A 20-storey commercial building is rising in the Tejgaon urban sprawl. The glass wall on its top floor would offer a view of the city all the way down to the nearby Hatirjheellake. The builder, Shanta Holdings Ltd, had Tk8 crore allocated in the construction plan for the glass walls, partitions and windows.
But a recent and abrupt hike in glass prices has forced the developer to bring about a change to its playbook. The allocation for glass structures of the multi-storey building now has an extra Tk3 crore.
"We are now constructing eight buildings in Dhaka. Pricier construction materials plus the recent glass price hikes have put us in numerous challenges in continuing the work," KhondokerMonir Uddin, managing director of Shanta Holdings, told The Business Standard.
Glass traders said prices of architectural, interior, automotive and mirror-making glass have surged by 30%-40% in retail, causing a rare stir in a rather staid local market, mostly owing to a supercharged construction demand and international supply crunch of the raw materials.
With the abrupt hikes, realtors who took money from their clients for apartments in advance now face trouble. They said a 5-storey building on five katha of land in Dhaka or adjacent areas used to cost Tk10 lakh for glass fittings. Now it has spiked to Tk14 lakh, but the prices of flats cannot be raised.
According to glass traders, per square foot of window glass, locally known as "Thai glass", is now at Tk130, up from the previous Tk80, mercury glass Tk100 up from the previous Tk65, and tinted glass Tk110 up from the previous Tk75. Flat glass prices per 0.04 inch have spiked by more than 30%.
According to the local glass and mirror traders' association, Bangladesh's glass industry has 30 manufacturers, with two key brands – PHP Family and Nasir Group – dominating the market.
"There has been a construction boom as the virus situation started to improve in September. The manufacturers have cashed in on the supercharged demand," Mohammad Shafikul Islam, president of the association, told TBS.
According to the Bangladesh Institute of Planners (BIP), 80% of commercial buildings and 30% of factories in 2020 constructed their walls with glass worth Tk2,000 crore instead of brick or concrete.
"The abrupt hikes will badly hurt the construction sector," BIP Vice-Resident Muhammad Ariful Islam told TBS.
Naimul Hassan, director of Real the Estate and Housing Association of Bangladesh (REHAB), said realtors had already been in trouble with pricier construction materials, while the recent glass price hikes have only intensified their woes.
There are three types of glasses – architectural, automotive and electronics – that are widely used in Bangladesh. Automotive glasses are used to make car windshields and windows, while smartphones, TV screens, cameras and spectacles require electronic glass.
Bangladesh is self-sufficient in architectural and automotive glass-making but mostly depends on imports for such raw materials as silica, dolomite, limestone, sodium nitrate and powdered charcoal.
Mizan Ur-Rahman, director of Euro Bangla Glass Ltd, said all the raw materials have registered a 30%-35% hike in the international market, thus driving up the rates of fine products.
Hasan Auto in Dhaka's Bijoynagar is one of the largest suppliers of car, bus and truck glass. ShahidulHasan, owner of Hasan Auto, said the prices of automotive glass have also gone up recently. However, prices of convex glass and looking glass for imported cars have remained the same.
The trader said prices of locally produced glass items only have had a surge.
Industries Minister Nurul Majid Mahmud Humayun told TBS that he was not aware of glass price hikes.
"If the price hikes are found unreasonable, the ministry will talk to the glass manufacturing companies," he added.
REHAB President AlamgirShamsulAlamin said if the price of something goes up once in Bangladesh, it rarely comes down again.
"Glass prices are not likely to decline in the coming months," he noted.
The glass industry in the country is growing by 8%-10% every year, mainly due to the increase in commercial building projects, with local companies meeting 90% of domestic demand, industry insiders say. The annual demand for glass is 25 crore square feet, and the annual production capacity of private and public glass manufacturers is 32 crore square feet.
The current size of the local glass industry is to the tune of around Tk2,500-2,500 crore.