Bangladesh’s ceramics industry has grown into a major manufacturing sector, meeting most domestic demand for tiles, tableware and sanitaryware. However, high energy costs, unreliable gas supply, expensive financing, currency depreciation, supply-chain disruptions and an uneven tariff structure continue to limit its growth and export potential.
Sheltech Ceramics Managing Director Tanvir Ahmed says policy should focus not merely on protecting local manufacturers but on making them genuinely competitive in global markets.
According to the Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA), Bangladesh now has 75 ceramic manufacturers, with nearly Tk190 billion invested in the sector and more than 500,000 people employed directly and indirectly. Investment and production capacity have increased by around 150 per cent over the past decade.
Local manufacturers now meet around 89 per cent of domestic tableware demand, 82 per cent of tile demand and 65 per cent of sanitaryware demand, while exporting products to more than 50 countries.
“Twenty-five years ago, most of these products were imported. Today, Bangladesh is essentially self-sufficient in ceramics,” Ahmed said, adding that there is still significant growth potential, particularly in sanitaryware.
Tariff Structure Hurting Local Manufacturers
Ahmed said local producers face a structural cost disadvantage because they bear the full costs of gas, electricity, labour, financing, transport, taxes and production disruptions.
Around 95 per cent of ceramic raw materials, including clay, feldspar and glaze materials, are imported and subject to duties, while finished ceramic products can enter Bangladesh comparatively easily.
“That is a structure that punishes value addition in Bangladesh and rewards those who add value elsewhere,” Ahmed said.
He called for rational duties, stronger incentives for value addition and policy stability, including rationalising duties on raw materials and spare parts, withdrawing supplementary duties and reducing VAT at the sales stage.
He also identified under-invoicing of imports as a major concern, saying honest local manufacturers can be undercut when imported products are declared below their actual value.
Policy Stability and Bonded Facilities
Ahmed warned that frequent policy changes are damaging investment decisions. Between 2019 and 2021, supplementary duty on local ceramic production increased from 15 per cent to 45 per cent, while import duty was reduced from 60 per cent to 45 per cent.
“Entrepreneurs invest over 10 to 15 years. No business model can withstand policy swings like that. Businesses can live with tough rules, they cannot live with unpredictable ones,” he said.
He also proposed introducing a 15–20 per cent partial bonded-warehouse facility for ceramic manufacturers serving both domestic and export markets. Such a facility would reduce the upfront duty burden on imported inputs used for export production.
Ahmed pointed to the ready-made garment sector as an example of how bonded facilities helped Bangladesh become a major export-oriented manufacturing economy.
Gas Supply a Major Production Challenge
Reliable gas supply remains one of the industry’s biggest problems.
“Gas is our single-biggest operational problem. It is not just fuel for us; it is part of the process itself,” Ahmed said.
Ceramic kilns operate at temperatures above 1,000°C and require continuous operation. A sudden drop in gas pressure during firing can destroy an entire production batch, resulting in losses of raw materials, energy and production time.
High Financing Costs Reduce Export Competitiveness
Ahmed also highlighted the high cost of financing as a major disadvantage for Bangladeshi manufacturers. Ceramic production is highly capital-intensive and requires continuous investment in imported machinery and technology.
Industrial borrowers in Bangladesh are paying around 13–15 per cent, compared with around 3–4 per cent in China and 6–7 per cent in Vietnam, he said.
“We start every export negotiation with a 7–10-percentage-point cost handicap before a single tile is fired,” Ahmed said.
He called for dedicated long-term financing facilities for technology upgrades, energy efficiency and export expansion.
Construction Slowdown Hits Ceramics
The slowdown in Bangladesh’s construction and real estate sectors is also affecting ceramic manufacturers.
“Every apartment handed over means tiles, sanitaryware and fittings,” Ahmed said, noting that higher registration costs, interest rates and slower approvals are reducing apartment sales and, consequently, ceramic demand.
He said the government should reduce registration costs, speed up approvals, make home loans more affordable and maintain infrastructure projects to support demand across the construction supply chain.
Competitiveness Should Be the Goal
Ahmed believes Bangladesh’s ceramics sector can become a significant export industry if its structural challenges are addressed.
He urged the government to prioritise reliable energy at predictable prices, a level playing field in taxation and imports, affordable long-term financing, policy stability, stronger enforcement against under-invoicing, and greater investment in R&D, technology, skills and energy efficiency.
“Protection alone has never built a durable industry. The objective should be to reduce costs and build competitiveness,” he said.
“Give ceramics reliable energy, fair rules and stable policy, and it will earn its place on the global market the way garments did: on merit.”
