Ceramics industry seeks government support as coronavirus deepens crisis

Bangladesh's growing ceramics sector is seeking government support as the already-struggling industry is facing a deeper crisis amid the coronavirus pandemic.

The Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), last Monday, sent a letter to the Ministry of Finance seeking the government's support to stay afloat.

Sixty-eight BCMEA members – manufacturing ceramic tableware, tiles and sanitaryware – are helping the country save around Tk5,000 crore annually through catering to the local market alongside exporting goods worth over Tk400 crore annually.

Unusual gas price hikes over the year, and uneven competition both at home and abroad – mainly with China which is the key source of raw materials for BCMEA members – have recently been dragging the industry down.

Over the first eight months of the current fiscal year – July to February – ceramic exports fell 60 percent year-on-year – from over $56 million to $23 million.

The locked wheel of global trade due to the coronavirus pandemic has shut the doors for Bangladeshi ceramics exporters right now, while the fall in demand on the local market has also made it hard to sell manufactured products.

Additionally, disruptions to the supply of raw materials from China and lower attendance of workers at factories imposed a shutdown-like situation for ceramics manufacturers even before the 10-day government-announced holiday.

Like all other export sectors, the ceramics industry is facing order cancellations.

Ceramics factories are also facing extreme shortages of working capital.

In this circumstance they cannot pay regular wages or repay the current portion of bank liabilities on time and they need a hand from the government to keep afloat.

Meanwhile, Prime Minister Sheikh Hasina, last Wednesday, declared a Tk5,000 crore special fund to help export-oriented factories pay wages only.

"Around three-fourths of our members primarily serve the local market and seem not to be getting any help from the fund as they are not exporters," said BCMEA General Secretary Irfan Uddin, "But they are saving our hard-earned foreign currency and deserve some support during the crisis."

The ceramics industry now seeks: fresh working capital as loans without collateral for at least the next six months, interest waivers for six months against existing loans, and an exemption from payments of the current portion of bank liabilities for at least a year.

The ceramic manufacturers also want to defer the payment of taxes, value added taxes, and advanced income taxes for six months, and an opportunity to pay utility bills a year later to tackle the unprecedented crisis.

The BCMEA also recommends that the government prepare a Tk1,000 crore emergency fund for the ceramics industry so that the factories can pay wages, salaries and Eid bonuses to their workers.

The industry, now meeting 80 percent of local demand alongside exports, has grown 200 percent over last decade.

Currently the country's ceramic exports are going beyond tableware as some companies are selling tiles and sanitaryware abroad on a limited scale with high potential, said the association leaders.

BCMEA's members have invested nearly Tk9,000 crore in this sector and directly employed over five lakh workers.