The strategy to set up factories in remote Bhola island has worked wonders for Sheltech.
Within two years since the real estate giant stepped into the ceramics industry by setting up a tiles manufacturing unit in Bhola, it is now setting up two more plants there – buoyed by the natural gas reserve, cheaper land and easier water transport in the island plus huge customer response and growing market demands.
The two new plants – having a cumulative capacity to produce ceramic tiles three times the first one – are slated for starting production by the end of September and October this year.
Once the new units go into production, Sheltech Ceramics will have a total daily production capacity of 4.20 lakh square feet of tiles and thus will become one of the top tiles manufacturers in the country.
The new units have been focused on producing high-value import substitute large floor tiles, long-lasting scratch-resistant industrial floor tiles and double charging tiles.
The company is also planning to produce sanitary products and tableware at these factories in the coming days.
Kutubuddin Ahmed, chairman of Sheltech Group, said the new plants have already started a test run to examine the production efficiency. "Hopefully, they will be able to start commercial operations on time."
The company has also established a private naval jetty next to the factory premises to make water transport easier and plans to procure a cargo vessel to transport goods.
"We are going to produce the largest-sized floor tiles with a 1m×1m format that is currently totally dependent on import," said Kutubuddin Ahmed.
The factory has the capacity to produce scratch-resistant industrial floor tiles, mainly used in garment and textile industries, he said, adding the industrial floor tiles would be able to bear a load up to three tonnes and will be long lasting.
"The factories are capable of producing double charging tiles as well, which are also premium quality and high-value products," Kutubuddin continued.
Further explaining, he said double charging tiles are manufactured by infusing two layers of tiles together, which makes them thicker than most standard tiles.
First industry in Bhola
The Sheltech Ceramics factories on some 60 acres of land in Bhola Sadar involve an investment of nearly Tk700 crore. The industry has created direct employment for about 1,000 people, of whom 800 are locals.
It is the first industry in the water-locked district. Sheltech Group views this move as an inspiration for other investors who are willing to move to remote areas that have less pressure on necessary resources like water, gas and electricity, and low-cost water navigation facilities.
Sheltech Group Chairman Kutubuddin Ahmed said, "We observed that many entrepreneurs in the ceramics industry had to wait for three to four years to get gas connection for their factories. Even after getting connections, some are suffering due to the low pressure of gas in the pipeline.
"We have a vision to lead the ceramics industry, which is why we were looking for an area where natural resources are available. Bhola is the best location for this respect."
He said there is a scarcity of land for factory expansion in Gazipur, Narayanganj and Habiganj industrial zones – "these are very congested areas" – and the land price is also very high.
"But Bhola is an underdeveloped area and there is adequate land that is cheap too," he explained why Sheltech chose to establish its ceramics factory there.
Globally, water transportation is cheaper than other means of transportation, Kutubuddin said, adding that Bhola is a very much suitable location to get this facility.
"We have three warehouses in Lakshmipur, Jashore and Narayanganj. It is very easy for us to send our finished products from the factories in Bhola to these warehouses by waterway within 6-7 hours – there is no traffic jam and the transportation is cheaper," he added.
A blessing for local people
Most of the Sheltech Ceramics staffers coming from the local communities were unemployed. One of them is Jashim Uddin who is now working as a senior helper at the factory.
Jashim's father is a farmer who has no land of his own. The six-member family could barely make ends meet with the limited income the family used to earn by sharecropping land. But, the setting up of the Sheltech Ceramics tiles factory came as a blessing for them.
Jasim Uddin said, "After completing my graduation, I was jobless. After the Sheltech factory started operations, I joined there. I was supporting my family as the only job holder in the family.
"This year, my younger brother also joined this factory as a helper. This industry has made our life easier."
Why in ceramics industry
Sheltech (Pvt) Limited – one of the pioneers in the real estate and housing industry of Bangladesh – started its journey in 1988.
Seeing that the demand for ceramic products was increasing fast in line with the growing real estate sector, Sheltech Group could foresee good business in the manufacturing of ceramic products.
"We thought it would be a big sector, which is why we entered this industry."
Sheltech Ceramics' first plant started operations with a capacity to produce 1.07 lakh square feet of premium quality wall and floor tiles per day. Without carrying out any advertising campaign, the company has been able to sell all its products, thanks to Sheltech's brand value.
The group's chairman said they have established two Effluent Treatment Plants (ETPs) to make the factory environment friendly. They are also reusing the waste.
Policy measures still a big challenge
Government policy measures have been a big challenge for local ceramic goods manufacturers to export products as well as to participate in mega projects in Bangladesh.
Referring to the fact that the authorities have imposed a condition for using imported tiles such as in the expansion project of Hazrat Shahjalal International Airport in Dhaka, Kutubuddin said the government should allow locally manufactured tiles in their megaprojects.
The Sheltech chairman said, "We are producing world-class tiles using the latest European technology while the raw materials are also imported."
He also urged the prime minister to safeguard the local industry by imposing more duty on tile imports as local manufacturers have the capacity to meet total domestic demand.
"Unfortunately, total duty on imports of raw materials for the ceramics industry is higher than that on the import of finished goods," he said.
"European manufactures are dominating the high-value tiles industry. If the government provides duty-free facilities to local tile producers, the sector might turn into a good source of export earnings."
The Sheltech Group chairman also expressed frustration over the fact that the ceramic industry is denied the government tax holiday facility being offered to the apparel sector for investment in rural areas.