Growth of Bangladesh’s ceramics industry

There is no doubt ceramic products has the potential to play a more vigorous role in diversifying Bangladesh’s export basket. Our local ceramic market is big and it is witnessing continuous growth. 

A TBP report, published yesterday, referring to Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) stated that the demand for the ceramic products has gone up by 22 per cent in the last five years. The amount of total investment in the sector currently stands at $1.58 billion, the report says. A total of 71 companies invested Tk 15,356.50 crore in FY2021-22 in Bangladesh. Of them, 20 tableware companies invested Tk 3,174.25 crore, 33 tiles companies Tk 10,151.86 crore and 18 sanitary ware companies invested Tk 2,030.39 core, BCMEA data revealed.

Gone are the days when ‘ceramics’ were synonymous with tiles used to decorate home floorings. The material is now used for many other purposes. Currently ceramic tableware, pottery, tiles, sanitary ware, insulators, and other ceramic products are very popular and in high demand both in the local as well as international markets. There are more than half a million people are involved in this sector directly or indirectly. 

The global market of ceramic products, according to a recent report, is predicted to be worth USD 407.72 billion by 2025. This figure illustrates how exporting ceramic products can be a potential avenue to earn more foreign currency for Bangladesh. 

Like most of the industries in the world ceramic industry is getting more modern as demand for unique ceramic products grows. The key drivers of this market growth are the emergence of various applications of “advanced ceramics”. For example, the use of advanced ceramics in 3D printing technology and dental implants.

Raw materials and energy are the major constituents of the manufacturing cost structure of ceramics. Raw materials stand at 22 per cent, followed by energy which is responsible for 21 per cent, labour and overhead costs at 16 per cent and 13 per cent respectively. The remaining percentage, 28 per cent is attributed to transport, distribution, and depreciation.

Now the concerns for Bangladesh ceramic industry are the increase in gas prices, the news that we are running out of natural gas is also raising concerns and might affect future foreign investments. That means if in the future there is a shortage or no natural gas available for industries, we will have to import gas to run our factories. That will certainly affect the cost of production and then the ceramic export sector might face severe difficulties. 

Other concerns include ceramic exporters may have to go through a hard time after Bangladesh graduates from the least developed country (LDC) status in 2026 as such products will face 12.7 per cent tariff on average when entering international markets.

After graduation, Bangladesh will face a situation where its ceramic products will have to be exported with duty while Indian and Vietnamese goods will be exported without duty due to their FTAs. Bangladesh is currently enjoying the benefits of the employer investment fund (EIF) for the development of its technical capacity for export. Nevertheless, experts inform this benefit will no longer be available after graduation, and Bangladesh will have to find alternative sources to develop its export capacity. 

We believe that steps should be taken to reduce the cost of production, which means we have to introduce modern technology and machinery in this sector. Although it might seem costly at first glance it will beneficiary in the long run. Adjusting with imported low-duty products, adjusting between high tariff of export and incentives of the products, increasing productivity, diversifying products, introducing variations to the export market, improving the labour market, and protecting the environment. The authorities concerned should pay more close attention to the ceramic industry and take necessary steps to ensure the ceramic industry continues to grow.