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Bangladesh - Corporate - Power & Energy - September 4, 2022

Gas power shortage hits export sectors

Ceramic export under threat

Mahfuja Mukul: Most of the export sectors have been seriously affected production shortage due to gas and electricity shortage. As a result, not only the production but also the exports have been declining day by day including the ceramic, textile, readymade garments, jute and leather products and some other non-traditional items.
At one time ceramics and glass were said to be imported goods. The demand is met and exported to about 50 countries of the world. The market for this industry is growing gradually. Domestic companies are increasing investment. As a result, imports are decreasing (imports are currently closed). However, the export target of this sector is being hampered due to the gas and electricity crisis.
It is known that the international market of ceramics is about two thousand billion dollars.
Bangladeshi brand products are currently going to more than 50 countries including USA, Canada, UK, Germany, France, Italy. According to Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), the country has a ceramic demand of Tk 10 thousand crore every year. At present, 85 percent of ceramics are produced in the country.
It is known that in the fiscal year 2018-19, the export income of the ceramic sector is 69 million dollars, which is about Tk 587 million in Bangladeshi currency. At present it has exceeded thousands of crores of taka. Ceramics are being exported to India and South Africa. Bangladesh tableware, floor tiles, sanitary, commode and basin are in high demand in these countries. In the fiscal year 2021-22, seven-eight million dollar worth of ceramic products were exported. The target of exports in this sector in the financial year 2022-23 is 100 million dollars or 1000 million taka. However, it is currently hampered due to gas shortage.
Ceramic factories require 24-hour uninterrupted gas supply to furnaces for manufacturing products. As such, gas is one of the raw materials in this industry. 10-11 percent cost of product production is behind gas. The factory has to be closed many times a day. Turning off the furnace requires more gas to reheat. Gas pressure is required because the furnace has to be kept at a temperature of 11.5 to 1200 degrees Celsius. Production is disrupted when the temperature drops.
Ceramic industry does not contain gas during the day. Gas comes after evening, stays till morning. Due to the gas crisis, it is becoming difficult to pay the workers and employees in many factories due to the inability to produce at full scale.
According to Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) sources, the number of ceramic factories in the country is 66. These factories produce low-cost products as well as medium-priced quality products. Among the factories, 28 are for tiles, 20 are for furniture and 18 are for sanitary ware.
Among the factories, 28 are for tiles, 20 are for furniture and 18 are for sanitary ware. Four to five new factories are coming up, which will go into production within two to one years.
According to BCMEA, there are 70 factories in the sub-sector of ceramics, tiles and sanitary ware. Among them 20 furniture, 32 tiles and 18 sanitary ware factories. The market of ceramic products in Bangladesh is Tk 7 thousand 368 crore. Out of this, the market of tiles is Tk 5 thousand 378 crore. Companies have invested Tk 8,326 crore in tiles last year as the market is several times bigger than that of furniture and sanitary ware.
President of Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) Sirajul Islam Mollah told that the country is moving forward, per capita income is increasing, growth is increasing. As a result, the market for tiles in the country is growing day by day. Touch of development not only in cities but also in villages.
He also said that we have exported ceramic products worth 7-8 million dollars this year. It will increase to 10 million dollars in the future. But the gas crisis is extreme. As a result, production is disrupted. At one time, 100% of the tiles were imported from abroad. Now the demand of the country has been met and it has turned into an export-oriented industry, but this industry is under threat due to the gas crisis. If the gas crisis continues like this, the investment of thousands of crores of domestic entrepreneurs will be threatened. All the raw materials for the production of ceramic products have to be imported from abroad.
With that in mind, the future of the ceramic industry depends on gas and electricity prices. Therefore, we request the government to keep the ceramic sector out of the increase in gas and electricity prices. At the same time, uninterrupted supply of gas should be provided to this industry.
85 to 90 percent of glass and ceramics are produced in the country. The remaining 10 percent is imported. The country’s leading industrial group Akiz, Abul Khair, DBL, Sheltech and many other companies have recently invested in ceramics. Newly 10-12 companies including JB, Tushar, BHL, Meghna group are investing. Not only domestic but also foreign investment has come. It has investments in brands including CBC, New Jong Yan, Fu-Wang, RAK and China-Bangla. As a result, imports have decreased. Glass and ceramic industry have expanded in the country.
President of Bangladesh Ceramic and Glassware Importers Association Mohammad Kabir Uddin Bhuiya told that currently ceramic and glass import is legally closed. It can be said that the country is self-sufficient in glass-ceramics. Earlier it was imported from China. But currently it is closed. Imports from China are also suspended. In response to the question why the closure, he said, the expansion of ceramic and glass industry in the country has increased the import tax. Tax is 160 percent. Value added has also decreased.

Tk 41.5 cr govt expenditure
The government conducts research activities in the field of glass and ceramics by processing various domestic raw materials including sand. It helps in developing new methods and setting up industries to produce exportable or import substitute products in the country. Through this, research activities are conducted on energy efficient methods for use in the ceramic industry.
Bangladesh Council of Science Industry and Research (BCSIR) Institute of Glass and Ceramics Research and Testing (IGCRT) strengthening project undertaken. The cost of the original project was Tk 38 crore 41 lakh. The project started in July 2018 and is expected to be completed in June 2021. The new project cost has been increased to Tk 41 crore 46 lakh 84 thousand and the term has been extended till December 2022. The project will be completed within this period. The project has already reaped benefits.
Project director Dr. Shirin Akhter Jahan told that the project is at its final stage. The project was undertaken to increase production of glass and ceramics using indigenous raw materials. The project is ending in December. Our institute has been strengthened. Glass and ceramic research has been strengthened. Certain requirements before export, such as testing, are also being strengthened. As a result, it can be said that the glass and ceramic industry has expanded. Now the country has advanced a lot in glass and ceramic industry.

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