Ceramic leaders desperate to find new export markets
Saturday, 18 April 2009
Md. Fazlur Rahman
The country's two leading tableware manufacturers are trying to explore new sales destinations in the face of falling international orders and export growth triggered by the ongoing global financial crisis, officials said.
Both Shinepukur Ceramics Ltd and Monno Ceramic Industries Ltd will participate in an international ceramic fair in the United States to be held in the last week of this month to find new buyers.
Shinepukur will also participate in another exhibition in July this year, which will be held in Germany, Ashek Alam, head of marketing of the company, told the FE.
He said, "We have already participated in an exhibition in February in Germany where we received orders worth Tk 200 million. We have also plans to explore markets in South Africa, Russia, the Middle East and the Latin America."
Afroza Khan, managing director of Monno Ceramic, said her company regularly participates in the international fairs, as part of their effort to strengthen its buyer-base.
"The search for new export destinations is an ongoing process. Apart from this, we will try to improve the quality of products by developing new designs and styles."
Shinepukur, a sister company of Bangladesh Export Import Company Limited (BEXIMCO), is the largest tableware producer in the country, while Monno is the oldest company of this genre established in 1985.
Both companies are mainly export-oriented. However, 20 per cent of Shinepukur's and 40 per cent of Monno's produces are sold locally.
Shinepukur's porcelain unit has a capacity of 60,000 pieces, whilst the capacity of the bone china unit being 10,000 pieces a day. Monno produces 2.0 million pieces of ceramic tableware per month, officials said.
The Export Promotion Bureau (EPB) recent data showed, although the country's total export grew by 15.90 per cent during the July-February period of current fiscal year over the corresponding period of the fiscal year 2007-2008, the export of ceramic products could not achieve the target of $30.68 million.
During the July-February period, the country fetched $23.66 million in ceramic products export. The total export target for the current fiscal year has been fixed at $47.91 million, according to EPB.
The export of tableware products has been witnessing over six percent yearly growth for the last ten years carving a significant niche in US and European markets. As these two markets have been extensively hit by global crisis, the necessity of exploring new markets and strengthening the existing ones is being felt.
Mr Alam said that the export of country's ceramics might fall during the next half of the current fiscal year, as the global financial crisis is still rocking the world economy prompting slow growth of business, even their collapse.
"The business was fine in the first half of the current fiscal year. But we anticipate that the growth may fall by 20 to 30 per cent in the next half."
"We have received very good response from Germany because of our product quality. But the problem we are now facing is that the buyers are taking time before opening letters of credit (LC)."
"Few of them have already opened LCs. Some are saying that they will open soon. While others are saying that they will import only half of the order made in the fair."
However, none of them have cancelled their orders, he insisted.
Ms Afroza said the order has declined by about 25 per cent in the current fiscal year compared to the last fiscal year of 2008-2009 due to the recession.
Despite concern over further slump in international orders, Shinepukur has gone too far with its expansion plan by setting up another plant in their industrial park, Mr Alam told the FE.
He said with the existing capacity, Shinepukur could produce 3.0 million pieces of bone china a year besides 17.5 million pieces of porcelain tableware. But the company wants to add another 4.5 million bone china to its production capacity. Tk 800 million will be spent to complete the expansion plan, Mr Alam said.
Shinepukur is currently exporting its products to 40 countries including the UK, the USA, Spain, Italy, Australia, New Zealand, Norway, Sweden, Russia, the UAE, Denmark, Germany, France, Mexico, Turkey, and India.
Last fiscal year, Shinepukur exported 16 million pieces of items worth $18 million, Mr Alam said.
He said in the first part of the current fiscal year, the company has exported 8.5 million pieces of items earning $9.25 million. But he declined to predict what would happen in the second half.
"Buyers do not have problem with the quality of our products. But the reality is they do not want to stock products in their warehouses because of the turbulent time. Now they just want to import regularly and sell them straight away."
"On our part, we have to increase productivity and efficiency to face the financial crisis. Besides, we have to decrease unnecessary wastages."
He said, "We are offering packages and discounts, as promotional offers to retain our buyers."
Mr Alam said China - the world's largest ceramic producer - is offering products at 30 per cent discounted price. So we are losing market to them, he added.
"We need to be competitive in terms of price. But we cannot afford to offer such discount. It would be better to give up business, if we have to offer such large discount."
Monno, whose annual turnover from both local sales and exports is around Tk 1000 million, is currently exporting products to 25 countries, including the United States, France, Italy, the United Kingdom, Canada, Argentina and Greece. The company is also searching for new buyers, officials of the company said.
Officials said their participation at the German fair in February this year helped them find new buyers from Poland, Egypt and the host country.
According to industry insiders, there are over a dozen ceramic factories in Bangladesh, which produce over 40,000 tonnes of ceramic products a year. And the country exports around 34 million pieces of ceramic products every year, of which Shinepukur and Monno control over 80 per cent.
The country's Tk 4.0 billion ceramic industry, which produces tableware, tiles and sanitary ware, has only 0.17 per cent share of a $20 billion world market.
The country's two leading tableware manufacturers are trying to explore new sales destinations in the face of falling international orders and export growth triggered by the ongoing global financial crisis, officials said.
Both Shinepukur Ceramics Ltd and Monno Ceramic Industries Ltd will participate in an international ceramic fair in the United States to be held in the last week of this month to find new buyers.
Shinepukur will also participate in another exhibition in July this year, which will be held in Germany, Ashek Alam, head of marketing of the company, told the FE.
He said, "We have already participated in an exhibition in February in Germany where we received orders worth Tk 200 million. We have also plans to explore markets in South Africa, Russia, the Middle East and the Latin America."
Afroza Khan, managing director of Monno Ceramic, said her company regularly participates in the international fairs, as part of their effort to strengthen its buyer-base.
"The search for new export destinations is an ongoing process. Apart from this, we will try to improve the quality of products by developing new designs and styles."
Shinepukur, a sister company of Bangladesh Export Import Company Limited (BEXIMCO), is the largest tableware producer in the country, while Monno is the oldest company of this genre established in 1985.
Both companies are mainly export-oriented. However, 20 per cent of Shinepukur's and 40 per cent of Monno's produces are sold locally.
Shinepukur's porcelain unit has a capacity of 60,000 pieces, whilst the capacity of the bone china unit being 10,000 pieces a day. Monno produces 2.0 million pieces of ceramic tableware per month, officials said.
The Export Promotion Bureau (EPB) recent data showed, although the country's total export grew by 15.90 per cent during the July-February period of current fiscal year over the corresponding period of the fiscal year 2007-2008, the export of ceramic products could not achieve the target of $30.68 million.
During the July-February period, the country fetched $23.66 million in ceramic products export. The total export target for the current fiscal year has been fixed at $47.91 million, according to EPB.
The export of tableware products has been witnessing over six percent yearly growth for the last ten years carving a significant niche in US and European markets. As these two markets have been extensively hit by global crisis, the necessity of exploring new markets and strengthening the existing ones is being felt.
Mr Alam said that the export of country's ceramics might fall during the next half of the current fiscal year, as the global financial crisis is still rocking the world economy prompting slow growth of business, even their collapse.
"The business was fine in the first half of the current fiscal year. But we anticipate that the growth may fall by 20 to 30 per cent in the next half."
"We have received very good response from Germany because of our product quality. But the problem we are now facing is that the buyers are taking time before opening letters of credit (LC)."
"Few of them have already opened LCs. Some are saying that they will open soon. While others are saying that they will import only half of the order made in the fair."
However, none of them have cancelled their orders, he insisted.
Ms Afroza said the order has declined by about 25 per cent in the current fiscal year compared to the last fiscal year of 2008-2009 due to the recession.
Despite concern over further slump in international orders, Shinepukur has gone too far with its expansion plan by setting up another plant in their industrial park, Mr Alam told the FE.
He said with the existing capacity, Shinepukur could produce 3.0 million pieces of bone china a year besides 17.5 million pieces of porcelain tableware. But the company wants to add another 4.5 million bone china to its production capacity. Tk 800 million will be spent to complete the expansion plan, Mr Alam said.
Shinepukur is currently exporting its products to 40 countries including the UK, the USA, Spain, Italy, Australia, New Zealand, Norway, Sweden, Russia, the UAE, Denmark, Germany, France, Mexico, Turkey, and India.
Last fiscal year, Shinepukur exported 16 million pieces of items worth $18 million, Mr Alam said.
He said in the first part of the current fiscal year, the company has exported 8.5 million pieces of items earning $9.25 million. But he declined to predict what would happen in the second half.
"Buyers do not have problem with the quality of our products. But the reality is they do not want to stock products in their warehouses because of the turbulent time. Now they just want to import regularly and sell them straight away."
"On our part, we have to increase productivity and efficiency to face the financial crisis. Besides, we have to decrease unnecessary wastages."
He said, "We are offering packages and discounts, as promotional offers to retain our buyers."
Mr Alam said China - the world's largest ceramic producer - is offering products at 30 per cent discounted price. So we are losing market to them, he added.
"We need to be competitive in terms of price. But we cannot afford to offer such discount. It would be better to give up business, if we have to offer such large discount."
Monno, whose annual turnover from both local sales and exports is around Tk 1000 million, is currently exporting products to 25 countries, including the United States, France, Italy, the United Kingdom, Canada, Argentina and Greece. The company is also searching for new buyers, officials of the company said.
Officials said their participation at the German fair in February this year helped them find new buyers from Poland, Egypt and the host country.
According to industry insiders, there are over a dozen ceramic factories in Bangladesh, which produce over 40,000 tonnes of ceramic products a year. And the country exports around 34 million pieces of ceramic products every year, of which Shinepukur and Monno control over 80 per cent.
The country's Tk 4.0 billion ceramic industry, which produces tableware, tiles and sanitary ware, has only 0.17 per cent share of a $20 billion world market.