Ceramic manufacturers demand gas price freeze, duty cuts

The Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) has urged the government to refrain from further increasing gas prices, ensure a stable gas supply, and withdraw the supplementary duty on ceramic tiles and sanitary products to protect the domestic ceramic industry.

BCMEA President Mainul Islam made these demands while reading out a written statement at a press briefing at Dhaka Reporters Unity in the capital today (3 February).

BCMEA Advisor Mir Nasir Hossain, Senior Vice President Md Mamunur Rashid, Vice President Abdul Hakim Sumon, Director Rashid Maimunul Islam, Director Farian Yusuf, and General Secretary Irfan Uddin were also present.

The BCMEA president highlighted that Bangladesh's ceramic industry, comprising over 80 factories, plays a crucial role in reducing import dependence and saving at least $2 billion in foreign currency annually. 

However, he noted that irregular gas supply and low pressure have led to significant production losses, forcing around 50 registered ceramic companies to halt investments. Additionally, five new factories have been unable to commence production.

The situation has resulted in order cancellations from international clients, negatively affecting growth and employment. The BCMEA urged the government to prioritise the ceramic industry by ensuring a stable gas supply.

Opposition to further gas price hikes

Gas prices for the ceramic industry have already increased by 345% over the past nine years, with a 150% hike in 2023 alone, raising production costs by 18-20%.

The BCMEA warned that the proposed 152% price hike would drive up costs by another 30-35%, making it difficult for local manufacturers to compete with imports.

If implemented, the increase could lead to factory closures, reduced investments, and a shift towards plastic and melamine alternatives, harming both the environment and the reputation of Bangladeshi ceramic products in global markets.

The association urged the government to reconsider the planned hike.

Demand for withdrawal of supplementary duty

The BCMEA also called for the removal of the supplementary duty on ceramic tiles (15%) and sanitary ware (10%), arguing that these are essential building materials, not luxury products.

High prices, they said, contradict the government's "Sanitation for All" initiative by making sanitary ware less affordable. The association urged the chief adviser to prioritise the ceramic sector's sustainability by maintaining stable gas prices, ensuring uninterrupted supply, and eliminating these duties to encourage investment and job creation.

The BCMEA president also highlighted the ceramic industry's economic importance, citing Tk18,000 crore in total investment, Tk500 crore in annual export earnings, and over Tk8,000 crore in domestic sales.

Local production meets 85% of demand, contributing Tk3,500 crore in annual revenue and Tk1,200 crore in gas payments. The industry has seen 150% growth over the last decade, employing over 5 lakh people with a 60% value addition.

The BCMEA called on the media to highlight their concerns and support efforts to protect the industry.

'How will industrial establishments survive?'

Mir Nasir Hossain, BCMEA advisor and managing director of Mir Ceramics Limited, underscored the need to keep gas prices at a reasonable level.

"If this is not possible, how will industrial establishments survive?" he questioned.

He noted that the gas crisis has reached a stage where companies with four gas connections are now forced to operate with only one or two. Additionally, restarting a machine after a shutdown consumes gas equivalent to seven to eight days of continuous operation. However, factories cannot afford to shut down entirely due to financial obligations, including bank loans.

Nasir also stressed that political stability is essential for economic growth. However, the current situation, marked by continuous demands, is unsustainable in the long run.

Addressing economic concerns, he pointed out that extensive data manipulation during the previous government's tenure artificially inflated Bangladesh's economy. This has led to major issues in the export sector, reducing the country's competitiveness in the international market.

At the press conference, speakers highlighted the need to maintain gas pressure at 15 Pressure Swing Adsorption (PSA) for smooth production. However, despite the promised 15 PSA, factories are receiving only 10 PSA, disrupting production.

Due to this crisis, factories are operating at a maximum of 60% of their normal production capacity. Moreover, even when gas pressure is low, meters continue to record consumption, further increasing costs for industrial establishments.