Ceramics export rises to four-year high in FY23
Bangladesh's exports of ceramic products rose to a four-year high in the just-concluded fiscal year although the growth slowed as manufacturers failed to deliver products on time owing to the shortage of gas, official figures showed.
The industry fetched $43.39 million from the shipment of ceramic products in 2022-23, up 4.91 per cent year-on-year, according to the Export Promotion Bureau.
The export grew 32.95 per cent in 2021-22 and 11.23 per cent in 2020-21.
The receipts in FY23 were way lower than the $68.97 million exporters brought home in 2018-19, the year before the pandemic struck the country.
"Manufacturers could not run factories at full capacity due to the inadequate supply of gas. This was the main reason the sector did not achieve expected export growth in FY23," said Irfan Uddin, general secretary of the Bangladesh Ceramic Manufacturers and Exporters Association.
The gas crisis hit industries last year after the government paused purchasing liquefied natural gas directly from the international spot market to stop the depletion of foreign currency reserves, leading to a drastic fall in energy supply as domestic production has been inadequate for a long time.
Irfan said manufacturers did not get the gas supply for around 12 hours a day since October. "So, we could not produce products on time.
As a result, we were not able to supply goods against around 30 per cent of the orders," said Irfan, also the managing director of FARR Ceramics Ltd.
The government is providing a 10 per cent cash incentive against exports of ceramic products. "This is encouraging," Irfan said.
MA Jabbar, managing director of DBL Ceramics, said the business of the ceramic sector is going through a difficult period due to the increase in the production cost and the gas crisis.
The absence of uninterrupted gas and power supply and the increase in the cost of production hampered production, ultimately affecting the exports of ceramics, he said.
The entrepreneur said owing to the disruption in gas and power supply, the sector faced a big challenge in maintaining the quality of products.
Local ceramic manufacturers mainly produce three types of products: tiles, tableware and sanitaryware. Of the 68 manufacturers currently operating, 20 produce tableware, 32 make tiles and the rest produce sanitaryware.
Bangladesh mainly ships tableware and has added tiles to the export basket in recent years.
According to Jabbar, considering the ongoing high inflation environment, manufacturers have not been able to hike the price of their products in line with the spike in the cost of production.
"As a result, the profit margin has plunged to the lowest level."
Ruslan Nasir, deputy managing director of Mir Ceramic Limited, said tiles manufacturers export on a limited scale and contribute an insignificant amount to the export basket.
The company mainly exports to the northeastern states of India.
Nasir said local tiles manufacturers are focusing on the local market since demand has grown over the past decade thanks to rapid urbanisation.
"There is a lot of competition in the tiles segment globally. And since the sector is dependent on imported raw materials, it will take time for the local producers to grab a significant share of the international export market."
He, however, sees a bright future for the tiles segment since local manufacturers produce world-class products.
Manufacturers have so far invested around Tk 10,000 crore in the sector, which employs about five lakh workers, including two lakh women. They ship goods to more than 50 countries.
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