Tk 6.0b investment in ceramic sector remains idle

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Shah Alam NurLeading ceramic investors Tuesday said at least Tk. 6.0 billion investment in the booming ceramic sector remained idle for long simply due to lack of gas connections. They said more Tk. 6.0 billion investments have now been pending due to the same ground in the industry, which might employ at least 1000 skilled and semi skilled people. The ceramic entrepreneurs said their projects, mostly in Dhaka, Savar, Gazipur and Sreepur have now become costly following delay in starting the operation of their factories. On an average, the already built factories remained idle for two years. The factories like Akij Ceramic, DBL and Star were built more than two years back with combined investment of Tk 6.0 billion. "It is gas supply crisis .. which forced the entrepreneurs to keep away from going into production," Iftakher Uddin Farhad, managing director of Far Ceramic, a leading ceramic manufacturer, told the FE. New gas connections remained suspended since March 2009 when an acute gas crisis surfaced in major areas of the country. Mr. Farhad, also president of Bangladesh Ceramic Ware Manufacturers Association (BCWMA), said: "Many of our entrepreneurs have set up their factories with the permission of government, but now they are the worst sufferers." He said the country's leading conglomerates have shown their interest in the sector as demand for ceramic goods is on the rise both in domestic market and international market. Local ceramic manufacturers exported ceramic products worth Tk 3.03 billion in fiscal 2010-11, up by Tk. 3.0 million from the previous year. Pacific group, Abul Khair group, Globe group have already shown their keen interest in making investment in the sector. The ceramic products stretching from kitchen tools to high-technology devices have now become popular across the globe due to their environment-friendly features. An entrepreneur who invested Tk 2.0 billion in a ceramic plant said: "We've been paying bank interest regularly which is making our projects costly and inefficient." He also said machines installed in the factory will start disturbing as the warranty of most of them has expired. Managing Director of BDL Ceramic Abdul Jabbar told the FE: "I'm frustrated as my investment worth Tk 2.0 billion in the ceramic at Gazipur remained idle for the last two years." General Manager (GM) of Akij Ceramic AKM Ziaul Islam said: "We've invested in ceramics following bright prospects in the sector." He said wages in Bangladesh are much lower than that in the giant ceramic factories abroad and the country has raw material -- ceramic clay -- at Bijoypur. He said: "We have some comparative advantages over the major foreign ceramic producers, but gas crisis has made all our efforts futile." He said: "We've been waiting each day for gas connections." When contacted, Chairman of Petrobangla Hossain Mansur, said new gas connection may be resumed if the government gives green signal. Presently demand for ceramics and tiles is rising sharply in the country. Currently more than 40 ceramic plants are in operation. They are in manufacturing porcelain wares, tiles, table wares and sanitary wares. The local market size of the products is estimated at around Tk 15 billion, market players said. The combined investment of the existing plants is estimated to be more than Tk 30 billion.