Fu-Wang Ceramic Industries, a listed ceramics maker with foreign and local shareholders, will invest Tk 650 crore to expand its tiles production capacity by about 15,000 square metres per day, according to a disclosure on the Dhaka Stock Exchange (DSE) yesterday.

The money will be spent on a greenfield project, including land acquisition and BRME (balancing, modernization, rehabilitation and expansion) of the company's existing plant.

Following the disclosure, stocks of Fu-Wang Ceramic rose 2.15 per cent to Tk 19 per share.

The company is engaged in manufacturing and marketing various types of floor and wall tiles through its facility in Hotapara, Gazipur.

However, Fu-Wang Ceramic currently utilises 56 per cent of its 40 million square feet annual production capacity, which has been calculated as 100 per cent efficiency based on three shifts of eight hours a day, according to the company's annual report for fiscal 2020-21.

Between July 2021 and March 2022, sales of Fu-Wang Ceramic rose to Tk 62 crore while it was Tk 56 crore in the same period the previous year, as per its third quarterly report of fiscal 2021-22.

But in the same period, the company's profits dropped to Tk 3 crore from Tk 3.79 crore previously due to higher raw material and finance costs, the report shows.

The company, which began commercial production in 1996, has paid-up capital of Tk 136 crore and reserve and surplus of Tk 15 crore, according to DSE data.

Listed as a 'B' category company in the domestic stock market, Fu-Wang Ceramic provided 2 per cent cash dividend in fiscal 2020-21.

Fu-Wang Ceramic's expansion plan comes just months after RAK Ceramics, the market leader, announced that it would to invest more than Tk 900 crore to raise its production capacity.

The ceramic sector's growing potential has lured in big conglomerates like Akij Group and DBL Group in recent years.

Currently, there are over 60 ceramics factories in Bangladesh and over a dozen more are in the pipeline, according to the Bangladesh Ceramic Manufacturers and Exporters Association.

More than 25 crore pieces of tableware, nearly 20 crore square metres of tiles, and over 83 lakh pieces of sanitaryware were produced in the country in fiscal 2017-18.

Local manufacturers cater to 85 per cent of the domestic demand while the rest, mostly comprised of high-end products, is imported from Japan, China and Taiwan.