They said a ceramic factory usually stores raw materials for three months and companies that cannot export will be in trouble since several banks are not opening LCs (letters of credit) amid dollar crisis. If the situation does not improve in two months, several ceramic factories will face a shortage of raw materials.
According to latest data of Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), currently, there are 70 ceramic factories in the country – 20 of them are utensils manufacturing factories, 32 tiles factories and 19 are sanitary ware factories. There is a 65 per cent value addition to manufacturing ceramic products and overall investment has reached 137.81 billion in ceramic industry, which has created over 50,000 jobs.
With an annual capacity of about 250 million pieces, 20 factories manufacturing utensils meet 87 per cent of local demand while, with an annual production capacity of 210 million square meter tiles, 32 tiles factories meet 86 per cent of local demand and 18 factories manufacturing sanitary ware meet 60 per cent of local demand.
Great Wall Ceramic Industries Limited operates two factories in Gazipur and Habiganj’s Madhobpur. Production fell by 60 per cent in the tiles factory in Gazipur due to gas crisis while production of sanitary ware is going on in full swing in Madhoppur factory.
Speaking to Prothom Alo, Great Wall Ceramic managing director Aminul Islam said, “Our Gazipur factory has a capacity of manufacturing 12 million square feet tiles. Currently, we have gas supply from 10:00am to 5:00pm daily and there is no pressure of gas in the remaining time. We can light maximum three chimneys out of five during the seven hours when gas is available. Production cost has increased significantly since we can use only 40 per cent of our capacity.”
The factory of FAAR Ceramics in Gazipur has a daily capacity of manufacturing 60,000 pieces of utensils. The factory manufactures no more than 50 per cent of its capacity since gas pressure do not last more than 6-8 hours. Besides, products worth Tk 5-6 million were damaged last month.
Speaking to Prothom Alo, FARR Ceramics director Irfan Uddin said, “Production cost has increased by 35-40 per cent due to various reasons including dollar price hike and gas crisis, but customers are not paying us additional price, causing a loss. If this loss continues, it will not be possible for us to run the factory for long.”
Almost all raw materials are imported in ceramic sector, with clay contributing to 60 per cent of required materials. As much as 9,67,000 and 1.015 million tonnes of clay were imported in 2019-20 and 2020-21 fiscal respectively.
Traders said price of raw materials increased again because of appreciation of taka against US dollar following the Russia-Ukraine war.
When asked BCMEA senior vice president and Monno Ceramics vice chairman Moinul Islam said, “Entrepreneurs are trying to survive in business in present situation. Everyone is cutting the cost. Workers’ overtime has been suspended."
“Factories receiving work order amid gas crisis have been running production by bringing gas in cylinder from filling stations. Overall, product price did not rise as much as production cost. We hope situation will improve after December,” he added.
*This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna