Listed ceramic makers’ profit leapt in 2017
Listed ceramic companies saw higher growth in profit last year owing to an increase in demand from the real estate sector and export markets.
Five companies are listed on the Dhaka Stock Exchange. Of them, three posted more than 150 percent growth in profit in 2017 from a year earlier.
Monno Ceramic's profit grew a staggering 676.38 percent to Tk 4.27 crore, while Standard Ceramic's profit rose 209.24 percent to Tk 1.17 crore.
Shinepukur Ceramics's profit went up 188.86 percent to Tk 3.82 crore and RAK Ceramics' 11.17 percent to Tk 101.86 crore, the highest among the listed ceramic makers, according to an analysis of Prime Finance and data from the DSE. Only Fu-Wang Ceramic's profit declined -- by 36.49 percent to Tk 8.07 crore.
"Demand from the real estate sector as well as from abroad helped us net higher growth in profit," said Moynul Islam, vice-chairman of Monno Ceramic.
He credited Monno Ceramic's success in cutting cost for the higher growth in profit.
"2017 was a much better year for the real estate sector than the previous year," said Alamgir Shamsul Alamin, president of the Real Estate and Housing Association of Bangladesh (REHAB).
If the housing sector runs well it gives a boost to the backward linkage industries.
Exact data on the sales of homes, commercial space and land last year was not available.
But the REHAB said the sector grew 5 to 7 percent in 2017, overcoming the downturn in the previous several years.
Bangladesh's ceramic industry has experienced 200 percent growth in production in the last five years, according to the Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA).
The growth momentum is expected to sustain for a considerable period as the living standard of people is rising, according to the BCMEA.
The sector is not without challenges, and one of the main barriers confronting the industry is an inadequate supply of natural gas.
Natural gas is not only the key energy source for the industry it is also important for maintaining the quality of products, said the industry people.
The locally available gas does not contain sulphur, so the end product looks brighter and shinier, they said.
The government is set to increase the gas price, which will push the sector backward in the international market, said Islam, also the senior vice-president of the BCMEA.
Bangladesh's ceramic products have strong demand in the international market. "But if the price of gas goes up we will not be able to compete with others," he said.
The sector exports to more than 50 countries, including the US, Canada, the EU, Australia, India, Nepal and Bhutan.
In fiscal 2016-17, ceramic exporters fetched $39.1 million, according to the Export Promotion Bureau. The government has set a target to export ceramic products worth $43 million this fiscal year.
Currently, more than 60 tiles, sanitaryware and tableware manufacturers are in operation in Bangladesh, according to the BCMEA.
The ceramic industry caters to 85 percent of the demand for the Tk 2,000-crore local market. Investment in the sector by local and foreign investors has already exceeded Tk 5,000 crore.
At present, the production capacity of ceramic tiles stood at 12 crore square metres per year and for sanitaryware it is 75 lakh pieces.
Yesterday, Fu-Wang Ceramic, RAK Ceramics, Standard Ceramic and Shinepukur shares declined, while Monno Ceramic gained.