High utility prices hinders potential - Ceramics manufacturers | Sunday Observer

High utility prices hinders potential - Ceramics manufacturers

10 January, 2021

Local ceramics manufacturers, while acknowledging the need for the Government to ban imports to save the outflow of foreign currency at a time of crisis, said manufacturers could boost production and be more competitive in the global market if utility prices are brought down.

“The 2021 Budget did not address the high cost of LP Gas and electricity which the ceramics industry relies on for operations,” said  Sri Lanka Ceramics and Glass Council President Anura Warnakulasooriya. Ceramics manufacturers purchase 20,000 to 30,000 kgs of gas which is costlier than small cylinders.

Despite being a highly labour and capital intensive industry its value addition is over four to five times of the raw material bringing in the much needed foreign exchange to the country.

However, local sales had not been satisfactory due to the impact of the pandemic on operations.

Exports of ceramics have benefited from the devalued currency but the pandemic has added on to the cost of operations due to the five percent of the workforce needed to undergo PCR tests which cost Rs. 7,500 per test.

“A factory that employs around 200 workers has to spend around Rs. 80,000 a week on PCR tests,” a manufacturer said.

Ceramics manufacturers could not produce 100 percent in the recent months due to import restrictions and had the situation continued companies would have been forced to shut down.

Sri Lanka’s exports amount to around US$ 11.7 billion while imports are  around US$ 22 billion leaving a trade deficit of around US$ 10billion. This trade deficit is met by foreign remittances and income from tourism,

However, ceramics manufacturers are confident of President Gotabaya Rajapaksa’s   prosperity vision and have planned to invest Rs. 2-3 billion which would help boost production from 60% to 100% by the end of the year.  

 “The industry will be self-sufficient in terms of tiles and  bath-ware by two years meeting the full local demand,” manufacturers said.

Convening a media briefing in Colombo last week to present the current situation and the efforts being taken by the manufacturers to keep the prices down and supply the current demand in response to the current social media campaigns that imply that local manufacturers are inflating the prices to gain an undue advantage to the current import restrictions ceramics manufactures urged the authorities to increase the current book value on a sanitaryware set from USD 35 to USD100 per set  to help SMEs in the industry and prevent under invoicing.

The Council members  said  that the move will help create a level playing field, help manufacturers to be competitive and boost revenue to the state.

There is a buzz on social media that only a few players  manufacture bathroom sets. They produce them for the upper income class and for housing projects. 

“It’s not only one company that manufactures these products  on a big scale and others on a smaller scale.  There is no scarcity of products in the market  for a year due to the import ban,” ceramics  manufacturers said.