Ceramic producers aim for $12m sanitaryware export in 5 years

Policy support, including continuous gas supply, is crucial for the local ceramic sanitaryware industry as it aims to boost export volume by 10 to 12 times within the next five years from the current $1 million, industry insiders say.

Currently, around 85% of the local consumption of sanitary products such as commodes, pans, washbasins, taps, water closets, pedestals, showerheads, and bathroom towel holders is met by domestic manufacturers.

Industry insiders stress that ceramic exports have not been growing as anticipated despite huge potential.

They are concerned about the challenges due to the rising prices of gas and insufficient gas pressure, leading to production stoppages and financial losses.

"The markets for sanitaryware and tiles remain predominantly local. Sanitaryware exports only began recently, reaching a total of Tk6.89 crore in the last fiscal year — a very small amount. However, industries are gradually exploring different markets," said Irfan Uddin, general secretary of the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) and director of FARR Ceramics.

"Though it may take some time, we expect sanitary ware exports to reach $10-$12 million in the next five years," he added. 

"Tableware is being exported in significant amounts. It is mainly export-oriented. But in the case of tiles, the local market is unable to meet the demand. The same holds true for sanitaryware," he said.

"We imported sanitaryware worth Tk156 crore in the last fiscal year, indicating high demand in the country. However, the production capacity has not increased proportionally," he told The Business Standard. 

Irfan Uddin further said, "We are still in the testing phase to assess the costing involved in different countries and whether we can tailor our products according to their demand."

Ceramic industries in the country mainly produce four types of products: tiles, tableware, sanitaryware, and ceramic bricks.

The ceramic industry has received a total investment of around Tk17,845.45 crore. Specifically, the investment in sanitaryware manufacturing alone amounts to Tk2,714.90 crore, according to the BCMEA report for FY23. 

Annually, around 156.31 lakh pieces of sanitaryware are produced in the country, with 10,618 workers directly engaged in their production.

The country hosts a total of 74 establishments involved in ceramic product manufacturing, with 19 of them dedicated to sanitaryware production, as reported by the BCMEA. 

Star Ceramics is one of the top local producers of tiles, sanitaryware, and other ceramic products in the country.

"Right now, we are producing 7.3 million square metres of tiles along with 0.5 million units of sanitaryware. We have introduced multiple variations of tiles and sanitary ware in terms of sizes and attractive models," said Ehsanul Haque, head of sales at Star Ceramics.

"There are many other sectors of production we want to venture into, which have huge potential to flourish in Bangladesh. But for now, we are not focusing much on exports because our local demand exceeds our present capacity," he told TBS. 

Among the companies engaged in the production of ceramic sanitary ware in the country are RAK, Abul Khair, Akij, Charu, Excellent, Sanita, Euro Bangla, BISF, Apple, Glory, Solar, and Dhaka Ceramic and Sanitary.

Monalisa Ceramics is set to produce sanitary ware later this year. "We will be producing sanitary products by the end of this year. Initially, we will have a production capacity of 400 pieces per day," said Additional Managing Director of Monalisa Ceramics and BCMEA Senior Vice President Mamunur Rashid, speaking to TBS.

He mentioned that imported sanitaryware accounts for at least 15% of the country's market. "A portion of consumers who purchase imported sanitary ware believe that foreign products are superior. However, upon comparing local products, one can find that they are equally satisfactory. It is a matter of mentality. We have the capacity to meet our demand, and now our aim is to export."

"Currently, due to the dollar crisis, importers are encountering difficulties with opening LCs. Consequently, the demand for local products is on the rise," he added. 

The market size of ceramic products in the country is estimated to be over Tk8,688 crore. Among them, the largest market in terms of sales is tiles. In FY23, tiles worth Tk6,658 crore were sold, with domestic companies contributing Tk5,688 crore to this figure.

About 56,502 people are directly employed in the domestic ceramics and tiles industry. 

Furthermore, in FY23, the sales of sanitary ware in the country's market amounted to Tk908.14 crore, as reported by the BCMEA. Annually, a total of Tk1,064.54 crore worth of sanitaryware is utilised in Bangladesh, encompassing both imports and local sales. 

Gas supply a big challenge

One of the main challenges to the growth of the ceramics industry is the inadequate supply of natural gas, according to sector insiders.

"We have been advocating for uninterrupted gas supply for a long time. If the gas pressure is too low, the quality of the product is compromised. Another challenge is inflation. Our gas prices have increased by 136%," said BCMEA Senior Vice President Mamunur Rashid.

Entrepreneurs say that the gas crisis, the dollar crisis, and increased labour wages have all raised their production costs by 40% in the past two years. However, they have been unable to adjust the prices of their products accordingly.

In a written proposal to the National Board of Revenue (NBR), BCMEA President Md Shirajul Islam Mollah recently stated that due to fluctuations in currency exchange rates, import prices of raw materials are skyrocketing, significantly impacting the production costs of ceramics tiles, sanitaryware, and tableware.

He requested the government to withdraw the 15% supplementary duties on tiles raw materials and the 10% supplementary duties on sanitary ware raw materials. If the government withdraws supplementary duties on both raw materials, it will help reduce retail prices, thereby encouraging their use, he said.