Ceramic industry breathes easier as sales start picking up

Bangladesh's ceramic industry have enjoyed some relief from the coronavirus fallout in the past two months as domestic sales are showing signs of some recovery following the collapse in demand caused by the nationwide shutdown.

"Although the business is still uncertain, I am optimistic about the industry's future," said MA Jabbar, managing director of DBL Ceramics.

Exports dropped by around 60 per cent after the coronavirus outbreak was labelled a pandemic by the World Health Organisation in March as the demand for ceramic products declined in the global market.

As all economic activities were put on hold during the two-month general holiday that ended on May 30, the sector fell into trouble.

The industry could fetch just $27.97 million from the export of ceramic products in fiscal 2019-20, down 59.45 per cent from the previous year.

In fiscal 2018-19, local manufacturers shipped about $68.97 million in ceramic goods to more than 50 destinations, including the US, the UK, Canada and a few EU and Latin American countries, according to data from the Export Promotion Bureau.

This was a 32.79 per cent increase in exports compared to the fiscal year of 2017-18, when the sector brought home $51.94 million.

However, the upward trend in sales witnessed in the past may not return as quickly as hoped due to the global impact of the ongoing coronavirus pandemic, Jabbar said.

"Business scenario might have improved but it is yet to regain its previous momentum and thereby uncertain remains."

According to the entrepreneur, ceramic manufacturers received funds from the government's stimulus packages to continue operations but they require further financing at the moment to expand and contribute towards export diversification.

He demanded policy support to help increase investment in the sector as it would generate economic growth and job opportunities.

"Businesses do not enjoy cutting back on their operations. Instead, they try to find innovative ways to recover losses. So, they need policy support," Jabbar said.

Avenue Sangma, brand manager of Tilottoma Bangla Group, the sole distributor of Toto, a high-end Japanese sanitary ware producer, said his company's products cater largely the well-off, so there is little possibility for a sharp decline in sales.

If the current demand persists, it will help the company survive the ongoing economic crisis, Sangma said.

However, several reputed real estate developers who source products from Tilottoma have yet to resume making bulk purchases.

"Businesses are yet to return to the pre-pandemic stage despite the recent upturn in sales. It will take time for operations to return to full swing," Sangma said.

BCMEA General Secretary Irfan Uddin, also the managing director of FARR Ceramics, said the sector would face long-term challenges in its efforts to restore market trends as consumers tend to avoid purchasing luxury items amid the pandemic.

"It will take at least six months for things to return to normalcy. During this period, ceramic manufacturers will fall in serious trouble," he said.

According to the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), the market for ceramic products was valued at around Tk 35,000 crore in 2019.

The industry's production capacity has grown by about 200 per cent in the last 11 years and Bangladesh currently holds 0.14 per cent of the global market for ceramic products.

Local suppliers cater to around 80 per cent of the domestic demand.

Ceramic manufacturers in Bangladesh mainly produce three types of product: tiles, tableware and sanitaryware. Of the 68 ceramic manufacturers currently operating, 20 produce tableware, 32 make tiles and the rest 16 produce sanitaryware.

More than a dozen new companies are preparing to make a foray into the market.

So far, around Tk 9,000 crore has been invested in the sector that employs about five lakh workers, including two lakh women.

More than 25 crore pieces of tableware, 20 crore square metres of tiles and more than 83 lakh sanitaryware items were produced in Bangladesh in fiscal 2017-18, BCMEA data showed.

Bangladesh is now almost self-sufficient in meeting the demand for ceramic products, which is quite a turn of events from the 1990s.

Even 15 years ago, the sector was import-reliant. Now, local manufacturers supply reliable products that meet international standards.