Tiles market heats up

More players are joining the ceramic tiles business that has so far pulled in over Tk 1,000 crore investment with around 20 percent annual growth rate.
The latest entrant is Dulal Brothers Ltd (DBL), one of the leading apparel manufacturers and exporters in Bangladesh, while X Ceramics is going into trial production next week.
Several other companies, including Akij Group, Padma Ceramics and Tamanna, are in the pipeline to hit the market in the next two years.
“Civil construction of our company is going on in full swing. We hope to go for production by 2010,” said Fariduddin Akhter, general manager of DBL Ceramics, a project of nearly Tk 200 crore located at Sreepur in Gazipur district.
He said the demand for ceramic tiles both for interior and exterior is rising rapidly in Bangladesh.
“Use of tiles is no more a fashion now. It's become an essential increasingly being used in urban and semi-urban areas,” said Akhter who has 21 years of experience in the industry.
Bankers also consider the sector as a potential industry for financing.
Touhidul Alam Khan, executive vice president (corporate banking division) of Prime Bank, said the construction industry, including residence, shopping malls and others, is growing so fast that the tiles business is becoming one of the booming and prospective sectors.
“If we look on the local production in the period between 1984 and 2009, we will see tiles production has increased from 300 square metres to around 100,000 square metres per day,” Khan said.
Already 11 companies are now operating in the market with over Tk 1,000 crore annual sales turnover, industry people said.
According to a market study, the existing factories produced nearly 322 million square feet (sft) of tiles in 2007, up from 277 million sft a year ago. Production reached 374 million sft in 2008 and it is estimated to grow at 17 percent in 2009 and 2010.
Of the total production in 2007, RAK Ceramics alone made 74 million sft, followed by China-Bangla, Fu-Wang and Mir each slightly over 30 million sft.
Industry people said the history of tiles production in Bangladesh is not very old. The first factory was set up by Bangladesh Chemical Industries Corporation, a state-owned enterprise, in 1982. Private sector established the second one, Modhumoti Tiles, in 1988.
The situation started changing rapidly after 2000 when tiles became too cheap to easily replace mosaics.
RAK Ceramics (Bangladesh) Ltd, a UAE-based company set up in 2003, brought a drastic change in the tiles industry and now grabs one-fourth of the domestic market share.
According to the industry people, sales of the locally produced tiles did not go down even in the past two years, the worst time for the country's construction industry.
They attributed the growth to the demand and low production cost. Gas and labour account for 23 percent and 16 percent respectively of the total production cost, and so Bangladesh has an edge on these inputs over other countries.
“Bangladesh has an opportunity to export tiles because the major global player, China, is losing advantage to rising production cost,” said Akhter.
sajjad@thedailystar.net