Gas crisis cripples ceramic industry

Infograph: TBS

A crippling gas shortage exceeding a month has plunged the ceramic industry into crisis, with many factories being forced to keep their machinery idle and teetering on the brink of closure.

Gas-based industries have been facing gas shortages for a long time, but the situation has worsened over the past month as one of the two floating LNG terminals in the Bay of Bengal suffered damage from Cyclone Remal that hit the coastal areas on 26 May. The damaged unit is under repair and it may take until mid-July for it to return to service.

The Bangladesh Ceramic Manufacturers and Exporters Association sent a letter on 26 June to various offices, including the ministers and state ministers of industry, commerce, and power, the prime minister's adviser for private industry and investment, and the Energy Regulatory Commission, to address the gas crisis immediately to save the ceramic industry.

The letter, signed by the association's president, Md Sirajul Islam Mollah, read, "For nearly a month, a severe gas shortage has been affecting 22 to 25 ceramic factories, including those producing tableware, tiles, sanitary ware, and ceramic bricks, located at Mirpur, Savar, Dhamrai, Gazipur, Narsingdi, and Mymensingh."

It also read, "In these factories, where a gas pressure of 15 PSI (pounds per square inch) is required, the pressure sometimes drops to 2 or 3 PSI or even to zero. As a result, a large portion of their capacity remains unused. These factories are incurring daily losses exceeding Tk20 crore.

"In ceramic product manufacturing, kilns require an uninterrupted gas supply for 24 hours. To fire ceramic products, kilns operate at a temperature of 1200 degrees Celsius. It is impossible to maintain production in the kiln without a specific pressure level (at least 15 PSI). If the gas pressure drops, all products in the kiln process are immediately ruined. Restarting the kiln at full capacity after a shutdown takes a minimum of 48 to 72 hours.

"Additionally, the kiln equipment may get damaged, leading to significant financial losses for the factory. Consequently, companies in this sector are at risk of defaulting on their loans."

Manufacturers in dire straits 

Great Wall Ceramic Industries Ltd is one of the largest ceramic production companies in the country. The capacity of the company's tile factory in Gazipur is 1.5 crore square feet. However, due to the gas crisis, a significant portion of Great Wall Tiles' production has been idle for the past month.

Md Shamsul Huda, vice-president of Bangladesh Ceramics Manufacturing and Exporters Association and managing director of Great Wall Ceramic, told TBS, "We are running the factory on a single shift only instead of three owing to low gas pressure. The production cost has also risen by more than 30% due to load shading."

Another major producer of tiles, sanitary ware, and tableware in the country is RAK Ceramics, located at Maona of Gazipur. Due to the gas crisis, the company has been able to utilise a maximum of 55% of its capacity over the past week, according to its officials.

Muhammad Shahidul Islam, company secretary of RAK Ceramics, told TBS, "The gas pressure needs to be above 15 PSI. Most of the time, we do not get that. The captive power generation for the factory, which relies on gas, also has to be shut down for a significant part of the day. As a result, the operational costs of the factory have increased significantly."

Monno Ceramic, a leading tableware manufacturer in the country, has its factory at Dhamrai on the outskirts of the capital. It is also a top exporter of ceramic products in the country. However, due to the gas problem, about 40% of its factory's capacity is currently unused.

Khandaker Fayez Ahmed, head of business development of Monno Ceramic, told TBS, "There is no gas in the pipeline [in most of the time]. Even when gas is available, the pressure does not exceed 3-4 PSI, whereas we need 12 PSI to keep our kiln operational. As an alternative, we are using CNG. However, since the power of CNG is lower compared to natural gas, the pressure cannot be raised beyond 8-9 PSI."

He went on to say, "Due to these issues, we are now able to use only 50-60% of our capacity. However, we still have to keep the factory fully operational. As a result, our costs are increasing."

Irfan Uddin, general secretary of Bangladesh Ceramic Manufacturers & Exporters Association and managing director of FARR Ceramics, told TBS, "Gas prices have increased nearly 200% on three occasions since 2019. Raw material prices have risen by 35-40% globally. The increase in dollar exchange rate has raised the cost by another 40%. Delivery charges, marketing costs, and labour costs have also risen in the local market. However, product prices have not increased. On the other hand, due to the gas crisis, companies are struggling to pay salaries and wages, affecting their production."

It is very challenging to sustain in the situation, he said.