Ceramic industry ignored in budget

Gas, electricity, skilled manpower, industry-friendly tax measures are major challenges for the ceramic sector in Bangladesh but the industry was not given any advantage in the budget, CEO of Shinepukur Ceramics Limited Mohammed Humayun Kabir told The Business Post’s Rafikul Islam in an exclusive interview

As Shinepukur leads the ceramic industry particularly in tableware products in Bangladesh, which issue of the budget for the FY23 satisfies you?

The government passed a total of Tk678, 064 crore national budget for the Fiscal Year 2022-23 on June 30 but ceramic manufacturers didn’t get any advantages from this year’s budget.

About 20-25 items of raw materials are needed to manufacture a quality ceramic product. Of them, most of the items are imported from different countries like UK, Japan, New Zealand, China, India, Egypt, Thailand and Vietnam.

The government could provide equal benefits to all importers particularly in case of the customs duty (CD) on the same raw materials to produce tableware, sanitary, tiles and others items.

Now, National Board of Revenue (NBR) can amend Statutory Regulatory Order (SRO) to provide more benefits to tableware manufacturers as the item is contributing more to economy by exporting it to different countries.

Many companies are under pressure due to unfavourable advanced Income Tax (AIT) and VAT system.

Only Shinepukur will get around Tk12-15 crore of advanced VAT from the government.

Besides, it is illogical to impose VAT on products that are not meant for local consumers.

The fiscal law implementation is not export oriented. Businesses are suffering day after day owning to unskilled NBR officials.

What’s the potential of ceramic products in local and international markets?

There is huge potential for ceramics products in local and global markets following urbanization and high purchasing capacity of people as well as changes in lifestyle.

Now, Bangladesh has an annual market of ceramic products of around Tk8000 crore. Of them, Tk 500 crore accounts for tableware products. Local companies meet the demands for 90 per cent of tableware products and 85 per cent tiles market.

Shinepukur holds more than 10 per cent share in local market. We are in the top position among Bangladeshi exporters exporting to the global market of around one trillion dollars.

The market demand would further increase in future. Around 8-10 Bangladeshi companies are now exporting ceramic items amounting to less than $100 million.

What are the challenges in the industry? How can we overcome them?

The gas, power, skilled manpower, industry friendly tax measures are key challenges for ceramic sector in Bangladesh. So, proper policy advocacy is needed to ensure uninterrupted power and gas supply to the factories for manufacturing quality products.

Our production has been hampered since September last year following power and gas disruption. We can’t finish products properly due to frequent electricity cut.

Besides, product diversification is very important to fight with our competitors in global market. We produce innovative and attractive designs though research, hard work and spending money.

But some companies copy the products creating problem for us. The problem should be addressed to boost our sector.

Why do you claim that Shinepukur Ceramics is exceptional from other companies?

Shinepukur is the leader in the ceramics market and ranks number 1 in terms of sales revenue and market share in the country.

We produce both Porcelain and Bone China products. These are quality products, attractive and we have our own innovations in their designs that attract customers across the globe.

Our products are used in presidential houses like Bangabhaban and Rashtrapati Bhaban of India. Shinepukur ceramics are exported to more than 20 countries like USA, Canada, UK, Germany, France, Italy, Sweden, Russia, Australia, Brazil and New Zealand.

During the FY2020-21, the company earned export sales of Tk629.11 million including Tk39.68 million subsidy amid the Covid-19 pandemic and also earned Tk764.45 million from domestic sales during the corresponding period.

You are also a director of the Bangladesh-German Chamber of Commerce and Industry (BGCCI). What do you do to brand Bangladeshi products?

Germany is the largest trading partner of Bangladesh in Europe. Since its inception in 2003 we have been promoting bilateral economic trade relations between the two countries. BGCCI members take part in fairs and seminars to strengthen bilateral trade and reduce trade gap between the two countries. Actually we cooperate with all G2B and B2B activities.

(Bilateral trade between Germany and Bangladesh amounts to over $7 billion with Germany importing over $6 billion worth products, mostly textile.)

Generally we import machinery and take other technological support from Germany. On the other hand, Bangladesh exports only goods. Bangladesh has to be the part of supply chain for technological development.

Germany will hire several lakh workers from different countries. Bangladesh should train up people particularly in language to reap the advantages. Now Labour and Employment Ministry should work cordially here.