The situation incurs a daily loss of Tk20 crore and is also responsible for the decline in product quality.

TDS Desk:

Owing to the unrelenting gas supply crisis, Bangladesh’s ceramic industry is facing significantly slow production and fall in product quality, which makes the entrepreneurs suffer heavy financial losses.

The entrepreneurs claimed that they need gas supply at a pressure of at least 15 PSI (pounds per square inch) to manufacture ceramic products.

But the gas pressure at nearly 25 ceramic factories located at Mirpur, Savar, Dhamrai, Gazipur, Panchdona of Narsingdi, and Bhaluka of Mymensingh fluctuated only between three and zero for the past several months, they said.

Ceramics is a gas-dependent manufacturing industry where natural gas constitutes 10-12% of total production cost, said the industry insiders.

According to them, the situation incurs a loss at Tk20 crore per day. This is also responsible for the fall of product quality, creating a negative impact on Bangladeshi products in the international market, they added.

Production, product quality down, costs up

Additional Managing Director of Monalisa Ceramics (BD) Ltd Md. Mamunur Rashid said their factory, located in Sreepur of Gazipur district, was facing insufficient gas pressure for the last two months, supplied by the Titas Gas Transmission and Distribution.

“On an average, we are getting 8-10 PSI gas pressure while the minimum requirement is 15 PSI to maintain product quality. As a result, our production has dropped by 40% due to non-availability of gas pressure,” Rashid, also Senior Vice President of Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), said.

He said the industry is facing a number of challenges including irregular power and gas supply, increase of import duty on raw materials from 5% to 25%, high VAT rate of 15% on produced goods, high Supplementary Duty (SD) of 15% on produced goods, and higher interest on working capital and credit for the procurement of capital machineries.

“To encourage direct investment to the industries, initially the opportunity of tax holiday should be continued for a minimum period of five years. Measures should be taken against unfair trade or under invoicing, with a view to safeguarding the interest of entrepreneurs in the ceramic industries.”

BCMEA vice-president also stressed the need for research and development efforts to save energy cost as well as introducing appropriate and adequate training programmes to develop skilled labour forces.

According to him, initiatives should be taken to reduce SD step by step to protect our local industries.

Excellent Ceramic Industries Limited (ECIL) Managing Director Abdul Hakim Sumon said, “Gas is a very crucial element for the ceramic industry. But supply is not enough. We receive gas for 12 hours in a single day only. For this, production costs go up and product quality declines.”

According to the industry owners, the government assured of supplying gas uninterruptedly before increasing gas prices. The gas prices have increased, but the supply is not as promised.

BCMEA vice-president said that production cost has surged by around 50% during the last one year.

“Besides, we are hugely suffering from high dollar prices against taka, which makes us unable to match our business operational costs. We need the government’s policy support, enough gas supply, and resolving the dollar crisis for the growth of the industry,” he added.

BCMEA writes to the government to resolve gas crisis

As the gas supply crisis in the country’s ceramic industry continued for a long period of time, the BCMEA recently sent a letter, signed by its president Shirajul Islam Mollah, to different offices.

The letter was sent to the ministries of industries, commerce, power, Prime Minister’s Adviser on Private Industry and Investment, Bangladesh Energy Regulatory Commission (BERC) and Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

The letter urged the authorities to address the ongoing gas crisis on an immediate basis to protect the industry.

In the letter, BCMEA stated that the productions of ceramic tableware, tiles, sanitary ware and ceramic bricks in 22-25 factories have been disrupted due to severe gas shortages in the areas.

“Kilns in the ceramic industry need 24-hour uninterrupted gas supply to burn the products at 1200 centigrade at the desired PSI. Whenever the required pressure slides down, the incomplete products inside a kiln become wastage, even a kiln needs 48 to 72 hours to resume production in full swing after a halt,” the letter stated.

The BCMEA letter also read that the disruption in production could also lead to some entrepreneurs becoming loan defaulters. This will lead to a conflicting relationship between banks and the industry, and an increased number of cases at the financial institutions, it feared.

Talking to the Daily Sun, BCMEA General Secretary Irfan Uddin said they sent the letter to the higher authorities of the government on 26 June, but were yet to receive a reply till 9 July.

“The gas crisis continues across the country except Bhola and Habiganj. Exports have already faced negative impacts as product quality falls,” he said.

Irfan, also director of FARR Ceramics Ltd, emphasised, “The government should take proper steps to resolve the problems as soon as possible.”