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Opportunities of Bangladesh Cement Sector

Essay by   •  September 14, 2011  •  Case Study  •  794 Words (4 Pages)  •  1,358 Views

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Traditionally known for jute and tea exports, Bangladesh's entry in ceramic export market is not that old. But the rapid growth this industry has witnessed is extraordinary. In fact, a silent revolution has been taking shape in this sector for the last few years contributing a lot to the country's overall development.

Present scenario

At present, Bangladesh is exporting its ceramic products to over 48 countries from all over the world. In 2006-07, Bangladesh exported ceramic products worth approximately US$32.80 million. According to the Bangladesh Ceramic Manufacturers Association (BCMA), the ceramic sector in the country has every potential to grow and it will soon become a big foreign exchange earner in the coming years.

Given this present scenario, Indian companies should seek opportunities to take active part in the development of Bangladesh's ceramic sector. There are broadly three fields of opportunity Indian companies could consider-

* Raw materials export

* Machinery supply, and

* Production design and facilities.

The types of ceramic products mainly produced in the local markets of Bangladesh include insulators, tiles, float glass, tableware, sanitaryware, and tamla (drinking water glass).

Market study

Although the origin of Bangladesh's entry in the ceramic export market can be traced back to 1958, the country earned global repute for its quality ceramic products only recently. At present, there are 15 ceramic producing plants (12 private, 1 state owned and 2 joint ventures) in the country producing over 40,000 tonnes of ceramic products per annum. The main markets to which the aforesaid companies export to include Europe, Middle East, Scandinavia and the United States. This year, attraction has been so positive that Bangladeshi companies has already acquired advance orders for ceramic products worth Taka 3.0 billion (US$ 428 million) from the USA and different European countries. Keeping this in mind, the Bangladeshi Ceramic Manufacturing Association has projected annual export earning of US$100 million from 2008 onwards.

High demand at domestic level

In Bangladesh, the supply condition of ceramic products is insufficient in comparison to the demand condition. Demand for ceramic products is high even at home as the local companies export much of the products to the international market. Most of the ceramic factories import ceramics mainly from China.

The demand-supply gap is also evident for float glass in the local market. At present, Bangladeshi local industries are capable of catering to only 25-30% of the local demand for insulators.

It is only due to the demand-supply gap, Bangladesh's imports of ceramic products are increasing

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