Tiles sector eyes export

Changes in construction patterns and architectural tastes of the people along with cost-effectiveness and easy maintenance, have pushed the usage of tiles in Bangladesh’s construction sector to the peak. 

With a gradual increase in production, manufacturers are looking for ways to boost export but some stakeholders said it would be very challenging.

In the 2019-20 financial year, investment in the tiles industry was above Tk 5,235 crore and people bought tiles worth around Tk 4,602 crore, according to Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA).

During this time, tiles worth Tk 845.60 crore were imported, while the export volume was Tk 1.42 crore, according to BCMEA.

BCMEA President Shirajul Islam Mollah told The Business Post, “We were heavily dependant on tiles import but now, we can meet 75 to 85 per cent local demand. There is a huge demand for tiles in the local and global markets. We are aiming to capture the export market.” 

Tiles export grew 246 per cent in FY19-20, 11 per cent in FY18-19, 74 per cent in FY17-18, 79 per cent in FY16-17 and 49 per cent in FY15-16, BCMEA data showed.

Domestic market sales growth was 1 per cent in FY19-20, 1.44 per cent in FY18-19, 0.22 per cent in FY17-18, 14 per cent in FY16-17, and 48 per cent in FY15-16.

‘Boosting export will be tough’

BCMEA leaders think the growth trend in the tiles sector indicates that the supply will surpass the local demand in the near future. So they are emphasising finding out ways to increase exports.

They said it costs a minimum of Tk 200 crore to set up a tiles factory. 

BCMEA President Shirajul said hardly 10 per cent of the raw materials required for making tiles are available in Bangladesh. They need to import the remaining 90 per cent which pushes up the production cost. It puts Bangladesh behind in the global competition.

“But we have low-cost gas and labour force. We are looking for ways to increase exports and researches are underway in this regard,” he said, requesting the government to ensure an uninterrupted supply of gas on a priority basis and help them explore the export market.

DBL Ceramic Limited’s Manager (marketing) Shetu Ghosh told The Business Post that boosting export will be tough. “We have to import raw materials and there’s hardly any profit,” he said.

Tiles’ popularity spreads

Tiles’ use in beautifying building floors, interior and exterior walls and even pavements increased in Bangladesh compared to the past, boosted by remarkable growth in housing, real-estate and government-sponsored projects. 

Once marble chip mosaic was the country’s most popular flooring material, but ceramic tiles replaced it with their easy installation process, durability and cost-effectiveness, say builders. 

Demand for tiles has gradually spread to rural areas, industry insiders said. They noted that tiles’ demand was once limited to private sector housing but now it is increasing in various government projects as well. 

Just 10 years ago, Bangladesh’s tiles market was totally import-dependent but now local manufacturers meet 84 per cent of the domestic demand.  

State-run Bangladesh Insulator and Sanitaryware Factory Limited first began production of floor and wall tiles in 1986. Currently, 30 companies are manufacturing tiles in Bangladesh and their annual production capacity is 20.64 crore square metres, according to BCMEA.

There are 19,883 employees in the 30 factories and over half a million people are directly or indirectly involved with the sector, the BCMEA said.

Like other sectors, the tiles market remained down in the past year and a half for the Covid-19 pandemic as demand fell by 25 to 30 per cent, the manufacturers said, adding that the market was gaining heat after Covid-induced restrictions eased.

Pandemic hits demand 

Hatirpool, Bangla Motor, and Panthapath are the hub of tiles wholesaling and retailing in Dhaka. 

Bangladesh Tiles Sanitary and Marble Merchant Association General Secretary Md Zakir Hossain told The Business Post that there are about 496 shops in Hatirpool, Bangla Motor, and Panthapath area where around 15,000 to 20,000 people work. 

“It is the tiles hub. Tiles are supplied across Bangladesh from here,” he said.

Zakir said the market became much more competitive and profit has fallen. “For last one and a half year, the market remained down for the Covid. Trade has resumed. It will take at least a year to make up the loss incurred from Covid,” he said.

Abdullah Al Zaman, Assistant Manager (Brand and Communication) of Mir Ceramic Limited, told The Business Post that the use of locally-produced tiles has pushed down import. “Our industry is growing at 5 to 10 per cent per year,” he said.

The business was a bit sluggish due to the lockdown in Covid-19 pandemic. But now the situation is back to normal, he said.

Cheaper local tiles dominate market 

At Bangla Motor, businessman Mezbah Uddin was examining tiles for his flat. He said he wanted to buy foreign tiles but the price per square foot is comparatively high. So, he went for local tiles and came to the market to see which one was good.

Sabera Khanam, a resident of Moghbazar, came to a shop at Panthapath along with her real-estate developer. She said the developer agreed to spend Tk 90 per square foot for tiles but she wants something better and if needed, she would pay extra. She and her developer finally chose a product of RAK Ceramics which would cost Tk 140 per square foot.

Md Abu Al Hasan Khan, the owner of Maliha Stone, said once mosaic was everyone’s first choice for flooring but now tiles replaced them as the installation cost of tiles is lower than mosaic. He said he sells products of around 25 to 30 local companies including RAK, DBL, Mir, BCL, Celtech, Akij, CBC, Fu Wang, Euro, Sanita. People prefer local tiles for their diverse designs, he added.

Tiles View’s Senior Sales Executive Md Sobir Uddin said prices of tiles depend on design, quality, and sizes. Prices of local tiles vary from Tk 30 to Tk 180, he said. 

Among foreign tiles, Chinese tiles are sold between Tk 160 and Tk 480 while the Spanish ones range from Tk 285 to Tk 780, he added. 

Importers of tiles, however, said that there is also a huge demand for foreign tiles, particularly among the affluent section of the society as the finishing of local tiles lag far behind foreign tiles. 

They think the high price of foreign tiles was the lone reason behind the high demand for locally manufactured tiles. 

Bangladesh Tiles Dealer & Importers Association General Secretary MU Golam Rasul Belal said 70 per cent of the foreign tiles come from China, 20 per cent from India and the remaining 10 per cent from other countries.

Belal said the tiles importers have to pay a maximum of 160 per cent tax and called for fixing tax based on the price of the products in their country of origin as the prices vary from country to country. 

He said some unscrupulous traders show low prices on paper to dodge tax and launder the remaining amount through hundi. 

“We have informed the government in writing and requested it to take necessary steps,” he added.