The Financial Express

Size of ceramic industry may double by 2023

| Updated: November 20, 2019 14:42:15

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The country's ceramic industry is estimated to be doubled in size by 2023, aided by the growing domestic real estate industry, rising demand for products in the EU markets and the trade tension between US and China, industry people said.

A recent USAID report also made a similar forecast, saying the ceramic industry of Bangladesh would attain a value worth US$ 1.56 billion by 2023.

The industry that started journey in 1960s currently caters to 87 per cent of the domestic demand worth $ 668.5 million.

According to the Export Promotion Bureau (EPB), the country fetched $ 68.97 million through exporting ceramic products in the last fiscal year (FY 2018-19), marking a 32.79 per cent growth against $ 51.94 million in the last FY.

Industry people said 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.

"With similar growth trend, the industry is expected to reach $ 1.56 billion by the end of 2023."

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 per cent tax to operate in the European market, while Bangladesh enjoying duty-free access to the EU market. Such opportunities are indicating the industry's future growth potential.

Talking to the FE, DBL Ceramics Ltd vice chairman MA Feroz said the sector has huge potential to grow further due to the government's development works.

Regarding the gas issue, he said the ceramic industry cannot run without gas and the situation has improved much in the recent times.

Recently, the government has declared 10 per cent cash incentives on export of ceramic items, sources said. It is also a priority sector in accordance with the 2018-21 export policy.

The sector employs around 50,000 people, including 40 per cent female, according to Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA).

The USAID report, however, showed that the sector is operated mostly by unskilled people-92.50 per cent.

Currently, there are more than 60 ceramic manufacturers in the country with 20 units more in the pipe line to hit the market shortly, the association officials said.

Over 65 per cent of the manufacturers are producing items such as clay jars, clay flower pots, bathroom fittings, dinner sets, tea sets, coffee mugs and clay jewellery.

The country can cater 96 per cent of tableware, 77 per cent of tiles and 89 per cent of the sanitary ware demand through local production.

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.

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