Crafted out of ceramics
Ceramic tiles, tableware and sanitary ware have become an integral part of today's life. It makes a world of a difference to the look and characteristics of one's interiors and outdoors.
Though the use of ceramics dates back to a thousand years in history, its mass use began much later. It has become a trend in Bangladesh that gained momentum since 2000. The large number of shops selling porcelain products in retail points -- at both district and thana levels is also evidence of its widespread use.
The Bangladeshi ceramic industry, despite a slowdown in many other manufacturing sectors, continues to grow at a healthy 15 percent a year, reflecting growing demand both internally and externally. This is mainly because of cheap natural gas, the chief energy source required to manufacture the products.
The country enjoys comparative advantages in manufacturing ceramic products, as it is a gas-based, labour intensive and skills-oriented. Value addition in ceramics stands at nearly 70 percent.
Ceramics and tiles are an emerging industry in Bangladesh. Over Tk 3,000 crore has so far been invested in the sector from home and abroad. The local market size of the product was Tk around 1,500 crore in 2010, according to market players.
Traditionally, Japan, UK, Germany and other European countries dominated the export of ceramic products to world markets. But a jump in production costs, including wages and currency appreciation, made ceramic manufacturing unfeasible for many of those nations, even in China.
Presently, around 40 ceramic factories are manufacturing porcelain wares -- tiles, tableware and sanitary ware. A third of them are tableware producers and most of the rest are tile and sanitary plants. Leaving aside expansion, nearly 10 new factories have appeared on the scene in the past few years.
Aggregate annual production capacity of these tableware and sanitary is 70,000 tonnes and tiles 400 lakh square metres.
X Ceramics, DBL, Akij, Paragon and Protik have entered the market in the past two years to cash in on growing demand.
According to industry insiders, Bangladesh has certain competitive also enjoys the generalised system of preferences (GSP), which allows the country's to export duty-free to Europe. There is no quota restriction either on the export.
“The ceramics industry has been expanding fast due to a rise in demand both from the domestic and export market,” said Iftekhar Uddin Farhad, chairman and managing director of FARR Ceramics.
FARR Ceramics was set up in 2005 and started commercial production in 2007.
“We are getting export orders from new countries, like Turkey, India, Argentina and Brazil,” said Farhad.
Fast-growing FARR Ceramics recently invested over Tk 50 crore to double its porcelain production capacity to 70,000 pieces a day from 30,000 pieces.
Farhad said the company is injecting funds into adopting modern technologies and capacity expansion.
“We'll use raw materials in a dry format instead of a wet format to improve the quality of the products,” he said.
After expansion, he said the company's export earnings would reach nearly Tk 85 crore a year from Tk 30 crore at present.
Shinepukur Ceramics, a concern of Beximco Group, has invested an additional Tk 80 crore to expand its bone china production capacity last year by 4.5 tonnes to 7.5 tonnes a day.
A new factory will be set up with the funds, said a top official of Shinepukur Ceramics, the leading exporter.
“We are trying to grab a bigger share of the international market,” said Rizvi-ul Kabir, chief operating officer of Shinepukur Ceramics. Fund are being poured in to make and export premium-quality bone china products, he said.
Bangladesh exported ceramic tableware worth nearly $35 million in fiscal 2009-10, of which, over 80 percent was destined to Italy, UK, USA, Germany, France, Canada and Sweden. Recently, India has become an export market for Bangladeshi ceramics products.
Local consumption is much higher than export volumes. According to some estimates, the local consumption of porcelain tableware would not be less than Tk 1,000 crore. It is growing fast with an increase in the affluence of the growing middleclass. An estimate by Bangladesh Ceramic Ware Manufacturer and Exporters Association shows despite tremendous growth of the local industry, the country still imports to meet 20 percent of its demand.
Not only tableware, porcelain tiles are also gaining popularity in recent years. People are increasingly using tiles to make their homes or offices look good.
Mazharul Quader, chairman of X Ceramics, a joint venture porcelain tiles maker, said there is a good prospect for tiles in Bangladesh and exports too.
X Ceramics, a new entrant in the tiles industry, has a European brand manufacturing licence. It produces Majorca, Monica and Eurotiles.
Quader, however, said they have to import 95 percent of the raw materials required to make porcelain tiles. Moreover, they have to pay 30 percent value added taxes, which he said is high and cuts competitiveness. A shortage of gas supply is also hindering growth of the industry.
RAK Ceramics Bangladesh, which started business in 2000, has become a major market shareholder in the porcelain tiles category. It produces a very wide range of products -- wall and floor tiles, décors and Listellos, pencils and cappings and borders and corners.