Ensure uninterrupted gas supply, lift SD on ceramic products

The Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) has urged the interim government to ensure an uninterrupted gas supply and withdraw the supplementary duty (SD) on ceramic products to safeguard the industry.

At a press conference at Dhaka Reporters' Unity (DRU) on Monday, the BCMEA leaders emphasised that these measures are crucial to sustaining growth and competitiveness in the sector.

"Manufacturing costs have surged to around 30 per cent from just 3-4 per cent over the past decade. Challenges like gas crisis, price hikes, SD, and higher operational costs have turned ceramics sector into a struggling industry," said BCMEA acting President Moynul Islam.

BCMEA Adviser Mir Nasir Hossain, Senior Vice President Md Mamunur Rashid, Vice President Abdul Hakim Sumon, General Secretary Irfan Uddin, and Directors Rasheed Mymunul Islam and Fariyan Yusuf were also present.

Moynul further said that despite these challenges, the local ceramic sector has expanded significantly, with over 80 factories now operating nationwide.

"The sector contributes around Tk 35 billion in annual revenue to the national treasury, and saves nearly $2.0 billion each year through import substitution. More than 500,000 people are directly and indirectly engaged in the industry, which is now facing severe gas crisis, leading to daily losses exceeding Tk 200 million," said Moynul, also vice chairman of Monno Ceramic Ind. Ltd.

He explained that industrial zones located in Mirpur, Savar, Rupganj, Kashimpur, and other key areas are experiencing a severe drop in gas pressure-from the required 15 pound per square inch (PSI) to as low as 2-3 PSI or even zero-resulting in production halts and financial setbacks.

Moynul stated that the ceramic sector relies heavily on a continuous 24-hour gas supply at stable pressure to maintain production. Disruptions cause irreversible damage to ceramic products, leading to huge financial losses, he added.

"A lot of companies have halted investments, and the newly-built factories remain non-operational due to the ongoing crisis. This not only discourages further sectoral investment but also prevents thousands of potential workers from securing jobs," he said.

The BCMEA leader also added that further increase in gas prices would be devastating. Over the past nine years (2015-2023), gas prices for industries have surged by 345 per cent. In 2023 alone, the government raised prices by 150 per cent, resulting in an 18-20 per cent increase in production costs.

"If the proposed 152 per cent hike is implemented, production expenses could rise by an additional 30-35 per cent, affecting transportation and other associated costs. Industry insiders fear that such an increase will make local ceramic products uncompetitive in both domestic and international markets," he said.

The BCMEA leader has also urged the government to wipe out the Supplementary Duty (SD) on locally manufactured ceramic tiles and sanitary ware.

"Currently, ceramic tiles are subject to a 15 percent SD, while sanitary ware faces a 10 percent duty. These products are no longer luxury items, but essential components of modern construction and sanitation infrastructure. Higher prices will not only impact the ceramic industry but also burden consumers, particularly those relying on affordable housing and sanitation solutions," said BCMEA acting president.

He emphasised that removing these duties would attract more investment in the sector, create employment opportunities, and boost the global competitiveness of the "Made in Bangladesh" brand.

Countries like China and India already offer stiff competition in international markets due to lower production costs and stable industrial policies. Without strategic policy adjustments, Bangladesh's ceramic exports could suffer, ultimately affecting the national economy.

"The government should designate ceramics as a priority industry and ensure an uninterrupted gas supply. Instead of imposing financial burdens that could hinder growth, policymakers must focus on the long-term economic benefits of supporting this sector," Moynul added.

[email protected]