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The Financial Express

Coronavirus fallout: Ceramic industry seeks Tk 10b survival package

FE REPORT | Published: March 29, 2020 11:11:46 | Updated: March 30, 2020 15:20:11


Picture used for representation. Courtesy: Monno Ceramic Bd/via Facebook Picture used for representation. Courtesy: Monno Ceramic Bd/via Facebook

The country's ceramic ware manufacturers have requested the government to allocate an emergency fund of Tk 10 billion for them to tackle the adverse impact of coronavirus pandemic on the industry.

Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA) in a recent letter to the Ministry of Finance (MoF) on March 23 said the fund would be essential for providing staff salary, workers' wages and festival bonus till the overall situation improves.

It sought collateral-free and interest-free working capital from the financial institutions for at least next two quarters to run the factories, according to the letter signed by the BCMEA President Md Shirajul Islam Mollah.

It also demanded exemption from paying interest on bank loans for the next six months and deferring the repayment schedule for next one year.

According to the association, the ceramic manufacturing sector comprising tableware, tiles and sanitary ware is now facing serious setback due to the covid-19 outbreak.

"The sector has been witnessing scores of order cancellation and supply chain crunch due to the deadlock situation in international trade," reads the letter, adding the factories are facing crisis of raw materials, mostly imported from China.

The delay in receiving the proceeds of already exported goods is leading many factories to working capital shortage, it added.

Besides, the BCMEA said, the declining demand for ceramic ware in the local market due to the virus outbreak is posing a risk to the sector with bulk of unsold goods. "Overall, the factories are now on the verge of closure," said the letter.

It said that there are 68 industries operating in the country with an investment of around Tk 90 billion generating 0.5 million jobs. The sector earns about Tk 4.0 billion annually through export while local turnover would be over Tk 50 billion.

Considering the adverse impact on the investment and large number of workers in the sector, the ceramic makers requested the government to provide policy support, including delay in repayment of VAT, tax and AIT installments to be given by the factories in next six months.

They also called for extending the utility bills payment schedule by one year and not to disconnect the utility services like water, gas and electricity during the period. 

The BCMEA also called for collateral-free financing from the bank and other financial institutions for the next one year to bear the institutional expenditures.

saif.febd@gmail.com

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