ceramic factories in Bangladesh are currently meeting 85 percent of domestic demand, while also generating substantial export revenue.

The BCMEA reported that the sector has attracted a total investment of Tk 18,000 crore, with ceramic manufacturers paying Tk 1,200 crore in gas bills annually.

However, ongoing gas shortages have severely impacted business operations, leaving many factories struggling to maintain production for the past year, it said.

The factories are in areas such as Dhaka (Mirpur, Savar, Islambagh, Dhamrai, and Kalampur), Narayanganj (Rupganj and Meghnaghat), Gazipur (Tongi, Kashimpur, Bhabanipur, Sripur, and Mawna), Narsingdi (Pachdona), and Mymensingh (Bhaluka and Trishal).

Instead of the required 15 pounds per square inch (PSI), gas pressure often drops to 2 PSI to 3 PSI or even reaches zero, causing daily production losses of over Tk 20 crore, said Islam.

Many ceramic companies have been forced to halt investment plans, while newly established factories remain non-operational due to the crisis, he said.

"This not only restricts business expansion but also limits job opportunities for thousands of workers," Islam stated.

The BCMEA also raised concerns over the continuous increase in gas prices, which has significantly driven up production costs.

Between 2015 and 2023, industrial gas prices surged by 345 percent, including by 150 percent in 2023 alone, it said.

This has led to an 18 percent to 20 percent increase in production costs, making it increasingly difficult for local manufacturers to compete with imported products, it said.

Islam cited that recent reports indicate the government is considering another 152 percent gas price hike, which would further inflate production costs by 30 percent to 35 percent.

"This would not only impact the ceramic industry but also raise transportation and operational expenses, ultimately affecting end consumers," he stated.

The BCMEA called on the government to reconsider the proposed price hike to safeguard the sector's competitiveness in local and global markets.

Another pressing demand from the BCMEA was for the withdrawal of the supplementary duty (SD) on the sale of ceramic tiles and sanitary ware.

Currently, a 15 percent SD is imposed on the sale of ceramic tiles, while sanitary ware faces a 10 percent duty.

Mir Nasir Hossain, former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and adviser to the BCMEA, emphasised the importance of uninterrupted gas supply for ceramic production.

"Gas is a crucial component in ceramic manufacturing, requiring a continuous 24-hour supply at a specific pressure level. Any drop in pressure can cause immediate damage to products, leading to substantial financial losses," he said.

Hossain warned that ongoing production disruptions could push manufacturers into financial distress, making them prone to becoming bank defaulters due to high interest rates.

Some companies are already on the path of collapse due to the gas shortages, he claimed, adding that despite the inadequate gas supply, factories are still required to pay the same utility bills.

Md Mamunur Rashid, vice president of the BCMEA, criticised the proposed gas price increase for new factories, with the rates being increased from Tk 30 per unit to Tk 75 per unit.

"This decision is completely illogical and would act as a major barrier to the industry's development," he said.

Regarding the SD, Rashid pointed out that the effective corporate tax rate on ceramic manufacturers reaches around 32.5 percent.

"We strongly urge the government to withdraw the proposal for imposing a 20 percent SD on the ceramic sector to ensure its sustainability and growth," he concluded.​

 

[Saif]

Energy crisis, economic slump weigh on ceramic industry

The country’s ceramic industry is facing one of its toughest periods in recent years, as rising production costs driven by persistent energy shortages and weak domestic demand take a toll on manufacturers.

www.thedailystar.net

Energy crisis, economic slump weigh on ceramic industry
Says a leader of ceramic manufacturers’ association

Irfan Uddin

The country's ceramic industry is facing one of its toughest periods in recent years, as rising production costs driven by persistent energy shortages and weak domestic demand take a toll on manufacturers.

Irfan Uddin, general secretary of the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), highlighted the sector's challenges in an interview with The Daily Star.

"The economy isn't doing well, and that's no secret," Irfan said. "The ceramic sector, which depends heavily on real estate and development, is also facing serious difficulties."

He noted that as construction and development activities slow across the country, demand for materials such as ceramic tiles, sanitaryware, and tableware has dropped sharply.

"When development slows, the use of materials like ceramics falls automatically. We've seen industry-wide sales drop by nearly 25 to 30 percent," said Irfan, who is also managing director of FARR Ceramics Ltd.

Tiles, which make up about 80 percent of the market, have been hit hardest. "Because tiles have the biggest share, any downturn affects this segment first. Demand from both residential and commercial projects has fallen significantly," he added.

ENERGY CRISIS HINDERS PRODUCTION AND QUALITY

Although some earlier issues, such as the dollar shortage and import complications, have eased slightly, the ongoing energy crisis remains a major obstacle.

"The gas supply issue has not been resolved. Due to low pressure or interrupted supply, many factories are unable to run at full capacity," Irfan said. "We're currently facing around 15 percent production loss purely due to energy problems."

He explained that an inconsistent gas supply affects both quantity and quality. "Our cost of production is going up because our inputs are the same, but we're producing less. For example, where we used to make 100 pieces, we're now getting just 85 with the same labour force and overhead."

The irregular gas supply also causes firing problems in kilns, leading to lower-quality finishes. "Instead of bright white tiles, we're getting yellowish shades that can't be exported. We're forced to sell them locally at lower margins," he said.

EXPORT POTENTIAL HAMPERED

Despite domestic difficulties, demand for Bangladeshi ceramics remains strong internationally. However, manufacturers are struggling to meet it.

"Buyers are placing orders, but we can't deliver due to our production limits," Irfan said. "We usually aim for 80-85 percent export-quality production, but right now we're only reaching 55 percent."

He stressed that the drop in quality is not due to a lack of skill or workforce, but because of irregular gas supply affecting production temperatures. "We lose a lot of revenue because products that don't meet export standards have to be sold locally," he lamented.

To support the struggling industry, BCMEA has launched initiatives targeting both local and international stakeholders.

"In the last three days, over 22,000 people visited our industry exhibition," Irfan said. "We also held a special programme with all of Bangladesh's major ceramic distributors. The response has been very positive."

"These efforts aim to keep distributors and stakeholders engaged despite the downturn," he added. "Distributors are key to reaching the local market, so keeping them motivated is crucial."

FINANCIAL STRAIN AND INVESTMENT GAPS

The prolonged slowdown has put heavy financial pressure on ceramic makers. "Many companies are struggling to cover everyday costs like salaries and loan payments," Irfan said. "No one invests expecting to fail. When someone builds a factory with Tk 150 crore-Tk 200 crore, much of it comes from their own savings."

He also pointed to the lack of fresh investment. "We're not seeing new investment at the moment. Even local investors are holding back, and foreign investors are absent. Without fresh investment, economic growth will remain slow."

Irfan urged the government to ensure political and economic stability. "A functioning, elected government must take charge and steer the economy forward," he said.

He highlighted that the mid-range market, which forms the largest customer base, has been hit hardest. "The premium market is smaller, and while it's affected too, the volume loss is much larger in the middle-income bracket," he said.

As household and project budgets tighten, mid-segment consumers are delaying or reducing construction and renovation, directly impacting ceramic sales, he added.

Irfan urged the government to stabilise gas supply and provide targeted support to export-focused sectors like ceramics. "If we can stabilise gas supply and restore investor confidence, the industry can bounce back," he concluded.​