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Ceramic product manufacturers seek duty cut on raw materials import

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Due to the GSP suspension, Bangladeshi products need to count heavy duty while entering into the market of the United States 

Ceramic product manufacturers have proposed the government to cut duty on imported raw materials to help them survive and remain competitive in the global market in the backdrop of the suspension of generalised system of preferences (GSP) by the US administration.

Because of the suspension of the GSP facilities in the US market, the profit margin has almost came down to zero level in the US market that made up 65% of our total exports, Rizvi Ul Kabir, general secretary of Bangladesh Ceramic Wares Manufacturer Association (BCWMA) told the Dhaka Tribune yesterday.

“Bangladeshi ceramic products, particularly hotel ware are now entering into the USA market by paying 25% duty and we are doing business just to retain our customers by reducing product value by 20%, which largely affects our global competitiveness,??? said Kabir.

In June last year, President Barack Obama has suspended the US preferential trade benefits or GSP (generalised system of preference) facilities, which Bangladesh had been enjoying since long.

Due to the GSP suspension, Bangladeshi products need to count heavy duty while entering into the market of the United States. As a result, export of potential items such as ceramic, sporting equipment, plastic products and a small amount of textile products are now facing a severe setback.

In a budget proposal for the 2014-15 fiscal to the National Board of Revenue, the association demanded the government to reduce the raw material import duty to from existing 5%-25% on different raw materials.

“Besides, higher import duties has increased the production cost, which is another setback for the growing industry that earned Tk360 crore annually in foreign exchange,??? said Kabir.

Currently, 5% import duty is applicable on basic raw materials, 25% on cover coat, bond and silk screen, 10% on milk talc, magnesium sulphate and calcium carbonate, alumina liner, filter cloth and other raw materials.

Apart from this, the manufacturers also recommended reducing the import duty on zirconium, iron oxide and cobalt oxide to a minimum level.

The association also proposed to increase the import duty on finished ceramic products to help grow the domestic industry.

It recommended withdrawing the entire supplementary duty on locally made ceramic wares to boost the industry. The manufacturers, however, proposed to increase supplementary duty on imported ceramic nameplate, tiles, cube and other related finished products to 80% from present 60%.

They also urged the government to increase the supplementary duty on imported glass table ware to 80% from present 45%.

Bangladeshi ceramic wares are being exported to 48 countries, including USA, European Union and Scandinavian countries. China, Poland, Thailand, Romania and Indonesia are the major competitors of Bangladeshi products.

In first nine months of the current fiscal year, export earnings from ceramics products stood over US$36m, an almost 30% rise, comparing to previous year, according to the Export Promotion Bureau.

According to the BCWMA, some 16 ceramic producing plants are now in operation in Bangladesh that created 5 lakh direct and indirect jobs.

The present investment in the country’s ceramic industry is roughly Tk5000 crore and total annual capacity of ceramic tableware manufacturing companies is 22.2 crore pieces, tiles 687 lakh square meter and sanitary ware 1.14 lakh metric tonnes.

After meeting 80% demand of domestic market, ceramic industries exported the rest.

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Report: Kayes Sohel
Source: Dhaka Tribune

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