Large conglomerates expanding ceramic footprints

Rapid urbanisation, diversified housing and a rise in people's disposable income: these are the factors that have been boosting the country's ceramic market to a more than Tk6,000 crore with a 20% annual growth.     

The increasing demands for ceramic tableware, sanitaryware and tiles encouraged the large conglomerates to enter the market while the existing players are also in an expansion mode.        

Take essential consumer item maker Meghna Group, once tobacco giant Akij Group and agri-business and plastic manufacturer Pran-RFL. By chipping in with Tk500 crore, Meghna recently entered the tiles market, while Akij expanded production to tableware last month after logging bright records in tile-making.

Meanwhile, agri- consumer giant Pran-RFL is revving up to enter the ceramic market that has clocked around 100% growth in the last six years. The company will manufacture tiles initially, according to market sources.                       

Ceramic market in the past six years got at least Tk4,000 crore investments by five large companies such as Sheltech, DBL and Greatwall Ceramic – raising the total market investment to Tk10,000 crore.     

"Big companies are coming to ceramic market thanks to the increasing demand," Md Sirajul Islam Mollah, president of the Bangladesh Ceramic Manufacturers' and Exporters' Association, told The Business Standard.

"Ceramic tiles were once used mainly in urban homes. Now tiles are being used in the rural areas too, as it apparently has become an essential product," he said, adding the country's tiles market is now ever more competitive.

Echoing Sirajul Islam on growing demand, Meghna Ceramic Deputy General Manager Iftakhar Alam said rapid urbanisation all over the country is the key factor for pushing up the tiles market.    

According to the Bangladesh Ceramic Manufacturers' and Exporters' Association, ceramics logged Tk6,000 crore sales in the 2020-21 fiscal year. Of it, tableware and bathroom fittings jointly amounted to Tk1,000 crore. Local manufacturers in that year sold Tk4,300 crore tiles, while the item worth Tk700 crore was imported.    

It's expansion time

Apart from new investment, existing market players such as Mir Ceramics and Sheltech have expanded their production capacity substantially.    

Sheltech, one of the leading realtors for more than three decades, entered the tiles market in 2018 with its factory in south-central Bangladesh district Bhola. The manufacturer's capacity is now 1.20 lakh square feet per day, while two more production units of Sheltech are set to launch this year – raising the daily output to 4.75 lakh square feet.          

Akij wants to be country’s number one ceramic brand

"Uncompromising quality has earned us a high standing in real-estate. We will maintain the same policy in tile-making too," Tanvir Ahmed, Managing Director of Sheltech Group, told TBS.

With two production units, Akij Ceramics started its tile-making journey in 2012. Its production lines have increased to five now.

Sk Bashiruddin Uddin, managing director at Akij Group, said each of their new production lines are equal to 7-8 initial lines in terms of capacity.       

"Our sanitaryware factory probably is the largest in Bangladesh. We hope the tableware journey will be good too," he commented.

Market insiders said DBL Ceramics is also expanding its tile-making capacity with its "mirror-like shining" marketing slogan.   

Joint ventures, foreign technology

Greatwall Ceramic has been marketing Thai brand Cotto sanitaryware for a long time. Cotto has recently set up a factory in Munshiganj with an investment of more than Tk200 crore. The plant, a joint venture of Great Wall and Cotto, is set to begin this year.

"Demand for good quality sanitaryware has increased due to diversification of the real-estate business. We have taken the initiative to produce Cotto ceramics locally keeping in mind the country's needs," Md Shamsul Huda, managing director of Greatwall Ceramic said.

Apart from Greatwall, a number of local companies have either teamed up with foreign brands or are using foreign technology in production lines. Akij says it uses fully automated German ceramic-making technology.

Tiles top ceramic products

According to the manufacturers' association, currently there are 68 ceramic manufacturing factories in Bangladesh. Of them, 18 factories make sanitaryware, 20 make tableware and the remaining make tiles.

Sales of tiles amount to Tk5,000 crore of the Tk6,000 crore ceramic market, while five key manufacturers hold more than 60% of tiles market shares.     

With each holding more than 16% market shares, RAK and Akij jointly rule the tiles market, followed by Greatwall, Star, Abul Khair and Mir Ceramics.  

Beximco's Shinepukur Ceramics tops in tableware market with 18% market shares, followed by Monno Ceramic, FARR Ceramics and Star Ceramics.  

In bathroom fittings, RAK Ceramics remains the market leader with 30% market shares. Other key players in this segment are Abul Khair Ceramic, Akij, Greatwall and Star.   

Policy support still elusive

Although ceramic is a rising star locally, Bangladesh only exports ceramic tableware. Entrepreneurs said it is not possible to compete in the export market by importing all of the raw materials with higher duties.

Besides, local ceramics are lagging behind as foreign tiles are being used in many public projects, they claimed.

"Import duties and taxes levied on ceramic raw material imports are unfortunately higher than finished products," said Ceramic Manufacturers' Association president Sirajul Islam Mollah.

This means the tariff policy is encouraging the import of ceramic products and discouraging the import of ceramic-making items, according to Sirajul Islam.      

"European manufacturers are still dominating the high-value tiles segment. If the government provides us with a duty-free import facility, the sector could become a crucial source of export earnings," he added.