Local demand saves the day for ceramics makers
The local marketplace has emerged as a saviour for ceramics makers as the recovery in construction activities pushed up require, helping manufacturers make a turnaround from the pandemic-induced losses amid a steady fall in exports.
The relief came within the last 90 days of 2020 after domestic sales rebounded, allowing them to recover from losing incurred in the original a few months of the countrywide lockdown.
"The sector began to grab from June following the demand for sanitary and tile products from the housing and engineering sectors rose," said Abu Jubaid Mohammad Rassel, senior marketing supervisor at Akij Ceramics.
MA Jabbar, managing director of DBL Ceramics, said the business enterprise scenario may have improved nonetheless it was yet to regain its previous momentum and for that reason, uncertainty remains.
"The year that simply ended was a good challenging one not merely for the ceramic industry, but for depends upon," he added.
Ceramic manufacturers in Bangladesh mainly produce three types of product: tiles, tableware and sanitary ware.
Of the 68 ceramic manufacturers currently operating, 20 produce tableware, 32 produce tiles, and the others 16 manufacture sanitary ware.
The sanitary ware and tiles segments made a turnaround in July to October and reached the pre-pandemic level.
"The sanitary ware segment is essential as home items, and there is absolutely no way to avoid substitution and installation," Rassel said.
An additional 10 % customs duty on the import of foreign tiles and sanitary wares that was slapped this fiscal time helped the sector recover immediately, he said.
Not absolutely all manufacturers resumed operations just after the partial lifting of the lockdown in June.
"Those who showed courage and resumed businesses were gainers," he added.
Ceramic exports, however, did not fare well even before the pandemic.
Within the last fiscal year, ceramic exports dipped 59 per cent year-on-year to $28 million, data from the Export Advertising Bureau (EPB) showed.
Ceramic exports fell 16 % year-on-year to $15 million in the July-December period of the existing fiscal year.
Ceramics were exported to a lot more than 50 places, like the US, the UK, Canada and a few EU and Latin American countries.
"It will require until at least March for what to return to normalcy. In that case export orders and domestic demand will rise," said Irfan Uddin, standard secretary of the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA).
The tableware segment witnessed at least 40 % business fall in 2020 as require fell in both domestic and international market segments.
Customers treated tableware while luxury items, so organization was slow. The corporate purchase in 2020 was practically zero, he said.
The managing director of FARR Ceramics said the ceramics industry would face challenges in the coming weeks as consumers have a tendency to avoid purchasing high class items amid the pandemic.
Muhammad Shahidul Islam, company secretary of RAK Ceramics (Bangladesh), said the business achieved 80 % of the sales goal set for 2020.
"Businesses are but to return to the pre-pandemic stage regardless of the uptick in product sales," said Avenue Sangma, manufacturer manager of Tilottoma Bangla Group, the only real distributor of Toto, a good high-end Japanese sanitary ware maker.
The group, which suits largely the high-income groups, recovered about 75 % of its business towards the end of 2020.
"Last year's sales helped us survive," he said, adding that revenue may improve in 2021.
Several reputed real estate developers that source products from Tilottoma are yet to resume to place bulk orders because they did in the past, Sangma said.
In line with the BCMEA, the marketplace for ceramic products was valued at around Tk 35,000 crore in 2019.
The industry's production capacity is continuing to grow by 200 per cent within the last 12 years and Bangladesh currently retains 0.14 per cent of the global industry for ceramic products.
Local suppliers cater to 85 % of the domestic demand. The industry employs about five lakh workers, which two lakh happen to be women.
Manufacturers produced a lot more than 25 crore bits of tableware, 15 crore square metres of tiles and 1.20 crore bits of sanitary ware in 2019. Some 25 lakh pieces of sanitary ware were imported in the entire year.
DBL Ceramics Managing Director Jabbar is optimistic about 2021 but will not see an quick go back to the sales which were registered previously.
"Businesses will need to determine innovative methods to recover losses. They want more business-friendly policies from the government," the entrepreneur said.
