The country’s ceramic industry exports have not yet reached a satisfactory position, even after overcoming the setbacks of the COVID-19 pandemic. Industry stakeholders have been trying to recover for four years, and while there has been some progress, it has not come close to the pre-pandemic levels. The ongoing gas crisis is the main hurdle in the recovery of the ceramic industry. Additionally, the effects of political instability, dollar shortages, high inflation, and the decline in people's purchasing power have also impacted the sector.
Data from the Export Promotion Bureau (EPB) show that before the pandemic, the ceramic sector’s export earnings were $68.97 million in the 2018-19 fiscal year. Like many other sectors, this sector also experienced a significant decline in exports during the pandemic. In the 2019-20 fiscal year, exports plummeted by almost 60 percent, dropping to $28 million. In 2020-21, exports slightly increased to $31.11 million. The sector tried to recover in the 2021-22 fiscal year, with exports reaching $41.36 million. In the 2022-23 fiscal year, exports slightly rose again to $43.39 million. However, exports dropped by nearly 24 percent in the 2023-24 fiscal year due to various challenges. During that fiscal year, exports in the ceramic sector totaled $33.09 million.
Meanwhile, ceramic factories are struggling with a shortage of gas, a critical raw material for production. Depending on the factory’s production capacity, a load of up to 15 PSI is permitted. However, a minimum gas pressure of 10 PSI is required to keep the factory running. Without it, the furnaces have to be turned off. Once shut down, it takes at least three days to restart them. Repeated shutdowns and insufficient gas pressure lead to a reduction in product quality, and many products are wasted. There is also a risk of falling behind in the competitive market. This causes businesses to face unexpected losses, impacting the timely export of quality products.
Moynul Islam, President of the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), told Bonik Barta, “Due to the gas issue, we are currently operating at only about 50 percent of capacity. Many products are wasted, and production takes longer. This is affecting exports.”
He added, “Just as we are facing multiple challenges from the pandemic, there are also global economic crises and ongoing wars. There was a prolonged dollar shortage in our country, and many businesses were sidelined due to political issues. They couldn’t operate or export their factories effectively. These factors have negatively impacted the entire sector, making it very difficult to return to the previous state.”
The latest data from the EPB suggest that exports for the first six months of the 2024-25 fiscal year (July-December) amounted to nearly $20 million. In Bangladesh, during July-August 2024, the political instability caused by the government’s fall, followed by the formation of a new government, a lack of an elected government, and concerns over the upcoming elections have left businesses and investors at unease. Thus, stakeholders are unsure about the state of trade and commerce in the country during the remaining six months of the current fiscal year.
Regarding the challenges faced by the sector in advancing, Moynul Islam said, “We need to address the energy issue now. Because gas is considered a raw material for the ceramic sector. Without proper access to gas, production is not possible. I need a specific amount of gas pressure. Our ceramic products have a high demand in the European market, but there is an economic downturn in that region, reducing demand. We are looking for alternative markets, but the government needs to take adequate measures in this regard. There are many tasks to be done, such as improving the banking sector, addressing the dollar issue, ensuring trade agreements with different countries, and securing policy benefits for new markets. Without government initiative, it will be difficult for businesses to handle these on their own.”
Industry insiders say that the demand for raw materials used in ceramic production can only be fulfilled by local sources up to a maximum of 10 percent. The remaining 90 percent of raw materials need to be imported. Over the past three to four years, due to a decrease in domestic dollar supply, political instability, and fluctuations in the exchange rate against the dollar in the international market, domestic companies have faced some discomfort. This has affected the import of raw materials.
The modern ceramic industry in Bangladesh began in 1958 with the establishment of Tajma Ceramic Industry Limited in Bogura. Currently, there are 74 ceramic factories in the country. The total investment in this sector is around BDT 185 billion. Local ceramic manufacturers mainly produce four types of products: four factories produce ceramic bricks, 31 produce tiles, 20 produce tableware, and 19 produce sanitaryware. This sector provides employment to at least 500,000 people. In the tableware sector, the proportion of female workers is 55 percent, and in tiles and sanitaryware, it is 20 percent each. This sector exports products to over 50 countries worldwide.
When asked about the gas crisis, Shahnewaz Parvez, Managing Director of Titas Gas, told Bonik Barta, “Gas is the main raw material for the ceramic industry. We are aware of the impact that a lack of gas can have on production systems there. But the big issue is that the daily gas allocation for Titas is currently slightly less than required. This crisis has been created due to the maintenance of the Floating LNG Terminal (FSRU). We hope that once gas supply increases at the FSRU, the gas supply to Titas lines will improve. This will also benefit the ceramic industry. Additionally, the cold weather is affecting the gas supply system.”