Meghna Ceramic Industries, a subsidiary of the Meghna Group of Industries (MGI), has amplified its production prowess with a hefty investment of US $45 million (approximately Tk 5 billion) to bolster its foothold in Bangladesh’s burgeoning ceramic tiles market, valued at half a billion US dollars.
Since July last year, the company’s Ashariar Char factory in Narayanganj, neighboring Dhaka, has ramped up its daily output of ‘Fresh Ceramics’ tiles to 51,000 square meters, a substantial increase from the previous 31,000 square meters, as revealed by Assistant General Manager Rajib Bhattacharjee.
Of the total investment, $19 million was self-funded, while $26 million was secured through a syndicated loan, recently disbursed. Prime Bank, acting as the lead arranger, contributed $4 million, with the Islamic Corporation for the Development of the Private Sector, a subsidiary of the Islamic Development Bank Group, providing $22 million, Bhattacharjee elucidated.
The syndicated loan, repayable over 8 years with a one-year grace period, bears an interest rate of 3.75% plus the Secured Overnight Financing Rate (SOFR), replacing the London Interbank Offered Rate (LIBOR). The loan’s interest rate is variable and stood at approximately 4.3% in January 2023, escalating to 5.3% more recently.
The injected funds were primarily allocated to importing advanced machinery from Europe and facilitating technological upgrades at the facility. With a cumulative investment of $100 million, incorporating cutting-edge technology from the US, Germany, Italy, and China, the factory employs over 400 individuals, Bhattacharjee affirmed.
This expansion initiative aligns with the company’s strategic vision to capitalize on the burgeoning ceramic industry, buoyed by escalating consumer spending and rapid urbanization witnessed over the past decade, Bhattacharjee emphasized.
Bangladesh’s ceramic sector has attracted significant investment, totaling $1.58 billion, focusing predominantly on tile production. Currently, the country hosts 31 ceramic tile manufacturing facilities with an aggregated annual production capacity of 20.70 lakh square meters. Fiscal year 2022-23 recorded tile sales worth $633 million domestically, underscoring the sector’s robust growth trajectory.