There’s already ‘surplus capacity’, tile manufacturers tell BoI

ISLAMABAD: The tiles manufacturers have strongly urged upon the Board of Investment (BoI) and other government authorities/regulators to give market access to foreign investors only after consulting the local industry on demand/supply and capacity.

Talking to media here Wednesday, Sheikh Mahmood Iqbal - chairman All Pakistan Ceramic Tiles Manufacturers Association “APCTMA” stated that the BOI and other government authorities responsible for approving market access to Pakistani tiles sector may consult the APCTMA before according approval to any new tiles unit in Pakistan. There is already surplus capacity and any excessive capacity will severely hurt domestic tiles units.

The local tiles manufacturers are already facing problems. In these circumstances further installation of tiles units is not viable in Pakistan.

He added that at least, three big groups of China are coming in tiles sector, which shall cause further surplus capacity. Due to volatile market conditions, two of the tiles units, ie, Sonex and Emco have already shut down their operations. Stocks of billions of rupees piled up in the warehouses of different tiles units and dealers’ godowns.

The government should take an immediate notice of this very critical issue of tiles industry and consult the APCTMA before allowing access to any new tiles plant, so that existing plants may not close down. Unplanned expansion may cause underutilisation of capacities of local manufacturers and ultimately, increasing per unit cost of production leaving the local manufacturers uncompetitive in the international market.

Iqbal also emphasised that the government should treat ceramic tiles industry among five export sectors of Pakistan being an import substituting industry and allow the same set of tariffs and other incentives to this industry, so that the domestic tiles industry may become competitive in the international market. With a little effort, tiles may become another exportable product of Pakistan.

Sheikh Mahmood Iqbal strongly protested on heavy increase in gas prices and appealed to the prime minister to devise a consistent energy policy for the ceramic tiles industry, so that this industry may be saved from closure. There is an investment of more than 100 billion rupees in this industry, which is at stake providing employment to more than 100,000 households directly and indirectly. On top of making import substitution of millions of dollars, this industry is paying taxes of billions of rupees to the national exchequer.

Copyright Business Recorder, 2021