Business

Govt. relaxes ceramic imports, again

Issuing a gazette notification, the Ministry of Finance has exempted a number of ceramic items from its prolonged stringent import restrictions.

The Extraordinary Gazette No. 2214/56 dated 11 February, with the signature of Prime Minister Mahinda Rajapaksa as the Minister of Finance, includes products of ceramic pipes, conduits, guttering and pipe fittings, ceramic sinks, washbasins, wash basin pedestals, baths, bidets, water closet pans, flushing cisterns, urinals, and similar sanitary fixtures and exempts all forms of tiles, wall tiles, and floor tiles.

This comes following a gazette notification issued on 2 February 2021 by the Minister of Finance lifting the ban on the ceramic manufacturing company (including tiles) which was revoked within 24 hours by an order of the Controller of Imports and Exports.

“The local manufacturers and the importers work side by side. There should be competition to influence local manufacturers to increase productivity and bring out the best tile quality and give the best price. If there is a monopoly, it is not good for the industry,” Tile and Sanitaryware Importers’ Association President Kamil Hussain commented in their response to the gazette notification issued on 2 February 2021, speaking to The Morning Business.

“There are currently two local manufacturers. Thus, it is a monopolistic or duopolistic market situation that we have. So in the absence of importers, what has happened is that they have escalated the prices. There are a lot of conditions they have applied to purchase ceramic and sanitaryware products. For example, there is a manufacturer who asks the consumer to buy accessories and slow-moving products to purchase sanitaryware,” he added.

Also due to the import restrictions, ceramic products that have been in stock have gradually decreased. Thus, the demand in the industry has exceeded the supply.

“At the moment, local manufacturers can only cater to about 50-60% of the country’s requirements. The Government told us earlier that they want us to enhance the local production of tiles. We have ordered new machinery to increase the production capacity. The problem in the tile industry is that production cannot be increased very fast because the machinery is a bit complicated and has to come from Italy, and it will take at least up to five to six months until we get the machinery, install, and start the enhanced production,”‎ Macksons Holdings Managing Director Mohamed Mizver Makeen commented early this month.

Moreover, local manufacturers can only cater to 50% of this demand, and there has been a rise in prices and instances where dealers re-sell ceramic tile products in the black market for an increased price range from Rs. 700-1,000 per tile after purchasing from local manufacturers.