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Growth in ceramic industry
Shahiduzzaman Khan

          A HIGH-profile trade delegation, comprising seven UK ceramic companies, visited Bangladesh recently. Looking for partnership with Bangladesh in ceramic sector, the visiting mission expressed its keen interest to import on a large scale ceramic products from Bangladesh. Before going for import, the United Kingdom (UK) is expected to provide technical know-how to some 35 Bangladeshi industries to make sure the finished products would be free from arsenic contamination and other impurity. The imported Bangladeshi ceramic products will later be marketed in UK and some other countries like Japan and Ireland.
The delegation also offered raw materials, equipment or services to the Bangladesh ceramics sector to ensure quality of the products. At a meeting between the two teams, British High Commissioner Anwar Choudhury lauded the growing ceramic industry of Bangladesh. The ceramic industry in Bangladesh holds out relatively huge potential but quality and efficiency should have to be improved. Growth of any industry and ensuring the flow of foreign direct investment, political stability and security measures are a must, the British envoy pointed out.
Delegation leader Clive Drinkwater said his country is interested to work with Bangladeshi ceramic industry, particularly in quality management. Starting its journey in the 15th century, the UK ceramic industry has earned appreciation of the world and around 40,000 workers are now involved in some 700 industries in that country. Referring to diversified use of ceramic products, Drinkwather said the quality of Bangladeshi products is improving fast. He said that the visiting trade mission has talked to the authorities of some 35 ceramic companies of Bangladesh to go for partnership business.
Meanwhile, inspired by increased overseas demand and local capacity expansion, Bangladeshi ceramic manufacturers eye an annual $100 million export earnings by 2008, a mammoth jump from the current yearly income of $30 million. The export of tableware products has been witnessing over 6.0 per cent yearly growth for the last ten years carving a significant niche in US and European markets. With 56 per cent accumulated export growth in the last ten years, exporters now hope to see a double-digit growth which will help the sector break $100 million margin by 2008.
As overseas demand is going up, local big players -- Monno, Shinepukur and Bengal Fine -- now completely focus on export market, channelling over 80 percent output into international market.
Starting production in 1980s to feed the local consumers, ceramic tableware industry took a slow but steady progression to approach foreign market. The sector exported ceramic goods worth $30 million in last fiscal and targeted $45 million current fiscal year.
President of Bangladesh Ceramicwares Manufacturers Association Rashed Mowdud Khan is very optimistic about this industry's prospect of fetching over an annual $100 million by 2008. After consistent growth in the last ten years, the country is now in a good position to achieve the target. Quality of products has earned Bangladesh a niche market in the developed world and the recent trend shows that the market will grow further.
But in spite of all export prospects, a persistent gas crisis in the last few months seems to deprive the sector of a smooth rise. The association president said, "We need to run our kilns 24 hours a day but we cannot due to low gas pressure." However, the energy minister assured the ceramic ware manufacturers that the gas problem would be over when Sangu starts producing at its maximum capacity and the laying of Ashuganj-Monohardi bypass line is completed.
Bangladesh ceramic industry, which produces tableware, tiles and sanitary ware, has been witnessing a steady growth in the last few years due to the use of cheap gas, which resulted in low production cost. This has prompted many foreign buyers to make increased orders to Bangladesh. There are over a dozen of ceramic factories in Bangladesh, which produce over 40,000 tonnes of ceramic products a year. Monno, Shinepukur, Bengal Fine, Standard, Peoples and National Ceramic are engaged in tableware while RAK, Fu Wang, China-Bangla and Mir are engaged in tiles and sanitary ware.
The companies have invested over Tk 5.0 billion and more investments are in the offing with many companies planning to produce all the three ceramic categories. Ceramic products including stone tableware, porcelain tableware, bone China tableware, tiles and sanitary ware have a $20 billion world market of which Bangladesh's share is only 0.17 per cent. Although Bangladesh ceramic industry has become highly successful in carving out a niche for itself in the market of Europe and North America despite tough competition globally, it is losing its domestic market to outsiders surprisingly due largely to government's ill-advised policies.
Industry sources claimed that heavy duty levied on imported raw materials and comparatively lower duty on imported finished ceramic products is robbing the local ceramic industry of its growth in the local market. The size of the local ceramic tableware market has been estimated at about Taka 3.0 billion of which local manufacturers' share accounts for only Taka 500 million.
Industry sources, however, claim that with policy support they can very well meet the entire demand locally saving the foreign exchange spent on the import of the item. The local ceramic industry has developed over the last two decades and has now emerged as one of the finest ceramic producing sectors in the world. According to official agency figures, the sector has exported ceramic products worth $28.75 million during fiscal 04-05, exceeding the year's target of $20 million. It took many years before the exporters of ceramic wares from Bangladesh could establish the fact that the high quality of the products was capable of competing with the best in the world and carve out a market for itself.
Indeed, it takes time for any newcomer to establish its credentials and Bangladesh ceramic industry has successfully completed the hard part of the job and with some policy support from the government could further prove its true potentials. Local manufacturers claim that their quality products that include dinner, tea, cake and fruit sets are far superior than those produced in neighbouring countries. New designs and shapes are being developed in both the porcelain and bone China units to meet the demand of overseas buyers.
Bangladesh Ceramic Wares Manufacturers Association (BCWMA) leaders say that the industry could match the success of the garment sector if the government provides them with the necessary policy support. The ceramic industry imports raw materials from China, Rumania, Indonesia and Germany and if the import duty, currently ranging from 7.5 per cent to 15 per cent is reduced to five percent and the gas price is reduced, they can expand very quickly.
According to BCWMA leaders, the industry consumes a lot of gas because they need to generate very high degree of heat to manufacture their products. They say the government provides gas to fertiliser industry at Taka two per cubic metre, Taka 3.5 to gas-based power plants and Taka 5.13 to ceramic industry. They feel that these rates should be rationalised. The ceramic industry's success is visibly laudable and such successes could not have been achieved suddenly without a sustained policy support from the government. However, it is essential to develop a competitive working environment as well as a level playing field for all.


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