Asian Ceramics - AC16-6 Edition

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AC16-6

A NEW BEG INN ING

THE HEAVY CLAY INDUSTR IES OF IRAN SEE INSIDE

t d: A s ia n G ratnmit aojoLr a Guja ra

IN FOCUS: Nigeria: a special report

Middle-east sanitaryware Asian tableware: a top 20 Plus news, views and interviews

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Contents: AC 16-6

… e m i t g n o l a A m o nt h i s

They say that a week is a long time in politics, so on that basis, a month must be an eternity.

However, in the last few weeks since our last issue came out, the political landscape, globally, has had some dramatic changes. The UK has voted – somewhat stupidly – to leave the EU, throwing markets and industry into a period of extended chaotic uncertainty; Bangladesh has seen dreadful, tragic terror attacks leading to question marks hanging over its long-term stability as an OEM location, and we’ve just come out of a failed coup in Turkey. An old Chinese proverb does indeed say, “may you live in interesting times”, but I think that all of us would settle for some stability instead in the current climate.

News 6 Inside Asia

SITI B&T opens in Gaoming, China.

8 Welcome

Andhra Pradesh: open for business with China.

10 Across The Continent

Openings, closures and industry moves from across Asia.

18 International News Our eye on the international arena.

20 Material Matters Raw materials news and views.

22 Comment & Analysis

An Asian boon to Italian machinery sales.

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AC 16-6

32 www.asianceramics.com

News

www.asianceramics.com Features

Looking forward

14 Nigeria: a special report

Asian investment in the booming markets of western Africa is running into a number of labour-related issues which could threaten the Peoples Republic’s long-term strategy.

24 Iranian heavy clay

Iran has the potential to be one of the most exciting heavy clay markets in the coming decade as modernization programmes and expanded construction activity take hold.

AC examines the options...

Tecnargilla Italy 26-30-Sep Cersaie

Italy 26-30-Sep

The 28th China International Ceramic & Bathroom Fair Foshan 18-21-Oct CICA Annual Meeting

TBA

Ambiente

Frankfurt

10-14 Feb 2017

Cevisama

Spain

20-24 Feb 2017

Yogender Malik looks at how the mainstream sanitaryware manufacturers across the Arabian peninsula are grappling with the demands of an ever-evolving marketplace.

Indian Ceramics

India

1-3 Mar 2017

ISH Frankfurt

Germany

14-18 Mr 2017

40 Asian tableware

Keramika

Indonesia

16-19 Mar 2017

32 Middle Eastern sanitaryware

Jahir Ahmed looks at how the continent’s leading tableware brands are equipping themselves for a more exacting future…

The 29th China International Ceramic & Bathroom Fair Foshan Apr 2017 Mosbuild

Russia

4-7 Apr 2017

Ecobuild China

China

26-28 Apr 2017

ISH China & CIHE

China

13-15 May 2017

Middle East Stone

UAE

22-25 May 2017

Ceramics China

China

1-4 Jun 2017

We look forward to seeing our readers and advertisers at the show!

www.asianceramics.com 48 48 Talking Shop

Your favourite magazine is now available at the App Store…

50 Insight

download today to see your first sample issue!

Anaylsis Mr. Kamlesh Patel, CEO of Asian Granito Ltd in Himatnagar, Gujarat, India, talks to AC about his company’s growth in the last decade, and its outlook for the challenges to come.

Analysis and insight into Germany.

52 The Hunter And The Hunted

William upgrades to an ipad, but still casts his unsympathetic eye over industry issues: this month he asks if the Chinese “economic miracle” ever actually existed..

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Asian Ceramics: now for mobiles, ipads and androids

AC 16-6

asian ceramics

5

Inside Asia SITI B&T OPENS IN GAOMING, CHINA Institutional figures, customers, management and employees of the Formigine-based group took part in the opening ceremony held on 26 May. The most innovative technologies for large-format panels and slabs were presented at the CTW Forum during the exhibition Ceramics China The SITI B&T Group’s new facility in Gaoming in Guangdong province (district of Foshan) was officially opened on 26 May. The opening ceremony was attended by numerous institutional figures, including Laura Egoli (Consol General of Italy in Guangzhou), Richard Yu (Director of the Foshan Investment Promotion Bureau), Li Wensheng (Vice director of Gaoming District Hecheng Street Party Committee) and Elena Faoro (Board member of CICC Guangdong).

Extending the group’s presence in the Foshan ceramic district in China since 1999, SITI B&T’s new ecofriendly factory has a built surface area of 8,000 sq.m and employs more than 100 people. It involved a 6.8 million dollar investment and is a vital hub for the entire Asian market.

“This new facility will enable our group to further improve the quality of the technologies it delivers to the Asia-Pacific and Middle East markets, increasing the efficiency of its services and remaining constantly at the forefront in terms of productivity and energy savings,” commented Fabio Tarozzi, Chairman and CEO of SITI B&T. “By combining Italian expertise with our Group’s quality control capabilities, this facility is able to

produce machines combining excellent performance with competitive costs for the Asian market,� added Luigi Cormaci, General Manager SITI B&T China.

The forum CTW was held on Saturday 28 May during the exhibition Ceramics China and saw the participation of leading ceramic companies. The event was also attended

by SITI B&T Chairman and CEO Fabio Tarozzi and several leading executives of the Formigine-based group.

Fabio Tarozzi opened the proceedings with a presentation focusing on the international presence and various divisions of SITI B&T Group, the world’s only manufacturer based in the Sassuolo ceramic district capable of supplying specific machinery for large format tiles and panels and complete plants for ceramic tiles and sanitaryware.

Daniele Brugioni, Supera Product Manager, presented the new Supera line, focusing in particular on the innovative ISO Technology which applies a uniform pressing force over the entire surface of the tile. This ensures uniform thickness and density and consequently perfect flatness and complete absence of internal stresses (TensionlessÂŽ technology).

Next up, Massimo Proietti (Ancora Sales Manager) offered an in-depth discussion of the Ancora complete finishing lines for large-format tiles and panels, including the score-and-snap line, the high-speed dry squaring and chamfering line, and the honing line for large format ceramic tiles and panels. The forum ended with questions and a debate amongst participants, who showed strong interest in the SITI B&T technologies presented.

Welcome

Companies that make building materials and home decorative and interior products in China are planning to set up a large manufacturing cluster in Andhra Pradesh to fully access the Indian market as the state rolls out the “welcome� mat.

In a first-of-its-kind initiative in India in terms of scale, Andhra Pradesh government has decided to facilitate an industrial park and a logistics park on 10,000 acres exclusively for units set up by the Chinese companies.

The companies have proposed to bring in an investment of close to Rs 40,000 crore into the industrial park and the logistics park in the next 4-5 year time, according to the AP authorities.

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AC16-6

A N EW B EG IN N ING

THE HEAVY CLAY INDU

STR IES OF IRAN

SEE INSIDE

EDITORIAL Publishing Director Andy Skillen Email: askillen@asianceramics.com Direct line: + 44 (0) 208 123 0196 Fax: + 44 (0) 207 183 7196

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The AP government officials have signed an MOU with China Association of Small and Medium Enterprises and China Small and Medium Investment Group Limited, Beijing, for establishing an international industrial park and a logistics park exclusively for building materials and the related products.

AP chief minister N Chandrababu Naidu and his team of officials currently touring China to invite Chinese companies to the state.

Though Indian market has been flooded with cheaper Chinese products ranging from ceramic tiles to sanitary ware products, the anti-dumping duties and logistics costs have deterred Chinese companies from fully accessing the growing Indian market.

"They want to overcome these issues by setting up their manufacturing units here. Many of them are small and medium scale companies but some big Chinese firms are also expected to join the group."

The building materials industrial park will come up in an area of 20 square kms and will produce all categories of building products involving low-carbon, energy saving and new materials. The government also facilitate the creation of a logistics park in another 20 square km area for facilities to take care of distribution and logistics of these products.

The park will manufacture structured materials with ceramics, sanitaryware, bricks and tiles featuring heavily.

The products manufactured will be mostly supplied to local markets, other areas of India and in some portion to the export markets, according to the government. The new capital city of Amaravati and the upcoming smart cities in the state are expected to fuel demand for the building material products, according to officials.

Decoration materials like coatings, paint, cladding materials, veneering, ceramic tiles in all colors and glass with special effects will also be made here. Currently Gujarat is home to a huge cluster of ceramic and home interior products makers who also cater to a large chunk of unbranded product market in India.

The government expects to see Rs 10,000 crore investments in manufacturing and logistics parks involving the building material products just in the first phase itself followed by a little higher size of investments in the next two phases.

This building materials park is in addition to a 14,231-acre National Investment Manufacturing Zone (NIMZ) cleared in the same district by Government of India. This is the first of the two NIMZs, the second one being set up in 5,000 acres in Chittoor district bordering Tamil Nadu.

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Asian Ceramics (ISSN: 1476-1467), is published by Bowhead Media Ltd, registered in the UK no: 6127651

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GST imposition will boost sanware majors • Toto increases focus, but considers expansion delay • RAK Ceramics c tile production • Downgrading duties hit manufacturer prospects • Asian investment in Nigeria hits rocky road • ceramic dumping • Nabel opts for System INDIA

GST imposition will boost sanware majors The introduction of the goods and services tax (GST) will benefit the or-ganized sector compete with the unorganized and bring down taxes, po-tentially reducing prices of products, says Atul Sanghvi, Executive Director of Cera Sanitaryware.

Speaking in a recent interview, Sanghvi said that the sanitaryware sector faces about 30 percent tax rate, including about 12.5 percent excise duty, 12.5-15 percent VAT and 2 percent cen-tral sales tax. This has helped the unorganised segment captured about 55 percent of overall market share, as opposed to 45 percent by the organised players.

"If the GST rate is 18 percent [as proposed], at least 10 percent benefit will be passed down to the end customers and it will also bridge the gap between organised and unorganised players in the sanitaryware industry," he said.

“In the case of the sanitaryware, we believe that more than 50 percent of it is in the unorganised sector. We can presume 55 percent is unorganised and 45 percent is organised. If we talk about faucets, 65 percent is unorganised and 35 percent is organised. In case of tiles about 60 percent is unorganised and 40 percent is or-ganised. In case of sanitaryware, the price difference to the cus-tomer is -- if a customer is getting a

product of an organised brand, which is for Rs 100 in case of unorganised he may be able to get that for about Rs 50-55.

So, the price difference is huge, almost double.

“When it comes to the GST, therefore, it all depends on the per-cent. In any case we believe that the end customer is going to be benefitted. Currently, the central excise duty is 12.5 percent on sanitaryware and the value added tax (VAT) ranges from 12.5-15 percent and of course the central sales tax (CST) is two percent. So, overall if you see the impact it comes around 29-30 percent.

As such, if we presume that the rate is fixed around 18 percent so, very clearly we can say

that about 10 percent can be passed on to the customer.

Therefore, if it is done by the organised industry and on the other hand the unorganised will start paying the taxes, the gap between unorganised and organised will narrow down to a great extent. “ Of course it will not exactly become a level playing field but the different will still remain between 10 percent and 15 percent. But the consumer will be willing to pay that extra 10-15 percent to any brand because of the after sales service and the confidence he will be getting because of the brand. This means, it is going to help the volumes of the organised player.”

THAILAND

Toto increases focus, but considers expansion delay Leading Japanese sanitary ware producer Toto’s Thai subsidiary is unlikely to pursue a factory expansion in Thailand before 2020, even though it is running its plant at a full capacity, partly because the Japanese sanitary-ware company is already invest-ing significantly to expand its Vietnamese production.

According to Hiroyuki Suzuki, president of Toto (Thailand) the Thai unit aimed to increase the proportion of domestic sales from less than 20 per cent of the total to 30 per cent by 2020. Although currently running its sanitary-ware plant at full capacity in Thailand, the company has no plan to increase its production capacity but will instead reduce its exports to make way for more local sales.

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At present, Toto (Thailand) makes 60 per cent of its sales revenue from its exports to Japan, 15 per cent from the United States, and about 5 per cent from Europe. With a Bt2billion investment made prior to its takeo-ver of the local operations from Siam Cement Group in October 2013, To-to has a sanitary-ware production capacity of 540,000 pieces per year. The company has about 8 per cent of the medium-toupper-end segment of the Thai sanitary-ware market, which accounts for about 30 per cent of the total market in Thailand.

Toto aims to boost its sales in Thailand by 30 per cent this year, after growing by about 20-30 per cent in 2015.

Toto is building its third factory in Vietnam with a total investment of 9.7 billion yen (Bt3 billion). When completed

in March 2018, the Hung Yen plant will have a capacity to produce 600,000 pieces of sanitary ware per year.

Though, Vietnam's production costs are similar to Thailand's but its wage costs are currently about half of the Kingdom's.

Nevertheless, Vi-etnam's labour costs are rising by 20 per cent per year, and sanitaryware shipments to the US from Vietnam will be subject to an import tax, while Thai products are not being taxed.

At present, Indonesia is Toto's largest production base in Asia outside Ja-pan, followed

by Vietnam, whose capacity is already three times that of Thailand factory. Toto has high expectations for the Asian market. The top three markets that it has given the highest priorities are Thailand, Vietnam and India.

NEWS IN BRIEF Bath fittings and sanitaryware major Jaquar Group is nearly doubling its manufacturing facility for faucets with an investment of Rs 150 crore as it targets 25 per cent growth in revenues to Rs 3,000 crore this fiscal, a top company official said.

"We are expanding our manufacturing facility by 30,000 square meters for faucets in Bhiwadi, Rajasthan, which will be operational by the middle of next year," Rajesh Mehra, the director and promoter of Jaquar Group, said.

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completes expansion • Cuba looks good for Viglacera • ML Global to cease roof Cookware tests aim to expose leaching issues • Action sought to stay tough on BANGLADESH

VIETNAM

Cuba looks good for RAK Ceramics completes expansion Viglacera RAK Ceramics Bangladesh has achieved a capacity addition at its tile facilities in the country. With the expansion the ceramic tile capacity of the company has reached 11.6 million sqm, a jump of 22 % from its earlier capacity of 8.3 million sqm. The company spent AED 97 millions on this expansion. RAK Bangladesh also has a sanitary ware plant in the country with an installed capacity of 1.47 million pieces.

The company claims that it is the market leader with around 25% market share in tiles sector and around 65% market share in sanitary ware sector based on production capacity.

The current market for the RAK Bangladesh includes construction developers, government institutions and local consum-ers. The Company has a strong market

reputation in Bangladesh with a wide network of 98 dealers nationwide and receives strong support from its par-ent company in UAE in terms of technological know how, management and marketing support.

The ownership of RAK Ceramics (Bangladesh) Limited comprises with 75.89% held by the sponsors (71.67% by RAK Ceramics PSC, UAE and 4.22% by local investor Mr. S.A.K. Ekramuzzaman) and remaining 24.11% is holding by general public including institutional investors as on December 31, 2015. With an annual net turnover of over Taka 5,059.30 mn in 2015, RAK has firmly established itself as one of the leading manufacturer of high quality ce-ramic wall, floor, porcelain tiles, and sanitary wares products in Bangladesh.

The Viet Nam Glass and Ceramics for Construction Corporation (Viglacera) and Cuba’s Geicons Group are set to establish a joint venture producing ceramics sanitary wares and tiles.

According to Viglacera, the two sides signed an agreement on the joint venture in the last couple of months, and have now made the announcement public.

The joint venture, once established in October, will contribute to meeting the demand for construction materials in Cuba and the Latin American market.

Viet Nam is the second biggest trade partner of Cuba in Asia, with bilateral trade value exceeding US$207 million in 2014, according to the General Department of Customs.

Viet Nam’s major exports to Cuba include rice, coal, chem-

icals, textiles and computers; while Cuba exports pharmaceuticals to Viet Nam, worth nearly $1.3 million.

According to the Ministry of Planning and Investment, as of December 2015, there was one Cuban project operating in Viet Nam with a registered capital of $6.6 million. Viet Nam also had one oil project in Cuba.

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MALAYSIA

ML Global to cease roof tile production ML Global Bhd’s whollyowned subsidiary Vintage Tiles Industries Sdn Bhd (VTI) will cease manufacturing and trading of roof tiles (manufactur-ing division) effective July 15.

In a filing with Bursa Malaysia, it said the manufacturing division of VTI is operating in a very competitive environment and in an industry which is experiencing declining revenue and margins.

“Based on the latest audited financial statement as at Dec 31, 2015 and the unaudited quarterly results ended March 31, 2016, the manufacturing

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division has incurred an accumulated loss of RM17.2 million and loss for the period of RM208,000 respective-ly.

“The board is of the view that the prospects of the manufacturing division continues to be challenging.

As such, the cessation is expected to reduce losses and improve the overall cash flow of the group through the rental income received from the tenancy agreement with Terreal (M) Sdn Bhd,” it said.

The move will see the disposal of all manufacturing machinery and equipment of the manufacturing division at a

later stage, the company added.

VTI has also agreed to enter into a tenancy agreement with its business collaboration partner Terreal for the rental of VTI’s manufacturing factory in Nilai, Negri Sembilan, for nine months with the option to extend for two successive terms of three months at a monthly rental of RM30,000.

The tenancy agreement is expected to generate positive cash in-flow to the group.

Terreal is principally involved in manufacturing and trading in clay roof tiles.

Moving forward, the group will focus on the construction

busi-ness, which is expected to generate sustainable income revenue and profit for the group in the future.

Based on audited financial statement as at Dec 31, 2015, the construction division contributed revenue of RM28.1 million and pre-tax profit of RM8.3 million.

The cessation is not expected to have any effect on the issued and paid-up share capital and substantial shareholders’ shareholdings of ML Global nor on the consolidated net assets per share and gearings of the group for the financial year ending Dec 31, 2016.

AC 16-6

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MALAYSIA

Cookware tests aim to expose leaching issues In monitoring ceramic cookware in the market the Health Ministry has so far found only one type of cookware which has exceeded the permissible lead leaching limit, said Health director-general Datuk Dr Noor Hisham Abdullah.

He said the study which used the X-ray fluorescence spectrometry technique and found eight types of ceramic utensils containing high levels of heavy metals and chemical elements as reported by a newspaper yesterday differed from the method used by the Health Ministry.

He said the method was

used to measure the amount of heavy metals in the ceramic cookwares and not the amount of heavy metals leached into food.

“In this case, the method of analysis conducted by the Health Ministry is more acceptable as it analyses the amount of heavy metals leached into food for the purpose of evaluating its risks to consumers,” he said in a statement.

Earlier, a local newspaper reported that eight types of ceramic cookwares were found to contain high levels of heavy metals and chemical elements after a preliminary test

using the X-ray fluorescence spectrometry was conducted by the the Malaysian Association of Standard Users and Greenfinite Sdn Bhd. Dr Noor Hisham said the test method conducted by the Health Ministry was consistent with sub-regulation 28(4) of the Food Regulation 1985 under the 1983 Food Act. He said the regulation provides that ceramic products used for preparing, packaging and storing food should be tested according to the “Malaysian Standard MS 1SO 6846-1 ceramic ware, glass ceramic ware and glass dinnerware in contact with food - Release of

lead and cadmium - Part 1: Test method.”

“The amount of lead and cadmium released from ceramic wares should not exceed the maximum amount permitted as stipulated in the regulations.

“Failure to adhere to the regulations is an offence which upon conviction, may be subjected to a fine not exceeding RM5,000 or imprisonment of not more than two years,” he said.

Dr Noor Hisham said the ministry was always sensitive and serious on matters related to consumer safety and gave his assurance on the level of food safety and quality.

CHINA/EUROPE

Action sought to stay tough on ceramic dumping Ahead of the EU China Summit in Beijing, AEGIS Europe, an alliance of more than 30 European manufacturing associations, calls on European Commission President Juncker and President of the European Council, Donald Tusk, to take a clear position against Chinese dumping, overcapacity and illegal subsidies.

"China is not a market economy and therefore cannot be granted Market Economy Status (MES) by the EU. It is of critical importance for all European industries that anti-dumping measures are calculated properly and remain effective and possible under EU trade law," said Milan Nitzschke, spokesman for AEGIS Europe.

China's state planned economy systematically orchestrates overcapacities and then offers products below production costs in international markets to overwhelm competition.

Guy Thiran, Director General of Eurometaux, the European non-ferrous

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metals association explained, "Chinese overcapacities affect all non-ferrous metals. Take aluminium for example: China's share of global production has skyrocketed to over 50% in the last decade. Over the same period, a third of EU smelters closed their doors.

With China's overcapacity now five times bigger than EU primary production, granting MES prematurely presents a real risk to 80,000 hardworking aluminium workers".

Vidmantas Janulevicius, CEO Global BOD Group and Solitek, the largest producers of CDs, DVDs, ophthalmic lenses and solar cells in Central Eastern Europe, said: "International rules must apply to all countries. If the EU did not act against dumping forcefully, my company would have never invested in solar technology - one of Europe's key technologies. If anti-dumping investigations were impossible in the future, massive manufacturing investments in Europe would be lost forever."

"Alfonso Panzani, President of the ceramic wall and floor tile

manufacturer Settecento and Vice-Chairman of CerameUnie said: "Chinese dumping is about much more than steel.

Any company, especially the small ones that manufacture products in Europe will be affected. Currently there are about 100,000 jobs at stake

in the EU ceramic industry concerned by anti-dumping.

80% of them are SMEs, the backbone of EU's economy.

The EU must maintain a robust and effective trade defence system and not accept China's demand for lax anti-dumping measures."

CHINA

Nabel opts for System The historical Chinese brand of top quality tiles Nabel Ceramic has now adopted System technology to produce large format sheets, mainly in the sizes 1600x2400 mm and 1500x3000 mm, relying on the efficiency of the mould-less press GEA 2.0 44000 tons, developed by System Lamina.

The agreement between Nabel and System was recently signed and start-up is scheduled for 2017.

The supply includes raw tile cutting line, necessary to obtain the sub-formats, and 3 Creadigit machine models

BS for high definition digital printing.

The press will be installed at the facilities of Huangshan, located in eastern China at 350 km from Suzhou, the district also host to the main System branch, which will supervise installation and startup of the systems selected

by Nabel. System China will also guarantee after-sales services, spare parts, and highly specialised technical assistance both for the graphic configuration of Creadigit and as regards the electromechanical sections of all System solutions.

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NIGERIA

Asian investment in Nigeria hits rocky road The establishment of two ceramics firms, namely West African Ceramics Limited and BN Ceramics Industry Nigeria Limited, to create jobs for the unemployed people was the best thing that happened at Ajaokuta, a town in Kogi State. But sooner than expected, many of the workers started complaining of alledged dehumanisation and exploitation.

West African Ceramics Limited, Ajaokuta, established in Nigeria since 1995 under the name Royal Ceramics, located in Suleja, Niger State, is a leading brand name in the Nigerian ceramics market and Sub-Saharan West African region due to growing demand for E u r o p e a n s t a n d a r d quality tiles. Its competitor, BN Ceramics Industry Nigeria Limited, is also carving a niche for itself in the same area.

However, cross section of workers who spoke to local media alleged that the two firms, operated by Indian and Chinese expatriates, are not complying with the extant labour laws of Nigeria.

It should be noted that the relationship between employers and employees (industrial relations) is structured, mediated and regulated by general and specific laws as enshrined in relevant public policies of international labour standards, coded in conventions and recommendations, as well as national legislations with

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a view at ensuring that in the course of employment, people work in dignity and humane conditions.

There are pointers that employees in these firms are not getting a fair deal from their job places.

In West African Ceramics Limited and BN Ceramics Industries Nigeria Limited, workers who spoke to Daily Trust at their factories near the Niger (Murtala) Bridge in

Workers, especially at the West African Ceramics, express their displeasure over prolonged working hours and casualisation of workers and working without appointment letters. A similar situation was alleged by employees of BN Ceramics Limited.

Workers in West African Ceramics described how majority of the staff earn only between N18,100 and N20,100 while those in BN Ceramics

Ajaokuta, some 10 kilometres from Itobe town, on condition of anonymity for fear of intimidation and likely sack, alleged that there have been cases of noncompliance with labour law on employment, remuneration and the adoption of unethical measures in punishing employees.

There are also concerns over alleged disregard for the rights of workers to rest and leisure. The workers claim they are underpaid, and made to work during weekends and holidays with no commensurate appreciation.

earn between N18,000 to N30,000, a remuneration they say is not commensurate to the workloads of workers at the factories who work from 7:00am-7:00pm.

Workers of the two companies alleged disregard for industrial legislations which seek to protect workers from work-related hazards and diseases and refusal of the companies to pay compensations for injuries or disabilities suffered in the course of work, citing how some workers, especially at the West African Ceramics, suffered injuries and died in the cause of their jobs without

compensation.

Some workers in BN Ceramics voiced their displeasure over alleged racist dispositions being exhibited by some of the expatriates of the companies.

Alleging an instance of high handedness and molestation of workers by Chinese expatriates which, sometimes ago, culminated into the shooting of one Oloye Elega, a cleaner in the company, under a controversial circumstance.

They also frowned at the company’s policy of employing women for night shifts and the attendant abuse they are bound to suffer by virtue of their night work.

T h e concerned w o r k e r s appealed to the government to intervene by prevailing on the two companies to stop all forms of anti-workers’ activities and improve on the welfare and wellbeing of workers.

But in a reaction, the Human R e s o u r c e /A d m i n i s t r a t i o n Manager and Spokesman of BN Ceramics, Malam Saliu Mohammed, said that the working condition provided by the firm is the best the firm could offer. He said that the firm pays daily wages to employees of N600 - N1,000 for work done from 7:00am to 7:00pm and a bonus of N10,000 if an employ makes a 28 working days in a month through weekends and holidays or N13,000 for 30 working days work. He said that work officially closes by 5:00pm everyday while the overtime period is between

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5:00pm and 7:00pm. The sum of N120, he said, is paid for the two extra hours of work while work during public holidays attract twice that amount.

Salihu debunked allegations of high handedness and molestations of workers levied against expatriates in the company. He, however, said that language barrier between the expatriates (Chinese) and Nigerians working in the company often make some of the expatriates to raise their voices whenever they issue instructions to workers.

On the alleged shooting of a company worker, Oloye Elega, by an expatriate in the company, Salihu said that the incident occurred, adding that it was not intentional. According to him the concerned expatriate staff footed the medical bills of the injured staff and he was arrested by the security

agencies who seized his passport.

But when Daily Trust contacted the Oloye on the matter, he complained of being abandoned by the company, saying that he was not compensated by the company.

On their part, in an interview with Daily Trust in Abuja, the management of West African Ceramics, represented by the human resource manager, Alhaji Abdulraheem Bello, and three others, namely, Alhaji Adama Samari (labour contractor), Alhaji Mohammed Ndanusa (administrative director) and a trustee of the National Union of Chemicals, Footwear, Rubber, Leather, and NonMetallic Product Employees (NUCFLANMPE), Comrade Isiaku Musa, denied most of the workers’ claims, insisting that the company complies with the relevant laws regulating industrial relations

in Nigeria. “The company places premium on the wellbeing of its workers which it demonstrated in workers remuneration of a sum above the national minimum wage, ranging between N20,000 and above, depending on the categorisation the worker falls under” Bello said.

He said that workers are entitled to one day off, per week, sick, casual and annual leaves.

On the issue of overtime, Bello said that workers in West African Ceramics are not forced to embark on overtime work, as alleged.

He added that the official working ours last between 7:00am and 4:00pm, with a one hour break interval, while workers are at liberty to do overtime which lasts between 4:00pm and 7:00pm Commenting on the complaints over prolonged casualisation of workers without conversion and

promotion, Bello said: “The confirmation of a staff on probation is legally six months, subject to performance, there are some that have spent about two years on probation.”

He said that the management will address the issue of appointment letters for its workers.

On the case of industrial safety, he said that the company has an industrial clinic to handle emergency cases and three other designated hospitals where sick staff are usually referred to for treatment, if need be.

The negligence of employees in using protective wares is responsible for cases of accidents that led to the death of a staff and loss of body parts of some other workers for which the company spent over N4 million for treatment and compensation, he said.

Though, the workers refuted this claim.

IN THE HEART OF CERAMIC Compact | Easy | Reliable Take a look on www.tecnoferrari.it

DECORATION EFFECTS

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Gruppo TECNOFERRARI S.p.A. con socio unico Via Ghiarola Vecchia, 91 | 41042 Fiorano Modenese (MO) | ITALY Tel. +39 0536 915000 | Fax +39 0536 915045 | info@tecnoferrari.it | www.tecnoferrari.it

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News

PAKISTAN

Downgrading duties hit manufacturer prospects The Directorate General of Customs Valuation Karachi has drastically downwardly revised customs values on the import of ceramic & porce-lain tiles which is contested by local manufacturers on grounds that rul-ing was issued without considering actual cost of the locally produced tiles. AC understands that the directorate has issued valuation ruling number 874 of 2016 at the end of June to reduce custom values on the import of a wide range of tiles including ceramic & porcelain tiles.

Collectors of Customs have been directed by the directorate to imme-diately apply new values and finalise assessment in the correct classi-fications after fulfilling all formalities relating to importability or any other certifications required thereon. Collectors should verify that there is no misdeclaration of any sort or violation of Import Policy Order or Section 15 of the Customs Act, 1969.

Strongly reacting to the valuation ruling, All Pakistan Ceramic Tiles Manufacturers Association (APCTMA) and Organisation for Advancement and Safeguard Industrial Sector (OASIS) have jointly submitted implications of the revised ruling to the Directorate General of Customs Valuation Karachi. The evidence and data has been collected by repre-sentatives of the local industry through personal investigative visits to China as well as examination of import statistics and extensive market research. Instead of 20 percent enhancement in customs values on the import of ceramic & porcelain tiles, the values have been brought down.

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The industry has conducted a detailed research on the cost structure prevalent in China and on the basis of annual audited financial state-ments for the year 2015 of one of the biggest tiles manufacturers in China.

Industry has requested that the customs valuation of tiles may be constructed on the basis of Computed Method as mandated under Section 25(8) of the Customs Act

valuation of tiles has reduced over a period of 10 years instead of increasing in line with the increasing cost of production, inflation and devaluation of Chinese currency against US Dollar as exhibited herein-after. The weighted average prices of tiles have been decreased over a period of last 14 years instead of increasing. The valuation of tiles had been being lowered instead of

to the value of imported Tiles in terms of, inter alia, Rule 108 of the Customs Rules, 2001 is not being made in a bid to evade payment of the due and proper customs duty and other taxes, duties and levies thereon. As a direct conse-quence thereof, loss is being faced by the national exchequer in terms of revenue foregone. Additionally, injury and damage is being caused to the domestic industry

"Collectors of Customs have been directed by the directorate to immediately apply new values" 1969. It is also requested that the present valuation may be increased by at least 30% so that the ongo-ing loss of revenue to the national exchequer may be saved and the lo-cal industry may be protected against the curse of mis-declaration.

According to the APCTMA and OASIS, it is evident from the analysis that the

increasing the same in line with the in-creasing cost of production world-wide.

This practice of continued suppression of declared as well as assessed prices may be observed from the data showing downward trend over a period of last five years. The association contested that a declaration disclosing full and accurate details relating

producing similar and like products, which compete directly with the Tiles imported from China. Due to the failure to declare the true and correct customs value of the Tiles being imported from China there is lack of a level playing field for the domestic tiles industry as the importers of Tiles are able to undercut the prices due to the margin

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News

available to them because full and correct customs duty and other taxes, duties and levies on the Tiles is not being paid.

The weighted average cost of one Square Meter of tiles in Pakistan is Rs 571/ in terms of US dollars it amounts to US $5.71 per SQM. If we simply apply formula of weight per square meter to this average price we can easily find out price of any size. For example the average weight of one SQM of tiles of Stile is 18Kgs (This may be verified by weighing different sizes of tiles of Stile from open market) it means the average price per kg is approx. US $0.32/Kg. Now if we take the small-est size of 8"x12" and apply the same rate to its weight which is 12 kgs per SQM its average price shall be worked out to be US $3.84 (0.36x12). Likewise if we assume the biggest size of 24"x24" weighing 25Kgs per SQM its price shall be worked out to be US $8/SQM. Theq formula is so simple and understandable. It may be seen that how the local industry would be competing against such a heavily misdeclared and under invoiced products, calculations of domestic industry re-vealed.

The domestic sector further said that as a result of underinvoicing and failure to declare the true, correct and full transaction value of the im-ported tiles at the time of payment of customs duty, loss to the ex-chequer of at least Rs 400 million on annual basis is being caused and this loss is increasing day by day as massive quantities of Tiles are being cleared by the customs authorities on the basis of declarations which do not reflect the true and correct transactional value for the tiles in question.

Local industry pointed out that there was inflation in China during the last one decade which ought to have impact on the cost of production of Chinese producers. The cumulative effect till 2015 suggests a total increase in the general price index of 28% as compared to the general price index of 2006. According to this

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factor alone the price of one SQM of the same Tile 10"x13" should have been USD 3.75/ SQM. Again the decrease in the value of tiles in 2015 to USD 2.50/SQM is not at all understandable. The association added that it is crystal clear from the above table that there should be a cumulative effect of 72% on the overall price structure of the Chinese tiles and the price of the same Tile ie, 10"x13" should have been USD 5.05/ SQM in 2015 if we only take into account the currency and inflation factors.

Local manufacturers were of the view that especially in the case of China the importers have their longterm relationships with their related exporters and they are able to obtain any kind of document from their related exporters. Therefore, it is not appropriate to rely on any of such proforma invoices or commercial invoices, which are submitted by importers themselves during proceedings. It is a known fact that the im-porters declare only that portion of their total deal against which they have to transfer foreign exchange through official channels and rest of the amount is transferred through unofficial channels like TT etc.

Local industry has suggested the directorate to declare and hold that there are sufficient grounds for determination of the customs value of Tiles imported from China under and in accordance with Section 25A of the Customs Act, 1969 read with Section 25(10) thereof. Based on the data and information available, it is suggested to enhance the present Customs Valuation by at least 20% and rationalise the product grouping (or categories) for determination of customs value of Tiles for which the local industry may assist this office in arriving at a justifiable basis and criteria to determine the customs value of tiles imported from China at rates which reflect the indicative customs values submitted for each corresponding group.

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International News Industry magnate secures Royal Crown Derby United Kingdom

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eramic industry business leader Kevin Oakes has acquired 100% of the share capital in fine bone china manufacturer Royal Crown Derby, for an undisclosed sum.

In doing so, he has chosen to exit global tableware manufacturer Steelite International after a 39-year tenure, the last 10 of which were spent as chief executive. Royal Crown Derby manufactures fine bone china tableware and giftware. Its products are 100% made in England, using techniques largely unchanged since the business was established in 1750.

Over 130 people are employed at its Osmaston Works factory in Derby. Kevin said: “Royal Crown Derby is one of the UK’s most iconic brands and I’ve always passionately believed that the business can succeed on the global stage. “I led Steelite

International’s acquisition of Royal Crown Derby in 2012 and I plan to invest heavily in the business to ensure our long term vision is realised. “Market conditions remain extremely challenging and changes will be implemented across all areas of the business to ensure it is appropriately structured and resourced. “We are committed to long-term manufacturing in Derby and I’m confident that with targeted investments in our team, our factory and product innovation, the outlook for the business is both positive and exciting.” Kevin leaves Steelite International in a strong position having taken sales from £45m to over £100m in 10 years, while achieving record profitability in 2015. He said: “Steelite International has been my life’s work and I’m delighted to hand the business over to the existing management team. I now

look forward to concentrating my efforts on ensuring Royal Crown Derby goes from strength to strength.” Royal Crown Derby sales and marketing director Christopher Oakes added: “Over recent years we have successfully diversified the business into the luxury hospitality market.

We are now proud suppliers to leading establishments such as The Dorchester, Warwick Castle and Waldorf Astoria. “While this strategy is paying dividends, the markets in which we operate are constantly changing. Therefore we need to be proactive to forge ahead of our competitors.

“The significant experience and skill of our workforce allows us to introduce new, technically challenging products - and we will shortly be launching tableware and giftware collections that we believe will be hugely successful. “I firmly believe

Kevin’s vast experience in the industry, combined with targeted investment, will accelerate our growth momentum and we look forward to the challenges and successes that lie ahead of us.” Kevin has more than 38 years’ experience in the ceramic tableware industry.

He is chairman of the BPMF (British Pottery Manufacturers Federation) and a board member of both the BCC (British Ceramic Confederation) and Stoke-onTrent & Staffordshire LEP. He was awarded Ernst & Young Midlands Entrepreneur of the Year for 2012 and presented with The Queen’s Award for Enterprise in the international trade category in 2013. This year he was the recipient of an honorary doctorate from Staffordshire University in recognition of his career and championing of the ceramics industry and UK manufacturing.

Brexit: will tableware face a shake-up?

United Kingdom

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t does not get much more English than supplying plates and tea-pots to roadside café chain Little Chef.

But Steelite International, the company behind such activities, was this week bought out by a US firm, providing a boost to the UK’s traditional ceramics industry despite renewed fears of a British re-cession.

Steelite, which was originally Royal Doulton’s hotelware division, makes wholesale tableware for a range of customers from the Dorchester hotel to Little Chef.

It is seen as a bellwether for the UK’s potteries — an industry that for decades was in retreat but is enjoying a mini revival with employment and sales up.

On Friday, one of Stoke’s oldest potteries, Hudson & Middleton, whose mugs are sold in Fortnum & Mason, was bought out of administration by a Surrey-based investment group, saving 45 jobs.

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But despite this activity, industry experts worry that last week’s referendum result could damage the economy of the six potteries towns that make up Stoke-onTrent. They fear a Brexit-induced slowdown and the possibility of tariffs imposed by Brussels on British-made china and porcelain.

Tableware manufacturers have been the direct beneficiaries of EU policy, such as the anti-dumping duties imposed by Brussels on Chinese products introduced in 2013. The UK government abstained on that vote — largely because it felt it would put up prices for UK consumers.

Steelite, Stoke’s largest tableware manufacturer, was bought by US private equity company PNC Riverarch Capital for an undisclosed sum.

Under the leadership of Kevin Oakes, who is selling his 43 per cent share and stepping down as chief executive, its sales have

grown from £45m in 2006 to £100m last year.

Mr Oakes said the buyers were not concerned about the impact of Brexit.

“The Americans never asked the question,” he said. “It was not an issue, not raised. They were confident they were buying a first-class business, which they are.”

As part of the Steelite transaction Mr Oakes is buying — and investing £1m in — the company’s Royal Crown Derby brand, a fine bone china made with techniques largely unchanged since the business’s establishment in 1750.

Royal Crown Derby has little exposure to the EU, which accounts for 8 per cent of the company’s £5m annual sales. The weak pound may help exports but also increase input costs, with its designs using 22 carat gold decoration.

The tableware industry as a whole

is more dependent on EU exports, however, with £87m worth of goods sold in EU markets in 2015, around 43 per cent of total exports, according to the British Ceramics Confederation. The Irish Republic is the largest market, but Germany and Spain are also key destinations.

“Historically countries like France and Germany have preferred their own brands,” says Linda Salt of Denby Pottery in Derby.

If the UK reverts to World Trade Organisation rules, there would be a 12 per cent tariff on UK tableware sales to the EU. The UK would also still have to comply with food contact legislation because of the chemicals, lead and cadmium used in tableware manufacturing.

One Stoke businessman said if the UK’s new trade arrangements failed to include protective measures on Chinese products, it would be “like sticking up a huge sign — China please dump here.”

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News

Steelite scooped by US investors ACIMAC chairman sets out vision USA/UK

Italy

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teelite International, the £100m-turnover ceramics manufacturer, has been acquired by US investors.

The takeover by PNC Riverarch, the private equity arm of the PNC Financial Services Group, and John Miles provides an exit for chief executive Kevin Oakes.

Oakes has been with the business for almost four decades and has been chief executive for the past ten. As part of the deal, he has acquired Royal Crown Derby, which the group purchased in 2012 (see other story).

Miles, former president of the Americas division at PNC Riverarch Capital, has now been appointed Steelite chief ex-ecutive.

"Having worked in the business for twenty years and served as president of the Americas division for the past eleven years, it fills me with immense pride to have made this personal investment alongside PNC Riverarch," Miles said.

"Steelite International is known as the leader in the hospital-ity tableware industry and our goal is to continue that lead-ership through the introduction of new, creative and innova-tive products."

Oakes added: "Steelite

International has been my life’s work and I am honoured to have been part of such a committed and passionate team. I firmly believe that Steelite International is the best in the world and the people, products and company values are testament to this collective success.

"I am delighted to hand the business over to John Miles and the management team whom I’ve worked with for a number of years and I am confident that the tradition of reinvesting profit back in to the business will continue. I now look for-ward to an exciting future working with Steelite Internation-al who will represent Royal Crown Derby in the hospitality market."

Steelite's UK shareholders were represented by Catalyst and Eversheds and John Miles was represented by Conflu-ence Advisors. Senior financing for the transaction was pro-vided by the Bank of Montreal and The Private Bank.

Earlier in June, it was revealed that Steelite had generated sales of £102m in the year to 31 December 2015, up from £93.9m a year earlier. Pre-tax profit also climbed to £8.8m from £6.7m.

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aolo Sassi, the newly elected Chairman of the Italian Ceramic Machinery and Equipment Manufacturers’ Association, set out the agenda for his term in office to a large audience of business leaders gathered at Villa Marchetti for the Annual Members’ Meeting.

“It is with a sense of enormous responsibility that I undertake to lead our Association during the next four years with the goal of increasing its already high standing at a national and international level.” It was with these words that Acimac’s new Chairman, Paolo Sassi, began his address to the Members’ Meeting of Acimac (Italian Ceramic Machinery and Equipment Manufacturers’ Association).

“Over the next four years we will work together to ensure the continued growth of our association and member companies,” continued Sassi. “We will provide tools and services to promote international development, nurture professional skills and increase company size.”

These results will be achieved by developing a number of key strategies, which Sassi presented

to the business leaders gathered at the association’s headquarters Villa Marchetti.

The key items on the newly-elected Chairman’s agenda include strengthening association services such as the SBS training school, the Research Centre, and the international communication and development activities, including participation in trade fairs, events and networking activities aimed at promoting the sector’s image of excellence.

One key aspect over the next four years will be trade fair policy with the aim of maintaining the leader-ship role and increasing the international scope of the exhibition Tecnargilla, which will be held this year from 26 to 30 September.

There will also be a strong focus on further expanding the association’s membership to increase its already high level of representation (members currently account for 85% of the sector’s turnover). This will be done by extending membership to machinery manufacturers who are not yet members and to all companies operating in the ceramic industry supply chain.

Raw Material News ILUKA CONSIDERS CONDITIONS REMAIN “MIXED” Australia // Zircon Despite delivering a steady operational performance in the June quarter, mineral sands miner Iluka Resources' revenue was hampered by lower prices, with the company providing a mixed outlook for the remainder of the year.

Iluka, which is valued at $3 billion, produced 182,500 tonnes of its three principal products – zircon, rutile and synthetic rutile – in the three months to June 30, bumping up its first half production to 334,400 tonnes, which was 20.8 per cent higher than the first half of 2015.

The result keeps the miner on track to achieve its full-year production target of about 660,000 tonnes of zircon, rutile and synthetic rutile, with guidance that sales "may exceed production".

Sales for the first half of 316,000 tonnes were 14.7 per cent higher than the same period in 2015.

However, the unit revenue for the three products fell 10.2 per cent to $1,015 per tonne due to the product mix favouring synthetic rutile, and

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lower prices received for its zircon and rutile products compared to the first half of 2015.

For Iluka, the world's largest producer of zircon, full-year 2015 combined sales volumes for its three key products were down 38 per cent from a 2010 and 2011 average. Zircon prices were 29 per cent lower.

While there are some signs of conditions improving in 2016, Iluka's outlook remains mixed.

Iluka said there were signs of much-needed consolidation in the Chinese ceramics sector, which could improve demand longer term. However, high inventory levels persisted, as did weakness in the chemicals segment.

Iluka indicated it was pursuing a $US60 per tonne rise in its zircon reference price for sales into China to $US1010 a tonne for the third quarter but noted "additional time in the third quarter will be required to elapse to determine whether and to what extent this price increase is realised".

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News Anaylsis

News

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Asia rises as markets recover

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he Italian ceramic machinery and equipment manufacturers reported 8% year-on-year turnover growth in 2015 to reach 1,982.8 million euros. At 2.3 percentage points above the peak pre-crisis levels of 2007, this marked an all-time high for the sector. The figures, unveiled during the Acimac Members’ Meeting held on 24 June, show that the sector maintained its high export share in 2015 (76.8% of total revenues) at 1,522 million euros (up 9.1% on 2014). The Italian domestic market showed an outstanding performance for the third year running with 4.3% growth in sales over 2014 to 460.8 million euros (23.3% of total turnover).

“The results go well beyond our expectations,” said Fabio Tarozzi, outgoing chairman of Acimac, in his end-of-term speech. “Our sector has once again demonstrated its excellence and confirmed the cluster’s strength and ability to develop technological innovation. We have been rewarded by our courage to invest in research and development even in times of crisis, enabling us to be the first to reach certain niche markets.”

Export sales performed most strongly in Asia (excluding China) at 278 million euros (up 29.3% on 2014).

This excellent result demonstrates Italy’s ability to maintain its leadership position despite the strong Chinese presence in the region.

The European Union remains in second place with 22.6% growth from 226.2 to 277.3 million euros, followed

by Africa (predominantly the north African countries) with 22.8% growth to 203.8 million euros. The Middle East dropped to fourth place with a 25.1% decline in export sales to 186.6 million euros. South America was fifth with 185.9 million euros (+8%).

North America saw an excellent performance driven by the new US manufacturing cluster, with exports doubling (+92.8%) to 160.9 million euros.

Next were Eastern European markets with a turnover of 152.9 million euros (+7.9%), China with 75.5 million euros (-34.9%) and Oceania with 1.2 million euros.

According to figures from the Acimac Statistical Survey, as of 31 December 2015 there were a total of 148 companies operating in Italy (4 fewer than in 2014). The majority of companies (51.4%) have turnovers below 2.5 million euros, while just 19

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(12.8% of the total) have turnovers above 10 million euros.

According to the Statistical Survey conducted by the Acimac Research Department, the best-performing client sectors were tiles, heavy clay and sanitaryware, driven as usual by exports. As always, sales to tile manufacturers made up the largest share (82.5%) with a turnover of 1,635 million euros (up 6.1% on 2014).

After years of contraction, heavy clay machinery saw double-figure growth (+38.3%) to a turnover of 156.1 million euros (compared to 112.8 million euros in 2014).

In third place was the ceramic sanitaryware sector following strong turnover growth (+25.9%) to 126.9 million euros and a significant

increase in domestic market sales (+78.6). The tableware sector also performed strongly (+103%), bringing turnover to 18 million euros. The refractories and technical ceramics sectors did less well with falls of 15.5% and 72.8% respectively.

Despite the decline in the Italian market (-5.9%), the first quarter of 2016 saw 9% growth over the same period the previous year. “Export sales have risen by 14.2% despite slowdowns in several major markets and the economic and social crisis that are affecting some areas,” commented Acimac’s newly-elected Chairman, Paolo Sassi. “We trust that this growth will continue over the coming months and enable us to maintain last year’s excellent results".

Turnover breakdown by “machinery families” (period 2015-2014) (Values in million Euros) Domestic Sales 2015

Exports Total Turnover 2014

2015

2014

40,3 (8,7)

31,7 (7,2)

199,6 (13,1)

189,5 (13,6)

Forming (% value)

58,6 (12,7)

68,9 (15,6)

420,3 (27,6)

407,2 (29,2)

Dies (% value)

44,7 (9,7)

43,7 (9,9)

53,1 (3,5)

53,4 (3,8)

Drying (% value)

13,3 (2,9)

12,3 (2,8)

80,1 (5,3)

63,6 (4,6)

Glazing and decoration (% value)

31,2 (6,8)

28,2 (6,4)

84,7 (5,6)

75,3 (5,4)

Digital decoration (% value)

53,6 (11,6)

51,9 (11,8)

139,6 (9,2)

134,9 (9,7)

Storage and handling (% value)

47,5 (10,3)

47,7 (10,8)

138,6 (9,1)

124,6 (8,9)

31,2 (6,8)

31,5 (7,1)

194,8 (12,8)

160,3 (11,5)

Finishing machines (% value)

84,0 (18,2)

69,4 (15,7)

94,9 (6,2)

81,5 (5,8)

Sorting, Packaging and Palletizing (% value)

34,8 (7,6)

36,1 (8,2)

84,0 (5,5)

78,2 (5,6)

Purification systems (% value)

10,6 (2,3)

9,5 (2,2)

7,5 (0,5)

8,4 (0,6)

Quality and process control (% value)

3,1 (0,7)

2,6 (0,8)

5,7 (0,4)

5,7 (0,4)

Engineering (% value)

4,6 (1,0)

5,2 (1,2)

14,8 (1,0)

7,3 (0,5)

Laboratory instruments (% value)

3,3 (0,7)

3,0 (0,7)

4,4 (0,3)

4,5 (0,3)

460,8 (100)

441,7 (100)

1.522,0 (100)

1.394,6 (100)

Earth Preparation (% value)

Firing (% value)

Total

Data released by Centro Studi ACIMAC

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Analysis: Heavy Clay

IRAN CONSTRUCTS A BRIGHTER FUTURE

Iran has the potential to be one of the most exciting heavy clay markets in the coming decade as modernization programmes and expanded construction activity take hold. AC examines the options…

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onstruction sites and cranes can be seen almost everywhere in Tehran. Many new buildings are under construction and older ones are being renovated. In the current postsanction era, Iran’s top priority is to rebuild its outdated infrastructure – housing, construction, railways, water treatment plants, and ports. Without this basic infrastructure, the country will find it difficult to achieve its ambitious goals. Since, bricks are one of the important component of infrastructure in the country; this gives great opportunities to the domestic producers and international heavy clay producers to enter the country and capitalize on the opportunity. Along with the new enterprises, there is an urgent need of modernization of existing brick producers, most of which still operate using age old methods of producing bricks.

The construction industry is often a key indicator of business sentiment in an economy and there has been some very brisk activities in Iranian construction sector for past one year. There has been an injection of real optimism for heavy clay producers and other companies involved either directly in construction or

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the supply chain. Iran is likely to become a regional economic giant in the coming years of redevelopment and reconstruction as the country steadily re-establishes business ties with the wider world. Since easing of sanctions against Iran, the construction industry, which has had some stagnation in last few years is quickly gaining momentum, providing a much needed fillip to country’s heavy clay industry.

Currently, there are about 7400 brick makers in Iran. Out of this figure, about 7'000 are manual brickworks and rest 400 are machine brick plants which include companies with Hoffmann, tunnel kilns or some level of automation. For a majority of brick yards, brick production is still largely an ar¬tisanal business and is often integrated with agricultural activities on the same sites where the clay quarries are located. The farming and brick making operations are performed by the same workforce on a seasonal basis. Higher quality of the clay in the north than in the south of the country has favoured the development of the brick industry in the Tabriz and Yazd areas near the border with Azerbaijan.

Though, there is an ample capacity ( in fact there is a slight overcapacity) in country’s heavy clay industry, yet on performance front Iranian heavy clay industry lags far behind than the heavy

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Analysis: Heavy Clay clay industries of many countries in the region. Low degree of automation and heavy reliance on manual labour coupled with a large production of mid quality products characterizes a large section of country’s heavy clay industry. Though, existing and some new producers have showed their willingness to invest in the state of the art technology, but most of these plans are still in the inception stage, so it would be another couple of years ( at least), when we will see the dominant part of total production coming out of state of the technology automated plants.

Besides, lower quality products, Iranian heavy clay industry are a huge user of energy. Availability of energy at competitive rates ( rather at very cheap rates) has made a large number Iranian Heavy clay production of heavy clay producers 2015 2014 complacent. However, as Iranian government 18 billion Installed 17.5 billion is in the process of Capacity units gradual removal of Actual 14.7 billion 13.6 billion energy subsidies to Production country’s industries No of Heavy in phases, its high clay producers 7400 7350 time for the country’s (Operational) heavy clay segment to embrace the automation and improved technologies. Most of the heavy clay producers and association of Iranian heavy clay producers are unanimous that in order to survive and meet the demand of higher quality products they will have to modernize their operations. A handful of automated plants will be unable to meet the demand of high quality of finished products in coming years.

you know the investment in new and modern plants is quiet high. Due to the low price of energy and relative low cost of labor the lifting of the sanctions alone does not mean we will all start purchasing European machinery and updating our brick plants.

Technology investment

Sensing the opportunity offered by Iranian heavy clay industry, global technology providers in the segment have increased their focus on the country’s market. Most of the technology providers have either displayed at the exhibitions in the country in last one year.

One of the leading technology providers to the industry, Sacmi organized a workshop in country’s Esfahan province in the month 2013 2012 2011 of May to stress the importance of state of 17.5 billion 16.45 billion 16.05 billion the art technology in heavy clay industry.

12.9 billion 11.2 billion 12.6 billion Esfahan is considered heart of the industrial district in which there is 7450 7600 7600 a strong focus on heavy clay manufacturing.

Besides, the heavy clay industry stakeholders, the event was attended by functionaries and representatives of the Iranian Ministry of Industry and Mining and researchers and professors from the Technical University of Teheran.

High-efficiency tunnel kilns to new flat extrusion technology and advanced, automated handling systems were presented to the brick industry stakeholders by the company. Sacmi presented potential investors with a comprehensive overview of its heavy clay solutions, Demand drivers especially as regards the innovative plant engineering solutions Iranian construction sector has a project pipeline worth more than that could provide local industry with the key to modernisation and USD 200 Billion, for housing, energy and transport infrastructure. The expansion of the construction industry. country’s construction sector witnessed a steady annual growth of Sacmi claimed that 4.2 per cent in 2014 the solutions for heavy and 475 construction Recent announcements in Iranian infrastructure development clay included high tenders worth USD levels of automation, 88 Billion were Name Location Province Area lower labour costs and awarded. The value Anazzali Trade Free energy and emissions of construction to be Caspian Sea Gilan 3200 ha Zone savings: these pivotal awarded in 2016 is Aras Trade- Industrial aspects are the result of expected to reach East Azerbaijan Caspian Sea 1670 sq Km province Free Zone decades of investment USD 155 Billion. The and know-how in both Government through Arvand TradePersian gulf Khuzistan 170 Sq Km kiln development and in initiatives such Mehr Industrial Free Zone handling and process Housing Scheme is automation. planning to build 4 Chabahar TradeChabahr Gulf Sistan and Baluchestan 14,000 ha Industrial Zone Another leading million new technology provider residential units.

Kish Trade- Industrial Persian Gulf ( Kish to heavy clay industry, Iranian government Hormozgan 90 Sq Km Island) Free Zone Italian company has announced a slew Bedeschi is working of measures to attract Qeshm TradePersian Gulf ( Strait of Hormozgan 300 Sq Km Horomoz) Industrial Zone on a number of foreign investment. projects in the country These measures are with fully automatic tunnel kilns. One notable example is the Hoonan likely to increase the demand of sophisticated heavy clay products Sofal project, a plant with a production capacity of 600 tons/day in coming years. For instance, announcement re setting uo of un¬der construction about 200 km from Tehran and owned by the business in the free zones in the country will exempt investors from Zanguie family, a leading brick producer under the Azharshal brand paying any taxes for the first 15 years. Currently, 6 major districts name. This modern turnkey plant achieves outstanding flexibility have been dedicated to free zones of Iran in order to encourage through the use of the latest technologies. Clay preparation is foreign investments. performed using a storage silo with automatic extraction, while the The lifting of the sanctions should facilitate the import of machinery semi-continuous drying and firing in a tunnel kiln are controlled by a for updating the plants and building new ones but the willingness to computer¬ised system. The program allows for remote monitoring buy alone is not enough. The sanction having been lifted financing is of the entire system. complicated, the price of current brick products is quiet low and as

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AC 16-6

asian ceramics

25

Analysis: Heavy Clay

A comparison of labour cost in various construction related sub-segments Factor

2015-16

2014-15

2013-14

2012-13

2011-12

Daily Wage of bricklayer

235.7

204.9

173.4

130.3

100.0

Wage of unskilled construction worker

244.1

212.7

190.7

141.3

100.0

Wage of skilled plumber

232.2

203.4

170.4

128.8

100.0

Wage of cementing

227.9

190.6

165.2

120.1

100.0

Wage of well digging

249.6

218.5

195.2

147.8

100.0

Labour costs

Low labour costs have been both a boon and bane for Iranian heavy clay industry. Boon, because it has enabled a lot of small businessmen to start small brick producing plants ( called brick yards in the country) with the help of small capital. Ample availability of labour at cheap rates popularized these labour intensive units in the country.

On the other hand, cheap labour cost has been a major deterrent in adoption of state of the art technology or automation as huge capital investment in technology acquisition. Since, most of the small units have been profitable, investment in technology could never become a priority for brick producers in the country.

Time to upgrade

Cheap labour and low cost of energy has had a negative affect on the Iranian heavy clay production for many years. The situation is no different currently as a vast majority of brick plants are still manual.

Most of the brickyard producers claim that cheap labour makes their current arrangement more profitable.

Another major factor behind slow deployment of state of the art technology is due to drastic reduction in in¬ternational trade since 2012, which has held back technological devel¬opment in heavy clay industry for past few years. To meet the most urgent needs, several small domestic com¬panies manufacturing machines, dryers and automation and capable of providing service and spare parts have been set up in the Isfahan area, one of the most densely populated and industrialised regions in the centre of the country.

While continuing to use Hoffman kilns, in several cases converted to gas, many brickworks have reorgan¬ised their preparation and production departments and installed locally-built chamber dryers.

Without any doubt, Iranian market offers interesting prospects due to the fact that there are currently relatively few plants using advanced technology and capable of operating efficiently at an industrial level (such as cham¬ber of tunnel dryers, tunnel kilns and automation).

Dr Bidar, President of Iranian Brick Association told Asian Ceramics, “Technology adoption from European suppliers will certainly take some time but not because of lack of familiarity with the suppliers but because of the time it will take for this updating of the industry to be feasible. It is clear that many of the current plants will have to close and all the brick yards will have to close or switch to higher capacity more modern plants. We can’t have thousands of large, medium and small brick plants and brick yards and expect them all to update to large capacity modern plants. It will create an extremely illogical overcapacity. So it is clear that there will be a filtering period where companies will have to either merge to create a larger modern production unit or leave the industry all together.

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Technology Partners Installed Capacity ( TPD)

Location

Technology Partner

Nama Sazan

1200

Dehdasht

Sinoma

Sahel 1

400

Esfahan

Sinoma and AG

Nemachin

200

Esfahan

Sacmi

Shahrzad

100

Esfahan

Sacmi and AG

Company

After that filtering period, prices will become more reasonable and investment in modern plants and manufacture of modern products will be more feasible.”

Challenges

Despite many a positives, Iranian heavy clay industry faces a number of challenges. Currently, three of the largest challenges facing the industry are; • Overcapacity in the lower quality products along with the large number of manufacturers.

• Difficulty in financing the investment needed to to update the plants.

• Changing the product to mode modern lighter and more insulating products from the current products.

With about 7000 small and medium brick producers , who produces by age old techniques there is a significant overcapacity of low quality heavy clay products in Iranian market. Extended sanctions and stagnant incomes of past few years has further popularized these products in a vast section of projects due to the low cost of products.

According to Iranian Heavy Clay Industry Association President, “ We can’t do much about the overcapacity and we can’t force the lower quality products companies to shut down. In the medium and long run the market and economy will do the filtering process.”

He further states, “ Regarding the difficulty in financing the investment we are discussing with the related ministries to make them understand the value and significance of heavy clay industry industry and to help support it with loans and other helps within the limitations there exist due to the economy. We are working with the government entities to develop a suitable clay based product system for the Iranian market which will be more up to date with better weight and insulation properties.”

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Analysis: Heavy Clay

CURRENTLY, THERE ARE ABOUT 7400 BRICK MAKERS IN IRAN

Immense potential

Moreover, despite the large size of Iran’s energy resources, its economy is relatively diverse: roughly 50% services, 41% industry, and 9% agriculture. Oil and gas account for less than one-fifth of Iran’s GDP, according to official estimates. According to the International Monetary Fund’s World Economic Outlook, Iran’s GDP per capita, roughly $17,000, places it ahead of Brazil and China, even after its stagnant growth in recent years. Easing of sanctions will lead to a quantum jump in per capita GDP and increased spending on heavy clay products due to spending on housing and infrastructure in coming years.

The most promising indicator of Iran’s heavy clay industry’s potential is its vast market on account of its human capital. Iran has a population of 80 million. About 64% of Iranians are below the age of 35, which will require a huge housing stock in coming years, necessitating high usage of heavy clay products. The population is 73% urban, a percentage similar to those of most industrialized countries. The population is expected to increase from the cur-rent 80 million people to 100 million in 2040-2050. New house construction is therefore the top priority togeth¬er with urban infrastructures such as shopping centres, hotels, offices, etc. At the same time it will be necessary to remodel existing buildings, many of which are in poor condition.

Merikhipour TAM Bricks Company

Established in 1977 in the Northwest of Isfahan, Merikhipour TAM Brick Co. is one of the biggest brick manufacturing companies in Iran. At its inception, the company produced facing bricks.

For the first thirteen years of its operations , the company was involved in production of low quality bricks.

The company installed state of the art technology in 1991, which included a semi-automatic line from Germany and a drying line with Hoffman kiln system. In 2001, the company went for a major revamping, when it installed a complete automatic brick production line at its plant. Last major expansion in 2010 resulted in expanding the company’s installed capacity by double.

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Vahedi Decorative Brick Group

Vahedi Decorative Brick (Mines & Factories) Group was established in 2007 in Dowlatabad Industrial Zone, one of the most prominent industrial centres of brick industry in Iran.

Spread over an area of more than 16000 square meters, the state of the art brick factory uses best in class technology.

The group seeks to provide the construction industry and its ever-increasing needs of refractory brick with the productions with the highest quality and based on the international standards.

The company claims that their products are differentiated on the basis of better raw material, which it sources from its own mines. The shale soil, which it uses for bricks production has sedimentary rocks as its basic composition, which results in a more resistant brick with better quality.

Koswar Brick Company

Located in Habibabad industrial zone at Isfahan, Koswar Brick Company factory consists of two production lines with an installed capacity to produce 600,000 tons of bricks in a year.

In year 2008, Kowsar brick factory started-up its automatic production line, including the tunnel kiln, with the European state of art technology ( supplied by Tecton). Koswar says “Use of the tunnel kiln enables uniformity of the quality, color and the physical mechanical properties of the bricks”.

Bam Rodbar

Bam Rodbar is a manufacturer of clay brick and clay paver production in Iran. It is located in north of Iran at Rasht, near Caspian Sea. To expand its product portfolio, the company entered into roofing tile manufacturing in 2011.

Roofing tile and brick factory have highly automatic and fully computerized systems to produce and supply a variety of roof tiles and bricks for domestic industry.

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Analysis: Heavy Clay

Iran in focus

Mr Hossein Bidar, president of the Iranian Heavy Clay Association, airs his views on the current industry situation: AC: Lifting up of sanctions will have a great impact on the consumption of heavy clay industry products. Are Iranian producers ready for the change?

HB: The lifting of the sanctions should facilitate the import of machinery for updating the plants and building new ones but the willingness to buy alone is not enough. The sanction having been lifted financing is complicated, the price of current brick products is quiet low and as you know the investment in new and modern plants is quiet high.

Due to the low price of energy and relative low cost of labor the lifting of the sanctions alone does not mean we will all start purchasing European machinery and updating our brick plants.

AC: What role technology/ automation play in Iranian heavy clay industry? What is the current status of technology adoption in the industry. How is your association helping the producers in this aspect?

HB: The level of automation is quiet low. Most plants have Iranian made equipment and few have tunnel kilns. The cost of energy is low so the investment on tunnel kiln and energy saving solutions is not always feasible and the labor cost is also relatively low making the investment in automation unfeasible.

Nevertheless, government policy to remove subsidiaries in energy prices and also increasing salaries are making the investment in modern and automated plants more attractive for the future.

Amongst other activities, the association is collaborating with government entities to create a brick based construction system which will be lighter and more insulating.

AC: Since, Iran was practically closed for leading heavy clay technology suppliers from Europe for very long. Do you think it will still take Iranian heavy clay producers some time to adopt to state-of-the art technology adoption?

HB: Keep in mind that though we had been under sanctions European machinery supplier have been visiting potential Iranian clientsall along and Iranian manufacturers have been visiting exhibitions such as Ceramitec and Tecnargilla during this period.

It will certainly take some time but not because of lack of familiarity with the suppliers but because of the time it will take for this updating of the industry to be feasible. It is clear that many of the current plants will have to close and all the brick yards will have to close or switch to higher capacity more modern plants.

We can’t have thousands of large, medium and small brick plants

30

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and brick yards and expect them all to update to large capacity modern plants. It will create an extremely illogical overcapacity. So it is clear that there will be a filtering period where companies will have to either merge to create a larger modern production unit or leave the industry all together.

After that filtering period, prices will become more reasonable and investment in modern plants and manufacture of modern products will be more feasible.

AC: Compared to Iranian ceramic tile sector, heavy clay industry in the country has not progressed at the similar pace. What are the reasons for it?

HB:Ceramic tiles had the advantage of being an exportable product and up to a point there was a shortage in domestic production. At the moment that industry does face some similar issues to the brick industry. They have over capacity and hence need to export and for exporting they have issues (different from those the brick industry has) which is the reason that industry is also in deep trouble at the moment.

Also keep in mind that large number of brick plants have been made with local equipment in Iran which in the ceramic tile industry was not an option.

AC: Could you list the three top challenges facing Iranian heavy clay industry? How is your association and Iranian government addressing these issues?

- Overcapacity in the country along with the large number of manufacturers - Investment to update the plants (problems finding financing for this) - Changing the product to mode modern lighter and more insulating products from the current products HB: We can’t do much about the overcapacity and we can’t oblige companies to shut down hence regarding the first issue the market and economy will have to do the filtering.

Regarding the investment we are discussing with the related ministries to understand the value of this industry and to help support it with loans and other helps within the limitations there exist due to the economy.

As mentioned before we are working with the proper government entities to develop a suitable clay based product system for the Iranian market which will be more up to date with better weight and insulation properties.

AC: How and where do you see Iranian heavy clay industry five years from now?

HB:Updating plants and turning the large number of brick plants and brick yards (the latter not part of our association) into 100-200 modern high capacity updated plants.

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Advertiser feature

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Possible applications for these raw materials range from the wide variety of requirements for fine and heavy ceramics production to solutions for the diversified fields of application for industrial mineral products.

The basis for this wide range of products is the availability of our extensive raw material reserves which, on the present extraction level of approx. 1.5 million tons of special clays per year, will last for several generations to come. Long-term quality consistency at the highest stage to our customers‘ satisfaction is one of the primary objectives of our staff, as is substantiated by our certification according to DIN ISO 9001:2008 for all divisions of our company.

Professional experts are available as contact persons for each market and every field of application.

What has to be highlighted this year is that Stephan Schmidt KG is now able to offer raw material solutions for the Italian tile industry

directly from a warehouse in the Sassuolo region. These products are a mixture of a clay from Saxony high in Al2O3 and well-approved clays from the Westerwald region, which can be offered on a free domicile basis, thus combining the advantages of both raw materials without any need for additional storage capacity at the customer’s.

Moreover, Stephan Schmidt KG recently put on stream a facility for ultrafine classification allowing for residue-free production of clay powders < 40µm.

This very high fineness is particularly suitable for applications in the production of engobes, glazes, enamels and fillers.

We look forward to interesting conversations with you.

Stephan Schmidt Gruppe Bahnhofstrasse 92, D-65599 Dornburg www.schmidt-tone.de hall B5, booth 074

n o o i t

vo r re l

o v l E u

Analysis: Sanitaryware

Mid-east sanitaryware faces change

on uti ?

Yogender Malik looks at how the mainstream sanitaryware manufacturers across the Arabian peninsula are grappling with the demands of an ever-evolving marketplace.

L

ast three years have been a challenging period for the Middle Eastern sanitary ware producers on account of political and economical events, which to a large extent has had a negative effect on regionâ&#x20AC;&#x2122;s construction activities. Sanitary ware demand from new projects has taken a significant hit, while that from the remodeling activities has also exhibited declining trends. Second half of 2015 has brought some cheers to regional producers and situation continues to be positive as of June 2016.

Notwithstanding the current lull in construction, the Middle Eastern region is anticipated to increase its construction industry spending by a significant degree, thus underlining its prominence as the foremost global construction market. Driven by a rising population, increased disposable incomes and new housing developments on an unprecedented scale, such a hotbed of activity is also providing

32

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the ideal conditions for heightened investment in ceramic sanitary ware industry.

Production overview

The Middle Eastern region has been perhaps the most interesting battlegrounds for regional and international ceramic sanitary ware producers for a number of years due to scale and scope of constructions in the oil rich countries of the region. High per capita income in most of the countries have led to most of the international producers to establish their distribution systems in most of these countries taking advantage of demand supply gap in the region.

However, in recent years regional sanitary ware producers have internsified their efforts and most of them have scaled up their operations to take advantage of sanitary ware demand in the most construction intensive region of the world.

Catered by two large and four mid scale producers, The Middle

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Analysis: Sanitaryware

Major ceramic sanitary ware producers in the region Company

Country

Location

Installed Capacity

RAK Ceramics

UAE

Ras- Al- Khaima

3.3 million pcs

Saudi Ceramics

Saudi Arabia

Second Ind. City

2.5 million pcs

Al Forsan Ceramics

Saudi Arabia

Rabigh

1.42 million pcs

UAE

Sharjah

1.2 million pcs

Saudi Arabia

Second Industrial City

800,000 pcs

General Ceramics Porsalina Oman Ceramics

Oman

Sohar Ind Area

600,000 pcs

Aquasan

Kuwait

Shuaiba Western Industrial Area

300,000 pcs

Total

9.41 million pcs

Eastern sanitary ware production is slowly emerging as a force to reckon with. Not long back, a sizable part of the total sanitary ware demand was imported ( most notably in Saudi Arabia) in the region, but expansions by regional sanitary ware producers in recent years have made the region self sufficient to a certain extent. Though, a large portion of total demand is still imported in the region as domestic producers have focused on lucrative export markets of Europe. But in terms of numbers of production, the situation is far better as compared to five years.

Last eighteen months have seen setting up of a new sanitary ware producing company ( Al Forsan Ceramics) in Saudi Arabia and significant expansions by both the major players existing players, RAK and Saudi Ceramics. Both these expansions have commenced commercial production in the first half of the current year.

Demand overview

Traditionally , Saudi Arabia and United Arab Emirates have been the largest demand drivers for sanitary ware industry in the past.

However, in last few years other Middle Eastern countries too have started to register impressive growth in sanitary ware consumption due to commencement of large scale residential and commercial construction activities.

Despite its current slowdown and a decline in demand in 2015, Kingdom of Saudi Arabia continues to be the largest consumer of sanitary ware in the region, followed by the regional economic hub United Arab Emirates.

Sanitary ware demand did not register a very healthy growth in some of the countries in the region on account of a number of factors. There is a looming fear in the region due to softening of global crude prices and a decline in construction activities to some extent. Different countries in the region have been affected to varying degrees as a result of low oil prices in international market. The worst affected market from sanitary ware consumption point of view is Saudi Arabia, as a majority of countryâ&#x20AC;&#x2122;s GDP is dependent on oil.

Construction activities and sanitary ware demand has taken a severe hit due to continuing low oil prices. Regional economic powerhouse, UAE too was affected as sanitary ware consumption registered a meagre growth rate as compared to year 2014. Low growth in UAE is more because of global and regional economic environment as opposed to fall in crude oil prices.

On the other hand some countries were not much affected by fall in oil prices and sanitary ware demand remained robust. For example, sanitary ware demand in Qatar was not affected much, as the country is preparing to host the 2022 FIFA world cup and lots of construction activity is happening there. Similarly in Bahrain, the government has announced that it is going ahead with the project to

34

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provide free houses to all its citizen. Though, to some extent sanitary ware demand in Kuwait was affected in 2015 due to low oil prices.

But the country has huge reserves and construction activities in that country could continue at least for the next two years and sanitary ware demand is likely to be healthy.

Besides the construction and demand slowdown from the regional market a key challenge for the energy-intensive sanitary ware industry remains the limited local gas supply in the region.

Most countries are net gas importers and the regional focus on energy-intensive industries has put pressure on the allocation of gas. GCC countries will need to address their gas challenges through diversification of gas supply portfolio, exploring alternatives and assessing short- and long-term domestic needs. An added challenge, which has impacted the cost structure of sanitary ware industry , is the rise in water and electricity tariffs structure for industries, as introduced in the UAE and Oman. For example, leading sanitary ware producer from Oman, Oman Ceramics had to operate much below its operational capacity for a significant part of 2015 due to non availability of natural gas at its manufacturing plant.

Positive outlooks

In the midst of the low oil price and economic volatility, the key driving force for sanitary ware demand in the region remains the governmentâ&#x20AC;&#x2122;s commitment towards economic diversification and infrastructure projects. At an aggregate level, growing infrastructure investments are expected to drive demand and growth of sanitary wares in the GCC region. Preparations for the FIFA World Cup in Qatar in 2022 and the Dubai Expo 2020 are expected to generate healthy project activity across the GCC region that will fuel the market for sanitary ware and act as a catalyst for further developments.

All in all, global and regional market forecasts ( of constructions & major projects) indicate a positive outlook in the long-term for the sanitary ware industry. As sustainability and green building regulations become increasingly a priority for the governments in the region, the demand for environmentally friendly and energy-efficient ( less water consuming ) sanitary ware products is expected to grow, offering significant opportunities to regional manufacturers and international exporters to the region.

RAK Ceramics

One of the largest global ceramic producing company, RAK Ceramics has an installed capacity of more than 3 million pieces of sanitary ware from its two state of the art manufacturing plants in UAE. The company has recently carried out a major expansion at its sanitary ware plant at UAE resulting an increase of sanitary ware

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Analysis: Sanitaryware

Sanitaryware production in the Middle East Country

2015

2014

( In Million pieces)

2013

2012

2011

Saudi Arabia

3.9

3.1

2.9

2.7

2.4

UAE

3.5

3.6

3.4

3.4

3.2

Kuwait

0,29

0.30

0.30

0.30

0.24

Oman

0.52

0.60

0.55

0.60

0.55

capacity from 2.7 million pieces to 3.294 million pieces. The project, which was completed earlier this year cost RAK Ceramics 81 million AED. RAK’s sanitary ware division has witnessed a significant increase in its exports from 2009 to 2015, primarily driven by an aggressive sales and distribution strategy in its core markets of the UAE, GCC and Europe. From the UAE facilities, 30 per cent of the output is sold domestically and the remaining 70 per cent is exported mainly to Saudi Arabia, other GCC countries and Europe.

The company’s latest innovation, waterless urinal sanitation system, Eco Fresh, which, with a particular focus on water saving, requires absolutely no water to flush has been one of the best sellers in the region. In terms of other collections, the Harmony Bathroom collection offers customers a luxurious, Italian-designed range of sanitary ware and basins, complemented with sleek simplistic furniture. Harmony sanitary ware options include full back-to-wall, close coupled and wall hung designs. Matching basins are offered in half moon designs and counter top formats. The range also features three over-counter washbasins, in oval, rectangle and circular designs, and a new collection of harmony taps.

Saudi Ceramics

Largest ceramic sanitary ware producer of KSA, Saudi Ceramic Company was the second largest sanitary ware producer in the region for a long time. However, by virtue of addition of a capacity of 18,000 TPA during the first quarter of this year to its existing capacity of 36,000 TPA ( about 2.5 million pieces per annum) the company has become the largest sanitary ware producer in terms of installed capacity with an installed capacity of 3.7 million pieces per annum.

Saudi Ceramic’s sanitary ware plant is located at Second Industrial City ( South East of Riyadh).

Earlier, the new added capacity was to become operational in July 2015 ( The project was first launched in May 2013, and was initially scheduled to be completed during first half of 2014, but it was delayed due to economic and labour issues), but shortage of labours and reduced working for contractors forced the company to delay its plans by several months.

Saudi Ceramics’s total sales increased in 2015 by 2.26% compared to sales in 2014 and achieved a new record of SAR 1,658 million. The company continues to take a leading role in the rationalization of water of its products, with most of its range of sanitary ware modified to operate efficiently using only 3 liters of water. Saudi Ceramics is now working on the conversion of the remainder of its sanitary ware range to use only 3 liters of water.

Al Forsan Ceramics

Newest kid on the block, Forsan Ceramics at Al Forsan Global Industrial Complex (Forsan Ceramics) of Saudi Arabia believes it is well placed to lock horns with some of the renowned producers of ceramic tiles and sanitary ware in Europe. The driving force, behind the company is Dr Khater Massaad, former CEO of UAE based RAK

36

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Ceramics, who brings years of experience in the industry to Forsan Ceramics.

Based in King Abdullah Economic City, Rabigh, the company started production of sanitary ware in early 2015, followed by wall tiles and then floor tiles. The company has acquired a 1.5-millionsq-m of plot of land on a long-term lease with an option to purchase.

The complex allows for a tenfold increase in production to meet future demand. Currently, Forsan ceramics has an installed capacity to annually produce 1.5 million pieces of sanitary ware, 12 million sq m of wall tiles and 8 million sq m of floor tiles. An investment of SR500 million ($133 million) has gone into the facility, which is well equipped with the most sophisticated machinery, all imported from Italy.

Dr Khater says the company has a competitive edge in that it has commenced production with machinery and techniques that are state of the art. “We are employing the latest technology, best possible machinery as of today, the best designs and best raw materials. We dont want to cut corners but wants to build on a longterm strategy to be a serious, high-quality producer of ceramic tiles and sanitary ware.”

“We want to be the ‘Rolls-Royce’ of the ceramics industry,” he says, pointing to the huge opportunities offered by local and global markets. “In addition to Saudi Arabia’s huge market, there is not a single ceramics factory in Eastern Africa, from Egypt to South Africa so this is a big market. Other regional markets include Jordan and Iraq. Also, Europe definitely offers great potential.”

Dr Khater says Forsan Ceramics will not be in competition with regional manufacturers. “We are introducing new products, new technologies and new ideas. Our prices will be competitive but our competition will probably be Italy. I think about what the market requires and what I should produce in order to be the best in that market.” “We will select the most important and long-term markets.

We are not interested in one-shot sale. We want to create a good and long-term network for selling our production,” he further says.

In addition to the high-efficiency body preparation department, Al Forsan Sanitary ware has installed state of the art solutions for the pressure casting of sanitary ware articles using porous resin molds. Al Forsan plant can manufacture open-rim toilets on its fully automated multi-mold high-pressure casting bench. The toilets are then transferred to the robotized glazing line and subsequently sent on for firing and re-firing in tunnel and shuttle kilns.

The company claims that it has installed some of the most modern technology available for sanitary ware production at its plant , which includes innovative solutions for the pressure casting of sanitary articles using porous resin moulds. The company also has a multimould high pressure casting bench for the manufacture of openrim water closets that has a highly efficient work cycle and is fully automated. By offering modern design and simple yet exclusive lines from its new manufacturing site, the KMG Group aims to improve its positioning in Saudi Arabia and, from there, branch out into new high-end ceramic sanitary ware markets of the region.

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Analysis: Sanitaryware

Sanitaryware demand (m. pieces) Country

2015

2014

2013

2012

2011

Saudi Arabia

7.4

7.6

7.4

7.1

6.8

UAE

3.59

3.5

3.3

3.1

2.9

Kuwait

1.28

1.2

1.1

1.02

0.94

Oman

1.13

1.1

1.05

0.96

0.90

Qatar

1.29

1.2

0.95

0.85

0.74

Bahrain Total

0.64

0.6

0.55

0.5

0.52

14.11

15.2

14.35

13.53

12.80

Porsalina-Arabian Company for Ceramic

Porsalina- Arabian Company for Ceramic is a mid scale sanitary ware producer based in Saudi Arabia. Founded in 1998, with a production capacity of 180,000 pieces of sanitary ware, the company carried out three major expansion and revamping exercises. Company’s current installed capacity is 800,000 pieces of sanitary ware per annum.

The company claims that its products are manufactured in compliance with the strictest industry regulations and guided by its high-quality machinery investments.

“Whilst the domestic market was indeed our primary focus, and still remains our principal target, we today extend our reach throughout the GCC and Middle East – incorporating the UAE, Qatar, Jordan, Egypt, Sudan and Lebanon. Recently, we have seen particular demand for sanitary-ware products with watersaving properties. We are constantly adapting our strategies so that we are able to combine our innovative production methods and product provisions with over the next two years.” according to Porsalina’s management.

“All of our raw materials are of the utmost quality, and are imported from European suppliers from locations such as the UK, France, Italy and Turkey,” according to Porsalina’s management.

The company claims that for the upkeep of all machinery, it has a dedicated maintenance department in place that ensures that all the equipment runs smoothly and is kept in the best possible condition.

products under brand name “Wave”.

Besides meeting the domestic demand of Oman, the company exports a sizable part of its production to other GCC countries and Europe. “We are planning to be a global brand by the year 2020 and we have all reasons to aspire for more”, according to Vish Natrajan, CEO, Oman Ceramics Co SAOG. “We are quite ambitious about it because of our wide presence in the GCC, Middle East and the west where the demand for our products is on a steady rise, ” he further adds.

“I am optimistic about the growth of our business. Currently petroleum prices are down and we have to see what can be done in such a situation. Around half of our business happens in the GCC region most of the states here have not been deeply impacted by the oil prices,” according to Natrajan.

Oman Ceramics obtained ISO:14001 certificate for its Environmental Management System and OSHAS:18001 certificate for Occupational Health and Safety Standards in 2015. Oman Ceramics, which received the ISO: 9001 quality management certificate in 2008 is the only company in country’s ceramics industry that has been certified with three accreditations.

Total RAK sales by country (%)

Oman Ceramics

Sole producer of ceramic sanitary ware in Oman, Oman Ceramics Co SAOG is unperturbed because of construction slowdown in the region. The company with an installed capacity of 600,000 pieces of sanitary ware produces high quality

RAK sanitary ware sales in UAE and Saudi Arabian markets UAE sales ( in AED Million)

Saudi Arabia sales ( in AED Millions)

July- Sep 2015

34.3

7.5

April- June 2015

36.4

9.6

Jan- March 2015

32.6

7.8

Oct- Dec 2014

Period

29.2

7.5

July – Sep 2014

29

7.7

April- June 2014

34.1

6.3

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www.asianceramics.com

Analysis: Asian tableware

Silver service profile and presence underline prospects

Jahir Ahmed looks at how the continent’s leading tableware brands are equipping themselves for a more exacting future…

B

rand market is gradually getting a shape in Asia, which has boosted up production, consumption and export of top class ceramic tablewares in the past few decades. Besides household consumption, much of the products are used by the hospitality business. Globally, the hotels, restaurants and airlines now choose more Asian suppliers than before. In current slowdown-led unpredictable and volatile European and North American market situation, Asia is becoming the main choice for the companies sourcing high quality tablewares at a sustainable price with required consistency in quality and lead time. Which brands are in the lead? Obviously, brand recognition, sales turnover, production capacity, size of product range and market penetration at home and export markets are considered to be the main criteria in finding the top brands. In broad terms, top 20.

In an environment of widespread technology transfer through setting up of state of the art production plant, R&D and OEM facility, the rapid expansion of standard grade, or medium to high-end, tableware manufacturing in the emerging economies has changed the course of trade in the second half of the last century after about two centuries of dominance by Great Britain and continental Europe.

In fierce competition with the well known Western brands, the Asian companies, using Japanese and European technologies, have stolen much of the shows in Europe and North America, although, it is hard enough to establish as brand in those markets, what the Japanese, and lately the South Koreans, did. Since last few decades, the Western brand owners themselves are buying most of the whole lots of emerging Asia’s quality products to sell in their own name.

Besides outsourcing from several Asian companies, the top global brands Wedgewood and Royal Doulton of UK were forced to run production plant, PT Doulton, in Indonesia. To stay in the market, 20 years ago in 1996, the plant was started by Royal Doulton PLC, which became a part of Waterford Wedgwood PLC of UK in 1999.

Before entry of Royal Doulton in Indonesia, several foreign operators were already present in that location to sharpen their brands with cost

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Nikko Ceramics - bone china technology transfer boosts up Asian brands. Photocredit: Nikko

effective manufacturing.

Indonesia, more particularly, Jakarta’s neighbourhoods are most chosen sites for the foreign investors in ceramic tablewares. PT Doulton is located at the capital city’s neighbourhood of Tangerang. It is also host to South Korean Hankook Chinaware Co Ltd’s subsidiary, PT Hankook Ceramic Indonesia that set up plant in 1991.

Jakarta’s other neighbourhoods are also equally attractive to the foreign operators. South Korea’s Haengnam Chinaware Inc’s joint venture, PT Haeng Nam Sejahtera Indonesia, is located at Bogor, where it set up plant in 1989. In 1996, Japan’s Narumi Corporation’s subsidiary, PT Narumi Indonesia, started manufacturing at Cikarang Selatan in Bekasi, the factory township for Jakarta. All these companies are Asia’s prominent brand owners and they are

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Analysis: Asian tableware

Nikko Ceramics transferred bone china technology to some of Asian exporters. Photocredit: Nikko

increasingly grabbing the region’s market shares. Indonesia’s market leader, PT Sango Ceramics, which is located in Semarang, 250 miles east of Jakarta, is however, a big rival of all these companies.

The Asian tablewares are, of course, well known brands in their domestic markets, and to some extent regionally. The brands are growing faster, riding on the vehicle of the last century’s Japanese and Korean success. In the Western markets, the importers are mainly the brand owners who stamp their own signature on the back of the products during manufacturing in the Asian factories, which are now capable of producing high quality porcelain, bone china and fine china tablewares, in addition to their own famous stonewares, to meet the demand of the high-end customers.

The branding exercise

How the brands are rising to prominence? In the world markets, the leading Western brands are marketing Asian products indirectly introducing the real manufacturers in the guise of prominent OEM sources. Asian brands are steadily entering more Asian and world markets through participation in international trade fairs. The manufacturers in the ASEAN region are getting free access to the regional markets under ASEAN Community. Free trade agreements between the countries are paving ways to enter new markets. Chinese and Indian markets are accepting more products from the region providing access to each other.

Japan is now one of the world’s largest brand markets, but not all of Asian exporters are active there as few of them are of Japanese market specific to compete with the Japanese market leaders like Noritake Co Ltd, Narumi Corporation and Nikko Ceramics Inc. The

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demand for Western style tablewares is met mainly by the Japanese companies and the Western brands. Similar situation exists in South Korea. Two largest Korean brand manufacturers, Hankook Chinaware and Haengnam Chinaware, said the current trend of lifestyles has opened up big opportunities for supply of Western type ranges of dinnerwares. Asia’s Western type range makers can penetrate into Korean markets.

In the rest of Asia, except China and India, the home consumers’ outlook is mixed and diverse, while hotel and restaurant industry caters the choice of the tourist traffic. In China and India, the markets are largely dominated by the local brands, except a few number of affluent consumers who look for pride collections from eminent sources, such as, well known UK brands of porcelain and bone china.

This results in doing good business by the local brands, even though those are not competitive in quality by Asian standard.

Leading protagonists

There is a growing interest at all levels, national, regional and global, about the influence of the world’s fast expanding Asian tableware makers. In recent decades, there emerged a lot of manufacturers and producing countries in Asia, parallel to the present world’s mightiest production and supply source of China, and stable existence of the region’s century old and most admired Japanese brands. In this crowded manufacturing scene, a lead of Asia’s “Top 20” tableware makers reflects the current market trends.

After evaluating stringent details and technical analysis, the Asian top 20 tableware makers were positioned on reputation and market command, based on brand recognition, broad product range, national

AC 16-6

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Analysis: Asian tableware

and global image, access to consumers and segments in the world markets, including hospitality industry worldwide, OEM outsourcing, domestic customers, were able to be the part production capacity and sales turnover. of top 20, on consideration of their strength The research data and information gathered in OEM, household segment and hospitality from the tableware manufacturers, buying industry markets. agents, retailers and end-users including Noritake, Narumi, Nikko hospitality industry reflected a generalized Among the leading Asian brands, three assessment of the progress made by the leading Japanese market leaders, Noritake (established brands at national and Asian regional levels. in 1904), Narumi (founded in 1911) and Nikko Porcelain, bone china, fine china and (since 1908), have no rival in Asia, when it come stoneware, all were combined in the rating of to quality and prestige. The three are elite brands Asia-based production with national and global in the global brand markets of tablewares. All trading. The size of market share or production these companies are located within 100 miles, capacity or sales revenue was a major factor. with Noritake and Narumi production plants in But, such mass production related count Nagoya (Aichi) and Nikko production facility in was not number one factor in determining nearby prefecture, Ishikawa. They cater Japan’s the achievements made by the companies Nikko Ceramics - bone china technology growing demand of Western style dinnerwares in in creativity with beautiful and broad product addition to domestic style ranges. ranges, innovation in quality including whiteness, transfer proves a boon to Asia's exporters.

Besides operating at home in Japan, Noritake colour and durability, and, of course, functionality Photocredit: Nikko established Noritake Lanka Porcelain (Private) Limited in Sri Lanka in uses, particularly in hospitality industry including airlines, which are in 1977 for production of tablewares to cater the domestic and world catalytic in brand recognition. markets including Japan. Currently, Noritake Lanka has a production Yet, the size of production and sales turnover has its natural capacity of some one million pieces a year of porcelain and bone dominating impact on the emergence of top 20, for which, most of the china tablewares. In 2000, Noriotake established Noritake China Mfg companies with large capacity and turnover had significant command Co Limited and started production of tablewares for the Chinese and and were able to be qualified to hold position in order of capacity or world markets. turnover or both combined, nationally and regionally. However, brand Narumi is the second largest manufacturer of porcelain and recognition, product range and market penetration were found to bonechina tablewares in Japan, after Noritake. It is a worldwide be equally treated as dominant factors to assess the brand image of recognized manufacturer of high quality bone china hotelwares and the companies and scrutinize capacity and sales. Three Japanese meeting the global demand of five star hotels and national airlines, market leaders, Noritake, Narumi and Nikko and two South Korean including Japan Airlines, Singapore Airlines, Emirates airlines, etc. companies, Hankook and Haengnam, as well as the global leader “Narumi bone china tablewares are used at a lot of banquets and Royal Doulton’s Indonesia arm PT Doulton were natural lead winners. coffee shops in 5-star hotels all over the world with no complains,” For brand recognition, the OEM sourcing by the leading global claimed Narumi President Rikizo Matsukawa. Narumi established PT brands and tableware usage in prestigious homes and palaces, 5-star Narumi Indonesia and started production in that plant 20 years ago for hotels and restaurants, and airlines were considered to be indicative, supplies to the Indonesian domestic markets and global customers. while the information on production and trade from the stock market Japan’s third largest manufacturer of porcelain and bone china listed manufacturers were considered to be better transparent and tablewares, Nikko, claims to be the market leader in bone china in reliable. Royal Porcelain PCL of Thailand, RAK Porcelain Ltd of UAE, the domestic market and in luxury and elegance a leading player Bangladesh’s Shinepukur Ceramics Ltd and Monno Ceramic Ind Ltd, to cater the hotels and restaurants worldwide. Some of Asia’s major Indonesia’s Sango Ceramics and Sri Lanka’s Dankotuwa Porcelain manufacturers of bone china were provided with its technology that PLC were found to be influential among the region’s emerging helped secure a good name in the world markets. international brands.

Newly emerged players in the Asian scene included FARR Ceramics Hankook, Haengnam Ltd and Paragon Ceramic Ind Ltd of Bangladesh, and Vietnam’s Minh The two South Korean manufacturers, Hankook and Haengnam, Long I Co Ltd. Asia’s two older companies, Claytan Corporation of with monthly production capacity of 3-4 million pieces each, are high Malaysia and U.P. Ceramics & Potteries Ltd of India still hold key in quality manufacturers of porcelain and bone china and great rivals to their respective domestic market. each other in the domestic markets. Haengnam also manufactures Most of the companies listed among top 20 are of the annual high quality stoneware tablewares. Both the companies, producing production capacity of nearly 20 to over 20 million pieces. In this since early 1940s, are reputed worldwide as high quality brand category of certified global quality manufacturers, the Chinese owners and their brands are sold in prominent luxury stores in the companies alone qualify for a lot of top positions within top 20.

Western cities, including New York, London, Paris, etc.

Dozens of manufacturers or producers’ groups in China with annual Hankook established PT Hankook Ceramic Indonesia plant in production capacity of around 20 million pieces and above cater the early 1990s and producing some one million pieces of high quality OEM demand of the European Union and US brand marketers that porcelain tablewares for Indonesia’s domestic and export markets. prove their strength.

Before Hankook, Haengnam started a joint venture production unit, The Chinese companies deserved to be acknowledged on many PT Haeng Nam Sejahtera Indonesia, in late 1980s and producing counts including their powerful presence in the markets. Three about one million pieces a month of high quality bone china and fine reputed companies, Guangxi Sanhuan Enterprise Group Holding china and premier quality stoneware dinnerwares for Indonesian and Co Ltd, Hunan Hualian China Ind Co Ltd and Hebei Cameoln export markets.

Ceramics Co Ltd, which cater middle to high-end consumer

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Analysis: Asian tableware

Doulton, Sango

PT Doulton Indonesia, founded in 1995 as subsidiary of Royal Doulton PLC of UK, started production in the following year at Tangerang in Banten province, about 25 kilometres west of Jakarta, for manufacturing and sale of the tablewares for international brands that incorporated in WWRD group units, Waterford, Wedgewood, Royal Doulton and Royal Albert, for global markets. Doulton Indonesia, with a production capacity of some one million pieces a month, is manufacturing tablewares of bone china, porcelain, and earthenware.

Indonesia’s leading domestic brand owner, PT Sango Ceramics, set up in 1977 in Semarang, has a production capacity of some 35 million pieces of porcelain, bone china and stoneware tablewares. It has a large range of products for the domestic and export markets. Its capabilities include production of tablewares with different techniques.

It says its decal techniques include reactive decal, mica decal, and gold and platinum decals, and it works with several glaze types, from shiny colorful glazes, matte glazes and reactive glazes for a rustic look. It also claims that it has recently developed high luster metallic ceramic tableware through a remarkable decorating process known as vacuum plating. Sango’s tablewares are exported to almost every corner of the globe.

Royal Porcelain

Thai company Royal Porcelain PCL with a production capacity of about 35 million pieces per year manufactures high grade tablewares of porcelain and bone china and two other homegrown types, maxadura and ultra strong. It has a strong brand position in Thailand and other Asian countries, specially, in Asean Community countries.

Founded in 1983, Royal Porcelain has two factories located in the Kangkoi district of Saraburi province. Its products are exported to more than 60 countries worldwide.

Thailand is home to a lot of export grade tableware manufacturers like that of Indonesia. Many of them export well accepted porcelain and stoneware tablewares throughout the world, including Europe, North America and Japan. They also have good markets in Asia. But Royal Porcelain built up Thai image greatly.

RAK Porcelain

UAE’s Ras Al Khaimah based RAK Porcelain, which is a part of the RAK Ceramics Group, appears to be most dynamic in winning the global markets by using European product designers and production technology. The high alumina porcelain tablewares, it produces, are of premium quality with higher resistance strength, highly suitable for hotels and restaurants. With support from the parent company’s marketing facilities in Europe and North America, RAK Porcelain brand was promoted quickly within 10 years of its launching in 2005. The company claims, it ensures best USPs (unique selling propositions or points) with highest possible quality backed by its technology, creativity and designs.

Its production lines are spread over an area of 65,000 sq metres with a production capacity of 28 million pieces per year. The products, with a vast array of shapes designed by leading tableware designers for the hotels, restaurant and hospitality segments, are used by over 20,000 star-grade hotels all over the world through a distribution network in 135 countries in five continents, said the company. The company has already planned to raise the annual production capacity to 45 million pieces by 2018.

Shinepukur, Monno, FARR, Paragon

Bangladesh’s best known and largest ceramic tableware manufacturer, Shinepukur Ceramics Limited, set up in 1997 at

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Vietnam - Bat Trang dinnerwares. Photo by Jahir Ahmed

Top 20 in the lead 1.

Noritake Co Ltd, Japan (including Noritake Lanka Porcelain Ltd, Sri Lanka, plant and Noritake China Mfg Co Ltd, China, plant)

2.

Narumi Corporation, Japan (including PT Narumi Indonesia plant)

3.

Nikko Ceramics Inc, Japan

4.

Hankook Chinaware Co Ltd, South Korea (including PT Hankook Ceramic Indonesia plant)

5.

PT Doulton, Indonesia (subsidiary of Royal Doulton PLC of UK)

6.

Haengnam Chinaware Inc, South Korea (including joint-venture PT Haeng Nam Sejahtera Indonesia plant)

7.

Royal Porcelain PCL, Thailand

8.

RAK Porcelain Ltd, UAE

9.

Shinepukur Ceramics Ltd, Bangladesh

10.

PT Sango Ceramics, Indonesia

11.

Guangxi Sanhuan Enterprise Group, China

12.

Monno Ceramic Ind Ltd, Bangladesh

13.

Hunan Hualian China Ind Co Ltd, China

14.

Dankotuwa Porcelain PLC, Sri Lanka

15.

FARR Ceramics Ltd, Bangladesh

16.

Minh Long I Co Ltd, Vietnam

17.

Hebei Cameoln Ceramics Co Ltd, China

18.

Claytan Corporation, Malaysia

19.

U.P. Ceramics & Potteries Ltd, India

20.

Paragon Ceramic Ind Ltd, Bangladesh

Note: Most of the companies have porcelain and bone china lines. RAK, Dankotuwa, FARR, Minh Long I Co, Claytan and Paragon do not have bone china, but have porcelain. Porcelain and bone china producers, Haengnam, Sango, Guangxi Sanhuan and Hunan Hualian have stoneware also.

Claytan has porcelain and stoneware. U.P. Ceramics & Potteries manufactures only bone china.

Japanese and Chinese companies have two or more production plants in their respective home country. Indonesia, Sri Lanka and China bases of foreign operators serve domestic and world markets directly.

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Analysis: Asian tableware

Kashimpur, Gazipur, near Dhaka, started production in 1999. It has an annual production capacity of over 30 million pieces of high quality porcelain and bone china tablewares. The second largest ceramic tableware manufacturer, Monno Ceramic Industries Ltd, set up in Islampur, Dhamrai, near Dhaka city, started production in 1985. It has a production capacity of about 25 million pieces of high quality porcelain and bone china tablewares per year.

Bangladesh’s third largest tableware manufacturer, FARR Ceramics Ltd, and fourth largest one, Paragon Ceramic Ind Ltd, manufacture only porcelain tablewares of export quality. FARR Ceramics, set up at Bhabanipur in Gazipur, north of Dhaka city, started production in 2007.

It has an output capacity of over 20 million pieces a year. Paragon Ceramic, set up in Mirzapur, Gazipur, with an annual production capacity of nearly 20 million pieces, stated manufacturing in 2008.

All four factories are equipped with world class plant and machineries supplied from Japan and European Union countries. The companies produce a broad range of products for the domestic and export markets, located mainly in Europe and North America.

Sanhuan, Hualian, Cameoln

Among the top Chinese companies listed in “Top 20,” Guangxi Sanhuan Enterprise Group is a recognized brand owner. It supplied tablewares to the British royal wedding in 2011 beating many global leaders in a spectacular bid. The second Chinese company, Hunan Hualian China Industry Co Ltd, is the leading exporters of quality tablewares since many years. The other one is Hebei Cameoln Ceramics Co Ltd, which is the supplier to the leading hospitality industry, including in-flight catering of the prestigious Singapore Airlines.

All three companies have track record of prominence in global market as recognized brands, in addition to command in the domestic market. Sanhuan Group was set up in 1987 in Beiliu City, Guangxi Zhuang Autonomous Region, China, as a private company.

Its equivalent large capacity tableware manufacturer, Hualian was established as a state owned company in 1966 in Liling, Hunan, China. Both the companies have large exports. On the other hand, Cameoln, established in the 1950s in Feng Feng District, Handan City, Hebei Province, China, is comparatively smaller, with annual production capacity of 35 million pieces, but it has more focus on production of quality tablewares. All three have large product ranges for middle-segment to upper-end consumers.

Sanhuan has advanced porcelain, bone china and stoneware tableware production lines equipped with testing equipment, claims the company. Its annual production capacity is 43 million pieces of tablewares It produces around 40 million pieces annually. It is one of the first Chinese companies to attain ISO9001 in ceramic tablewares since 1998. It is made up of more than 20 member enterprises, including 7 subsidiaries, producing tablewares and other daily use products, such as, gifts, vases, decorative items, etc, with total annual production capacity of 210 million pieces. It supplies Chinese and Western style tablewares, including hotel wares, with more than 50,000 products in nine series of ranges. It exports to more than 80 countries mainly in Europe, North America, Asia and the Middle East.

Dankotuwa

Dankotuwa Porcelain PLC is the second largest tableware plant in Sri Lanka, after Noritake Lanka Porcelain (Pvt) Ltd. The company, established in 1984, set up the porcelain tableware factory at Dankotuwa. It manufactures some one million pieces of high quality porcelain tablewares per month for the domestic and export markets.

Most of the exports are shipped to North America and Europe.

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Dankotuwa brand competes with many international brands in different markets, outside its traditional Western markets.

Sri Lanks is home to one of Asia’s top tableware plant, Noritake Lanka Porcelain (Pvt) Ltd. Noritake Lanka is the pioneer porcelain tableware manufacturer in Sri Lanka. Its production facility is located in Matale, where there are deposits of rich minerals, such as, quartz, feldspar and dolomite.

Minh Long I Co

Vietnam’s largest ceramic tableware manufacturer, Minh Long I Co Ltd, was set up in 1970 at Tan Phuoc Khanh of Tan Uyen. The company has a production capacity of about three million pieces of high quality porcelain tablewars for domestic and world markets. Its factory is equipped with latest plant and machinery supplied mainly from Japan and Germany. Its main export markets are European and North American countries and Japan.

Minh Long I is expecting to expand its markets in the ASEAN countries. The company said many of its unique products have been chosen by the Vietnamese government as gifts to present more than 40 heads of state around the world, including the Pope, the US President, Chinese Party General Secretary, and the Japanese Emperor.

Claytan

One of Asia’s oldest and quality tableware makers, Claytan Corporation Sdn Bhd, of Malaysia is manufacturer of fine china, stoneware and earthenware tablewares, with a monthly production capacity of over one million pieces in the company’s two plants, Claytan Fine China Sdn Bhd, established in 1995, and the old plant Oriental Ceramics Sdn Bhd, established in 1975, under Claytan Group. The production plants are located in Hitam, Kluang, Johor.

Claytan claims it is the only major ceramic dinnerware manufacturer in Malaysia, producing full range of high quality fine English earthenwares and vitrified hotelwares in Oriental Ceramics.

Clyatan Fine China was established specializing stoneware and fine china tablewares. Both the units have four different types of body.

The tablewares serve both the hospitality industry and the household market segments. Claytan exports its products, including OEMs, to many countries worldwide.

U.P. Ceramics & Potteries

India’s one of the oldest and best manufacturers of ceramic tablewares, U.P. Ceramics & Potteries Ltd, set up in 1948 in Ghaziabad City, near Indian capital Delhi, with a production capacity of over one million pieces per month. It produces only bone china dinnerwares and leads the market nationally. It supplies tablewares to affluent homes, palaces, tourist and business class hotels, including five star ones. India’s other important manufacturer is Tata Ceramics Ltd, which for years is struggling for survival economically. Tata manufactures bone china tablewares, mainly OEMs, for the Western brand owners.

In India’s ceramic tableware sector no other standard quality factory exists as the sector is less demanding. Ownership changes in previously known Jaipur Ceramics Pvt Limited and Bharat Potteries group have led the two organizations go for restructuring for revitalization. Other similarly known manufacturers face stiff competitions from the alternatives, including metalwares, glasswares and plastic and melamine products. In Asia, India is the only country with huge population and negligible markets for high quality ceramic tablewares. Considering the size of the country, its import is also limited.

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Talking Shop

Talking Shop

Asian Granito:

a yearn for success Mr. Kamlesh Patel, CEO of Asian Granito Ltd in Himatnagar, Gujarat, India, talks to AC about his company’s growth in the last decade, and its outlook for the challenges to come.

AC: Asian Granito has been one of the most fascinating stories of Indian ceramic tile industry, could you take us through the journey?

Asian Granito: Of course, it is very fascinating as well as path breaking journey in Indian Ceramic tile Industry.

In Year 2000 we begin our journey with production of just 2500sq.mtr per day and today we produce 1lakh sq.mtr per day with 8 ultra modern manufacturing units in Gujarat. We trail growth in multifold within small span of 15years. We began with small size tile production and today we are pioneer in launch of many big format tiles in wall and floor tiles in India.

During the last 15 years, we have seen lots of challenges, ups and downs in market but we did not stop to give our best efforts in delivering innovative products and services to our customers. We took all challenges as opportunity to make a difference. We spread our decorative products across India as well in 50 countries globally. This journey is enthralled due to support of our business associates, stakeholders, 4000 dealers and sub-dealers, global customers and our smart 6000 talents within organization.

Year after year, we paralleled our journey with world’s best trend with small, big, thick to thin form of products and adopting world’s best technology in India to give best quality product to our customers and will be continue in future too.

AC: How did Asian Granito did things differently from its competitors to achieve the special position in Indian tile industry?

AGL: We believe in providing innovative product range to our customer supported by best service. Since our inception, we keep customer satisfaction in center of our decision. Time to time, we have introduced various product range to fulfill right requirement that helps our customer in beautifying their spaces in more decorative way. Our best marketing efforts is to keep customer aware of new introduction and also share indepth product understanding of right use of product. Out of our many

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introductions like Grestek, Grestek XXL, Grestek Hard stone, Grestek Slimgres (India’s thinnest Tiles), Whitest Carrara white Double Charge Vitrified Tiles, Decorative Digital Wall with Special effects etc… are few examples of unique product categories that standout from others. Beside this, we have made exclusivity of these products by expanding AGL TILES WORLD exclusive where we deliver unique customer experience and better service. Thus we are believed to be Innovative leader and recognized as one of the top 4 ceramic tile brands in India within short span of 15years.

AC: How do you see Indian ceramic tile manufacturing industry five years later?

AGL: Indian Ceramic Industry is certainly doing well not only to serve Indian market but also to deliver internationally. Due to change in consumer preferences, Indian Ceramic Industry is gradually moving towards premium lifestyle range. Introduction of innovative ceramic technology, Products developments are made very interesting and charismatic with the help of digital printing technology and new eco friendly double charge technology. We see Indian ceramic industry is going to make big difference through advance double charge vitrified tiles and glazed vitrified tiles manufacturing in India, earlier these product has been imported from China and Italy.

Beside above, there are many real estate projects announced by Indian Government like Swatch Bharat Mission, 100 smart cities, 2500 smart villages etc… indirectly create opportunities for Indian ceramic industry with huge demand flow. Presently, Indian Ceramic Industry grows 15% annually and it seems that it will get double in 5years from now.

AC: How is the Indian ceramic tile manufacturing industry different from Chinese? Do you see Indian producers becoming as competitive as their Chinese counterparts in near future?

AGL: Indian Ceramic industry is very different from the Chinese. First, China is largest manufacturer of ceramic tiles and also has nearly 90% consumed within country itself while India is 3rd largest in manufacturing Mr Kamlesh Patel

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Talking Shop

THE INDIAN CERAMIC INDUSTRY IS GRADUALLY MOVING TOWARDS PREMIUM LIFESTYLE RANGE of ceramic tiles and having very less per capital consumption. Thus Indian ceramic industry has huge potential and opportunities to cover untapped rural market.

Yes, we at Asian Granito India Ltd has expanded in multifold to get competitive advantage through establishment of advance technology likewise many top players in India have competence to Chinese. Indian Govt. has also supported us by implementing anti dumping duties on Chinese import which will give more competitive advantage to Indian ceramic industry.

AC: What according to you is the composition (% of wall tiles and floor tiles) of Indian ceramic tile production industry?

AGL: Indian ceramic Industry contains 66 % manufacturing for floor tiles while wall tiles contain 34% only. Floor segment contains vitrified tiles, ceramic floor tiles and industrial tiles. Due to increase of shopping malls, hospitals and other essential residential and commercial projects, flooring requirements are much higher than the wall. Wall tiles are having wide usage in bathroom, kitchen and elevation areas. Thus Floor tiles requirement is much more than wall tiles but due to introduction of slim tiles and other strong wall application adhesives, tiles are applied wall as well as floor.

AC: What are the three main advantages for ceramic tile industry in Gujarat as compared to other manufacturing locations?

AGL: We, Asian Granito India Ltd enjoy many advantages of having our modern manufacturing units in Gujarat. As Gujarat is having largest coastal area in India which gives us advantage of easy access for shipment. Out of many, three important advantages are: First advantage is best available infrastructure, second is availability of water, fuel & power for consistent production and third is very nearer to Mumbai to enjoy national and international trade requirements.

AC: What do you consider to be the two largest challenges facing Indian ceramic tile producing industry? How is Asian Granito dealing with these challenges?

AGL: Indian ceramic tile production is facing many challenges like increase of fuel cost and unstable real estate development. Increasing fuel cost affects more to production cost and reduces profit margins which are paralyzing player in competing to Chinese that avails product at very cheaper rate. Secondly, Real estate slowdown affects in consumption of big output. Apart from this, Ceramic industry is yet facing lack of consumer education for various products, which is big challenge for the industry.

At AGL, we have taken some strategic step towards saving fuel cost and making balance towards project and retail sales by introducing premium category of product. We framed to export our products internationally so that we can reduce our dependability on local market. AGL has initiated educating consumers by way of proper advertising and organizing mason/contractors meets to make them understand about our product range and right usage of tiles.

AC: What is the approximate volumes of ceramic tile imports from China in India? Do you see the situation detoriating in coming days as China is undergoing a slowdown in its domestic consumption?

AGL: Presently, Chinese import accounts for 10% and due to new antidumping duty it will be expected to reduce to 4-5%, this will create big opportunity to Indian players to compete with Chinese import.

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Insight

GERMANY Total unglazed tile exports (sq metres)

Total glazed tile exports (sq metres)

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Total unglazed tile imports (sq metres)

Total glazed tile imports (sq metres)

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Total sanitaryware exports (no. items)

Total sanitaryware imports (no. items)

Leading sanitaryware export destinations (no. items)

Leading sanitaryware import sources (no. items)

Leading glazed tile import sources (sq metres)

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Leading unglazed tile import sources (sq metres)

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27 51

Hunter and the hunted

Out of Ah...China?

Dear Diary,

e of China Uncensored. The episode was I was watching on You Tube just the other day an episod er of Commerce in China) which alleges about a survey carried out by AmCham (The American Chamb in 4 has left China or intends to leave. Hey following a survey of 500 US companies in China that 1 an economic miracle offering a pot of gold guys – why so pessimistic, come back already isn't China a population of 1.3 billion and its very very big and endless bonuses at the end of the rainbow? It's got don't you know? reasons shortly but also this week I So why are US firms leaving China? I'll explain the top four work this past 18 months for a large Chinese received an email from an old colleague who had gone to you would imagine that there would be a company. The ex-colleague is a Chinese Hong Konger so yer / employee relationship. certain amount of understanding and a relatively easy emplo the Chinese company had given Far from it. The ex colleague graciously acknowledged that they had felt that offering over 20 years of employment when they had been unemployed and that market would have been accepted and working in an international company and in the international tangible. The Chinese company had unrealistic respected. But apparently not. The disappointment was imagined that the international market was expectations with regards growing export business. They work. They felt that business could be carried a common thing where one size fits all marketing would tee an order. Communication was difficult. The out like in China where a good relationship would guaran the person who understood international Chinese company either could not or would not learn from errors or adapting or trying new approaches. business. Trying to save 'face' meant not acknowledging ue thankful for having a job in these trying The owner knew best; the staff acquiesced. The ex colleag they will be unable to satisfy their employer or times desperately wishes to find another job as they feel now there because they have to – not there further their career – you can feel their frustration. They are because they want to. . Sure China has developed dramatically It is clear now that there was no Chinese economic miracle Entering the WTO and having a lot of in twenty years but it was starting from pretty much zero. become the words factory. It's not a miracle manufacturing capacity and cheap labour meant it could the environment. It's not a miracle to falsify to ignore health and safety, contractual law, the impact on and plenty international companies eager to certification and audits, to fudge test results. But it is cheap blog (published by Harris and Moure pllc) get rich quick were more than happy to sign up. China Law they had had chosen to operate illegally in back in March 2015 noted how many international clients n legal and illegal and the machinations of China taking advantage of the ambiguity that existed betwee slowdown and the raise of the middle class and the legal system. Everything going great until economic 'Well, if we can get away with it, and we have middle class politics. The attitude was and in cases still is ing truly legal?' before – why worry about the cost and complication of becom such ers who either aren't placing Now China faces various problems – losing export custom get to way a find to has State' large orders or are placing orders elsewhere means 'The industries; hence the One sunset in ty capaci over e massiv s China' buy customers to begins with no country buying Belt One Road initiative which is floundering before it even

*The views expressed in this piece reflect those of the author, and not of the magazine or its staff

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Hunter and the hunted

e wa s n o r e h t t a h t w o n r a e l c s i It s t h le g c a r i m c i u m o n o o c e e s e h n i Ch t

larly unstable region. into it with the exception of Pakistan and one port in a particu tion. Various stock crashes, housing popula e But China can not afford or accept an upset Chines round banking system combines underg the bubbles and cash desperately leaving the country via and powerful equally hid wealth off rich the how n with an anti corruption purge which failed to mentio tion China is left to clamp down popula the t distrac shore – until the Panama Papers leak proved it. To rently to its closest neighbours bellige thus and y on internet and media freedom and act nationalisticall this all manner of gaffs such to Add ent. investm – again discouraging potential customers and inward the complete absence of rude, are s official e as the British Queen commenting on camera that Chines so on and China looks and nes medici and food attempts to stamp out the ivory trade, fake & unsafe And let's remember exist. laws ss busine what unattractive. Especially when belatedly trying to impose made. man are etc that even Chinese officials admit that GDP figures are leaving China? Actually its more like So what are the reasons the main why US companies

five reasons: e labour costs are rising. So that Firstly at the same time as the economy is slowing the Chines s now have some legal protection, worker e great advantage of making stuff cheap has gone. Chines s have more choice; migrant worker of r numbe ng know what the salary should be and with the declini surprisingly US firms cry foul the inconsistent labour looks to find jobs nearer home. Secondly and not e to China; rule is by law not rule of law. welcom interpretation of regulations & ambiguous laws. Well nt or failing. It's by design – that way the accide an The ambiguity and inconsistent interpretation are not its good old intellectual property with 52% government can act how it wants – when it wants. Thirdly surprise is it and given the fourth reason a really of companies complaining it gets stolen. This isn't technically isn't legal or you can't use which VPN is – internet freedom. You basically have to use a on which means you'd have to use the so ...and Gmail, Outlook, Twitter, Facebook, Instagram, Google – so your illegality will be more obvious ts produc monitored Chinese sites that copy these international are in China most of the time but more – as will your intellectual property. This is bad enough if you nly all of your common communication sudde and ss than inconvenient if you are traveling in on busine with another 52% of companies saying methods are unavailable. Finally it's a question of health e air quality issues. Add to that foreign Chines to they struggle to recruit senior expat managers due with Chinese media blaming 'foreign e surpris a companies and individuals feel less welcome; not even the 'it's a very big market, surely now t difficul forces' for China's woes. With growth in China more not a realistic strategy. ration despe of very important for future growth' sounds more a plea g to the USA, Canada headin are nies compa So who will benefit from China's loss? Well some are looking like winners who Asia East and South and Mexico – but not for the first time this year its nies and no doubt the compa US the again Once – step forward again India, Vietnam and Thailand. also ones where But costs. labour low with ies international ones are looking to benefit from countr to implement and when whim a at decide don't least the legal systems are transparent and fair – or at police the laws they do have.

Until next time, have a great summer Your humble servant William Hunter

*The views expressed in this piece reflect those of the author, and not of the magazine or its staff

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Silvia Spitaleri, Polytechnic School - University of Palermo (Industrial Design Laboratory III, Degree in Industrial Design)

BOLOGNA, 26 - 30 SEPTEMBER 2016 promoted by CONFINDUSTRIA CERAMICA

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EXHIBITION PREVIEW

EXHIBITION PREVIEW

EXHIBITION PREVIEW

Time for the

28 CeramBath th

China International Ceramics & Bathroom Fair, Foshan (CeramBath) will enter its 28th session in this coming October.

Initiated from 2002, the biannual CeramBath is regarded as the most prestigious and influential ceramic and bathroom exhibition in China. With around 750 leading manufacturers of ceramic tiles and bathrooms, CeramBath is the most professional exhibition of the sector in China, with most famous brands, largest scale and strongest aggregation effect. It has been seen as China home court of world ceramics & bathroom industry In 15 years, CeramBath has attracted visitors of over 2 million person-times, constructing an important platform for distributors from over 50 countries to know about China ceramics and helping establishing over 2500 ceramic and sanitary ware trading companies. By far, it has become the bridgehead of China ceramic industry connecting China and the world.

CeramBath attracts exhibitors from around the world, mainly from Germany, UAE, Italy, Spain, USA and Japan. Famous global brands included Porcelanosa, Madrid, Borja from Spain, Gardenia Orchidea from Italy, ICOT, TOTO from Japan, Bravat form Germany, Kohler, American Standard from USA, etc.

CeramBath covers three venues. China Ceramics City serves as Chinese Brand Venue; China Ceramics Industry Headquarters acts as International Brand Venue, gathering famous brands from abroad; Foshan International Conference & Exhibition Center is New Brand Venue, orientated to boost the development of new brands. With various orientations, three venues rely on and coexist with each other, constructing an important platform for ceramic & bathroom enterprises to exploit the market and upgrade brand value.

The 28th China International Ceramic & Bathroom Fair, Foshan Organizer: Foshan China Ceramics City Group Co., Ltd Date: October 18-21, 2016 Exhibitors: Around 750 Exhibition Area: 370000 m2 Exhibits: 1. Building Ceramic (wall & floor tile, mosaic, plaza tile, roof tile etc.)

2. Bathroom (Toilet, bathtub, shower room, bathroom cabinet, bathroom accessories such as faucet, hanger, etc.)

3. Others (Stone, art ceramic, ceramics technology, and media etc.)

Venues: > China Ceramics City Add: China Ceramics City, No.2, 3rd Jiangwan Road, Chancheng District, Foshan, Guangdong, China > China Ceramics Industry Headquarters Add: No.68, West Jihua Road, Foshan, Guangdong, China > Foshan International Conference & Exhibition Center Add: Taobo Avenue, Nanzhuang Town, Chancheng District, Foshan, Guangdong, China

Contact Us: Mandy Liu Tel: 86-757-82525961 E-mail: fair@eccc.com.cn Web: en.cerambath.org

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