The ceramic sector in Bangladesh, despite its impressive growth in recent years, faced a setback in the fiscal year 2023-24, as there was a decline in both exports and direct employment compared to the previous year.
With products ranging from tableware, pottery, and tiles to sanitaryware and insulators, Bangladeshi ceramics are much in demand worldwide due to their quality and cost-effectiveness.
The export volume of ceramic products dropped by nearly 2.00 per cent in FY 2023-24, standing at over Tk 5.92 billion, compared to Tk 6.03 billion in the previous fiscal year, according to the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA).
The export volume of ceramic products had increased by nearly 21.06 per cent during FY 2021-22 and FY 2022-23. In terms of value, the volume of exports reached Tk 6.03 billion, equivalent to more than US$ 54.86 million, according to BCMEA, in FY 2022-23 whereas it was Tk 3.85 billion or more than US$ 45.31 million in FY 2021-22.
Direct employment in the sector declined by 7.09 per cent in FY 24 compared to the previous year, BCMEA data said. It stood at 52,490 in FY 2023-24, down from 56,502 in FY 2022-23. Manpower involved directly and indirectly reached around 0.5 million. On the other hand, direct employment stood at 54,037 in FY 2021-22, according to the BCMEA data.
In tableware production in a factory, women workers on average account for 55 per cent of the labour force while in tiles and sanitaryware production, it is 20 per cent.
Despite challenges, the industry looks poised to enhance its export competitiveness, benefitting from duty-free market access to several developed nations through the Generalized System of Preferences (GSP). The export destinations include the European Union (EU), the United Kingdom (UK), Australia, New Zealand, Japan, Canada, and Russia.
In contrast, Chinese ceramics face a competitive disadvantage as they are subject to additional duties, such as tariff of up to 12 per cent, to access the EU market.
Before 2000, the country relied heavily on importing over 80 per cent of its ceramic products, necessitating significant spending of foreign currencies.
A recent study conducted by USAID revealed that the manufacturing capacity of country's ceramics sector saw a significant increase by around 200 per cent between 2008 and 2018. And the expansion was pivoted by enhanced capital investment.
With its strong foundation, strategic geographic position, and ongoing commitment to innovation and quality, country's ceramic industry is poised for even greater achievements in the coming years. Industry stakeholders anticipate further expansions in production capacity and export destinations, cementing the sector's status as a cornerstone of the nation's manufacturing economy.
On the other hand, the import of ceramic products rose to over Tk 18.57 billion in FY 2023-24, up from Tk 12.36 billion in the previous fiscal year, marking a 50.24 per cent increase, according to BCMEA data.
The local sale of ceramic products increased to Tk 76.42 billion in FY 2023-24, up from Tk 74.52 billion in the previous fiscal year, reflecting a 2.55 per cent growth. The total investment reached over Tk 184.25 billion in FY 24 whereas it was Tk 178.45 billion in FY 23. The total market consumption stood at Tk 94.99 billion in FY 24 whereas it was Tk 86.88 billion in FY 23, BCMEA data showed.
Bangladeshi ceramics are exported to over 50 countries, including the USA, Canada, Germany, France, Italy, and Japan.
Irfan Uddin, general secretary, BCMEA, highlighted that the sector's expected growth has been hindered due to financial challenges, leading to declines in both exports and direct employment. Some companies were forced to reduce their workforce as a result, he added.
He further pointed out that the ongoing energy crisis has been a major obstacle for the industry. "The energy shortage not only disrupts production but also severely affects export growth," Irfan stated.
The fluctuation on the dollar market is another factor impacting the sector, he said. However, he expressed optimism, noting that the country's rising foreign exchange reserves could bring a positive shift for the industry.
Prof. Mustafizur Rahman, a distinguished fellow at CPD, feels a critical need for collaboration and cooperation among the government, academia, and industry to elevate product diversification and tap into higher market segments amidst the sector's rapid growth.
He underscores the necessity of training programmes to facilitate product diversification. Additionally, Rahman stresses the importance of industries focusing on producing high-quality products to access global markets.
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