Asian Ceramics - AC16-8 Edition

is this your own issue? subscribe online at www.asianceramics.com www.asianceramics.com

AC16-8

RAJASTHAN:

A RIVAL FOR GUJARAT?

Se e Us at

TECNARGI LL A

SEE INSIDE

Se e U s at C ICA

h: s e d a l g n Ba a l u n d e r t h reat?

p o t e nt i

INChinese FOCUS: sanitaryware South Korea in focus Egyptian tile markets

t

Visit us a Hall C1 –

Booth 129

News

Contents: AC 16-8

e z i r p e h t n o Ey e s Italy remains a global epicentre for all facets of the ceramic industry. Although there have been many changes, contractions, expansions and evolutions in the last decade, it has always emerged stronger.

With the focus on the biennial Tecnargilla, and also Cersaie, in this part of the year, it is a timely reminder of the strength of the industry from both a technological and production perspective. Yes, there may be pressure on companies financially, and perhaps there is still some consolidation to be seen in the coming few years, but for now it remains a leading light‌and long may it do so. Have a great time at Tecnargilla!

News 8 Inside Asia

Celebrations at Kaolin AD.

10 Welcome

Indonesia feels the pressure.

12 Across The Continent

Openings, closures and industry moves from across Asia.

22 International News Our eye on the international arena.

24 Material Matters Raw materials news and views.

26 Comment & Analysis Bonded labour in brick kilns.

6

asian ceramics

AC 16-8

30 www.asianceramics.com

News

www.asianceramics.com Features

Looking forward

30 Rajasthan: a Gujarat rival

AC looks at how the rise of Rajasthan – driven largely by RIICO – could be about to displace Gujarat as the country’s most exciting ceramics investment location…

40 South Korea: a future stage

Jahir Ahmed examines how South Korea’s previously ailing ceramic industry is looking to re-invent itself for a new customer base.

56 Egyptian tile markets

AC looks at how Egypt’s developing ceramic industry no longer has the same low cost base that once made it so attractive and reflects therefore on the prospects for this maturing industry.

62 Chinese sanitaryware focus

In analysis just completed by AC’s China office, it is clearly evident that the performance of the industry during the last year has been weak, with sanitaryware potentially the only savior.

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

Indian Ceramics

India

1-3 Mar 2017

ISH Frankfurt

Germany

14-18 Mr 2017

Keramika

Indonesia

16-19 Mar 2017

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!

40

Anaylsis 66 Talking Shop

AC looks at how recent terrorist activity, fake shipments to the EU and an unsettling business climate as a result are casting shadows across the otherwise bright future of Bangladesh’s ceramic industry.

www.asianceramics.com Your favourite magazine is now available at the App Store…

70 Insight

download today to see your first sample issue!

74 The Hunter And The Hunted

Asian Ceramics: now for mobiles, ipads and androids

Analysis and insight into Turkey.

William upgrades to an ipad, but still casts his unsympathetic eye over industry issues: this month he questions the rise of the “product certification” bandwagon.

www.asianceramics.com

AC 16-8

asian ceramics

7

Inside Asia KAOLIN AD HOLDS TURKISH CELEBRATION Kaolin AD’s Turkish subsidiary Kaolin Endustriyel Mineraller A.S. organised a customer event on 2628th May 2016 and welcomed 65 people from 25 different companies in Antalya-Turkey. After two consequtive visits in 2014 and 2015 to Kaolin AD production facilities in Bulgaria, customer surveys helped to support the idea to plan an organisation to be held in Antalya which is most well-known touristical city of Turkey.

Participantsweremainlyfromdifferentdepartments of Turkish ceramic manufacturing companies and had the opportunity to follow presentations about various topics like quality systems, new technologies in ceramic industry, logistic operations, custom

broking, technical information about frits, firing rollers and many other issues. Presentations have been performed by 7 different companies including customers, distributors and partners of Kaolin AD: Ege Vitrifiye, Bien Seramik, Futura Ceramics, Moda Denizcilik, Barsan Global Logistics, Kaolin AD and Kaolin Endustriyel Mineraller A.S. After following presentations for 2 half-days, participants spent their time by joining acitivities like Antalya Old City Tour and Boat Tour to Duden Falls, ATV Quad Safari and Rafting. Final of the customer event was a Gala Dinner in the hotel and participants had great time to have fun with live music.

Welcome

Several Indonesian ceramic producers reportedly stopped production over the summer as stocks of ceramics piled up at their warehouses. Normally, in the good old days when there existed high demand for ceramic products (due to Indonesia's booming property sector), stocks of ceramics lasted for only two weeks.

Now, however, amid sluggish growth of Indonesia's property sector, the existing stocks of ceramics are estimated to cover at least three months.

is this your own issue? subscr

ibe online at www.asiance

www.asianceramics.com

ramics.com

AC16-8

CONTACT DETAILS EDITORIAL

RAJASTHAN: See Us at

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

See Us at

ADVERTISING AND DESIGN

A RIVAL FOR GU JARAT?

SEE INSIDE

TECNARGILLA

ade sh:t?

Ba nglu nder threa

potential

CICA

IN FOCUS: Chinese sanit aryware South Korea in focus Egyptian tile markets

Advertising Sales Paul Russell Email: prussell@asianceramics.com Direct line: + 44 (0) 208 638 0619

Both sales and production of ceramic products in Indonesia have been on the decline. During June 2016, Indonesia's ceramic manufacturers cut production of ceramic tiles, by 5 percent when compared to the same period one year earlier. This decline is attributed to the slowdown in Indonesia's property sector, where, of course, the majority of ceramic demand has come from.

Valerie Adamson Email: vadamson@asianceramics.com Direct line: + 44 (0) 208 133 5273

Elisa Sinaga, Chairman of the Indonesian Ceramic Industry Association (ASAKI), stated that at the start of the year he expected that the situation would improve for ceramic sales as there were high hopes that Indonesia's property sector would rebound supported by improving purchasing power, lower interest rates and Indonesia's tax amnesty program. However, matters have still not turned 'normal'. Indonesia's GDP growth was disappointing in the first quarter at 4.92 percent (y/y) and this undermines property sales and property development in Southeast Asia's largest economy. As such, the decline in ceramic sales has continued.

RESEARCH

Indonesia's tax amnesty program, which is expected to lead to capital inflows into Indonesia's property sector, was only approved by Indonesia's House of Representatives (DPR) in late June and therefore could not boost ceramic demand in the first half of 2016. Although it remains uncertain whether the amnesty program will be a success, it may still be able to boost the nation's property sector (and thus ceramic demand) in the second half of the year.

Although state income through the amnesty program was disappointing in the first couple of weeks since its launch in mid-July, ASAKI Chairman Sinaga remains optimistic that the program will manage to boost Indonesia's ceramic industry in the last quarter of 2016 or the start of 2017 (the tax amnesty program runs until 31 March 2017).

We shall maintain a watching brief‌ Happy Reading!

Production and design Tim Mitchell Email: tim@bowheadmedia.com Direct line: + 44 (0) 208 123 0839

Research Manager Alex Murphy Email: amurphy@bowheadmedia.com Direct line: + 44 (0) 208 123 0839

EVENTS Events Email: events@bowheadmedia.com Direct line: + 44 (0) 208 123 0839

Bowhead events OVERSEAS OFFICES China Professor Wen Lu and Wen Xin Email: 18980921123@163.com Tel: +86 28 8701 9077 Fax: +86 28 8701 9077 Bangladesh Jahir Ahmed jahir@asianceramics.com

Andy Skillen Publishing Director

India Yogender Singh Malik yogender@asianceramics.com Sri Lanka Rohan Gunasekera rohan@asianceramics.com

HEAD OFFICE Bowhead Media Ltd, 57 Oaks Avenue, Worcester Park, Surrey, KT4 8XE United Kingdom

Got a general enquiry? use enquiries@asianceramics.com

10

asian ceramics

AC 16-8

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

www.asianceramics.com

RAK looks for improved outlook • Dankotuwa boosts Indian market sales • Union fears labour recession • Toto loo Roca turns to plastic sanitaryware expansion • Fujitsu helps to evolve sanitaryware production statusplan • Fujit fall by 35%” • Industry costs “could fall by 35%” • Reports indicate that tile industry still has scope • Foreign boos UAE

RAK looks for improved outlook Abu Dhabi-listed RAK Ceramics expects to shore up operations in Iran and India after it posted a 24 per cent year-onyear drop in second quarter net profit.

Net profit touched Dh65.3 million in the three months ending June 30.

The drop was attributed to a slowdown in the construction sector in the Arabian Gulf region and geopolitical instability in its export markets.

The group’s net revenue dropped 5.9 per cent year-onyear during the second quarter to Dh756.5m, attributed to a decline in non-core revenues, which dropped 30.2 per cent to Dh96.1m. Core revenue decreased 0.9 per cent to Dh660.6m.

Its core business includes tiles, sanitary ware, tableware and taps and faucets.

The company is expected to face around 5 per cent drop on its top-line this year because

of sluggish demand in Saudi Arabia, according to Nour Eldeen Sherif, an equity analyst at Cairo’s MubasherTrade.

Saudi Arabia contributed 18.5 per cent to the RAK Ceramics’ tiles business and 6.5 per cent to the sanitary ware business last year.

"We also see operational deficiencies in India and the decline in revenue from noncore business contributing to the fall," he said.

Revenue in India fell 27.9 per cent year-on-year to Dh73.6m during the second quarter.

"In India, a new chief executive has been appointed and over the coming months we will be building an experienced team to strengthen our Indian operation," said Abdallah Massaad, the group chief executive at RAK Ceramics.The company also wants to expand its manufacturing operations in Iran. It fully acquired its Iranian business last August, which

was financed by the World Bank when it started in 2003.

"Iranian operations are on hold until the company can provide financing facilities for its plant in Iran, but the banks are too shy to deal with the banking sector there," Mr Sherif said. "Once this issue is handled, we expect operations to gradually recover as the Iranian ceramics market is huge and promising."

Volumes are expected to stay low this year in the Iranian plant with use rates at 19 per cent, he said.

The company posted a 4.6 per cent year-on-year revenue growth in the UAE during the second quarter to Dh165.4m.

The UAE market contributed 24 per cent to the tiles division revenue, and 31 per cent to the sanitary ware division revenue last year.

A pickup in the construction sector in the run-up to the Expo 2020 is expected to boost RAK Ceramics’ performance next

year in the UAE, said Mr Sherif.

"The company’s bottom line will remain under pressure if the company does not manage to exit its non-core business units," he said.

RAK Ceramics exited some of its non-core investments last year, such as RAK Pharmaceutical.

The company declined to comment on Ras Al Khaimah government’s recent position on Khater Massaad, who was the chief executive of RAK Ceramics between 1991 and 2012. This week, the Ras Al Khaimah government warned that the former chief of the RAK Investment Authority could face further charges in a US$1.5 billion embezzlement investigation.

RAK Ceramics operates 10 plants in the UAE, and one each in India, Bangladesh and Iran.

Shares of RAK Ceramics remained flat at Dh3.20, but are still up from Dh2.95 a year ago.

News, views Dankotuwa boosts Indian market sales and analysis SRI LANKA

Dankotuwa Porcelain, a Sri Lanka based tableware maker said it boosted sales to India 19 percent in 2016, and is facing competition in export markets by changing designs and catering to emerging trends.

Dankotuwa had merged operations with Royal Fernwood Porcelain, another Sri Lanka based manufacturer.

In 2016 the firm reported profits of 50 million rupees, up from a loss of 11 million last year.

At group level it lost 15.9 million rupees against a 157 million loss a year earlier.

12

asian ceramics

AC 16-8

The firm exported 827 million rupees of tableware. The firm was facing competition from China and Bangladesh and India.

However it had boosted Indian sales by 19 percent last year. Though sales in Chennai were steady, Dankotuwa said it had expanded into Northern India.

Europe, its traditional market was difficult amid weak economic conditions and price competition, Dankotuwa said.

"The market increasingly needs quicker lead times, prompt co-ordination and

communication. Trends have shifted from formal dining to more casual dining in most markets which were popular for formal dining," the firm said.

"As such, we focus on developing new innovative products, designs, shapes, demands investment in modern technology and people.

"It is through these efforts and continuous customer relationships that company will gain greater brand value, with a much bigger share of the overall global market of porcelain."

Subscribe to Asian Ceramics and get the inside story EVERY issue..

www.asianceramics.com

www.asianceramics.com

oks for “ranking” improvement • Boral looks for synergies with new US plan • itsu helps to evolve sanitaryware production statusplan • Industry costs “could st for Viglacera share-sale • Brick maker opts for Sacmi Heavy Clay...

IRAN

Union fears labour recession The head of the tile producers union in Iran has warned of a recession in various labour sectors, including the ceramic tile industry.

"From the second half of the last [Iranian calendar] year until now, three or four factories have been shut down and around 1000 workers have become unemployed," Mostafa Goudarzi said recently.

"The recession led to the equivalent of one and a half years' production of tiles and ceramic being stockpiled in the distribution warehouses of the ceramic tile producing factories," he added.

His remarks were carried by the state-run ILNA news agency on Thursday.

Last month, the Iranian regime's Deputy Minister of Industry, Mine and Trade acknowledged that some 7000 of Iran’s industrial units are currently inoperative

nationwide.

Ali Yazdani, who is also managing director of the state body Iran Small Industries and Industrial Parks Organization (ISIPO), said on April 30 that out of 37,120 industrial units situated in industrial townships and areas in Iran, 7,000 have been completely closed down.

The Iranian regime’s Supreme Leader Ali Khamenei, speaking in Mashhad on March 20, said: “There are reports indicating that 60 percent of domestic production resources have either ceased to operate or are functioning below capacity.”

Tasnim reported that on April 9, Arman Khaleqi, a member of the board of directors of the regime’s House of Industry and Mines, said: “Today, in the most optimistic assessment, around 10,000 production units are not working. If we consider that we have 67,000

production units in the country, then we are currently facing 30 percent stagnation.”

Pointing to the fact that 50 percent of the units situated in the industrial townships are working at 25 percent capacity, Khaleqi said: “This shows a severe stagnation in the production units.”

The Iranian regime’s former Minister of Education announced on April 21 that the country’s economy is on the verge of collapse and that not all problems related to the dire economic situation were the byproduct of international sanctions.

Hamidreza Haji-Babai, who in addition to being a minister was a legislator of the regime for 20 years, made the following assessment of the regime’s economy: “We should note that not all the problems are related to the sanctions. Just

30 percent of our problems are due to sanctions and the remaining 70 percent have to do with [mis]management.”

The regime’s First Vice President said in January that the regime is faced with a variety of economic crises which could lead to “threats” against the regime by Iran’s young restive population.

“The country is entangled in a special economic and political situation that demands serious action,” said Eshaq Jahangiri, who is top deputy to the regime’s President Hassan Rouhani.

“We are facing three important challenges with unemployment being prominent among them.”

Jahangiri expressed concern about the situation and said, “Iran has a large young population. If we are unable to solve their problems, this opportunity will morph into a threat.”

THAILAND

Toto looks for “ranking” improvement Toto Ltd has set a strategy to improve its rankings in Thailand’s sanitary-ware market from the fifth spot at present to the top three by 2020. It also aims to focus on boasting growth in two other strategic markets in Asia, Vietnam and India.

The growth strategy is based on Toto's forecast of the company enjoying sustainable growth in those three developing markets, driven by strong domestic consumption and the expansion their economies.

Hiroyuki Suzuki, president of Toto (Thailand) Co, said that under the 2020 strategy the Thai subsidiary aimed to double its business domestically both in terms of sales and market share.

www.asianceramics.com

"Since the beginning of this year, we have extended our product line-up from only the super-premium segment to the upper-medium segment, allowing a greater number of potential customers to afford our Toto products," he said.

"With such a product expansion, we aim to increase our domestic sales by between 20 and 25 per cent every year" until 2020.

He added that the retail prices of sanitary-ware products in the upper-medium segment started from Bt4,000 a piece, while super-luxury-product prices were between Bt100,000 and Bt400,000.

Toto's current share of the Thai sanitary-ware market is 10

per cent. Its rivals Cotto and American Standard lead the market with significant shares.

Toto (Thailand) was established on November 27, 2009, with a factory at Hemaraj Saraburi Industrial Land in Nong Khae district, Saraburi.

The Bt1.6-billion factory produces two categories of Toto products: sanitary wares, including toilets and ceramic items, with annual capacity of 500,000 units per year; and sanitary fittings, including faucets, with a capacity of 115,000 units per year.

Suzuki said the company exported 70 per cent of its products, with most going to Japan (60 per cent), followed by the United States (10 per cent),

Europe (10 per cent) and other destinations in Asia.

"With our 2020 plan, we want to emphasise more on the domestic market. We aim to significantly increase the ratio of our sales domestically [compared with exports] from currently only 30 per cent to 80 per cent by 2020," he said.

The Toto group posted total sales in the fiscal year ending March 31, 2016, of 567,889 million yen (Bt194.2 million), up 4.3 per cent over the previous year.

The group operates 29 manufacturing facilities in 18 countries and territories, including Indonesia, Malaysia, Vietnam, mainland China, Taiwan and India.

AC 16-8

asian ceramics

13

News

AUSTRALIA

Boral looks for synergies with new US plan Boral has announced plans to fold its US bricks business into a new joint venture with an affiliate of Forterra, as it reported flat net profit of $256 million.

Extending a formula applied to its US gypsum business and the Australian brick venture formed with CSR in May 2015, chief executive Mike Kane said he expected to pull up to $US25 million of synergies out of a business with the capacity to produce 2.6 billion bricks a year.

Mr Kane said the US housing market was four years into a cyclical upswing, but that the high fixed costs and energy intensive nature of brick making meant it was difficult to create a profitable business.

“The North American bricks

joint venture provides the opportunity to create a more efficient and better positioned business to compete long term,’’ Mr Kane said.

Boral’s (BLD) result was hit by significant items of $12 million that reduced what would have been a 9 per cent increase in after-tax profit to $268 million.

For the year to June 30, Boral logged a broadly flat profit of $256 million, although underlying earnings — which stripped out $12m in oneoff items — rose 8 per cent to $268m.

The results outshone analyst projections for net profit of $253.4m and underlying earnings of $254.5m.

Boral also reported pre-tax earnings before depreciation and amortisation (EBITDA)

rose 6 per cent to $645m, a number that also outstripped market projections.

Despite the steady earnings the group reported a modest 2 per cent dip in sales to $4.3 billion as strength in the US and Australian housing markets was offset by revenue declines from LNG projects in Queensland, Western Australia and the Northern Territory as key projects came into production.

“We have continued to improve our performance across our businesses in line with our strategy, managing our portfolio more efficiently and maintaining a strong balance sheet,” Mr Kane said.

“The continued growth in Boral’s earnings demonstrates the great work that has been

done to improve our cost base, grow margins and efficiently supply market demand, which continues to be strong in Australia and Asia, and is growing in the US.” The company was cautious on the outlook, tipping modest improvements across its core businesses.

“In FY2017 we expect slightly improved earnings from Boral Australia, underpinned by infrastructure activity and a thriving NSW market, lower property earnings and softer results from building products businesses,” the group said.

“We expect continued underlying growth from USG Boral, and earnings from Boral USA to continue to strengthen in line with the housing market recovery. “

INDIA

Roca turns to plastic sanitaryware expansion Spanish bathroom fittings firm Roca is planning to set up a new factory for plastic products by the next financial year, with a production capacity of 2 million plastic pieces per year.

"We can do an M&A or carry out a greenfield project for the new factory in either Tamil Nadu or Madhya Pradesh by next financial year," said Pau Abello

Pellicer, managing director, Roca Bathroom Products.

The company already produces around 3 million pieces of plastic cisterns/seat and covers per year.

The group also intends to continue investing around Rs 40-50 crore every year in India.

"We aim to enhance the quality processes, our QA

laboratories, provide with more technologically advanced machinery to all our 7 factories and develop and launch many new products with an aim to increase the sales by 15% annually," he said.

Out of Roca's 75 factories worldwide, seven are in India. The total installed annual capacity at the Indian

facilities is 6 million ceramic pieces, 3.8 million faucets, 1.5 million plastic cisterns and 1.5 million plastic seat and covers, respectively.

Roca Bathroom Products operates two sanitaryware brands in India, with Roca catering to the premium segment and Parryware catering to the mass market.

JAPAN

Fujitsu helps to evolve sanitaryware production statusplan Fujitsu and Fujitsu Systems East have developed a factory system for TOTO Vietnam, to help workers visualize production status and data on quality, starting from raw materials, and continuing throughout the process.

This system, introduced to raise the production efficiency of ceramic sanitary ware produced at the factory, started operations at TOTO Vietnam's first factory on July 1.

The system innovates the production of sanitary ware, which requires extremely

14

asian ceramics

AC 16-8

sensitive operations, such as the mixing of raw materials and adjusting contraction rates. IC tags are used to not only track the progress and quality of products, but also to collect and digitize a variety of data, such as work procedures and other know-how of skilled workers.

In addition, Fujitsu has a system which emphasizes the operability of tablets that operatives use to input inspection information, featuring displays with easy-to-understand graphics and touch input functionality, and proprietarily

developed applications.

By implementing IoTwhich puts the information created by people and things to effective use, the system enables visualization of trained workers' expertise, which was previously difficult to record as data. It also makes possible analysis with the use of statistical data, leading to stable production of high-quality products.

Through this system, Fujitsu contributes to TOTO Vietnam's efforts to improve sanitation conditions in Vietnam, a country which faces social problems due

to the difficulty of securing safe drinking water, as flush toilets have not spread to ordinary households and sewer systems have not been put in place.

TOTO has placed the Asia and Oceania regions at the center of its global supply chain, securing a stable global supply system. In addition to its 29 production-related companies located in the Japan, United States, China, Asia and Oceania regions, TOTO plans to operate a third Vietnam factory beginning in March 2018.

www.asianceramics.com

Up to 16 colour bars More than 650 pieces sold 30 R&D staff for machinery development 45 years of leadership in decoration

For us ‘decoration 4.0’ originates from the most advanced technologies and from the most expert hands.

We produce ultra-high resolution printers capable of printing even the darkest and most structured tones, with maximum precision.

FOLLOW US, CHOOSE CREADIGIT!

TECNARGILLA 2016 - HALL 1A

www.system-group.it

News

INDONESIA

Industry costs “could fall by 35%�

The Indonesian Ceramic Industry Association (Asaki) estimates that production costs in Indonesia's ceramic industry could decline up to 35 percent now the government plans to lower the gas price for industrial usage. Elisa Sinaga, Chairman of the Asaki, said Indonesian ceramic producers currently pay an average USD $9.1 per mmbtu (million metric British thermal units) for the ceramic production process, considerably higher than the gas prices that manufacturers pay in Singapore, Thailand, and India. This difference makes Indonesian ceramic products less competitive.

The gas price accounts for between 30 and 40 percent of total ceramic production costs in Indonesia. Therefore, stakeholders in the nation's ceramic industry were happy to learn that the Indonesian government planned to lower gas (and electricity) prices

for industrial usage in its third economic policy package (unveiled in October 2015), one of the series of policy packages designed by the government to boost overall economic growth. However, despite this announcement - and despite low crude oil prices - gas prices remained high in Indonesia's ceramic industry in both Q42105 and Q1 and Q2 in 2016.

Through Presidential Regulation No. 40/2016, the government can lower gas prices for industrial usage if these prices exceed the USD $6 per mmbtu mark (this policy became effective per 1 January 2016). Whether the government indeed cuts gas prices in a specific industry will depend on several matters including domestic and international gas prices, domestic purchasing power, and the value-added significance of gas usage in a specific industry. The industries that are eligible to receive such a

cut in energy prices include the fertilizer, petrochemical, oleochemical, steel, ceramic, glass, and rubber gloves industries.

Asaki Chairman Sinaga says the lower gas price would not immediately trigger rising ceramic sales in Indonesia because these sales are dependent on a number of factors, including the performance of the country's property sector, overall economic growth, and interest rates for credit disbursement.

However, a lower gas price would surely have a major positive impact on production costs of Indonesian ceramic producers. Currently, production costs in Indonesia's ceramic industry are high - implying output is less competitive compared to ceramic products in neighboring peers - primarily due to the high gas price.

Whereas Singaporean ceramic producers pay USD $3 per mmbtu, Thai manufacturers pay

USD $3 per mmbtu, and Indian manufacturers pay USD $5 per mmbtu, Indonesia's ceramic producers pay an average USD $9.1 per mmbtu for the ceramic production process.

Regarding ceramic sales in Indonesia in 2016, Sinaga expects to see an improving performance supported by government-led infrastructure development and an improving property industry.

Sinaga expects ceramic sales to have reached between 170 - 180 million square metres in the first half of 2016. Last year Indonesia's ceramic sales were curbed by the continuation of the nation's economic slowdown, the sharply depreciating rupiah exchange rate, and the high gas price. These were reasons for various Indonesian ceramic manufacturers to (temporarily) close their business. In full-year 2015 Indonesia's ceramic sales fell 30 percent to 360 million square meters.

INDIA

Reports indicate that tile industry still has scope The ceramic tile industry, which has recorded phenomenal growth through value-added products and geographical reach, has the potential to maintain its momentum in the medium term, a report has revealed.

Despite slowdown in the real estate sector and adverse macroeconomic environment, low per capita consumption of tiles in the country, rapid urbanisation, increasing disposable income of nuclear families, untapped rural market and stable replacement demand is envisaged to augur well for the sector, Care Ratings said.

The number of ambitious programmes launched in the last two years by the Centre, like Smart Cities Mission, Swachh Bharat Abhiyaan (Sanitation for All by 2019), Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All by 2022 would act as big push in demand for

16

asian ceramics

AC 16-8

the ceramic industry in years to come, it said.

The government's decision in March 2016 to impose antidumping duty of USD 1.37 per square metre (SQM) on all vitrified tiles imported from China is also expected to provide level playing field to the domestic players, especially in South India.

Till 2013, there was antidumping duty on Chinese vitrified tiles.

However, after the removal of duty by the government, Chinese companies dumped tiles in India which exerted pressure on domestic manufacturers on account of lower freight rates from China to South India, it said.

The implementation of Goods and Service Tax (GST) will also be a welcome change for the ceramic tile industry.

Currently, manufacturers pay approximately 26 per cent as indirect tax, including excise

duty, central sales tax (CST) and value added tax (VAT).

Care Ratings pointed out that the GST will create a seamless national market for the organised players, resulting in removal of inter-state barriers and improvement in supply chain.

GST will also bring the unorganised segment on a similar platform and reduce the price differential between them and the organised segment.

Care Ratings said India has one of the fastest growing ceramic tiles markets in the world.

Despite increase in consumption, per capita consumption of ceramic tiles in India is only 0.59 SQM. India lags behind Brazil, China and Vietnam which have per capita consumption of 4.12, 3.33 and 2.80 SQM, respectively.

This exhibits an exponential growth potential for the industry, the report said.

The industry enjoys the unique

advantage of being largely indigenous with abundance of raw materials, labour, technical skills and infrastructural facilities.

It is estimated that the ceramic tile industry employs over a half a million people, both directly and indirectly.

Largely dominated by familyowned and managed units, the Indian ceramic tile industry is the world's third largest manufacturer of ceramic tiles at 825 million square metres (MSM), after China and Brazil.

India is also the third largest consumer of tiles in the world with about 6.25 per cent of all global ceramic tile consumption, the report said.

News, views and analysis www.asianceramics.com

www.asianceramics.com

News

SP EC IA L RE PO

Leading this tendency, together with other stakeholders, top-class european machinery manufacturer VerdĂŠs started fabricating extruders in India in early 2,013. As reported by their indian branch in Hosur (TN), Verdes Clay & Minerals Equipment Pvt Ltd, the more progressive of the indian brick makers started to improve and modernize their brick plants. According to VCM executives, the indian market was slow during most of 2014 and the first quarter of 2,015.

But during the last 15 months the number of their customers has trebled, as compared to the years 2,013 and 2,014. This shows an erratic but sustained increase in mechanization, whilst in parallel the number of traditional brick plants that close down is on the rise. Their new customers are spread between Gujarat and Haryana in the north and Kerala, Tamil Nadu and Karnataka in the south.

A very typical clay extrusion line in India, when the customer can get hold of good, clean clays, is composed by several box-feeders, one by every kind of raw material, followed by primary and secondary grinding and one or two mixing-homogenizing machines. Depending on above-usual quality demands or on highly technical characteristics of the end product, different kinds of aging intermediate clay storage or a tertiary grinding (or both) may be added. After the extrusion, some simple but effective cutter is installed and following this the wet product handling is done by hand. With some very rare exceptions, whereby the wet bricks handling only is done automatically. Most of the brick drying spaces are in the open, although the amount of covered sheds is rising year by year.

Kilns are Bull Trench’s Kilns for the vast majority of the local brick production, although

www.asianceramics.com

a number of antiquated Hoffmann kilns plus some locally or chinese-designed muffled tunnel kilns are present. And of course, also a fair number of downdraft kilns (beehives), clamps, scotch kilns and a smattering of VSBKs, which all are meant for even smaller outputs.

Above 75 % of the production is fired on coal (mostly) or petcoke. The remaining on a variety of biomass products, like padi (rice) husks, cashew or coconut husks, wood sticks, etc.

Expectations are high that this should start changing before the end of this decade, as generally not even the more capitalised local brickmakers are able to raise the funds for an investment on a 400 or 600 ton/day plant. Which should involve artificial dryer and tunnel kiln, such as the example set up by this european brick group. This lack of capital is also the case in the other SAARC countries, which are the next target for the team at VCM. Some of these are at

The very first Hollow Block made in Karnataka by a Verdes Monobloc Extruder in 2015.

All in all, still the majority of the brick and tile plants in India are at the cottageindustry level. They mould the bricks by hand individually, and using dozens or hundreds of workers for this job and the consequent handling operations. In spite of this situation, no new relevant players or stakeholders seem to have appeared in the brick sector in the last 5 years.

Surprisingly, serious investors from indian sectors other than brick or from western countries continue absent since Verdes incorporated their branch and started promoting their locallymanufactured machines.

Which was after the start-up of the Wienerberger plant near Bangalore.

RT

Modernising Indian brick and roof tile

industry against alternative (usually cement or plasterbased) products but VerdĂŠs will do its utmost to collaborate in upgrading these primitive brick installations.

In the meantime, Verdes has had to adapt to the local needs by manufacturing a very wide range of small machines.

Only in extruders 6 different models are now available.

And similarly for grinding, mixing and dosing machines.

These are used to manufacture a variety of extruded products, being standard-sized perforated brick the most usual one.

But not exclusively brick. For example, 3 recent customers in Tamil Nadu produce exclusively floor tiles, while 3 more are concentrated in hollow blocks and ceiling blocks. Another half dozen of the regular brick makers are preparing themselves to also incorporate new, more added value clay products to their brick lines. Verdes is of course committed to help them in their industrial development and in generating enough capital to progress to modern, more efficient and bigger automated plants.

Partial view of a clay preparation hall by Verdes in Tamil Nadu, doing empty run tests in March 2016.

the same technological level as India, but unfortunately most countries are in an even lower stage of development.

This means a measure of risk for the clay brick and block

AC 16-8

asian ceramics

17

News

VIETNAM

Foreign boost for Viglacera share-sale VGC, a construction materials company in which the Ministry of Construction (MoC) holds 91.49 per cent, auctioned 11.34 per cent of its shares and brought in VND418 billion ($19 million).

Purchases for 82.33 million shares were registered, or 2.7fold higher than the amount on offer, by 178 investors, including 19 institutions and 159 individuals.

The highest bid was VND14,300 ($0.65) per share.

Five investors successfully bought all of the shares on offer, with foreign investors buying 15.5 million, or 52 per cent. The average bid price was VND13,923 ($0.63) against an initial price of VND11,700 ($0.53).

VGC recorded impressive business results in the first half of 2016, a July 4 meeting heard.

The pre-tax profit of VGC and its subsidiaries reached 129 per cent of the target and was up 53 per cent compared to the same period last year.

VGC itself reported pre-

tax profit VND87 billion ($3.95 million) higher yearon-year and 43 per cent higher than the target and representing 55 per cent of the corporation’s total.

VGC’s revenue increased 19 per cent compared to the target for the first half, which company directors described as impressive given the fierce competition.

Despite being known for products such as sanitary ware, ceramic and granite tiles, terracotta, and nonfired materials, “glass is the most promising product of VGC in the current market circumstances,” CEO Nguyen Anh Tuan told VCG’s shareholders meeting in April.

“With the current trend of real estate projects using box glass or at least double glazing along with the future trend of using ultra clear float glass and low-e glass, we believe the demand for glass products in general will rise significantly in the near term,” Mr. Tuan added.

Glass products like low-

emitting, or low-e glass, have become a trend in other countries and not just Vietnam.

Moreover, the number of glass and brick buildings has been increasing in recent years.

“Low-e glass, ultra clear float glass and solar power glass are currently seeing buoyant demand around the world,” Mr. Tuan said.

“Exports are therefore the top priority with VGC’s ultra clear float glass.”

“Even though revenue from glass products only stood at VND150 billion ($6.8 million) out of total revenue of VND1 trillion ($45.5 million) in 2015, that was only the paper figure,” he explained.

“VGC’s real profit from glass products last year was some VND200 billion ($9.1 million), representing a 20 per cent profit margin.”

In 2015 the Prime Minister approved the construction of two VGC glass factory projects.

The factory in southern

Binh Duong province, with a capacity of 2.3 million sq m per year, has begun operations while the factory in northern Bac Ninh province, with a capacity of 2.7 million sq m per year, is still under construction.

Early this year the construction a low-e glass factory with an annual capacity of 2.3 million sq m began in Binh Duong province and operations are expected to begin in the third quarter.

VGC will also be cooperating with the Urban and Industrial Zone Development Investment Corporation (IDICO) and a foreign partner to invest in an ultra clear float glass factory with a daily capacity of 600 tonnes in southern Ba Ria Vung Tau province.

Foreign investors are also paying close attention to the glass market. According to VGC research, Chinese investors have been looking to build a glass factory in northern Bac Giang province.

“This clearly illustrates the current trends,” Mr. Tuan said.

IRAN

Brick maker opts for Sacmi Heavy Clay With almost 100,000 tons per year of output sold on both internal and foreign markets, Iranian firm Azarakhsh International Refractory Brick Manufacturer Group is the main player in the area’s brick and construction material sector. Already well known and appreciated for its lowabsorption, high strength bricks – such as pavers and face bricks – Azarakhsh has asked Sacmi Heavy Clay to supply a new, complete line for the manufacture of strip bricks to be installed in its manufacturing facility in the town of Qom, Iran.

The new line – to be installed in the new building near the old factory – has been designed for a routine output of 140,000 pieces per day (85 tons) yet

18

asian ceramics

AC 16-6

can cope with production peaks of up to 100 tons per day. The ‘stars’ of this order are, above all, the two PH 690 D hydraulic presses, specially configured for the production of such product types. Then, downstream, there is the 5-level ECP 235/11.3 roller dryer with an effective intake width of 2350 mm and a length of 11.3 metres.

Completing the order are the single-channel roller kiln (a FMS 223/136.5 model 136.5 metres long with an effective load width of 2350 mm) and the Synthesis sorting and packaging line with the Extrapack Robot. More specifically, the kiln has been designed and equipped to fire heavy materials at high temperature – up to 1250

°C – and features a flashing system to obtain a reducing atmosphere in the final firing zone of the kiln.

This order equips Azarakhsh to extend its vast product range, already widely appreciated on the internal and external market. For Sacmi, which has operated in the area through its Sacmi Iran branch for years, this is a new customer of considerable size in an area that is strategic in terms of growth and development potential, especially in the construction and infrastructure sector. Thanks to recent changes on the international scene, the total growth of exports from Italy to the area can be estimated at no less than 3 billion euros over the next 4 years.

Asian Ceramics

online and on-app...

www.asianceramics.com

www.asianceramics.com

www.asianceramics.com

AC 16-6

asian ceramics

19

News

CHINA

Environmental suspensions stop Henan production An environmental protection inspectorate sent by Beijing has been conducting inspection work in Henan since July 16, with the effect of causing a great deal of turmoil in the ceramics community. Under the spotlight most importantly were tile manfuacturers, and, according to reports, more than 30 companies were asked to suspend production within 12 days of the visit.

One of the primary tasks by central environmental protection inspectorate is to conduct thorough rectification to those who have emission problems, such as dust, sewage, gas and uncovered materials stockpiling, etc, which seems to be difficult for ceramic manufacturers to follow. “This has been the most detailed, high-standard and strictest inspection. A minor problem

might lead to suspension.” said some manager from a ceramic company.

Immeasurable losses were caused by suspension as well. After years’ development, Henan has become a major province of ceramic manufacturing with its capacity ranking the sixth, following Guangdong, Fujian, Shandong, Jiangxi and Sichuan. Based on its output in 2015 nearly 700

million sq metres suspension for one day, divided by 330 days, would reduce over 2 million sq metres.

Moreover, for production stream with prevailing widebody furnaces, suspension for one time would cause hundreds of thousands of yuan. Meanwhile, enterprise operation costs, labor costs and financial costs weigh heavily on building ceramic manufactures.

CHINA

Tile store analysis shows downturn In statistics just made available to AC, there has been a downturn in the number of tile distribution centres and stores during the full year of 2015 in comparison to the previous year.

From the point of view of sampling data, the number of newly opened stores is 61 for 2014 and 49 for 2015. The reduction of number of stores can be attributed to the market downturn led to the slowdown in the expansion of enterprises.

Most of the new stores were opened from May to October, especially from June to August.

Many stores are available in 1st line cities and a few new stores were opened. The 2nd line cities are most welcome by the enterprises and the new stores there account for 29.5% of the total for 2014 and 28.6% for 2015. Moreover, the new stores in the 3rd line and smaller cities account for 65.6% of the total for 2014 and 65.3% for 2015. So, ceramic tile

enterprises should pay more Numbers of newly opened terminal exclusive stores of ceramic tiles attention to the 3rd line and during 2014-2015 smaller cities when they layout Year Jan Mar Apr May Jun Jul Aug Sept Oct Nov Dec in the future.

2014 1 4 3 9 8 7 7 12 8 1 1 The number of newly opened 2015 0 1 2 7 16 4 5 6 4 3 1 terminal exclusive stores in Note: Numbers for Feb are zero East China, South China and Central China accounts for Numbers of newly opened terminal exclusive stores of ceramic tiles 77.1% of the total for 2014 during 2014-2015 and 61.2% for 2015. But, Year 1st 2rd 3rd 4th 5th 6th Aug Sept Oct Nov Dec there are still a large number line line line line line line of blank markets in North city city city city city China, Northwest, Southwest 2014 3 18 13 9 3 15 61 12 8 1 1 and Northeast.

2015 3 14 13 6 4 9 49 6 4 3 1 The GDP of provinces and By Province autonomous South Central North Northwest Southwest Northeast regions for 2015 Year East China China China China began to gradually 18 15 14 1 3 7 3 released on 20th 2015 January, 2016. By 2014 16 5 9 4 6 4 5 the end of 21st January, there are eight area GDP growth of five provinces and regions for 2015 released annual GDP for 2015, Province Population (m.)

GDP (RMB m.)

Growth rate (%) Guangdong is topped the list Chongqing 29.70 1,571,972 11 and the GDP is RMB 7,281,255 Sichuan 80.50 3,010,310 7.9 m., year-on-year growth of 8%.

In view of the growth situation, Guizhou 34.75 1,050,256 10.7 the Southwest region is worthy Yunnan 45.96 --8.3 of ceramic enterprises to enter.

Tibet 2.81 --10.3

SAUDI ARABIA

Forsan sees “great opportunities” ahead Dr. Khater Massaad, CEO of Al Forsan Global Industrial Complex (`Forsan Ceramics`) in the Kingdom of Saudi Arabia (`Saudi`) has applauded the advantages presented to the fast growing company by the strong growth opportunities in the Kingdom.

20

asian ceramics

AC 16-8

Forsan Ceramics, based in the King Abdullah Economic City on the Red Sea coast of Saudi, was only set up in 2011, and is the result of a $186m investment with local Saudi partners.

The population of 30 million in the Kingdom is believed to be growing every year by 3-4%

with 500,000 new apartments needing to be built annually to match demand as well as the numerous public and municipal projects, such as schools and hospitals, required to meet the needs of the growing population.

Forsan Ceramics has forecast it will have a 10% market share

in the fast growing ceramics and porcelain market in Saudi by the beginning of 2017 as the combination of its highly experienced team, investment in the latest machinery and the underlying population growth all combine to create a world beating team.

www.asianceramics.com

News

International News

Rising home sales boost tableware imports United States

D

espite growing at the slowest pace in four years, U.S. containerized imports of tableware and household goods reached an alltime high in 2015, riding on the back of increasing disposable income and an ongoing recovery in the home sales market.

U.S. imports of tableware and household goods have been on the rise since dropping to their lowest point between 2007 and 2009, during the worst of the Great Recession. Imports grew 3.1 percent year-over-year in the third quarter of this year, marking the 16th consecutive year-overyear expansion, according to JOC Economist Mario Moreno.

Moreno said he expects U.S. imports of tableware and household goods to hit 132,216 twenty-foot-equivalent units by year’s end, a new record even if the rate of growth has been the weakest in the past four years.

There are several determining factors behind an increase in tableware and household good imports, Moreno said, but the most important ones are import prices, downstream demand from retailers, real disposable income and home sales. With the improving American economy, all four of those factors came into play in 2015.

“When real disposable

income increases, spending on discretionary goods such as toys, apparel, and household articles tends to increase as well,” Moreno said. “With the help of a relatively strong dollar, and a still recovering home sales market, it is no surprise to see demand for tableware and other household articles imports reach an all-time high this year.”

U.S. per capita disposable personal income has increased 3 percent since the start of the year, hitting $42,274 in November. The strong U.S. dollar, likewise, contributed by marking imports cheaper.

By TEU volume, China is by far the largest supplier of tableware and household articles to the U.S., but the country has lost market share over the past year. China accounted for 83.2 percent of all U.S. tableware and household imports year-todate through September. That number is, however, down from 84.6 percent over the same period in 2014 and inbound shipments from China were up only 3 percent year-to-date in 2015.

According to Moreno, the loss is more than likely the result of increasing production costs as the country shifts to a more consumer-baased economy and wages rise. The

China manufacturing sector has been contracting this year.

China’s factories in November delivered mixed results, with the National Bureau of Statistics’ PMI showing manufacturing activity for large state-owned firms hitting a three-year low.

Many manufacturers are now shifting their production from the mainland to neighboring Southeast Asian countries.

There’s no better example than Vietnam. The country, the fourth-ranking supplier of tableware and household goods to American homes, has been significantly increasing its market share of U.S. home goods imports for the past two years, from from 0.6 percent in 2013 to 1.5 percent in 2014 and to 2.3 percent year-to-date. Inbound shipments from Vietnam more than doubled in 2014 and have been up some 83 percent yearto-date.

Economists at IHS, JOC.com’s parent company, anticipate the Vietnamese dong will decline in value against the U.S. dollar by 2.5 percent by year’s end marking the 20th consecutive yearly decline. Inbound shipments from Vietnam more than doubled in 2014, and were up a remarkable 83 percent year-to-date.

Stateside, the port of Savannah gained more inbound traffic of

tableware and household goods than any other port year to date.

From January through September, the Port of Los Angeles handled the most international inbound shipments of tableware and household articles, with a 25 percent share of the trade in terms of TEU volume, unchanged from 2014.

Long Beach followed with a 22 percent share of the trade, down 4 percentage points from the same period last year. Savannah, though, handled 7 percent of the traffic, up 2 percentage points over the same period in 2014, thanks largely to increasing shipments from China.

In the first three quarters of 2015, Savannah handled 32 percent more Asia import volume year-over-year. Only time will tell, though, if Savannah will be able to hold on to that volume.

Port congestion on the U.S. West Coast during the worst of the between labor negotiations between waterfront employers and the International Longshore and Warehouse Union played an important role in Savannah’s increased market share. With trade patterns returning to normal, port officials in Georgia have already said they are beginning to see some of that diverted cargo return to traditional ports of entry.

Ceramic Industries innovates with Creadigit South Africa

T

he South African industrial group Ceramic Industries has recently installed eight CREADIGIT digital printers from System for decoration of top-of-therange tiles. Acclaimed as the most important manufacturer in sub Saharan Africa, Ceramic Industries has strengthened its already well known reputation as an innovative industrial group which has revolutionised production standards.

22

asian ceramics

AC 16-8

With the start-up of Creadigit machines from System for on demand ink jet printing, Ceramic Industries has chosen the latest high quality decoration for its factories, while guaranteeing maximum production efficiency.

Three Creadigit E models are installed at SAMCA FLOOR factory, for the production of fashionable floor tiles. Creadigit at SAMCA WALL is dedicated to the decoration of wall tiles,

complete with special effects.

Two Creadigit E models in the new factory, Gryphon, in Vereeniging are dedicated to the production of large format glazed white body tiles.

Meanwhile, installation is under way of two Creadigit machines in the factory Pegasus.

In addition, Qualitron systems together with dicoliner and planar dimensional controllers, have been installed for quality assurance on all tile production

lines. Multigecko sorting lines and the new Griffen palletizing equipment has been installed at Gryphon.

The result of this System technology installed recently at the facilities of Ceramic Industries is yet another confirmation of their industrial direction to ensure production of floor and wall tiles with top quality technology, from mixing through to decoration, resulting in top-of-the-range products.

www.asianceramics.com

News

Sekota to get ceramics factory Ethiopia

T

he Himrawi Investment and Trading Private Limited Company recently laid the corner stone for the construction of a ceramic factory in Sekota town of Amhara State at a cost of 220 million Birr.

Company General Manager

Frealem Shibabaw said that the company has conducted several studies, and ascertained mineral wealth of Sekota area.

According to the General Manager, Ethiopia imports eight million sq metres from China annually expending millions of Birr. Thus, the factory would

enable the nation to save hard currency that would have been spent for ceramics importation.

The factory has a capacity to produce two million sq metres of tiles annually that constitute only 24 per cent of local demand, she added.

The factory will also produce

fire bricks useful and input for glass and cement factories.

Indicating that such material is not produced in other African countries, Frealem said that the factory will be the first ever fire brick producer in Ethiopia. Quartz paint is another output expected from the upcoming factory.

Ibstock staves of “Brexit” threat United Kingdom

S

ales in July were at a similar level to the same period in 2015.

Wayne Sheppard, Chief Executive Officer of Ibstock said: “The EU Referendum result has added uncertainty to our outlook but, in advance of the important autumn period for new home sales, it remains too early to judge its full impact.

“It is reassuring however that, to date, current trading continues at normal seasonal levels.

“Contingency plans will enable us to balance production with sales volumes in the remainder of the year as necessary.”

Ibstock reported a rise in adjusted earnings to £55.6m for the half year to June 30 from

£51.8m last time as turnover ticked-up to £210m from £203.4m.

In the UK brick sales declined slightly “declined slightly largely due to the industry wide destocking of bricks within the builders merchant and distributor supply chain.”

Sheppard said: “The fundamentals supporting the

VIVAJET

STAMPANTE INKJET DIGITALE SINGLE PASS

decoration innovation Ta k e a l o o k o n w w w. t e c n o f e r r a r i . i t

UK housing market remain in place. The sector continues to receive focused government support, mortgage availability is good and there remains an undersupply of new homes.

“Our businesses are well prepared for the challenges and opportunities that our markets may present and we look to the future with confidence.”

INKJET DIGITAL PRINTER SINGLE PASS

LA SOLUZIONE PER DECORARE CON LA MASSIMA QUALITÀ E PRODUTTIVITÀ L’INNOVAZIONE TECNOLOGICA CON IL 100% DI AFFIDABILITÀ

THE DECORATING SOLUTION WITH THE HIGHEST QUALITY AND PRODUCTIVITY THE TECHNOLOGY INNOVATION PROVIDING 100% RELIABILITY

we are innovation P A V. B 2 pagina pubbli A5_V2.indd 1

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

01/09/2016 15:04:51

News

Raw Material News AMG COMPLETES COLORMINAS BUY-OUT Brazil // Feldspar AMG Advanced Metallurgical Group N.V. has announced that AMG Mineração has acquired the remaining 49.9% interest in their unincorporated feldspar partnership from Colorminas, Brazil. The partnership between AMG Mineração and Colorminas was established in 2003 with the objective of producing and commercializing feldspar from tailings generated from AMG Mineração`s tantalum operations.

"The acquisition is in line with AMG`s strategy to streamline its organizational structure and enables AMG Lithium to eventually expand production, subject to the completion of a feasibility study and management approval, from the previously announced initial annual production capacity of 90,000 tons of lithium concentrate up to 140,000 tons of lithium concentrate," said Mr. Fabiano Costa, President of AMG Mineração.

AMG Mineração`s Mibra mine produces 300,000 pounds of high purity tantalum oxides (Ta2O5) in concentrates annually primarily for use in capacitors for the electronics industry and produces 180,000 tons

of feldspar for the local ceramics and glass industry.

AMG is a global critical materials company at the forefront of CO2 reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG produces aluminum master alloys and powders, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal. AMG Engineering designs and produces vacuum furnace equipment and systems used to produce and upgrade specialty metals and alloys for the transportation, automotive, infrastructure, and energy markets.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, United States, China, Mexico, Brazil and Sri Lanka, and has sales and customer service offices in Russia and Japan.

ILUKA FALLS FOR FIRST HALF LOSS Australia // Zircon Mineral sands miner Iluka Resources plunged into a net loss of $20.9-milllion in the first half of 2016, compared with a profit of $20.4-million a year earlier, owing to lower revenue growth.

Mineral sands revenue dipped from $349.6-million in the six months ended June 30, 2015, to $338.4-million in period under review, the ASXlisted company has reported.

“The poor half-year financial results reflect a lack of overall revenue growth, despite 15% higher zircon/rutile/synthetic rutile sales volumes. Lower prices prevailed, especially for zircon, as Iluka responded to competitor price positioning, but gross margins were protected through reductions in unit costs of goods sold,” commented MD David Robb.

Zircon/rutile/synthetic rutile production increased by 20.8% year-on-year to 334.4-milion tonnes, while ilmenite production decreased by 15.9% to 164.1-million tonnes, putting total mineral sands production at 498.5-million tonnes, compared with 472-million tonnes in the first half of 2015.

Zircon/rutile/synthetic rutile sales increased from 275.9-million tonnes to 316.4-million tonnes, generating revenue of $321.1-million. Ilmenite sales fell to 17.7-million tonnes, from 159.5-milion tonnes, generating 17.3-million.

Sales mix factors, including a higher proportion of synthetic rutile and zircon concentrate sales, also influenced revenue outcomes, as did a lower Mining area C iron-ore royalty contribution.

“Earnings and free cash flow generation were adversely affected, influenced in part by the timing of sales towards the end of the half and therefore lower collections occurring within the half,” he said, adding that free cash flow was expected to be second-half weighted.

Robb detailed Iluka’s approach to adverse market conditions, pointing out that the company had constrained its production to match demand, it continued to focus on operational efficiency and unit cash costs improvements, reporting a reduction in unit cash costs of production of 34.7% and a 12.7% reduction in the unit cost of goods sold.

The group also continued to focus on investing in its future, he said, stating that it invested in trailing an innovative mineral sands mining technique together with continued support for other research and development work in mineral sands mining and processing.

Iluka aims to take advantage of opportunities by investing in a countercyclical manner, Robb said, pointing to the offer for Sierra Rutile as one such example.

“Investing counter-cyclically by nature involves investing at a time when current cash flows are depressed. To do otherwise is to fall into the resources industry trap of investing pro-cyclically. The timing of investment, as well as the nature of investment, is central to the creation of value in mineral resources, as is a through-the-cycle commitment to exploration, innovation and technology.”

SHEFFIELD SAYS: “THUNDERBIRD IS GO” Australia // Zircon Sheffield Resources has jumped on its recent share price run by announcing plans to raise up to $17.1 million.

The company, which is developing the Thunderbird mineral sands project near Derby, said it would use the funds would help in its push towards production.

Sheffield hopes Thunderbird, what it says is a zircon-rich deposit and one of the world’s biggest and highest-grade mineral sands assets, will be in production by 2019.

24

asian ceramics

AC 16-8

The 52¢ placement price was a 17 per cent discount to the company’s 30-day volume weighted average price and the market pushed its shares down 7.5¢ to 67¢.

The company said the allotment was “oversubscribed” and taken up by a “select group of high-quality institutional investors”.

Sheffield also has a project in the Fraser Range near Balladonia, about 30km from Independence Group’s Nova project.

www.asianceramics.com

Pav. C1 · Booth 126

Hall 33 · Booth G2

Discover the new

ecosystem A complete solution for the

ceramic world

New Digital Inkjet Printers C4, M4, X4 and D4 Maximum performance under all printing conditions.

Color Management EFI™ Fiery® proServer The first complete color management system for ceramic tile printing.

New Cretacolor Inks A new and full range of ceramic inks.

Intense colors for a very large color gamut and special effects for high performance and premium quality.

Tel: + 34 964 340 264 · cretaprintsales@efi.com · www.efi.com/cretaprint Pol. Ind. Supoi-8. C/. Dels Ibers, 54. PO Box 93 · 12550 Almazora · Castellón, Spain

News Anaylsis

News

26

Bonded labour haunts Punjab brick industry

C

asian ceramics

entral and south Asian brick kilns have long attracted the attention of humanitarian agencies, activists and scholars as sites of severe labour exploitation.

Brick kiln workers are routinely described as ‘modern-day slaves’ in need of rescue. But we need to go beyond this simplistic ‘victim paradigm’ in order to understand the social nature of bondage as well as to situate that bondage within both local and global systems of domination and dependence. This is what I propose to do over the next 1000 words, using a case study of the brick kilns I researched in the Pakistani areas of Gujrat, Islamabad, and Rawalpindi in 2015 and 2016.

First, however, we must understand the crucial role of debt as an engine of capitalism, as well as the ways in which it restricts the choices of nominally ‘free’ labour.

Scholars of south Asia are divided over when and how capitalism first took root in colonial India (of which Pakistan was formerly part), yet most agree that it was already a reality by the late nineteenth century. One of its hallmarks was the growth of long working hours for low hourly wages in agriculture and industry, propelled by the imposition of debt.

Loans were given to workers in the ‘credit market’ at an exceedingly high price and then paid off in the form of low wages in the labour market. These wages were kept artificially low, ensuring the development of a cycle linking debt to labour dependence. Workers indebted themselves ‘voluntarily’ to help pay for their survival, and then had to ‘voluntarily’ take jobs which paid so little as to require their further indebtedness. This flow of demand for both credit and wagelabour was continual, with debt thus playing a crucial role in the establishment – and maintenance – of capitalism in the sub-continent.

Such dynamics are echoed in contemporary Pakistani brick kilns.

My research focuses on those at the bottom of the brick kiln hierarchy –

AC 16-8

people who typically work on piece rates to pay off debt accumulated with the brick kiln owner. This debt comes in the form of an ‘advance’ (peshgi) that people take to pay for things like marriages or illness, or to buy material goods such as motorbikes. Although the debt is held by an individual household head, all household members are involved in producing bricks to pay it off. And since households face regular deductions as part of their repayments, they are often compelled to ask for additional advances, with the ensuing debt cycle ultimately transferred inter-generationally.

An example of this indebtedness is Faisal, who I first met in October 2015 at a kiln near Rawalpindi. He was 41 and told me that he had been living in brick kilns for 25 years. His son and two daughters grew up in brick kilns with him.

“I didn’t realise I was not a free person”, he said, “until I asked for a second loan from the owner of the kiln. I was young at that time and needed money because my father didn’t have a job…There is no other way for people like us to get money”.

The lack of basic social and economic protection, as well as the lack of access to credit, are the fundamental prerequisites of this kind of debt-dependence. Faisal’s story is a case in point, as is Syeda’s.

Syeda is an 18 year-old girl I met in a brick kiln in Gujrat in June 2015.

“In Pakistan”, she said, “once you ask for a loan, you become a debtor forever. Nobody cares. We ask for loans as the only way to make a living”. When I met her again in February 2016, she was pregnant: “I have to keep working”, she said, “even if it’s harder now”.

Because debt dominates the entire horizon for people like Faisal and Syeda, it is fair to say that their future itself is bonded. But as Syeda put it, “If we were not here in the kiln, how could we manage to have a child? It’s a bad life. But at least it’s a life”. Bonded relationships can provide a measure of security in

situations of grinding poverty and insecurity, and workers exchange their subservience for protection.

Yet a full picture of debt bondage under capitalism can only really emerge once when we bring ‘the social’ back into our analysis.

“Pesghi is the only possibility we have to fulfil our duties in society”, Faisal explained to me. “There are several issues to think about – dowry being a good example”.

In his case, he also had to worry about remittances and the future of his children. These socio-cultural duties all require money – and when you’re too poor or too excluded to access cheap money, you end up needing debt.

Socio-cultural factors can be seen in other dynamics too. In Rawalpindi, the owner of a kiln explained to me that “migrants and low cast families tend to accept working conditions that locals would refuse. They are willing to live in a way that others would consider unbearable”. This often includes being deeply in debt and having that debt condition their labour. In part, this is the result of migrant and low caste poverty. But not solely. Low caste families, for example, also face radical social immobility due to their status, and debt offers them an alternative to street begging. Migrants, on the other hand, use brick kiln work as an alternative to escape agriculture, but their social and economic isolation strengthens the bonding capacity of the debts they accrue.

Debt, in itself, does not lead to bondage. Rather, the potential for that kind of exploitation emerges out of the way in which indebtedness interacts with social, legal, and economic uncertainty, and with social and cultural inequalities and injustices. In situations of vulnerability and social marginalisation, debt can become the crucial link between a person’s ‘free’ choice and their unfree life – to paraphrase Marx, they might ‘choose’ their indebtedness, but they don’t do so in conditions of their own making.

www.asianceramics.com

HER_AsianCeramics_254x86_09_16_print.pdf 31.08.2016 10:37:50

Economic Solutions for Sanitaryware Production

KERASYS LC ®

for perfect surfaces

Cost reduction with increases in quality!

Kerasys® LC makes damages almost invisible.

C

M

Increase your profit!

Accelerate your workflow with Kerasys® LC. Kerasys® LC – light curing repair system for sanitary ceramics and porcelain.

Energy-saving high-output plants for gentle drying

Y

CM

Meet us at :

MY

CY

26. – 30. Sep. Rimini, Italy Pav. C3, Booth no. 174

CMY

K

New package design for Primer RC

Enhanced quality and maximum flexibility through robot spray glazing

Perfect plaster moulds through automatic batching and vacuum mixing

Advantages: - faster application by direct material injection - less waste of material due to precise dosing

Maximum economies of scale through optimized handling and transport

fast·easy·cost-effective For more information: www.kerasys.de technik.wehrheim@kulzer-dental.com

Julius Lippert GmbH & Co. KG Boettgerstrasse 46, Postfach 1120, D-92686 Pressath Phone +49 9644 67-0, Fax +49 9644 67 222, e-mail: lippert@lippert.de Internet: www.lippert.de

Probedruck

Analysis: Rajasthan

Return of Gujarat’s neighbour as a rising rival

AC looks at how the rise of Rajasthan – driven largely by RIICO – could be about to displace Gujarat as the country’s most exciting ceramics investment location…

I

n September 2014, a group of about 40 ceramic industry owners from Gujarat ( mainly from Morbi, Thangadh and Himmatnagar) visited the state of Rajasthan in search of opportunity of setting up ceramic plants there. Those who have already moved to Rajasthan had recommended a better deal in the state.

At that time, these ceramic producers had claimed that Gujarat state pollution board is harassing the ceramic producers on the pretext of pollution. These producers claimed that though Gujarat High Court has allowed usage of gasifiers for ceramic production, the state pollution board was not granting permission for same to ceramic units.

These producers claimed that the Rajasthan government is welcoming Ceramic industry with red carpet and offering round the clock power supply, cheap land, cheaper gas, low interest loan, simplified tax structure and permission to use gasifiers for their units.

Though, later these ceramic producers postponed their plans to set up ceramic manufacturing units but there is no denying the fact that currently it is second most attractive destination for ceramic manufacturing in the country. ( Note- Our readers would remember that during 2014-15 some

30

asian ceramics

AC 16-8

200 ceramic units of Morbi were closed due to coal gasifier related petition filed in Gujarat high court for a period of around 2 months.

Gujarat based ceramic Industrialist tried get good support form Govt of rajasthan but it did not results in migration of ceramic industries into the state.)

Availability of ceramic industry raw materials and state’s proximity to Delhi are two unique strengths, which makes the state an ideal place for ceramic manufacturing. A significant part of the state is located within National Capital Region (NCR) which is a well known established industrial hub and has excellent infrastructure.

With a slew of steps (by the authorities and ceramic producers) in the right direction, the state has the potential to give a tough competition to Gujarat’s ceramic industry.

Rajasthan- Slew of Projects

Growing attractiveness of Rajasthan could be gauged from the quantum of investments made in the sector in last six months.

One Japanese sanitary ware (anonymity due to official nondisclosure policy of the company) plant is under construction and

www.asianceramics.com

Analysis: Rajasthan

the Raj THERE IS A HUGE POTENTIAL OF CERAMIC INDUSTRIES IN RAJASTHAN will be in operation by mid 2017. Leading organized sector sanitary ware producer, Cera has announced to set up a new sanitary ware manufacturing plant in the state with an investment of INR 800 million. Leading tile producer, Kajaria Ceramics is under expansion with more then a 100 crore investment in Alwar district of the state.

Roca Paryware has invested significantly in the state and looking for expansion options. India’s largest organized sector sanitary ware producer, Hindustan Sanitary ware Industries Limited has made an investment of INR.150 crore in sanitary ware plant which will be fully operative in 2017.

Raw Material: Advantage Rajasthan

Almost all major minerals required for ceramic industry are available in Rajasthan. Currently, the state accounts for more than 70% of country’s total requirement of ceramic industry’s raw materiala. The state is endowed with rich reserves of quality ball clay and fire clay, silica sand, feldspar, gypsum, china clay, limestone, talcum and dolomite.

The deposits of ball clay and fire clay at Kolayat, Kharduja,

www.asianceramics.com

Devikot, Baser, silica sand at Bundi and other locations, feldspar at Beawar and Ajmer, gypsum at Nagaur, Ganganagar and Bikaner, china clay at Neem Ka Thana, limestone at Gotan, talcum at Dausa and dolomite at Bhilwara, Alwar and Udaipur are known for their quality in the ceramic industry.

Climbing up on the value chain, a number of downstream raw material processors have emerged in the states, who have become mainstay of ceramic industry raw material industry. In fact, about 70 % of the ceramic industry’s raw material processors / grinding units are based in Rajasthan, which provides the ceramic industry of the state its greatest strength.

Rajasthan government and associated departments are vigorously trying to attract investments in ceramic industry in the state. According to Rajasthan’s Joint Director of Mines, Iqbal Kahn, “Given the availability of a large variety of minerals for the industry, there is a huge potential of ceramic industries in Rajasthan. In addition, there is well-developed transport, communication and power infrastructure in the State. The State offers an investor-friendly environment and welcomes Indian and multinational investment in ceramic and mineral based industries.”

AC 16-8

asian ceramics

31

Analysis: Rajasthan

Ashok Kajaria, Chairman and CMD of Kajaria Ceramics, one of the largest ceramic tile producers in the country says there is an undoubted advantage of availability of raw materials in the state, but the government should also take some other measures to promote a healthy manufacturing environment in the state. His company operates one of the largest installed capacity at single location at Gailpur in the state of Rajasthan and five small JV plants in the state of Gujarat. He says, "Rajasthan is the resource base for 90% of the raw materials used in the ceramic industry.

But investments in ceramic manufacturing in the state are far less compared to Gujarat, which accounts for 75% of the production in the country. Even though Rajasthan government has taken some important decisions like setting up a dedicated ceramic zone and providing it with critical infrastructure, the state needs to bring down VAT to compete with Gujarat," says Ashok Kajaria, chairman, and CMD of Kajaria Ceramics Ltd, which has plants both in Gujarat and Rajasthan.

Gujarat, on the other hand has limited availability of ceramic industry raw materials in the state. There are some reserves of ball clay and some other materials but quality of these reserves is far from satisfactory. The state’s ceramic industry is heavily dependent on raw material supply from Rajasthan and some other Southern Indian states.

Infrastructure

While, both the states, Gujarat and Rajasthan has spent huge amounts on physical infrastructure in recent years, state of Gujarat is a clear winner in terms of better infrastructure needed for ceramic industry due to its head-start.

However, Rajasthan is expected to gain heavily with the setting up of Delhi-Mumbai Industrial Corridor. With more than a third of the 1,483km-long dedicated western rail freight corridor between Dadri in Uttar Pradesh and Jawaharlal Nehru Port Trust in Navi Mumbai, will pass through the state. A number of industry stakeholders are terming it a game-changing project that will bring development directly to the state’s doorstep.

For Gujarat based producers, excellent road connectivity to the two most important markets of Northern and Western India and intercity connectivity among Gujarat’s cities offers a greater advantage to its ceramic peers in Rajasthan. By virtue of its strategic location, state of Gujarat also enjoys a huge advantage in terms of exports as the state has a number of sea ports, which makes it cheaper for the state based ceramic producers to export their products to the Middle East and African markets at very competitive prices.

Despite the excellent roads connecting Morbi , Thangadh and Himmatnagar to other parts of the country there exists some problems. Bhavesh Patel , a partner at Sunshine Tiles at Morbi puts it very succinctly, “Every day, we have more than 30 businessmen and partners coming to Morbi. There is no proper connectivity for them to travel, nor are there good hotels for their stay. The less said about the water supply and the quality of interior roads, the better. In fact, half of Morbi’s internal roads have been made by local ceramic producers acting in collaboration.”

Business case

In a 2015 survey by Indian central government’s Department of Industrial Policy and Promotion ( DIPP) state of Gujarat ranked first, while Rajasthan could manage only sixth position. Gujarat, with a net score 71. 14 % was way ahead of the other Indian states. Though, Rajasthan with a score of 61.04 % has improved

32

asian ceramics

AC 16-8

Area

Gujarat

Rajasthan

196,024 sq kms

342,239 sq kms North-western India; shares domestic borders with Punjab, Haryana, Uttar Pradesh, Madhya Pradesh and Gujarat.

Location

Population

Ceramic Production of tiles, sanitary ware and tableware in 2015 (Value) Share of India’s GDP

60,383,628

68,213,745

15,600 crores

1400 crores

8,200 crores

1200 crores

1100 crores

2900 crores

7.31 %

4.70 %

518 ( active)

13

308

8

Number of ceramic insulator producers

7

38

Number of ceramic tableware producers

7 ( Two in organized sector)

21 ( Eight in organized sector)

Number of ceramic tile units Number of sanitary ware producers

Leading ceramic industry players in Rajasthan Company

Area of Activity

Location

Kajaria Ceramics

Tiles

Gailpur

Liberty Whiteware

Sanitary ware

Neemrana

Roca Perryware

Sanitary ware

Alwar

Ceramic Insulators

Mount Abu

Tablware

Jaipur

Colour, Fits and Glazes

Jaipur

Tableware Producer

Jaipur

Wollastonite

Udaipur

Golcha Group

Talc

Jaipur

Golcha Associated

Talc

jaipur

Modern Insulators Jaipur Ceramics Hopewell Ceramics Clay Craft Wolkem India Limited

its position in the tally, when compared to previous years score.

The DIPP listed eight areas in which states were ranked: setting up a business, allotment of land and obtaining construction permits, complying with environmental procedures, complying with labour regulations, obtaining infrastructure-

www.asianceramics.com

Analysis: Rajasthan

related utilities, registering and complying with tax procedures, carrying out inspections, and enforcing contracts.

According to Surendera Singh, President of RIICO at Bewar in the state of Rajasthan, “ Disposal of applications at various levels in Rajasthan is not so smooth as happened in Gujarat and investor do not like long delays. The Rajasthan pollution control board and Environment clearance committees are too slow in disposing and also work under pressure where as the Gujarat is so quick.”.

He further says, “Another factor, which could have spurred development of ceramic industry in the state is granting mining right to companies for captive use in ceramic industry. But, the state and central government doesn’t have any policy about grant of mining rights for captive consumption.”

Gujarat Strikes Back

In a bid to retain its leadership position and thwart competition emerging from Rajasthan, Gujarat government has reduced VAT on ceramic products from 15% to 5% in the Budget 2016-17.

The move could undercut the recent efforts of Rajasthan aimed at building a vibrant ceramic industry as the tax rates in the state still remain high at 14.5 %.

Rajasthan- Hub of ceramic Tableware and Insulators

Despite, all the success achieved by Gujarat in ceramic tile and sanitary ware segments, Rajasthan is a clear winner in the production of ceramic tableware and insulators.

Most of the prominent ceramic tableware producers are based in the state. The state accounts for more than 50 % of the total tableware produced in the organized sector.

Bikaner, located in the north-west of Rajasthan is a hub of ceramic insulator production in India. Ample availability of raw materials in the towns of Kolayat, Nokha, Dulmera, Mudh, Gura and Lunkaransar have made Bikaner an ideal location of ceramic insulator production. The annual volume of white clay mined in the region is about 8 lakh metric ton.

Ceramic Zones of Rajasthan

In order to take advantage of raw material availability and improving infrastructure for the industries, Rajasthan has not only given ceramics a priority sector status, but is also working on the development of ceramic clusters in the state.

First such cluster, which is under advanced stage of completion is being set up at Ghiloth of Neemrana in Alwar district of Rajasthan. This region is a part of Delhi-Mumbai Industrial Corridor (DMIC). Ghiloth is located approximately 100 km from the Delhi airport, off the Jaipur-Delhi National Highway (NH-8) along the interstate natural gas pipe-line.

Spread over 500 acre, this cluster will be entirely dedicated to ceramic production. Out of the 500 acre, 250 acre will be used for factories having a total of 69 units. The zone promises to be an ideal location for

34

asian ceramics

AC 16-8

Ease of doing business in Indian states Ranking

State

Score

1

Gujarat

71.14 %

2

Andhra Pradesh

70.12 %

3

Jharkhand

63.09 %

4

Chhattisgarh

62.45 %

5

Madhya Pradesh

62.00 %

6

Rajasthan

61.04 %

7

Orissa

52.12 %

8

Maharashtra

49.45 %

9

Karnataka

48.50 %

10

Uttar Pradesh

47.37 %

units manufacturing ceramic floor tiles & wall tiles, sanitary ware, porcelain & bone china tableware and ceramic colours and glazes.

"We have already allotted plots to 24 investors for 25 projects in Ghiloth. So far, the investor interest has been very good but there are still 44 plots vacant," says Vinay Shehawat, a Rajasthan government official associated with Neemrana project. He further says, “Non-availability of gas, which is a major component for running ceramic units, was one of the main handicaps in the past.

But Rajasthan State Gas Ltd has already developed the pipeline infrastructure to supply gas to the zone and this will provide the operational comfort that the factories require.”

In addition to Ghiloth, Rajasthan government is planning to open one more ceramic complex in the state in order to promote investments in the ceramic manufacturing. This complex will be set up in Sathana in Ajmer district. 550 bighas of land has been demarcated and polting under way for medium to large scale ceramic mnfrs at Sathana village in Ajmer district by Commissioner of Industries through state corporation, RIICO .Ten ceramic producers have shown interest to set yp manufacturing units.But, further investments in ceramic industry would not take place until gas availability in the region become is ascertained.

According to Rajasthan state mining department, the state government will provide infrastructure facilities and financial help to mineral industry entrepreneurs based in the state so that ceramic industries could be established in the region.

Ajmer is a key center of ceramic industry raw materials in the state.

Though, there are a number of ceramic units in the state, but having a dedicated industrial complex will spur the growth of ceramic production in the state.

In order to promote the ceramic zone, state government is planning to establish natural gas fuel hubs along national highways of Ahemadabad- Udaipur and Palanpur- Sirohi, which can meet the future needs of ceramic units of Sathana Ceramic complex.

www.asianceramics.com

a brand to cover the future

BONGIOANNI

Leader in the construction of machinery for the heavy clay industry, with over 100 years of experience, Bongioanni supplies solutions projected into the future. Bongioanni Macchine and Bongioanni Stampi design machinery and production lines for claddings that provide the construction sector with materials characterised by high energy savings, high quality and refined aesthetics. Innovative solutions are tailored to suit every customer’s individual needs. Bongioanni covers all requirements, from raw material to the damp-moulded product, making it possible to obtain constant and high production capacity, respect of working safety standards and the supply of a complete aftersales service.

Bongioanni Macchine S.p.A. Macchine per Laterizio Via Macallè, 36/44 12045 Fossano (CN) - Italy Tel. +39 0172 650511 Fax +39 0172 650550 www.bongioannimacchine.com info@bongioannimacchine.com Certified company. REG. N° 815 UNI EN ISO 9001:2008

Stampi e Filiere Via Salmour, 1/A 12045 Fossano (CN) Italy Tel. +39 0172 693553 Fax +39 0172 692785 www.bongioannistampi.com info@bongioannistampi.com

Analysis: Rajasthan

Competitive Advantages Gujarat

Rajasthan

Mumbai region is in close proximity. This along with rapidly modernizing cities of Gujarat forms a large customer base for ceramic industry.

Rajasthan forms a considerable part of the National Capital Region which has a huge consuming population with respect to the ceramic industry

Ceramic clusters of Morbi, Thangadh and Himmatnagar provides the greatest strength to ceramic industry of Gujarat.

Exclusive ceramic clusters spread over 1000 acres being developed by the State Government at Ghilot and Sathana.

Natural gas is available to producers in all the major ceramic clusters.

To encourage investments in the ceramic sector piped natural gas has been made available in Neemrana and other areas.

A major proportion of raw material comes from Rajasthan.

Ample availability of raw material for ceramic industry.

565 Kms of Delhi-Mumbai Industrial Corridor (DMIC) passing through the state will provide excellent logistics & transportation infrastructure.

553 Kms of Delhi-Mumbai Industrial Corridor (DMIC) passing through the state will provide excellent logistics & transportation infrastructure.

Labour

Skilled and chaep labour is available.

Cheap labour is available but training for skilled labour is needed.

Incentives

No special incentives by government.

Incentive package for ceramic manufacturing.

Markets

Ceramic Clusters

Natural Gas

Raw Material Delhi- Mumbai Industrial Corridor

Rajasthan: Incentives for Ceramic Sector

Recently, Government of Rajasthan through Commissioner of Industries has attempted to prepare ceramic industries development policy to attract largest investment. Industrialists from Morbi and Delhi have shown keen interest. The policy is under consideration phase and is likely to be announced soon.

Surendera Singh, President of Bewar chapter of RIICO and Managing Director of RGe Group, a key raw material provider to ceramic industry, who attended the policy formulation meetings told Asian Ceramics, “ Rajasthan Government is considering of providing rebate in registration and stamp duties, electricty duty, VAT tax subsidy, ensure availability of gas, liberal pollution control licensing at par with Gujarat state pollution control policy to potential ceramic entrants in the state.”

He further says, “ In near future, state government may allow captive mining leases to ceramic industries. Mineral intermediate producers are demanding for ban on sale of raw minerals to other states, which could create hurdles for ceramic producers elsewhere in the country.”

Rajasthan government has announced a slew of other measures to attract investment in the ceramic sector.

Ceramic producers making a minimum investment of five crore rupees in the ceramic sector [shall be granted] the following benefits:– (a) Investment Subsidy of 50% of VAT and CST which have become due and have been deposited by the enterprise for ten years; and (b) Employment Generation Subsidy up to 10% of VAT and CST which have become due and have been deposited by the enterprise, for ten years Provided that for enterprises making a minimum investment of fifty lakh rupees in the ceramic and glass sector in a ceramic hub, as notified by the Industries Department and having at least ten enterprises with a minimum investment of fifty lakh rupees each, the quantum of investment subsidy shall be 65% of VAT and CST.

36

asian ceramics

AC 16-8

Ceramic Tableware Producers in Rajasthan Company

Location

Jaipur Ceramics Pvt Ltd

Jaipur

Bharat Potteries Limited

Jaipur

Data Ceramics

Jaipur

Neeraja International

Jaipur

Clay Craft India

Jaipur

Jaipur Glass & Ceramics

Jaipur

Marvel Ceramics

Alwar

Hopewell Tableware

Jaipur

Ceramic Insulator Producers in Rajasthan Company

Location

Installed Capacity

Bikaner Ceramics Pvt Limited

Bikaner

9000 TPA

Bikaner Porcelain Private Limited

Bikaner

3000 TPA

Mount Abu

30,000 TPA

Bikaner

12000 TPA

Jaipur

3000 TPA

Bikaner

4000 TPA

SLGK Cera Pvt Ltd

Jaipur

2000 TPA

Ambica Ceramics

Bikaner

3000 TPA

Modern Insulators Suraj Insulators Adpro Ceramics India Pvt Limited AK Ceramics

www.asianceramics.com

38

asian ceramics

AC 16-8

28719

2290

000 Wollastonite Tonnes

-

2705 197

14770 2487

46193 3750

6155

-

-

7323

-

3724

19196

-

76

1685

24356

3325

837

668

25480

000 Tonnes

11990

3154

16502

Talc

575

9666

19484

222017

11415

4042

5598

-

9840

3559

000 Tonnes

34715

64160

Bentonite

8838

20250

350

7793

9601

000 Tonnes

2580

-

Fuller’s Earth

2256

18676

18083

583

2875062

000 Tonnes

1071

1100691

Feldspar

195

4301217

Indicated

34309

14202

9471710

Measured

000 Tonnes

5000

2845470

Pre- Feasibility

Dolomite

659

350832

Feasibility

8543

6275408

Probable

100 Tonnes

Tonnes

Ball clay

Proved

Remaining Reserves

China Clay

Unit

Mineral

Reserves

Reserves and remaining reserves of key minerals for ceramic industry in Rajasthan

1213

50768

139423

189709

25859

324604

45536

14045369

Inferred

-

5

25730

-

-

784

-

-

Reconnaissance

12089

85969

411526

190059

53231

396010

57221

22341015

Total

14576

132161

423517

190059

87946

460170

66423

31812725

Total Resources (A+B)

Analysis: Rajasthan

www.asianceramics.com

GAME CHANGING

We like to change the rules of the game, not follow them. With SuperaÂŽ technology, our complete line for the production of tile slabs shifts up a gear and moves to the next level.

Are you ready to start?

26-30 SEPTEMBER RIMINI - ITALY

www.sitibt.com

Analysis: South Korea

Setting a future stage South Korea looks for a brighter tomorrow

Inus sanitarywares. Photocredit Inus

Jahir Ahmed examines how South Korea’s previously ailing ceramic industry is looking to re-invent itself for a new customer base.

W

hat is the secret behind South Korea’s dynamic ability to get rich quick? From the ravage of a rural economy of the seven decades ago, South Korea’s gross domestic product (GDP) now stands at over US$27,200, at current exchange rate, according to the World Bank. The Korean boom was not that simple. The South Koreans are not that tiny nation, which can be wealthiest one just after striking a mineral reserve on or offshore. The huge South Korean population of over 50 million is larger than Belgium, the Netherlands, Denmark, Norway and Sweden combined.

40

asian ceramics

AC 16-8

The touch of their ability is unimaginably great in ceramics. They are the world’s most efficient nation today in making money not only from electronics, shipbuilding, IT, automobiles and some others in which they hold a lead, they are also doing well in advanced and traditional ceramics alike and earning billions in US dollars from the world markets from almost nothing when their country was freed from the Japanese occupation at the end of the World War II in 1945.

Much of smart phone and IT parts, as well as electronics, energy industry, medical care and spacecrafts, are ceramics, and the South Koreans know those technologies that have worldwide business turnover of several hundred billion US dollars a year, mainly in the

www.asianceramics.com

Analysis: South Korea

COATING OPTIONS

Ceramic coating is not new, it is used commercially since decades, but ‘Ceramica’ coating developed and marketed by Korea Fine Ceramic Co Ltd (KFCC) has robbed the dream of many manufacturers of cookwares who were spending a lot on R&Ds for a long time. Compared to very high temperature porcelain enamel, this low curing temperature non-toxic and non-flammable coating is a hard glassy film based on nanotechnology and sol-gel process and its application has become widely accepted.

“With constant technical research, development and efforts, KFCC has developed this eco-friendly fine ceramic coating material which can be applied to many applications in various fields,” said KFCC while campaigning for the product with a slogan “technology for happiness,” targeting dozens of product groups, including, cooking and baking appliances, electronics and home application, transports, and architecture.

South Korea is setting the future state in manufacturing and consuming ceramics by inventing lots of opportunities in all areas of applications of ceramics, specially, in production of traditional ceramics, such as, tiles, sanitarywares and tabletops and kitchenwares. They have added anti-biotic to tiles and sanitarywares and functional advantages of improved bidet toilets to glass/ceramic glass tablewares like ‘Glasslock’ brand as huge commercial success.

Large Korean industrial conglomerates are spending huge funds to improve the quality and functionality of tiles and sanitarywares and some of them have concentrated more smarter shower integrated intelligent bidets, but KFCC Ceramica coating-applied cookwares have hit the mass market greatly in recent years for its wider global demands, backed by continued R&D since launching in 1987.

The cookwares and baking utensils using the KFCC Ceramica

industrialized countries. The technology researchers know the South Korean ceramic experience is setting a future stage of the world.

Korea Advanced Institute of Science and Technology and many other similar institutes, research organizations, universities and industrial companies’ R&Ds are involved in ceramic related researches.

The Korean economy has reached that stage to support the country. International Monetary Fund’s World Economic Outlook Database shows, South Korea’s total GDP amounted to US$1.849 trillion in 2015. Annual export in 2015 was US$526.76 billion (down from US$572.66 billion of 2014 due to slump in export markets). A considerable part of worth many billion US dollars, of total export products, use locally produced advanced ceramics, including semiconductors.

With the rise of production cost in this high-income country, the production base has gradually switched to high-tech industry.

Investment in ceramics also elevated to advanced ceramics, most particularly, to sophisticated ceramic semiconductors. However, traditional ceramics still exist in South Korea just to cater the deficit domestic markets, while export is less competitive.

Rather, import substitution has been more logical, as the domestic markets of ceramic tiles, sanitarywares and tablewares are substantially import dependent. Housing and construction companies now own a number of ceramic tile and sanitaryware plants.

South Korea’s semiconductor production is the world’s second

www.asianceramics.com

are quickly getting the market for the revolutionary strength of the coating that makes cookwares amazingly useful heatand-scratch-free. In South Korea’s cookware market, KFCC Ceramica commands some 90 percent market share in ceramic coating, according various sources. Almost every cookware, non-electric cooking utensil, cooker, even a tableware can apply this fireproof, chemical proof and scratchproof coating.

KFCC Ceramica coating is going to change the world as its scope of application is enormous. It has already marketed dozens of Ceramica coatings for over a hundred applications.

The ceramic coating that can be applied on many household materials has been changing the everyday-use household utensils to larger multi-storied buildings to transport and vehicles. Interior and exterior of metro trains are coated with Ceramica coating for safety. Everywhere, metals, panels, paints, reinforcing materials, and others are using the coating for so many advantages, said KFCC.

largest after USA. Its ceramic application exports were worth about a billion US dollars in 2015 and exported mainly to the USA. The products included cutting and digging tools, precision machine control, glass, semiconductors and display products, etc.

Its traditional ceramics export in 2015 was US$418.918 million, import was a few folds higher, at US$1.490 billion.

Ceramic imports in million US dollars in 2015 from seven largest supplying countries included China (781.8), Japan (238.2), USA (98.1), UK (59.3), Poland (59.2), Germany (48.7), and Indonesia (37.6).

The 2015 ceramic exports in million US dollars to seven largest destinations were China (126.1), Japan (94.5), Taiwan (41.8), USA (40.2), Indonesia (19.0), Hong Kong (15.7) and Vietnam (11.2).

Semi-finals

According to the US market research firm IHS Technology, South Korea ranked second in the semiconductor production race, recording a market share of 16.2 percent in 2013, said the Korean Ministry of Trade, Industry and Energy (MoTIE). Korea’s semiconductor output recorded sales of US$51.5 billion that year, outpacing Japan, which recorded US$43.4 billion in sales and a market share of 13.7 percent.

The US’ share was 52.4 percent with sales of about US$166.6 billion. Europe and Taiwan took fourth and fifth places, with market shares of 8.7 and 6.5 percent, respectively.

AC 16-8

asian ceramics

41

Analysis: South Korea

Since past several years, South Korea is the world’s top memory maker. MoTIE said in 2013, South Korea’s share in world memory market rose to 52.4 percent with output of worth US$34.297 billion, outperforming the second position holder US that recorded a market share of 27.1 percent only.

South Korea’s success is attributed to the Korean semiconductor makers having entered the world semiconductor market about 30 years ago. Korean semiconductor producers, like Samsung Electronics and SK Hynix, have been strong in the memory market, making dynamic random access memory (DRAM) and NAND (negative-AND flash memory).

Developed rich nations had to make voyages century after century in last 600 years across the globe in search of wealth and occupied country after country to sit on money, but the Koreans never did this. They were rather invaded repeatedly by the Japanese. Their country was finally occupied by Japan in 1910. During the occupation period the economy was totally doomed. The Koreans rose from the ashes. The people who were born during the Japanese occupation still work harder in their seventies to revitalise their skills to take the country to riches in only one generation, driving on scientific and technological advancements being a most knowledgeable nation.

TABLE SETTINGS

Korean table setting in traditional style includes unique side dishes and less flat wares. In modern style, a couple of fork and spoon added.

Traditionally, the Korean table settings are comprised of a number of side dishes. Family and friends gather around the table and share between themselves, sampling every dish. Only boiled rice and guk (soup) are two items that are not shared. These customs represent the true character of Koreans as being people who prefer to do everything together, according to the organizers of party dinners.

Passion for work

Despite a boom in earning of the South Koreans, who are already having the benefit of the economic rise and improvement of lifestyle at mass level, many of the ceramic artisans of over 70 years are still working passionately in their potteries.

Whang Chong-nye at her 90 said she finds pleasure in working at her work place, in Goyang, a lively city of one million in north of Seoul. She continues to update and improve Korean origin Buncheong ceramic technique, producing and painting cups and bowls with Korean traditional Gwi-yal paste brush patterns in grayish-blue, giving a pleasant touches that everyone likes in familiar objects, commonly, birds and fishes, she told the daily newspaper The Korea Times recently.

Foreign and domestic buyers of everyday-use products find confidence in commitment of Korean artisans. Small and medium enterprises (SME) struggle hard to operate profitably due to rising wages. They survive using their traditional creativity in modern industrial production. Ms Whang emphasised importance on such commercial application of the traditional skills to let the general consumers use the produced ceramicwares in everyday life.

Elix table-setting set. Photocredit Elix..

Ring out the old…

Jeollanam-do (South Jeolla Province) based SME tableware maker Premium Ware CEO Lee Ohhoon speaks bravely about his application of traditional techniques with modern technology and stay at business in a changing economy and lifestyle. He believes Korean traditional ceramics stay live and now travel around the world with its high quality cuisine and getting a boost with globalization of trade and services.

Korean pre-porcelain traditional ceramics Goryeo celadon, grayish-blue powdered celadon and white celadon of Yi Dynasty (1392–1910) are valuable in both splendid and cultural aspects that helps let the world know about the great Korean culture and civilization, said Lee. Elix, with manpower of 80, produces 600,000 pieces monthly of about 300 different moulds, of full ranges of dinnerwares, in both Korean and Western styles with ability to supply any

42

asian ceramics

Elix table-setting set. Photocredit Elix..

AC 16-8

Elix table-setting set. Photocredit Elix..

www.asianceramics.com

Analysis: South Korea

customized products and ranges. It offers the full tablewareranges of Korean traditional style table-setting that sells well.

Companies like Elix are working to spread the centuries-old traditional ceramics to the world market by applying modern techniques and styles. During the 2nd and 3rd centuries BC new techniques were introduced that allowed the Koreans to produce grayish-blue stoneware.

Introduction of celadon from China was well accepted and spread in Korea in the 9th century and developed the Korean versions with more advanced techniques and styles of their own. During the 14th century when the more advanced Chinese white porcelain became most dominant ceramics in China it was quickly adopted by the Koreans, who improved further by developing own porcelain technology that later attracted the Japanese to use it.

Lee said his company is able to supply not only the targeted high-end ceramics and porcelain products that inherit traditional ones in modern ways, but also customized ones that can express the originality of the individual themes and categories for luxury caterers of foods and services.

The Korean white porcelain differed in design from the Chinese wares in that the elaborate decoration techniques used by the Chinese were never practiced. The resulting wares had a simpler and more elegant look.

The quality of Korean white porcelain advanced quickly after its introduction and was soon reached to its peak with high enough quality that it was sent as a gift to the Chinese Ming Dynasty Imperial Household in 1425. In the following centuries the Japanese followed the Koreans and developed their own versions of porcelain for commercial success worldwide.

Import issues

South Korea’s traditional ceramic market is now import dominated because of very high labour cost. Despite opportunities in reducing labour cost in tile factories by automation of the total production with advanced technologies, the investment in high-tech tiles is still in waiting.

Industry sources believe, the annual import of tiles will rise to about US$400 million by the next few years as new houses and buildings are import dependent. According to the Korea International Trade Association (KITA) and the Geneva based International Trade Centre (ITC), import of ceramic tiles has exceeded US$310 million in 2015.

Sanitaryware import in 2015 was about US$144 million and growing rapidly since last few years. Tableware market also has high import growth. This year’s imports may exceed US$200 million from last year’s US$190 million. Imports of ceramic laboratorywares, refrectories and other under HS codes 6909 and 6902 totalled US$640 million last year.

Compared to high imports, the exports under HS codes 6909 and 6902 totalled US$318 million; these two sectors combined have good expansion, although exports under 6902 is smaller with less stable growth. Almost stagnant tableware export was US$28 million. Exports of sanitarywares and tiles were too poor, less than US$4 million and US$2 million, respectively, in 2015.

Two worldwide reputed brand tableware manufacturers, Hankook Chinaware Co Ltd and Haengnam Chinaware Inc, said, production cost is going up while the domestic consumers favour Western brand products. They fear the export sales also may be affected badly if slump in export markets continues.

The slump in export markets has affected ceramic shipments.

44

asian ceramics

AC 16-8

INCHEON: THE CERAMIC VILLAGE

500 year old Korean ceramic village houses 80 potteries, 300 kilns Icheon Ceramics Village, the center of traditional pottery developed during the Joseon Dynasty (1392-1910) in about 500 years due to the easily obtainable materials in the areas, produces traditional Korean ceramics, which are of high quality. The crafts of the potters are known as Living Cultural Treasures of Korea for creating the highest quality ceramic handicrafts. About 80 pottery factories with some 300 pottery kilns are congregated there.

Besides the traditional Cheongja, Baekja, and Buncheong pottery produced there, modern designed pottery are also manufactured and sold to the visitors.

The area’s Haegang Ceramics Art Center is the only ceramics art center in Korea, where anyone can learn about ceramics. The village is internationally famous for Icheon Ceramics Festival held every year, normally in November.

Display of pottery, pottery classes, traditional kiln handling, pottery character show, and even parades are held during the festival.

Traditional and advanced ceramics, semiconductors, all were down. Major semiconductor market China is going to develop own domestic supply base for the growing local consumers.

A report released by Statistics Korea showed that industrial output in South Korea continued to decline in the second quarter amid weak demand and low business confidence. The factors that weighed on industrial production were weak exports.

In overall total industrial sector, the factory output declined by 2.8 percent year on year in April, as compared to a drop of 1.3 percent in March. This was worse than economists’ expectations of a decline of around 1.4 percent. The weakness in output indicates that the South Korean economy is headed through a ‘rough time,’ according to the researchers.

Changing lifestyles

Western influence in lifestyles has now captured most of the Korean markets. Local tableware manufacturers are now facing strong competition from imports, mainly from the UK bone china and porcelain manufacturers, such as, Wedgewood, Royal Doulton and similar others.

South Korean upper-end market is dominated by the UK products. Last year’s imports from UK was about US$58 million, while the largest supplier China’s supply was over US$83 million. Imports from the rest of the world totalled some US$50 million.

Massive imports of tablewares of porcelain, bone china and stoneware have affected almost all of the domestic manufacturers. Hankook Chinaware and Haengnam Chinaware with annual neck and neck sales of some US$50 million each are now busy in consolidating market positions domestically as well as worldwide.

The largest one, Hankook, capitalising on its global brand recognition has planned to expand export market. Its local rival Haengnam also has expanded export drive. Total annual exports of all the tableware operators are not much significant at less than US$30 million, considering their production capacity and market potentiality. A part of their capacity remains unutilized since the beginning of the global slowdown that affected growth of Korean exports in last half a decade.

www.asianceramics.com

Analysis: South Korea

Hankook and Haengnam said they have been manufacturing Western style products, yet the Western brand influence and styles have greater impacts. Middle segment imports from China have also captured a big market share. Both the local elites have a combined potential of about US$100 million a year in the domestic market.

The Korean players recreate local style products in Western designs to stay in the market by following the experiences of the Japanese global players, particularly, Noritake Co Ltd, who added Western tastes, including blends with the Japanese, in styles and designs and achieved success.

To increase manufacturing cost efficiency, Haengnam opened a production plant in Indonesia a quarter century ago. Soon Hankook followed the suit. They entered Indonesia much before Royal Doulton of UK and the Japanese manufacturer, Narumi Corporation. In fact, the two Korean tableware manufacturers’ setting up plants near Jakarta city, the capital of Indonesia, showed the way to Royal Doulton and Narumi.

Sanitaryware advances

In an intense rivalry against foreign suppliers of ceramic sanitarywares, a dozen local ceramic sanitaryware producers, including major ones, Daelim B&Co, IS Dongseo Inus Sanitarywares, Kelim Ceramics Co Ltd-TOTO and American Standard-Lixil Korea, each with over a million piece production capacity per year, are now engaged in a tough fight, mainly against the Chinese products.

In 2015, China alone supplied some US$138.792 million worth of sanitarywares to the South Korean market, against South Korea’s total imports of US$143.881 million. Import from the second largest supplier, USA, was only of US$2.148 million.

Korea’s leading player, Daelim, is the manufacturer and exporter of “all in one bidet” or innovative ‘Smartlet’ bidet toilet with huge popularity in the domestic market to check imports significantly. It is a Korean answer to Japanese TOTO’s ‘Washlet toilet’ with different features. “Smartlet is designed to fit the human body’s curves perfectly,” claims Daelim. High technology goes hand in hand with the quality of high-end one-piece shower toilet of Daelim. The company said its normal bidet is also designed to fit in almost any ceramic base.

Daelim FULEN Smartlet. Photocredit Daelim

COMPANY PROFILES Hankook Chinaware Co Ltd Location: 4 production plants in Cheongju-City, South Korea Founded in 1943 Products: Porcelain and fine bone china hotelwares and household tablewares Markets: Domestic and export markets.

Others: South Korea’s largest manufacturer and exporter of ceramic, porcelain and bone china tablewares. Operate a manufacturing plant in Indonesia.

Haengnam Chinaware Inc Location: Jeollanam-do, South Korea Founded in the 1940s Products: Tablewares, dinner wares, bowl, coffee cup, mug, tea cup Markets: Domestic and export markets Others: South Korea’s second largest manufacturer and exporter of ceramic, porcelain and bone china tablewares. Operate a production plant in Indonesia.

Elix Premium Ware Established in 1998 Factory location: Illo-eup, Muan-gun, Jeollanam-do, South Korea Products: Ceramic and porcelain tablewares Others: Everyday and customized ceramic and porcelain tablewares for high-end hotels and restaurants and also for domestic and household uses.

DAELIM B&Co Co Ltd. Location: 2 plants in Changwon (Gyeongsangnam-do) and Jecheon (Chungbuk), South Korea Products: Water closet, urinal, washbasin, bidet, fabricated bathroom, etc Markets: Domestic and export markets Others: Leading manufacturer and exporter of ceramic vitreous china sanitarywares, and ‘smartlet’ bidet toilet with huge influence in the domestic market.

American Standard Korea Inc / LIXIL Korea Inc Location: Danwon-gu, Ansan-shi, Gyunggi-do, South Korea Products: Ceramic sanitarywares and bathroom accessories Markets: Domestic and export markets Others: Originally the US owned American Standard is owned by the Japanese LIXIL Inc. Inus Sanitarywares / IS Dongseo Co Ltd Location: Tangjeong, Asan-si, south of Seoul, South Korea Products: Ceramic sanitarywares Markets: Domestic and export markets Others: Inus sanitaryware production unit is a sister unit of IS Dongseo tile production plant under owning company IS Dongseo Co Ltd. Inus’annual production scale is 11,232 tons of sanitarywares, said the sanitaryware factory, which produces high quality bidet-attached water closets and other sanitarywares, including fashionably designed wash basins.

Kelim Ceramics Co Ltd / TOTO Korea Ltd Location: Incheon, near Seoul, South Korea Products: Ceramic sanitarywares, including TOTO sanitarywares Markets: Domestic and export markets Others: In South Korea’s domestic markets and for exports, Kelim Ceramics Co Ltd joined hands with TOTO of Japan in 2010 to produce TOTO sanitarywares. TOTO Korea is the Japanese TOTO owned sanitaryware business operations in South Korea.

YMTech Location: Gwangjin-gu, Seoul, South Korea Products: Water-saving water closet Markets: Domestic market Others: It has an innovative project to develop quality and environment friendly sanitrywares for common consumers with help of academic researchers.

Daelim FULEN Smartlet. Photocredit Daelim

Daelim has two manufacturing plants, in Changwon (Gyeongsangnam-do) and jn Jecheon (Chungbuk), with the combined annual production capacity of 1.2 million pieces of vitreous china ceramic sanitarywares.

The half a century old company introduced a bathroom

46

asian ceramics

AC 16-8

www.asianceramics.com

Stephan Schmidt KG for duravit High-performance ceramic. A material that meets many requirements. The production of ceramic is one of mankind’s oldest cultural techniques. Initially used to make dimensionallystable containers for storing food, clay, as a raw material, provided an excellent base for artistic design. Even after about 8.000 years, the potential of ceramic is far from exhausted in many application areas.

www.schmidt-tone.de

Š Duravit AG

Analysis: South Korea

system that contains a stylish design and functionality for the consumer lifestyle. Daelim claims it is also the largest ‘total bathroom’ fixture company in South Korea, although, others exist. Since the beginning it has been the leading player in the market of vitreous china bathroom and utilities in the domestic market, and has elevated the quality of living standard through quality toilets.

Daelim offers a total toilet fixture service, with shower toilet and electric bidet. In its total bathroom system, it provides ceramic bathroom with water closet, bidet, washbasin, urinal, and other related toilet accessories. It has a tile division that provides bathroom wall, floor and kitchen walls and others.

The company promoted its “Daelim Bath” culture with a total bathroom remodeling service, “Daelim Bath Plan.” In its massive marketing efforts it has diversified distribution channels, including distributors, retail stores, as well as shopping, hypermarkets and department stores, and online in order to strengthen consumer contacts.

IS Dongseo’s sanitaryware plant, Inus Sanitarywares, is another major bidet attached water closet manufacturer. Located in Tangjeong in Asan-si with a production capacity of 11,232 tons of sanitarywares per year, Inus is equipped with high-tech production technologies supplied from Europe.

IS Dongseo claims Inus’ sanitaryware manufacturing succeeded to achieve zero production error using the ultraprecision automation applying advanced CAD and CAM design systems in the country. Inus produced premium class and general segment bidet-attached water closets and far-infra red water closets, as well as. combined lavatory fixtures, acclaimed high confidence from the customers, claimed the company.

The manufacturer has integrated its SAMHONGTECH brand bidet into Inus Sanitarywares and renamed the bidet Inus. Previously SAMHONGTECH was the product of its bidet plant, Samhong Tech Co Ltd, which also manufactured other sanitarywares.

Small is beautiful

The Koreans proved small is beautiful when it comes to start.

Small manufacturers are also working with their innovative projects in sanitarywares. YMTech is an innovative company for the water saving toilet products and technologies in South Korea. “We have been continuing on research and development for high efficient water saving toilet technology and our developed technologies are applicable for any kinds of water closets in the world market,” said the manufacturer.

South Korea has lots of water saving toilets. But YMTech is looking further to spread the technology beyond home country through its research integration. “We will participate actively and continually in resolving water shortages in the world and do our best to improve eco-friendly water saving technologies,” it said.

YMTech has successfully marketed water saving and low noise water closets.

Constructor’s affiliate

“IS Dongseo, which owns Inus Sanitarywares, strives to satisfy the needs and dreams of its customers as if they were their own,” said Hyuk-Woon Kwon, President of IS Dongseo. The company has taken ceramics as a challenge. It is part of the Seoul based conglomerate Dongseo group of companies which has its own construction business with major housing projects of villas and apartments and an annual revenue of around a billion

48

asian ceramics

AC 16-8

IS Dongseo Co Ltd Location: 2 tile manufacturing plants, in Goesan-gun in Chungcheongbuk-do and in . Jinju-si in Gyeongsangnam-do, South Korea Products: Ceramic floor and wall tiles Markets: Domestic and export markets Others: Goesan-gun tile plant’s annual production scale is1,185,600 boxes of floor tiles, while Jinju-si plant’s annual production scale is 3,088,500 boxes of wall and floor tiles. IS Dongseo operates a substrates production unit at Hadong-gun in Gyeongsangnam-do, near the tile factories, with an annual production scale of 190,008 tons as rawmaterials for tiles.

Kukdong Ceramics Co Ltd (Woongjin Ceramics Co Ltd/Woongjin Group) Location: Seo-gu, Incheon, South Korea Products: Ceramic and porcelain floor and wall tiles Markets: Domestic and export markets Others: Manufactures ceramic and porcelain floor and wall tiles and anti-biotic floor and wall tiles for bathroom, kitchen and hospital.

Seoul Ceramics Co Ltd Location: Jinyeong-eup, Gimhae-si, Gyeongsangnam-do, South Korea Products: Porcelain granite exterior and floor tiles Markets: Domestic and export markets Others: Quality manufacturer of granite tiles for pavements interior floors. Produce tiles for visually disable people.

Taeyoung Ceramic Co Ltd Location: 2 plants. Myeoncheon-myeon, Dangjin-si, South Korea Products: Ceramic floor and wall tiles Markets: Domestic and export markets Others: Currently meets domestic demands.

Han Young Ceramic Co Ltd Location: Gimhae-si, Gyeongsangnam-do, South Korea Products: Ceramic floor and wall tiles Markets: Domestic and export markets Others: Currently meets domestic demands.

Sung Il Ceramics Co Ltd Location: Seoul, South Korea Products: Porcelain floor and wall tiles Markets: Domestic and export markets Others: Currently meets domestic demands.

Ihhwa Industrial Co Ltd (Ihhwa Ceramic Tile Factory) Location: Yesan South Chungcheong, South Korea Products: Ceramic tiles Markets: Domestic and export markets Others: Currently meets domestic demands.

Daemyung Tile Co Ltd Location: Yeonji-Dong, Busanjin-Gu, Busan , South Korea Products: Ceramic floor and wall tiles Markets: Domestic markets Others: Daemyung tiles are produced as green ceramics.

Korea Fine Ceramic Co Ltd Brand: KFCC Ceramica Location: Bangbae-Dong, Seocho-Gu, Seoul, South Korea Products: Ceramic coating for various products including cookwares and baking utensils Markets: Domestic and export markets Others: KFCC Ceramica coating is fast spreading worldwide for its diverse application to many products, since launching in 1987 as the first brand of its type, with a good reputation from the world cookware market. The manufacturer is continuously investing more to improve the quality with more advantages for expanding market share.

KC Co tiles for visually handicapped.

Photocredit KC Co

www.asianceramics.com

‌totally new perspectives

Isostatically based cup production system Cup pressed with handle – a world premiere

- Top quality and high output rate

- Highest productivity - Fully automatic production

Patent pending

- Quick tool-change - Small space requirement

- ECON engineered - New cup-designs possible!

We raise the limits

Analysis: South Korea

US dollars. It also operates a ceramic plant in China, Qingdao Inus Ceramic Co Ltd. The company said its porcelain floor and wall tiles of 300mmx300mm and 300mmx600mm sizes, and 250mmx400mm, 300mmx600mm and 300mmx750mm wall tiles have good demand in the market in competition again imported products, which are supplied mainly from China, Italy, Spain, Vietnam, Indonesia and India.

Imports from China alone was of worth US$234 million in 2015, when South Korea’s total tile imports was US$310 million.

The leading South Korean tile manufacturer IS Dongseo also said its slip resistant floor tiles of 300mmx300mm, 500mmx500mm and 300mmx600mm sizes and porcelain stairway and ECO-CARAT tiles of 300mmx300mm dimensions HS Code

are some of the products well accepted to the customers. IS Dongseo also has exterior tiles of attractive appearance and workability with different designs and colours.

IS Dongseo entered export markets in Southeast Asia, Australia, Europe, USA and others, but domestic markets offer better opportunity in present slumps in exports. It has two tile factories, south of Seoul, for production of over four million boxes of floor and wall tiles per year. For reference, in South Korea, each box of 300mm x 300mm tiles contains around 16 individual items.

The production capacity of its largest plant, in Jinju-si in Gyeongsangnam-do, is 3,088,500 boxes of wall and floor tiles per year. The other tile plant, located in Goesan-gun in Chungcheongbuk-do has an annual production capacity of 1,185,600 boxes of floor tiles.

Imported Imported Imported Imported Imported South Korea’s ceramic imports Product label value in 2011 value in 2012 value in 2013 value in 2014 value in 2015

6909

Ceramic wares for laboratory, chemical or other technical uses; ceramic troughs, tubs and similar

227,057

267,120

251,043

314,060

430,711

6908

Glazed ceramic flags and paving, hearth or wall tiles; glazed ceramic mosaic cubes and the similar others

197,405

188,378

204,283

234,581

255,466

6902

Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods

225,862

266,471

259,120

303,374

209,362

6910

Ceramic sinks, washbasins, washbasin pedestals, baths, bidets, water closet pans, flushing

97,170

88,222

95,208

120,207

143,881

6903

Retorts, crucibles, mufflers, nozzles, plugs, supports, cupels, tubes, pipes, sheaths, rods

160,043

142,488

115,179

128,972

123,029

6911

Tableware, kitchenware, other household articles and toilet articles, of porcelain or china or similar

72,297

69,671

82,571

102,068

97,278

6912

Tableware, kitchenware, other household articles and toilet articles, of ceramics other than china or porcelain or similar

47,577

52,264

65,585

77,714

92,442

6907

Unglazed ceramic flags and paving, hearth or wall tiles; unglazed ceramic mosaic cubes and similar

43,438

40,722

46,260

55,321

54,950

6914

Ceramic articles, n.e.s.

50,627

58,748

57,571

54,944

46,424

6905

Roofing tiles, chimney pots, cowls, chimney liners, architectural ornaments and other ceramics of similar types

6,262

9,090

9,232

13,207

14,570

6913

Statuettes and other ornamental ceramic articles, n.e.s.

5,710

7,304

7,656

8,728

9,407

6904

Ceramic building bricks, flooring blocks, support or filler tiles and the like

3,147

6,045

5,599

6,293

5,821

6901

Bricks, blocks, tiles and other ceramic goods of siliceous fossil meals, e.g. kieselguhr, tripolite

9,309

5,220

4,956

3,729

4,811

6906

Ceramic pipes, conduits, guttering and pipe fittings, excl. of siliceous fossil meals or similar

1,611

1,433

1,480

1,572

1,600

Sources: ITC calculations based on Korea Customs and Trade Development Institute (KCTDI) statistics since January, 2015, and based on UN COMTRADE statistics until January, 2015.

50

asian ceramics

AC 16-8

www.asianceramics.com

NEW Supporters

NEW dates

NEW halls

Southeast Asia’s #1

ceramic manufacturing exhibition

31 Aug - 2 Sep

2017 BITEC I BANGKOK

www.ASEANceramics.com TEL : +66(0) 2 207 2412 Supported by :

Conference Organised by:

Organised by :

Analysis: South Korea

Korea Ceramics highstrength tiles.

Photocredit KC Co

The company also operates a production plant for substrates in Hadong-gun in Gyeongsangnam-do with an annual output capacity of 190,008 tons, for use as raw material for tiles, for installations.

“We produce world class functional antibactatial anion tile, ocher tile and eco-carat with excellent effect on sick house syndrome, and developed new and exquisite porcelain tiles,” said IS Dongseo President.

Despite increasing influence of imported ceramic tiles and posing threat to over a dozen local manufacturers, South Korea still expands local capacity bravely. Relatively new Taeyoung Ceramic Co Ltd, located at Dangjin-si in Chungcheongnam-do province, has set up a second tile factory last year.

“We have most up-to-date single firing technology to beat competitors in quality and price, and we are expecting to be HS Code

Imported 2012 Imported 2013 Imported 2014 Imported 2015 Imported South Korea’s ceramic imports Product label 2011 quantity, Tons quantity, Tons quantity, Tons quantity, Tons quantity, Tons

6908

Glazed ceramic flags and paving, hearth or wall tiles; glazed ceramic mosaic cubes and other similar

666,563

664,047

698,771

817,374

919,270

6902

Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods

252,590

258,630

240,348

272,677

224,924

6910

Ceramic sinks, washbasins, washbasin pedestals, baths, bidets, water closet pans, flushing

100,952

88,768

94,136

110,202

128,659

6907

Unglazed ceramic flags and paving, hearth or wall tiles; unglazed ceramic mosaic cubes and similar

95,206

80,524

90,302

105,544

109,903

6905

Roofing tiles, chimney pots, cowls, chimney liners, architectural ornaments and other ceramics of similar types

27,436

33,553

37,857

52,056

67,649

6914

Ceramic articles, n.e.s.

41,491

38,863

37,796

41,470

36,180

6904

Ceramic building bricks, flooring blocks, support or filler tiles and the like

12,839

14,368

14,094

17,871

31,660

6901

Bricks, blocks, tiles and other ceramic goods of siliceous fossil meals, e.g. kieselguhr, tripolite

26,054

17,683

11,313

9,013

31,096

6903

Retorts, crucibles, mufflers, nozzles, plugs, supports, cupels, tubes, pipes, sheaths, rods

19,130

17,301

19,001

23,151

23,988

6911

Tableware, kitchenware, other household articles and toilet articles, of porcelain or china or similar

21,519

19,339

20,219

23,359

22,305

6912

Tableware, kitchenware, other household articles and toilet articles, of ceramics other than china or porcelain or similar

9,815

9,203

11,172

11,956

14,331

6909

Ceramic wares for laboratory, chemical or other technical uses; ceramic troughs, tubs and similar

10,179

11,119

11,755

11,632

13,930

6913

Statuettes and other ornamental ceramic articles, n.e.s.

1,146

1,434

1,349

2,202

2,544

6906

Ceramic pipes, conduits, guttering and pipe fittings, excl. of siliceous fossil meals or similar

1,163

913

858

698

784

Sources: ITC calculations based on Korea Customs and Trade Development Institute (KCTDI) statistics since January, 2015, and based on UN COMTRADE statistics until January, 2015.

52

asian ceramics

AC 16-8

www.asianceramics.com

Analysis: South Korea

Kukdong ceramic tiles.

Photocredit Kukdong

one of the market leaders soon as our third factory is coming on stream,� said a company official. The company made debut in 2005 when started production of floor and wall tiles with latest technology supplied from Italy, and was awarded Korean Standard Association certificate, KS A 9001:2001/ISO 9001:2000.

In import dominated traditional ceramic ware markets in South Korea, the granite tiles (unpolished natural granite shape porcelain tiles) manufactured by Korea Ceramics Co Ltd (KC Co) continues to stay in the market as a successful operator since last half a century despite fierce competition from the alien products.

KC Co CEO Park Jinseong said KC Co is currently equipped with high tech manufacturing facilities. Located at Onsan National Industrial Complex in Ulsan, KC Co started up as a specialised tile unit.

Now it manufactures exterior and flooring tiles, such as, polished floor and wall tiles, porstone bricks, granite tiles, grastone tiles, highstrength tiles, pastel tiles, and special tiles for visually handicapped persons. Its products for pavements were used on many grand national and international occasions in South Korea.

HS Code

Exported 2012 Exported 2013 Exported 2014 Exported 2015 Exported South Korea’s ceramic imports Product label 2011 quantity, Tons quantity, Tons quantity, Tons quantity, Tons quantity, Tons

6902

Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods

16,325

14,147

15,951

17,179

14,879

6909

Ceramic wares for laboratory, chemical or other technical uses; ceramic troughs, tubs and similar

2,685

3,407

5,466

5,413

5,486

6901

Bricks, blocks, tiles and other ceramic goods of siliceous fossil meals, e.g. kieselguhr, tripolite

1,954

2,358

3,621

5,599

4,465

6903

Retorts, crucibles, mufflers, nozzles, plugs, supports, cupels, tubes, pipes, sheaths, rods

3,883

3,577

3,444

3,185

4,159

6912

Tableware, kitchenware, other household articles and toilet articles, of ceramics other than china or porcelain or similar

2,028

2,089

2,441

3,010

2,558

6908

Glazed ceramic flags and paving, hearth or wall tiles; glazed ceramic mosaic cubes and the other similar

1,169

1,270

1,881

1,660

2,425

6904

Ceramic building bricks, flooring blocks, support or filler tiles and the like

1,140

2,566

5,177

1,047

2,361

6914

Ceramic articles, n.e.s.

1,494

1,024

1,102

1,432

1,764

6911

Tableware, kitchenware, other household articles and toilet articles, of porcelain or china or similar

1,983

2,015

1,744

2,103

1,602

6910

Ceramic sinks, washbasins, washbasin pedestals, baths, bidets, water closet pans, flushing

640

473

1,063

736

545

6907

Unglazed ceramic flags and paving, hearth or wall tiles; unglazed ceramic mosaic cubes and other similar

540

145

212

136

121

6906

Ceramic pipes, conduits, guttering and pipe fittings, excl. of siliceous fossil meals or similar

98

65

27

236

42

6913

Statuettes and other ornamental ceramic articles, n.e.s.

40

27

39

29

32

6905

Roofing tiles, chimney pots, cowls, chimney liners, architectural ornaments and other ceramics

149

166

94

71

23

Sources: ITC calculations based on Korea Customs and Trade Development Institute (KCTDI) statistics since January, 2015, and based on UN COMTRADE statistics until January, 2015.

www.asianceramics.com

AC 16-8

asian ceramics

53

Advertiser feature

Technology and “smart” processes for the ceramics of the future – Sacmi at Tecnargilla 2016 From amazing decorated slabs made with Continua+ to the latest generation of integrated-automation presses and innovative end-of-line solutions, the Group continues to improve and extend its product range in the direction of “Industry 4.0”, the revolution taking place in industrial manufacturing that focuses on sensorbased systems, supervision and control systems and process computerisation.

What exactly is a “smart factory” in the world of ceramics? To begin with, it is a continuous pressing line, where a spray-dried layer of powder is transformed into a finished product, with countless size, decoration and structural options. Yet it is also the latest generation of integrated-automation presses, boosted by even more powerful digital architectures and monitoring systems, with immediate benefits in terms of management and productivity. Lastly, it is a different way of managing stocks and warehouses: thanks to the use of advanced on-machine sensors and control systems, just in time production is a sound reality, allowing optimisation of costs and augmenting the customisation options available to clients while opening up the new frontier of predictive maintenance.

These are just some of the key features of the Sacmi world that visitors to the international Tecnargilla fair in Rimini (2630 September 2016) will have the opportunity to explore on stand B1, an extensive display area fully dedicated to Sacmi ceramic technology and plant engineering solutions. With 25 lines sold worldwide just 2 years after its market launch, Sacmi’s CONTINUA+ technology has become the world’s most flexible, competitive solution for the manufacture of large decorated ceramic slabs. Capable of handling infinitely long formats with widths of up to 1600 mm and variable thickness (up to 2 cm), the CONTINUA+ line (which will be up and running at the fair, with frequent demonstrations for visitors to the stand) is, this year, enhanced with a new real-time slab density and thickness control system called MDX. By using automatic, accurate, nondestructive measurement the system ensures the best possible finished product quality (slabs or sub-multiples made with cutting machines, also integrated into the line), thus eliminating expensive (and sometimes inaccurate) manual measuring tasks.

To give the product maximum added value in terms of aesthetics there is, on the one hand, the quick-to-replace compaction belt (for decoration within the structure), and, on the other, integration with digital decorating machines produced

by Sacmi-Intesa. The dry decorating machine (DDD), wet decorating machine (DHD range) and upper compaction belt subject the product to three different decorating cycles, all in real time, resulting in slabs and trims with unique decorative features.

In addition to the machines integrated on the CONTINUA+ line,

54

asian ceramics

AC 16-8

the Sacmi Group will also be displaying a vast range of solutions with a strong focus on fully digital application processes that use all available raw materials (inks, digital glazes and dry glazes).

These solutions, which can be observed in the Intesa display area, are accompanied by the innovative new DGD245 digital press feeder, which, thanks to special DDD powder depositing modules, can create double-loading products with multi-coloured digitized graphics.

From product design to line design: the layout of the dryer installed downstream from the CONTINUA+ is modern and effective. With the E7P (the 7-layer Sacmi Forni drier), built according to design specifications that optimise drying process efficiency, especially as regards new products, come innovative features aimed at limiting noise pollution and avoiding accidental contact with hot surfaces. Moreover, Sacmi Forni will be

www.asianceramics.com

Advertiser feature

presenting the FBN EKO kiln, a totally new product which applies tried-and-tested EKO technology to a double channel kiln: this Sacmi-developed technology for optimising the production firing process has, to date, been successfully implemented on single-layer kilns.

While Continua+ might be also from an aesthetic standpoint - the jewel in the Sacmi ceramic technology crown, it is the supervision and control systems (on which the Group has been working since the early twentyfirst century) that are the heart of the smart factory philosophy, which can also involve traditional pressing systems. Sacmi will thus use Tecnargilla 2016 as a springboard to present PH SMART, the latest generation of integrated-automation presses (currently limited to the high tonnage PH 7500 model yet soon to be extended to the entire range). Thanks to a complete redesign of the software, this latest generation of Sacmi presses will be faster and more accurate and will - above all, in time - allow customers to take advantage of another Industry 4.0 principle, namely “predictive maintenance”. Advanced sensors, integrated web-based diagnostics and real time monitoring of consumption let users effect fast control in all machine areas and plan any required actions in advance.

A revolution that - explains Sacmi’s management – starts with technology, but focuses on people, workforce training, new IT skills and Data Flow Management, together with operator interfaces that (e.g. in the new PH SMART) are made even simpler. This is the result of experience accrued from thousands of machines installed by Sacmi in over fifty years of activity. Speed, precision, user-friendliness and easy size changeovers: four characteristics that also define the moulds produced

by Sacmi Mold&Dies, which achieve their full potential when assembled on Group-manufactured presses; these moulds feature the CRS (quick mould change) system, a solution that slashes the mould changeover time to little more than half an hour and allows the process to be completed in total safety by just one worker.

Considerable investment has also gone into end-of-line solutions, thanks to Nuova Sima, the Group company that oversees the Nuova Fima, Surface Inspection and Sima brands. More specifically, Nuova Fima has developed and marketed innovative sorting and packaging systems such as EkoSort and EkoRoll. These immediately won over the market and will be

CONSIDERABLE INVESTMENT HAS ALSO GONE INTO END-OF-LINE SOLUTIONS

www.asianceramics.com

presented at the exhibition in the new “Plus” version, which offers cutting-edge speed, simplicity and versatility. For the slabs sector, highly advanced integrated solutions for handling, palletisation and packaging will be showcased. Major new developments in the automated inspection field will also be displayed: there will also be a preview of Surface Inspection, the new integrated surface-dimension inspection system. Technological solutions offered in the ceramics field also cover logistics processes related to warehouse management: progress in this regard is clearly seen in the initial results of a recent agreement between Sacmi and Toyota Handling Italia, results that have led to the acquisition of a number of contracts around the world for the integrated management of production, logistics, storage and transport.

“A smart ceramics factory is one that lets a company manage a production order in its plant from the other side of the world, providing real-time control of line, warehouse and logistics for the benefit of increasingly attentive and demanding customers who see product customisation and service quality as essential elements of their selection process,” explains Claudio Marani, general manager of Sacmi’s Ceramics Division. “A cross-sector revolution in European manufacturing,” adds Marani, “that Sacmi has invested in heavily to stay ahead of its competitors.

Following the excellent financial results of the last two years, that investment will ensure positive results for many years to come”.

AC 16-8

asian ceramics

55

Analysis: Egypt

EGYPTIAN TILE losing the low cost advantage?

AC looks at how Egypt’s developing ceramic industry no longer has the same low cost base that once made it so attractive and reflects therefore on the prospects for this maturing industry.

T

he last few years have been a roller- coaster for Egyptian tile producers. Since 2008-2009, when the global financial crisis was at its worst, Egypt's ceramic tile manufacturing industry has experienced no fewer than four boom-bust cycles. The steepest rise and fall, however, started after the army's ousting of President Mohammed Morsi in 2013 and continues to date.

Boom in ceramic tile production lasted for about one and half year - from mid 2013 to the start of year 2015 - reaching an alltime high in mid of 2014.

However, the weakness in production and consumption, which started in the early 2015, continues till date. Considering the current economic situation in the country and production & consumption trend of ceramic tiles in the early months, year 2016 is unlikely to have a positive growth rate over 2015 in both production and consumption.

Currently, catered by one large, about a dozen mid-scale and fifteen small scale producers, country’s ceramic tile industry is operationg at low capacity utilization rates. Egyptian ceramic tile industry has added a significant capacity in last few years. Most of the new capacity has come through the expansion of existing ceramic tile producers.

Production overview

With a ninety million plus population, favourable demographics , rising disposable incomes and a vibrant construction sector has spurred the consumption of ceramic tiles in the country. Beniffiting from these factors, Egyptian ceramic tile industry has registerd an average CAGR of more than 10% during the 2005- 2010 period. However, in last five years, the country’s ceramic tile manufacturing and consumption has not been able to replicate the numbers posted in the 2005-10 period.

Total installed capacity, which has steadily climbed to 420 million sqm is one of the largest in the region. However, capacity utilization of the industry in last two years remains a big concern.

Sagging demand in domestic and hurdles in some of the key export markets has forced ceramic tile operators to operate much below their capacity levels. Domestic market consumes about 80 % of the total production, while exports account for the rest 20 %

56

asian ceramics

AC 16-8

of the production.

Regular capacity additions by existing players and new entrants in the field have added a considerable new capacity in the tile market. A large part of the new capacity has come in the higher quality porcelain segment, a segment, which has seen the fastest growth from commercial and a large part of housing segment.

But, as mentioned elsewhere in the article, the tile production has gone up and down in last few years due to a number of factors (sudden and excessive fuel price hikes, political and economic situation). These factors have hindered the development of country’s ceramic tile industry to a great extent.

Lack-lusture demand in the second half of 2015 and first half of 2016 in the domestic tile industry has translated to a flat growth or losses to most of the tile producers in the country. One of the largest ceramic producers in the country, Lecico Egypt turned into losses for the first half of the current year. For the first six months of 2016, the company lost EGP 81.9 million against EGP 6.5 million profits for the same period in 2015.

Supply/demand dynamics

Healthy capacity addition by most of the prominent domestic ceramic tile producers in Egypt has made the country quite self-sufficient in recent years. Capacity additions in country’s ceramic tile production, which commenced in 2007 has continued till 2014 with a minor blip in 2011 due to political reasons. In fact, in percentage terms Egypt saw the second highest capacity ( Iran witnessed the highest capacity expansion in ceramic tile industry in the region) in the entire Middle East and North African region.

As a result of huge capacity expansion, Egypt has been a net exporter in ceramic tile industry ( both in volume and value) for a number of years. Volume of imports, which used to happen in luxury segment of industry ( from Europe, Iran and UAE ) has been continuously falling with the increasing capabilities and offerings of domestic producers.

Declining exports

Large capacity additions in recent years and a limited domestic market has forced most of the domestic tile producers to explore export route. However, last few years have not been very

www.asianceramics.com

Analysis: Egypt

E MARKETS

satisafactory on export front for Egyptian tile producers. Rising cost of production, significant capacity additions in some of the key export markets ( Tunisia and Morocco) and import duty impacts in Jordan has resulted in declines in exports of ceramic tiles from the country.

The main obstacle for a number of these ceramic tile producers is their inability to compete in the marketplace because their products are perceived as of low quality and relatively high priced. According to a study conducted by the ceramics division of Federation of Egyptian Industries the total ceramics ( all segments) exports declined from $398m in 2012 to $178m in 2015 compared to the high volume of imports from $51m in 2012 to $84m in 2015.

Lows cost loss?

A few years back, Egypt was one of the most attractive lowcost base for ceramic tile production due to cheap fuel and labour cost. However, in last few years the local tile industry has increasingly come under pressure from other aggressive low-cost international players, particularly Turkey, China, India and the UAE. Rising cost of capital and ever increasing natural gas prices for ceramic industry in the country has taken away the advantages for domestic tile producers to a large extent.

The price of the natural gas to ceramics factories has increased from $1.25 per 1m thermal units in 1996 to $2.65 in 2001, then to $3 before the significant increase in July 2014, when it increased

www.asianceramics.com

to $7 per 1m thermal units. This coupled with US dollar exchange rate, which has increased from EGP 5.5 to EGP 9, has led to huge increases in production costs. Both of these increases have whittled away the competitive edge Egyptian tile producers used to have over its counterparts in the region, such as Turkey, Iran, the Emirates and Saudi Arabia.

A key executive from Ceramica Cleopatra told on condition of anonymity, “Gas prices used to represent 6- 9 % of the total cost of the ceramic tile production a decade back, however, now it represents 25% of the product compared to competing countries, where gas prices do not exceed $0.5 or $1.5 per 1m thermal units.”

High fuel cost has hurt the country’s ceramic tiles producers badly and prompted the ceramics division of the Federation of Egyptian Industries (FEI) and the Ministry of Industry has demanded an intervention from the Egyptian prime minister to decrease the prices of the gas provided to factories to $3 per one million thermal units, similar to global prices and competitive markets in the ceramics industry.

According to Sherif Afifi, Head of the ceramics division at the federation, “Increasing gas prices has led to lowering the production capacity of some of the ceramic producers to just 30% to 35%. Exports were halted to several markets due to the increase in costs, including Jordan, Lebanon, and Saudi Arabia.

One factory has shut down and the exports volume has declined by 50%.”

AC 16-8

asian ceramics

57

Analysis: Egypt

COMPANY PROFILE BOXES Company- Al Omarra Location- 10th of Ramadan City Products- Wall and Floor Tiles Markets- Domestic and Export Markets Others- Established in 2005 in the 10th of Ramadan city, Al Omarra has a state of the art production facility spread over an area of 88000 square . meters.

With its last investment in early 2014, the company has an installed capacity to produce 6 million square meters of ceramic tiles.

He further says, “The increase in the US dollar exchange rate against the Egyptian pound has negatively impacted the ceramics industry. The price of raw materials in the quarries has increased by 25%, as well as the cost of transporting these raw materials.”

According to Lecico Egypt’s Management, “Average cost of ceramic tile production in 2015 rose 23% year-on-year to reach LE 19.8 per square meter due to the increase in energy prices in July 2014 as aresult we had to reduce our production by 30% from the start of the year 2015 in the face of lower sales in domesticand export markets”.

Future prospects

With a current per capita usage of less than 2 square meters, Egyptian ceramic tile market offers great opportunity for domestic and international ceramic tile producers. Increased spending on housing and infrastructure in coming years is going to increase the per capita ceramic tile consumption to higher levels.

Government steps like amendment of investment law in order to foster an environment that encourages foreign direct investment (FDI) are expected to bring a steady demand in ceramic tile consumption in medium-term. Egypt ranked second in the list of top African countries with FDI growth. Egypt marked an increase of 49.3% of FDI inflow, going from $4.6bn in 2014 to $6.9bn in 2015. These investments will spur domestic construction sector to new levels, which will translate into huge gains for ceramic tile companies.

Ceramica Cleopatra

One of the largest tile producers in Egypt and entire Middle East region, Ceramica Cleopatra was established in 1980’s. The company , which commenced commercial production with a meager capacity of 3000 sqm of ceramic tiles has achieved a scale of 100 million square meters of different ceramic tiles per year. Besides ceramics, the group has investments in six sectors including agriculture, housing, tourism, mining and media.

With three state-of-the-art manufacturing facilities (Tenth of Ramadan City, Suez) the company operates 60 production lines for wall and floor tiles. The company claims that it treats every piece of ceramic tiles for walls, floors and porcelain tile and sanitary ware as a work of art, which have been designed to transform the place where you live or bathroom or kitchen into a masterpiece. The company offers a wide variety of tastes and shapes including more than a million design inspired by Italian spirits in 55 different sizes.

Established in 2007, Galleria is the latest entrant in the family of Ceramica Cleopatra. This Factory, which is located on an area of 1.5 million square meters in AL dorado uses the latest stateof- the- art technology for production of porcelain and larger format tiles. Equipped with eighteen production lines, installed

58

asian ceramics

AC 16-8

Company- Al Masia Location- 10th of Ramadan City Products- Wall and Floor Tiles Markets- Domestic and Export Markets Others- Established in 2004, Al Masia Group is a rapidly developing ceramic tile producer. In 2012, the company installed a new single-firing line dedicated to the production of red body single-firing with a production capacity of over 20.000 sqm/day. The plant located in the area 10th of Ramadan city has a daily installed capacity of 40,000 sqm, making it one of the top tile producers in the country.

capacity of Galleria is in excess of 35 million sqm of ceramic and porcelain tiles in various sizes.

Ceramica Cleopatra has been one of the top spenders on new technology adaptation, which is evident from its manugfacturing facilities. The company has put special emphasis on exports of ceramic tiles in recent years as the domestic market is unable to absorb its total production. The company is planning to double its exports to Saudi Arabia, according to Chairman Mohamed Abou El Enein, “The company is working on how to make the best use of the facilities provided by Saudi Arabia to Egyptian producers. Egyptian government should also look to reduce the price of natural gas to ceramics producers, as it did for steel manufacturers.”

Lecico Egypt

With an installed capacity of 36 million sqm from its three manufacturing facilities, Lecico is one of the largest producers of ceramic tiles in the country. The company operates three manufacturing facilities in the country. Borg El- Arab plant in Alexandria has an installed capacity of 12.8 million square meters, while the neighbouring Khorshid plant has an installed capacity of 21.4 million sqm.

Due to slowdown in demand in the company decides to cut its production levels by about 30 %. As a result, Lecico’s tile sales volumes decreased by 22% year-on-year (7.3 million square meters) to reach 25.79 million square meters. Sales in Egypt fell 19% (4.9 million square meters) and regional export markets fell 31% (1.8 million square meters According to Tahir Gargour, Managing Director of Lecico Egypt, “2015 has been our most challenging year ever with the deteriorating quarter-onquarter in the face of falling demand and competition on pricing. The slowdown in sales we saw in the second half of 2014 accelerated over the course of 2015 and towards the end of the year the loss in sales volume and value – with a corresponding reduction in production – has resulted in a significant loss for the company.”

GEMMA

Established in 1989, as a subsidiary of Ezz Industries, a manufacturing group of building materials in the Middle East region, GEMMA is one of the top ceramic tile producers in Egypt. The company produces quality ceramic, porcelain and decorative accessories in Egypt from a fully integrated production facility at Sadt city.

With its last major expansion in 2009, the company has reached to an installed capacity of 18 million sqm of ceramic tiles in various formats and designs. The company claims to export about 25 % of its output to neigbhouring markets. However , the slowdown in Egypt’s market in the current year, which has a bearing on almost all of the ceramic tile producers in the

www.asianceramics.com

Analysis: Egypt

COMPANY PROFILE BOXES Company- Art Ceramics Location- 6th of October City Products- Wall and Floor Tiles Markets- Domestic and Export markets Others- Art Ceramics was established in 2010 at 6th of October with with two production lines and an installed capacity of 8 million sqm of ceramic and porcelain tiles. The company invested in state of the art technology and acquired the production lines from reputed Italian technology providers.

Company- Alfa Ceramic Location- 6th of October City Products- Wall and Floor Tiles Markets- Domestic and Export markets Others- Established in 1996, Alfa Ceramics is among the second generation of ceramic tile producers. With a manufacturing capacity of 12 million sqm of ceramic tiles, the company is one of the leading exporters of the tiles from Egypt. In its latest expansion in 2014, the company installed 4 new production lines with a total investment of EGP200 million.

country has led to its net profits lowering ( on the basis of first six months) 18.5% year-over-year to EGP 14.5 million from EGP 17.8 million recorded in January- June 2015.

abroad because of their extensive use of social media outlets.”

Al Amir Ceramics

Founded in 1994 and one of the fastest-growing ceramic tile producers in Egyptian ceramic tile market, Al Amir Ceramics operates two ceramic tile manufacturing plants with a total installed capacity of 10 million sqm of floor and wall tiles.

Al Amir Ceramics established a new tile manufacturing plant in 2014. The new facility, can produce from 22 to 24 thousand square metres a day – depending on the production mix – of single-firing red body tiles, mainly in the 400x400 size.

Ceramica Venzia

Located at 6th of October city, Ceramics Venzia has emerged as one of the key players in Egyptian tile market.

The company made a major expansion at the start of 2014 by installing a state of the art new automated production line for porcelain tiles. The total installed capacity of Venzia stands at 20 million square meters post the expansion.

Ceramica Venezia has developed an ambitious plan aiming at boosting exports to Lebanon, Jordan and Emirates. According to the managing director of Ceramica Venezia Farouq Mostfa . “ Our new export plan rests on opening new markets instead of the lost ones in Libya, Iraq and Yemen due to security instability. Dubai is one of the markets sought to be penetrated by the company. An agreement has been reached recently to export ceramic shipments to it.”

The firm is currently exporting to Jordan, Lebanon and Sudan, according to Mostafa. Ceramica Venezia exported shipments worth USD 50,000 to Sudan during the first 5b months of the year.

Mostafa further says, “ The cost of natural gas accounts for 30% of total annual cost, compared to 10% earlier, adding that 5 factories incurred extensive losses due to high price of gas, calling for reducing gas price.”

Gloria Ceramics

Gloria Ceramics, a new entrant in the Egyptian ceramic tile manufacturing has carved a niche for itself in its bief history of five years in the tile manufacturing. The company, which commenced production in early 2011 ( coinciding with the gulf spring crisis) at Nasr city with an installed capacity of 8 million sqm of wall and floor tiles has been very proactive in its approach to meet the customers’ demands.

According to Gaby Michel, Chief Executive Officer of Gloria Ceramics, “Gloria Ceramics aims to be more youthful, trendy, and colorful. You will find that our collections tend to be more modern, while other brands stick to a more stylistically classical trend and target older age groups. Gloria appeals to a more style conscious young generation who are aware of the products

60

asian ceramics

AC 16-8

Pharaohs Ceramics Group (Ceramica Innova) Established in the year 1989 with two factories for ceramic tiles, one located at Fayoum city (80km from cairo) for wall tiles and the second in Alexandria city (200km from cairo) for floor tiles with a capacity of about 10000 sqm per day, Ceramic Innova is counted among the top five ceramic tile producers in the country.

Currently with 27 production lines at both the factories, the company has an installed capacity of about 40 million square meters of wall and floor tiles at both the locations. The company has two plants each for wall and floor tile.

The company claims to create distinctive, international standard products that cater to domestic and export markets.

Ceramica Innova produces glazed, matt, listello and porcelain tiles. With the recent addition of a new production line using kerajet and inkjet printing, the company is able to produce new shapes like with unique designs at competitive prices.

Misr International Ceramic Company (MICC) Located at Nile Delta region, Misr International Ceramic Company is more than thirty years old ceramic tile producing company in the Egypt and has emerged as one of the top tile producing company in the country on account of its latest expansion in 2013. The latest expansion at its Quesna Region Industrial Ceramic region factory has resulted in the company achieving an installed capacity of more than 20 million sqm of ceramic tiles in different formats.

Ceramica Prima

Located at fifth industrial zone of Sadt city, Ceramica Prima commenced production of ceramic tiles in 1998 with a capacity of 4000 sqm of ceramic tiles per day. Eighteen years later, the company operates four production lines and can produce 20,000 sqm of ceramic and porcelain tiles for wall and floor segments. The company claims to exports 40 % of its total production to other Arabian markets.

The company acquired a new sorting and palletizing system to handle large tiles in early 2014 and has put increased emphasis on newer designs and large format tiles after the investment.

Ceramica Glamour (Al Ekhwa for Ceramic Manufacturing)

Ceramica Glamour is a new player in Egyptian ceramic tile industry. Company’s plant is located on the Red Sea coast in the industrial district between Suez and Soukna. The company, which commenced production in second half of 2014 has an installed capacity to produce 23,000 sqm of red body floor and wall tiles.

www.asianceramics.com

Analysis: China

Saving grace

sanitaryware supports an ailing China In analysis just completed by AC’s China office, it is clearly evident that the performance of the industry during the last year has been weak, with sanitaryware potentially the only savior.

I

n 2015 the overall growth of China’s ceramic tile and sanitaryware industry was weak. The sales throughout the year started from a high point and then declined gradually. Most of the enterprises had worse sales performance and the profit is less than that in 2014.

Although the price advantage of Chinese products decreased year by year in the world market, the growth rate of export higher than the growth rate of domestic sales reappeared because of the weakness of domestic demand. The pressures from energy-saving and emission reduction have grown with each passed days. The stagnation of market demand growth and the continuous increase of capacity caused ever serious contradictions and imbalance between production and sales so that it’s difficult for the enterprises to continue operating business due to funding strand breaks. The real estate market has entered a “New Normal” where the market demand is expected to be low. The whole industry accelerated the pace of structural adjustment to promote industrial upgrading because only innovative products and excellent brands can be recognized by the market. According to the statistics of the 2,752 scaled enterprises of ceramic tile and sanitaryware, the main business income of the industry is RMB 672.9 billion, increasing by 2.11%, down 8.08 percentage points compared to 2014 (the main business revenue grew by 10.19% in 2014). Among which the main business income of 1,410 ceramics tile enterprises is RMB 435.4 billion, increasing by 2.33%, down 9.73 percentage points.

The revenue main business income of 320 ceramic sanitaryware enterprises is RMB 63.2 billion, increasing by 10.49%, down 6.04 percentage points. The main business income of 1,022 hardware sanitaryware enterprises is RMB 174.3 billion, increasing by 8.59%, up 4.35 percentage points. The output of main product is almost zero growth or negative growth.

Of which, the output of ceramic tile is 10.18 billion square meters, decreasing by 0.5%. The output of ceramic sanitaryware is 218 million pieces, increasing about 1.58%. The export value of ceramictile and sanitaryware is more than US$21.1 billion, increasing by 9.25%, up 1.25 percentage points..

62

asian ceramics

AC 16-8

Annus horribilus

In 2015 the overall operation of the industry had no great achievements and an obvious decline in economic benefits can be seen. The scaled enterprises of the industry achieved the profit of RMB 43.55 billion, increasing by 3.04% and the average profit rate is 6.47%, down 0.78 percentage points. Among which, the profit of ceramic tile enterprises grew by 0.84% and the average profit rate is 6.63%, decreasing by 0.09%. The profit of ceramic sanitaryware enterprises increased by 5.23% and the average profit rate is 7.54%, decreasing by 0.22%. The profit of hardware sanitaryware enterprises increased by 4.68% and the average profit rate was 5.68%, decreasing by 0.02%.

The growth and benefits of the industry in 2015 can be said to be the worst after stepping into the 21st century. One reason is that the market competition is too fierce and then the sales profit is quite low.

On the other hand, the market demand developed rapidly over the past some ten years and the overall efficiency of the industry is high so that the profit base is high. The statistics show that the coverage and losing amount of the losing enterprises increased significantly due to poor market in 2015. The whole industry faced a losing coverage of 7.56%, increasing by 15.6%and the loss amount increased by 13.2%. Among which, the number of ceramic tile enterprises in loss increased by 21.3% and the loss amount increased by 18.4%. The number of ceramic sanitaryware enterprises in loss grew by 18.2% and the loss amount reduced by 1.5%. The number of hardware sanitaryware enterprise in loss increased by 15.7% and the loss amount grew by 34.2%. Although enterprises made investments on transformation and upgrading, the technological improvement increased for higher energy-saving and emission reduction requirements and labor costs increased, the enterprises strengthened internal management, cut payroll for efficiency improvement and cut the cost of raw materials and energy, operating costs did not add too much in 2015. The main business cost of the industry increased by 4.87% averagely. Of which ceramic tile enterprises, ceramic sanitaryware enterprises and hardware sanitaryware enterprises increased by 2.69%, 9.19% and 8.85%, respectively.

www.asianceramics.com

Analysis: China

China ceramic tile production appeared negative growth firstly in 2015 since the Asian financial crisis. The major ceramic tile producing regions such as Guangdong, Fujian and Liaoning the outputs appeared negative growth, while the output of Sichuan, Shandong and Jiangxi grew small. The emerging ceramic tile production regions such as Guangxi, He’nan, Hubei, Shaanxi and Hebei had varying degrees of growth, and only Guangxi and Hebei grew by over 10%.

Liaoning, Chongqing, Jiangsu, Shanghai and Xinjiang dropped by 20%. According to the surveys and measurement results from China Building Ceramics & Sanitary ware Association, the effective utilization rate of ceramic tile production lines in 201was less than 80% and the contradiction between supply and demand imbalances exacerbated the market competition. In order to keep the market share, cut-price promotions became the first choice to the majority of enterprises.

As the development of China’s real estate industry has entered a new normal, ceramic tile industry basically bid farewell to times of volume growth. It indicates that after more than thirty years of rapid development, ceramic tile production capacity and market demand in China has experienced (or reached) the historical peak. In 2015 production and sales of sanitaryware products (including ceramic sanitarywares and their accessories, and hardware sanitaryware products) remained stable and the production and sales grew slightly. The sales and benefit of ceramic sanitaryware enterprises are better than those of other sanitaryware and ceramic tile enterprises.

The output of main ceramic sanitaryware producing regions such as He’nan and Hebei grew in a certain extent while the output of Guangdong decreased significantly and the output of other regions such as Sichuan, Shanghai and Jiangsu decreased by over 20%.

Sanitaryware: investment and sales ('00m. RMB)

Sanitaryware (non-ceramic): investment and sales

Fixed assets

In 2015 scaled ceramic tile and sanitaryware enterprises completed the investment on fixed assets nearly RMB 94 billion, increasing by 2.54% which is the smallest growth since 21st Century. Ceramic tile enterprises completed investment of RMB 81.2 billion on fixed assets, increasing by 2.16%. Among which, the investment on fixed assets of ceramic tile enterprises in eastern coastal areas led other regions, increasing by 5.05%. The investment on fixed assets in central region fell by 0.51% while the investment on fixed asset in western region grew by only 0.42%. The investment on ceramic tile industry in Guangdong was nearly RMB 14 billion, far more than those in other provinces, growing by 39.9%. The investment in Guangxi, Jiangxi, Shandong, He’nan, Liaoning and Hubei was over RMB 5 billion. The investment in Sichuan, Hebei and Fujian was over RMB 3 billion. The investment in western provinces including Ningxia, Xinjiang, Inner Mongolia and Gansu dropped by 50% and the investment in central China including He’nan, Shanxi and Hebei fell over 30%. The ceramic sanitaryware enterprises completed investment of RMB12.8 billion on fixed assets, growing by 5.08%, in which the ceramic sanitaryware enterprises in eastern coastal areas led other regions greatly, growing by 8.04%. The investment in the central region decreased by 16.2% while the investment in western region increased by 153%. sanitary The ceramic sanitaryware enterprises in Guangdong completed investment on fixed assets nearly RMB 4.4 billion, far more than those in other provinces, growing by 20%. The investment in Fujian, Hebei and Hu’nan was over RMB 1 billion. The investment in two main ceramic sanitaryware production regions, He’nan and Hebei were reduced by 45.2% and 25.9%.

During the "Twelfth Five-Year Plan" period, China’s ceramic tile and sanitaryware industry developed in terms of adjustment and

64

asian ceramics

AC 16-8

Sanitaryware export volume by Province SHANGHAI ZHEJIANG HUBEI HENAN

OTHER

GUANGDONG

SHANDONG FUJIAN

HEBEI

www.asianceramics.com

EXPERTISE IN MINERALS FOR CERAMICS • Impressingly white firing kaolins, tailor made for casting, jiggering and isostatic pressing process for the tableware industry • Unique kaolins for sanitaryware, with a remarkable casting rate • White firing kaolins for Gres Porcellanato • Highly purified feldspars for bodies and glazes • Crystal quartz – thoroughly pure

ntre Fiera, Expo Ce Italy – Rimini 154 H OT HALL B5, BO 26-30, 2016 Visit us: SEP.

Amberger Kaolinwerke A COMPANY OF QUARZWERKE GROUP

Amberger Kaolinwerke Eduard Kick GmbH & Co. KG Georg-Schiffer-Straße 70 D-92242 Hirschau

Asian Ceramics Ad_86x254.indd 1

27/07/16 18:26 AKW_AZ_Keramik_254x86 mm_RZ_ChinaCer.indd 1

fon +49 (0)9622/18-0 fax +49 (0)9622/18-375 www.akw-kaolin.com keramik@akw-kaolin.com

12.08.16 12:31

Analysis: China

upgrading. The production capacity of ceramic tiles increased by 31.9%, sales value grew by 73%, export volume grew by 26.8% and export value grew by 97.4%. The cumulative (2011-2015) investment (technical transformation) of ceramic tile enterprises was RMB341.4 billion. The output, sales value, export volume and export value of ceramic sanitarywares grew by 26.4%, 73.3%, 46% and 390%, respectively. The cumulative investment of ceramic sanitaryware enterprises in five years (technical transformation) was RMB 61.5 billion. The sales value and export value of sanitarywares (nonceramic) increased by 41% and 46%, respectively. The output of ceramic tiles in China occupies 63.15% of the world total and the export volume and value of ceramic tiles accounted for 40.33% and 38.9% of the world trade, respectively. The output of ceramic sanitarywares in China took up 55% of the world total and accounted for over half of the world's trade.

Production of ceramic tiles and sanitaryware in 2015 According to the statistics of scaled 2,752 building ceramics and sanitaryware enterprises in China, the main business income of the whole industry for 2015 was RMB 672.9 billion, growing by 2.11%, down of 8.08 percentage points ( grew by 10.19% in 2014). Of which the revenue of 1,410 ceramic tile enterprises was RMB 435.4billion, growing by 2.33%. The revenue of 320 ceramic sanitaryware enterprises was RMB 63.2 billion, growing by 10.49%. The revenue of 1,022 hardware sanitaryware enterprises was RMB 174.3 billion, growing by 8.59%, up 4.35 percentage points. The output of main products almost showed "zero growth" (or negative growth). Of which, the output of ceramic tiles was 10.18 billion square meters, decreasing by 0.5%. The output of ceramic sanitarywares was over 218 million pieces, increasing by 1.58%. The export value of all kinds of ceramic tiles and sanitarywares was over US$ 21.1 billion, growing by 9.25%, up 1.25 percentage points.

Output of ceramic tiles in 2015

In 2015 the output of ceramic tiles was 10.18 billion square meters (10,178.66 million square meters), decreasing by 0.5% compared with the output of 10.23 billion square meters in 2014, which was the first negative growth in ceramic tile industry since 2000. Following the single-digit growth in 2012, 2013 and 2014 for three consecutive years, this was the first negative growth since 2004.

The output of ceramic tiles for 2015 shows some features different from the past years. Due to the negative growth of ceramic tile output, among the 26 producing provinces the ceramic tile production 12 provinces showed negative growth, notably Shanghai (-43%), Liaoning (-36.5%), Jiangsu (-26.6%), Xinjiang (-24.6%) and Chongqing (-23.3%). Instead, six provinces showed two-digit growth: Guizhou (24.2%), Heilongjiang (18.7%), Inner Mongolia (16.5%), Guangxi (14.3%), Sichuan (10.9%) and Hebei (10.7%). The output of ceramic tiles in Liaoning, one of the top six ceramic tile production regions, dropped significantly (-36.5%) in 2015 was replaced by Guangxi to become the sixth largest ceramic tile producing region following Sichuan. The output of ceramic tiles in Guangxi grew by 45.76% in 2014 and then 14.3% in 2015.

Although the ranking order of ceramic tile output for major provinces changed in 2015 compared to previous years, it didn't shake the basic pattern of the China’s ceramic tile industry. Guangdong, Fujian, Jiangxi and Shandong kept the top four producing regions of ceramic tiles.

The negative growth of ceramic tile output appeared in 12 provinces in 2015, 10 provinces in 2014 and 2013, and 11 provinces in 2012 and

66

asian ceramics

AC 16-8

THE REVENUE OF 320 CERAMIC SANITARYWARE ENTERPRISES WAS RMB 63.2 BILLION, GROWING BY 10.49% Output of ceramic tiles on province* for 2015 Rank

Province

Output (m.m2)

Growth rate (%)

China total

10,178.66

-0.5

1

Guangdong

2,469.25

-1.4

2

Fujian

2,218.55

-0.3

3

Jiangxi

952.06

3.7

4

Shandong

879.76

7.0

5

Sichuan

752.96

10.9

6

Guangxi

472.26

14.3

7

Liaoning

434.47

-36.5

8

Henan

420.48

4.5

9

Hubei

392.51

4.2

10

Shaanxi

350.28

2.0

11

Hebei

246.92

10.7

12

Hunan

126.49

-5.3

13

Zhejiang

110.14

-14.9

14

Guizhou

97.82

24.2

15

Chongqing

64.90

-23.3

16

Yunnan

47.87

4.1

17

Gansu

28.71

-6.4

18

Anhui

28.30

-13.0

19

Xinjiang

21.07

-24.6

20

Ningxia

17.61

-15.5

21

Shanxi

14.07

6.0

22

Heilongjiang

11.35

18.7

23

Jiangsu

8.52

-26.6

24

Inner Mongolia

6.32

16.5

25

Shanghai

5.47

-43.0

26

Tianjin

0.52

–

*Other provinces without production of ceramic tiles

www.asianceramics.com

Analysis: China 2011. In contrast, the negative growth Output of ceramic tiles during 2000-2015 Output of ceramic sanitarywares during 2000-2015 appeared Shandong, Chongqing and Year Output (m.m2) Growth rate (%) Year Output (m.pcs) Growth rate (%) Hu’nan only in 2010. That means an apparent slowdown for the industry.

2000 1,750 11.43 2000 56.00 3.7 In 2015, China's per capita 2001 1,815 3.71 2001 58.00 3.45 consumption of ceramic tile [(annual output - exports +imports / total 2002 2,179 12.90 2002 65.00 12.07 population) reached 6.69 square 2003 2,363 8.44 2003 70.00 7.69 meters (output 10.18 billion square meters, Export 1.139 billion square 2004 2,960 25.26 2004 80.00 14.29 meters, import ignored and population 1.35 billion). The figure was 6.74 for 2005 3,500 18.24 2005 98.00 22.5 2014 and 6.33 for 2013. It is high in the 2006 4,302 22.93 2006 121.74 24.22 world and significantly surpassed the vast majority of the world's big ceramic 2007 5,010 16.44 2007 143.11 17.55 tile production and consumption 2008 5,755 14.87 2008 154.13 7.7 countries, such as Brazil, India and Iran. China's per capita ceramic tile 2009 6,427 11.68 2009 156.90 1.8 consumption in 2015 decreased slightly compared to those in 2014. However, 2010 7,576 17.87 2010 177.84 13.35 it is still at a high level, ranking the 2011 8,701 14.86 2011 191.55 7.71 world's first. In the history, per capita consumption of ceramic tile in Spain 2012 8,993 3.35 2012 199.71 4.05 was 6.7 square meters in 2005, while 2013 9,690 7.8 2013 206.21 3.3 in 2015 China's annual per capita consumption of ceramic tile is still the 2014 10,230 5.57 2014 215.09 4.3 highest in the world.

2015 10,179 -0.5 2015 218.53 1.6 In 2015, the total output of ceramic sanitarywares was 219 million pieces (218.53 million pieces), increasing Output of ceramic sanitarywares in 2015 by 1.6% compared to the output of 215.08 million pieces in 2014. In Rank Province Output (m.m2) Growth rate (%) 2015 China's ceramic sanitaryware experienced the smallest growth in recent years. The output of ceramic sanitarywares grew by 4.3%, China total 218.53 1.6 3.3%, 4.05% and 7.71% for 2014, 2013, 2012 and 2011, respectively.

1 Henan 79.28 13.0 According to statistics of all provinces for 2015, He’nan surpassed Guangdong once again on output and became the country’s largest 2 Guangdong 65.92 -9.3 ceramic sanitaryware manufacturing province again. In 2012 and 3 Hebei 26.03 9.1 2013, He’nan Province twice surpassed Guangdong Province on ceramic sanitaryware output, and in 2015 He’nan Province became 4 Hubei 18.22 3.4 the largest ceramic sanitaryware producing region once again.

In 2015 the total output of ceramic sanitaryware in Henan, 5 Hunan 7.32 -3.4 Guangdong and Hebei was 171.23 million pieces, accounting for 6 Fujian 4.97 8.5 78.36% of the China total output. In 2014 the output was 166.68 million pieces, accounting for 77.49% of the total output and in 2013 7 Guangxi 4.28 5.3 the output was151.49 million pieces, accounting for 73.46% of the 8 Chongqing 3.09 3.4 total output, in 2012 the output was 151.79 million, accounting for 76% of the total output and in 2011 the output accounted for 76.58% 9 Shandong 1.94 – of the total output. The proportion of ceramic sanitaryware output for 10 Jiangxi 1.92 – Henan, Guangdong and Hebei continued to decline in three years and appeared a growth in 201. The proportion is 81.04%, 82.04% and 11 Beijing 1.64 -4.5 80.51% for 2010, 2009 and 2008, respectively.

12 Sichuan 1.02 -52.9 The data of the 31 provinces, municipalities and autonomous regions also showed that ,so far there have been 12 provincial regions, 13 Shanghai 0.87 -33.3 including Shanxi, Inner Mongolia, Jilin, Heilongjiang, Zhejiang, Hainan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang without the 14 Jiangsu 0.52 -20.4 production of ceramic sanitarywares, the same as the overall industrial 15 Tianjin 0.52 -11.5 layout in 2014.

Quality issues

With regard to the quality of China’s ceramic tile and sanitaryware productss, whether it is manufacturers and consumers, or the officials in charge of product quality or industrial professionals or non-professionals, they can directly or indirectly feel that the quality of Chinese ceramic tile and sanitaryware products is getting better and better. With the continuous expansion of the ceramic tile and

68

asian ceramics

AC 16-8

16

Anhui

0.32

-11.9

17

Guizhou

0.30

3.9

18

Yunnan

0.26

-10.7

19

Liaoning

0.11

5.7

*Other provinces without production of ceramic sanitarywares

www.asianceramics.com

Analysis: China

sanitaryware industry in China, quality of the Export of ceramic tiles during 2006-2015 products continue to improve subsequently. Year Volume Value However, China has been lacking the Average unit price (US$/m2) m.m2 Growth rate (%) US$ m Growth rate (%) comprehensive quantitative description and statistical analysis of the quality of the whole 2006 54,373 29.2 1,079 44.8 3.14 ceramic tile and sanitaryware products.

2007 59,007 8.62 2,131 24.7 3.61 Every year a routine "state inspection" (national quality supervision and inspection 2008 67,090 13.7 2,711 27.2 4.04 of ceramic tiles, ceramic sanitarywares and ceramic seal faucets) can reflect the overall 2009 68,547 2.15 2,862 5.54 4.18 quality of ceramic tile and sanitaryware 2010 86,720 20.96 3,851 25.68 4.44 products.

3.1. "State inspection" report of ceramic 2011 101,528 17.07 4,764 23.72 4.69 tiles and sanitarywares in 2015 2012 108,621 6.99 6,352 33.33 5.85 3.1.1 In 2015 state supervision and inspection results of ceramic tiles: 9 batches 2013 114,778 5.71 7,893 24.26 6.88 of ceramic tile products do not meet the 2014 112,810 -2.0 7,814 -1.0 6.93 requirements of the standards On January 22nd, 2016, AQSIQ 2015 113,853 0.4 8,326 6.69 7.31 announced results of the quality inspection on ceramic tile products. In the fourth quarter of 2015, AQSIQ inspected 180 batches of ceramic tile products of 180 enterprises in 16 provinces, including Hebei, Shanxi, Liaoning, Shanghai, Zhejiang, Anhui, Fujian, Jiangxi, Shandong, He’nan, Hubei, Hu’nan, Guangdong, Guangxi, Sichuan and Shaanxi.

It is found that 9 batches of products fell to meet the standards on breaking strength, modulus of rupture, water absorption and size.

The ceramic tile national supervision and inspection in 2015 is on the standard requirements basis of GB/T4100-2006 “Ceramic tile" and GB6566-2010 "Limits of radionuclides in building materials", testing Sanitaryware export value by Province 9 items of ceramic tile products, including size, water absorption, SHANGHAI OTHERS breaking strength, rupture modulus, abrasion resistance of unglazed ZHEIJIANG tile, stain resistance, chemical resistance, crazing resistance and HUBEI HENAN radionuclide. In 2015 national supervision and inspection found 9 SHANDONG batches of substandard products.

FUJIAN

Provincial inspection

GUANGDONG

On March 23rd, 2016, Administration of Quality and Technology Supervision of Guangdong Province announced the special inspection results on quality of ceramic tile products of Guangdong Province in 2015 on the official website. The inspection was made on 349 batches of ceramic tile products produced by 155 enterprises in 12 regions, including Zhuhai, Foshan, Heyuan, Huizhou, Dongguan, Jiangmen, Yangjiang, Zhanjiang, Maoming, Zhaoqing, Qingyuan and Yunfu and found the substandard rate of 3.7%.

HEBEI

Shandong gets involved

Sanitaryware export destinations by volume (%)

On July 7th, 2015, Shandong Bureau of Quality and Technical Supervision announced quality supervision and inspection results of the second batch of ceramic tile products in 2015 on its official website. The inspection was made on 28 batches of ceramic tile products from 28 enterprises in the second quarter of 2015, and found that 4 batches of products of 4 enterprises fell to match the concern standard requirements.

OCEANIA

NORTH AMERICA

ASIA

Guangdong calling

Here, the discovery rate of substandard products of ceramic sanitarywareswas 5.9%. On March 23rd, 2016, Administration of Quality and Technology Supervision of Guangdong Province announced the special inspection results on quality of ceramic sanitaryware products of Guangdong Province in 2015 on the official

70

asian ceramics

AC 16-8

SOUTH AMERICA EUROPE

AFRICA

www.asianceramics.com

looking for improved

casting performance?

ReďŹ ned Ball Clays

For Contemporary Sanitaryware Designs Benefits:

Stable rheological properties and deflocculant demand Improved casting properties and increased yield performance Fast firing stability and controlled organic content Stable vitrification and shrinkage

For more information and further enquiries, please contact www.sibelcoasia.com/enquiries

Find out more at our booth in

TECNARGILLA 2016

Hall B4, STAND 017

Italy - Rimini Fiera, Expo Centre 26th -30th September 2016

Analysis: China

website. The inspection was made on 170 batches of ceramic sanitaryware products from 151 enterprises in 5 regions, including Guangzhou, Shenzhen, Foshan, Qingyuan and Chaozhou. 10 batches of products are substandard and the substandard product rate is 5.9%.

State inspections

Export of ceramic sanitarywares during 2006-2015 Year

Volume

asian ceramics

AC 16-8

Average unit price (US$/m2)

m.pcs

Growth rate (%)

US$ m

Growth rate (%)

2008

56.32

1.92

818

11.29

14.51

2009

46.09

-18.16

668

-18.34

14.49

2010

54.12

17.42

779

16.62

14.39

6.28

846

8.60

14.71

-4.16

933

10.28

16.93

10.52

1,988

113.08

32.63

26.06

3,205

61.22

41.73

3.83

4,495

40.26

56.36

In 2015, the qualified rate of ceramic tiles 2011 57.52 in "state inspection" was 95%, which was 2012 55.13 the highest in recent years.

Over the past few years, "state 2013 60.93 inspection" results of Chinese ceramic 2014 76.81 tiles were as the following: the qualified rates were 89.5%, 93.89%, 86.59%,86.1%, 2015 79.75 81.62% and 73.35% for 2014, 2013, 2012, 2011, 2010 and 2009, respectively.

The changes of qualified rate on "state inspection" for seven consecutive years reflect basically the quality of ceramic tiles in China. In 2015, 9 batches of unqualified products in "state inspection" mainly concentrated in substandard water absorption and strength. Actually, the water absorption of ceramic tile products can be arbitrary and the so-called water absorption unqualified means that the absorption rate doesn’t conform to the water absorption range the product tagged, most of which were highly tagged and fell to reach in fact, influencing the strength. In previous years there was the case of low absorption rate range so that there was no strength problem. Among quality supervision and inspection of ceramic tiles in 2015 (state or provincial inspection, etc.) there was no case of excessive radionuclides.

In 2015, 18 batches of ceramic sanitaryware products were substandard in state inspection and the product qualified rate is 81.4%, which fell sharply compared to 92.7% for 2014. In 2013 and 2014, the qualified rates in "state inspection" were 93.75% and 92,5%, respectively,. The main reason is that intelligent toilets were involved largely in "state inspection" of 2015. Among the 18 batches of substandard products 17 batches were intelligent toilet products.

The fire-resisting test of seat ring material was unqualified. Heat and fire resistance is the mandatory requirements for the electrical safety standards, it seems that the enterprises are not used to the mandatory requirements for ceramic electrical safety standard.

In 2015 the export volume of ceramic tile products was 1,139 million square meters (1,138.53 million square meters), accounting for 11.19% of total output and grew by 0.4% compared with 1,128 million square meters in 2014, below 1.148 billion square meters in 2013, the historical highest export volume. In 2015 the exports value was US$ 8,326 million, growing by 6.6% compared with US$ 7,814 million in 2014. In 2015 the average export unit price of ceramic tiles was US$7.31 per square meter, growing by 5.38% compared with US$6.93 per square meter in 2014. China's ceramic tile export grew in volume, value and average unit price at the same time in 2015.

Data show that in 2015 China's ceramic tile exports recovered to positive growth compared to the negative growth in 2014 and the average unit price grew significantly.

In 2013 and 2014 export of ceramic sanitarywares grew largely in volume, value and average unit price at the same time. In 2015 export of ceramic sanitaryware products kept growing and export volume reached 79.75 million pieces, growing by 3.83% compared with 76.81 million pieces in 2014. But the growth rate decreased

72

Value

Average import/export prices of sanitaryware

Household consumption of sanitaryware (no. pieces)

www.asianceramics.com

Analysis: China

sharply. In 2015 the export volume accounted for 36.49% of the total output, 215.08 million pieces, increasing lightly compared with 35.71% in 2014. In 2015 the export value was US$ 4,495 million, growing by 40.25% compared with US$ 3,205 million in 2014.

In 2015 the export average unit price was US$ 56.36 per piece, growing by 35.06% compared with US$41.73 per piece in 2014.

With regard to the export proportion of ceramic tiles in 2015in, compared to 2014, the biggest change was the greater decline in the proportion of export volume of Guangdong Province. In 2014 the export volume of Guangdong ceramic tiles accounted for 77.1% of the total export volume, while in 2015 the proportion was 63.26%, decreasing by 13.84%. However, the proportion of export amount in Guangdong grew greatly to 74% in 2015, while in 2014 it was 65.27%. That means that the average export unit price of Guangdong ceramic tiles grew substantially. In 2015 the export average unit price of Guangdong ceramic tiles was higher than the China’s average, which changed the situation that the export average unit price of Guangdong ceramic tiles is often lower than the China average price. The second large feature was the great growth of ceramic tile export in Shandong Province. In 2014 the export volume of Shandong ceramic tiles accounted for 4.68% of the total, while in 2015 it reached 10.83%, but the average export unit price decreased significantly. The export volume of ceramic tiles in Fujian province also increased in 2015. In 2014 export volume of Fujian ceramic tiles accounted for 6.97% of the total and in 2015 it reached 15.08%. However, the average export unit price was lower than the price of whole country.

In 2015 the overall export pattern of China's ceramic

www.asianceramics.com

sanitarywares did not change much. The top three provinces on export volume were still Guangdong, Hebei and Fujian. The export volume proportions of the three provinces were 46.96%, 29.11% and 6.20%, respectively, in 2015 and the corresponding proportions were 47.84%, 26.96% and 6.26% respectively, in 2014.

The proportion of export values were 10.10%, 70.86% and 3.17%, respectively, in 2015 and the corresponding proportion were 69.59%, 11.63% and 3.77%, respectively, in 2014.

These data indicate that the export of ceramic sanitaryware in Guangdong province is prominent and the export volume, value and average unit price were significantly higher than the average of the country.

Energy consumption, tile and sanware industry (standard coal 10kt)

AC 16-8

asian ceramics

73

Talking Shop

Talking Shop

Storm in a teacup AC looks at how recent terrorist activity, fake shipments to the EU and an unsettling business climate as a result are casting shadows across the otherwise bright future of Bangladesh’s ceramic industry.

When Bangladesh is faced with image crisis and buyers are still hesitant in arriving the country on deals and physical supervision of their purchases following recent carnage by the militants that killed 18 foreign nationals among others, the Bangladeshi ceramic exporters now fear to be affected more by the recent detection of fake shipments in European Union (EU) markets that used their business names.

Fake shipments and militant issue both are affecting the reputation of Bangladesh as source of safe and stable supplies, said Bangladesh Ceramic Ware Manufacturers’ Association (BCWMA), as the ceramic importers of EU were hacked by the smugglers of contraband ceramic items damaging Bangladesh’s fame triggering further the shocking impact of the mass killing of foreigners, mostly buyers, at Dhaka’s posh Spanish restaurant, Holey Artisan Bakery, in the evening of July 1.

The killing impacted immediately and reduced the presence of buyers in Bangladesh, although the export shipments still remain unaffected and deals on future consignments are continuing.

The restaurant massacre left 29 persons dead. Among the killed on the spot inside the dining and service area were nine Italian apparel buyers, seven Japanese experts connected with Dhaka metro rail project, one Indian, one Bangladeshi American, and three Bangladeshis.

Two encountering police officers were killed by the militants’ grenade explosion while trying to enter the restaurant. One grenade injured person was died in the hospital.

All five terrorist gunmen were killed by the morning by the Bangladesh Army led commando assault that rescued 13 hostages alive unharmed.

They included two Sri Lankans, one Japanese and 10 Bangladeshis.

The five young killers, who had no demand for anything during their attack, were suspected to had some link with the Middle East based Islamic State that claimed responsibility of the Dhaka killing. Bangladesh’s business circles believe that normalcy has greatly returned by the end of the month, while the Commerce Minister Tofail Ahmed claimed within a couple of weeks the export business is going as usual and foreign buyers are arriving with confidence in a situation of improved security.

But, the fake shipments have been haunting the ceramic exporters complicating Bangladesh’s trade relationship with EU as the suspicion cannot be removed easily until the offenders are caught or their identities were established.

The EU authorities have detected several smuggled consignments of low-quality ceramic tablewares, which entered the EU countries allegedly from China in last two years with fake documents prepared in the name of some Bangladeshi suppliers to evade European Commission (EC) imposed anti-dumping duties on Chinese ceramic tablewares.

74

asian ceramics

AC 16-8

Suppliers’ names included Bangladesh’s famous tableware manufacturers-exporters, Bengal Fine Ceramics Ltd, FARR Ceramics Ltd, Monno Ceramic Industries Ltd, Paragon Ceramic Ind. Ltd, Peoples Ceramic Industries Ltd, etc, according to BCWMA General Secretary Irfan Uddin Rifat, who is also the Managing Director of FARR Ceramics Ltd. The EC is now investigating the sources of the shipments, as shown on the documents, but could not yet trace out any of the smugglers of many container-loads of contraband tableware items shipped illegally at some one third of the prices of Bangladesh’s exports.

Bangladeshi tableware exporters’ shipments are made only from Bangladeshi ports and their products are of superior quality and export prices are 200 percent higher compared to those of the detected fake shipments, according to Irfan.

Tableware traumas The EC is investigating the dumping of the ceramic tablewares in cooperation with the Bangladesh government. A team of EC visited Bangladesh recently and found that no Bangladeshi manufacturer-exporter shipped those consignments, said the BCWMA General Secretary.

On request from the EU the Bangladesh government is investigating if any Bangladeshi company or individual is involved in such fraudulent activities. The EC is also chasing the shippers’ logistics to locate the origins of the shipments in all possible locations, including, Bangladesh, China and international seaways. Details of financial transactions and discharges in the EU ports, as well as deliveries of the consignments and names of the consignees could not be known immediately.

“The illegal shipment documents detected in EU looked like identical official papers of Bangladeshi tableware shipments but those were not passed through Bangladesh,” Irfan claimed.

“It could not be traced out how and where those documents were prepared and processed and through which ports the shipments were made,” Irfan told Asian Ceramics, quoting the EC team that met the Bangladeshi tableware manufactures-exporters and the government run Export Promotion Bureau of Bangladesh (EPB) during investigations.

Due to entry of fake ‘Made in Bangladesh’ tablewares, EU is losing taxes and faced with threat of health hazard toxic ceramic wares, while Bangladesh is losing its reputation as quality manufacturer and facing the threat of cancellation of GSP facilities provided by EU to all of its exports, said the industry sources.

Due to withdrawal of GSP by USA a few years ago on compliance issues, including absence of full trade unionism, Bangladesh’s tableware exports are now dependent on duty free access to the EU markets. EU is

www.asianceramics.com

Talking Shop

SUSPICION CANNOT BE REMOVED EASILY UNTIL THE OFFENDERS ARE CAUGHT OR THEIR IDENTITIES WERE ESTABLISHED traditionally the largest market of Bangladesh’s ceramic tablewares and all other types of export items, including apparels which is currently the life blood of Bangladesh, employing several millions of women workers.

USA never allowed Bangladesh’s apparels as duty free.

Almost all of Bangladesh’s tableware exports are of high quality porcelain and bone china dinnerwares. In financial year 2015-16, ended on June 30 last, Bangladesh exported a total US$34.54 million worth of tablewares to the whole world, covering all continents, mainly to Europe and North America.

The EU imported a half of Bangladesh’s total tableware exports, according to the provisional estimates of the EPB. EU member UK was the largest single market of Bangladeshi tablewares in in the world with shipments of US$6 million, while USA was the second largest with US$5.7 million.

Bangladesh’s 18 organised ceramic tableware factories have a total annual production capacity of 250 million pieces, mostly for exports to the established tableware marketers, super stores and outsourcing brand manufacturers who are leading global players.

Export data supplied by EPB shows that in recent years Bangladesh’s tableware exports are experiencing a declining trend in terms of value,

www.asianceramics.com

although in quantity the exports are showing steady rise.

Data available with BCWMA however shows the year on year steady rise in exports of tablewares parallel to increasing production and addition of new production capacity.

According to the EPB provisional estimates, In last fiscal year, the total exports of all types of ceramic products from Bangladesh was US$37.69 million, which is 12.19 percent lower than the previous year’s US$42.92 million.

Besides tablewares, some other traditional ceramics, including ceramic tiles, ceramic bricks and other heavy clay items, decorative and giftware items, etc, are exported from Bangladesh.

Bangladesh’s 20 tile and 16 sanitaryware manufacturers, with total annual production capacity of over 120 million sq metres and 130,000 tons, respectively, are expanding production of export quality products with hopes to exploit the markets of the neighbouring countries, where exports of Bangladeshi tablewares are steadily rising fetching premium.

Some of the tile manufacturers are also planning to export to the EU countries to avail of the opportunity of GSP. Despite the current trend of buying cheaper from Bangladesh, the Bangladeshi exporters are exploiting the EU markets profitably driving on the GSP facility.

Bangladesh’s largest beneficiary, apparel sector, thrives on GSP of EU. EPB statistics shows in financial year 2015-16 Bangladesh’s total exports to EU markets rose to US$18.687 billion, which was more than a half of the country’s total worldwide exports of US$34.241billion, mostly from the shipments of apparels. The value of total shipments to the world market rose by 9.72 percent from the previous year’s 31.208 billion.

“The export volume of apparel products alone would have been US$40 billion if we had the actual price of our products," said the Commerce Minister Tofail while commenting on the falling export prices, adding "we did not get the actual price of our products like Vietnam and other countries as the buyers pay us less on issues of factory compliance.”

AC 16-8

asian ceramics

75

Insight

TURKEY Unglazed tile imports (sq metres)

Leading unglazed tile export destinations (sq metres)

76

asian ceramics

AC 16-8

Unglazed tile exports (sq metres)

Glazed tile imports (sq metres)

www.asianceramics.com

Insight Glazed tile exports (sq metres)

Sanitaryware exports (no. items)

Leading sanitaryware export destinations (no items)

78

asian ceramics

AC 16-8

Leading glazed tile export destinations (sq metres)

Sanitaryware imports (no. items)

www.asianceramics.com

3HUIHFW 'HVLJQ 3HUIHFW 6HUYLFHV 3HUIHFW 6ROXWLRQV

3+( 3+1 /DE 0LOO

3%0 %DVNHW 0LOO 3+1 1DQR %HDG 0LOO

3+( 'LVF %HDG 0LOO

36' +LJK 6SHHG 'LVSHUVHU

3XKOHU *URXS &KLQD /WG 1R &KXDJ\XDQ 5RDG =KRQJFXQ 6WUHHW 3DQ\X 'LVWULFW *XDQJ]KRX 3 5 &KLQD 0RE 0RE 0RE (PDLO VDOHV#SXKOHU FRP :HEVLWH ZZZ SXKOHU FRP

0253+ '+0 '5< *5,1',1* 6<67(0

Hunter and the hunted

Country of Origin Dear Diary,

ned the new independent certification scheme I received an email circular recently from Lucideon. It concer cture. My interest was piqued as this I believe manufa of origin prove (V-MARQ) that offers an assured route to just to end users but to retail chains, traders and all is something the industry needs and should champion. Not stops in between. ' or 'Made in Hong Kong' it would have been looked Not so many years ago if a product was 'Made in Taiwan 'cheap' or even 'tacky'. Not necessarily bad with mous synony at with some humour as the countries were ts and poor quality also. A few years before that products or poor quality – just cheap. OK, maybe bad produc t of the same way. Not as good as western brands Japanese or South Korean products may have been though in Hong Kong' outside jewelry, watches or 'Made but cheaper and cheerful. Not now. You'd struggle to find to the Mainland. So now 'Made in China' border the over moved some food items; much manufacturing has but... Japanese products on the other hand are is often associated with fakes and poor quality. Not always t standards with extreme care and consideration expected to be of the highest quality and made to the highes the products would be highly efficient. Nowadays taken over packing and it expected that the factories making South Korea has an enviable reputation for eness, inventiv their for Taiwanese products are more likely known quality electronics and automobiles. This is no accident. nt as companies and brands bid to promote Where something is made has become increasingly importa Isn't it sufficient to just make a good product, bother? themselves and differentiate from the masses. But why then rely on your customers to give feedback and suitable for purpose and advertise it, market it as such and friends? Obviously not. It's not been sufficient for use word of mouth to promote your products to family and been a skill going back to Josiah Wedgwood's day. hundred years to rely on local reputation and marketing has ts. Far more recently the Italian tile industry produc his He used royal connections to advance the reputation of logy it wasn't any good. Sanitaryware – seems to be had reached such a zenith that if it wasn't Italian tile techno tional companies who produce high specification marketed based upon the sound reputation of major interna products that are increasingly 'green'. differentiate from cheaper products because so But brands have suffered and it has been hard to always our product is invisible. about te celebra much of what we would like to promote and by alluding to 'values' that they suppose we price selling higher a achieve to Companies and brands want ethical values, a sense of fair play, a desire to be want to share; whether its some concept of life style, some human rights. To want to be part of a caring and ment, better, superior. To respect craftsmanship, the environ with poor practices and low standards. ted associa are es sharing world. Unfairly or not some countri hold our values. There needs to be away to Thus we want to distance ourselves from products that don't be objective about the subjective. quantify that which previously could not be quantified. To Is there now away? or more have not only given a growth in regional The problem is complicated as the last twenty five years out sourcing where supposedly famous brands get manufacture which is admirable but also in off-shoring or they are cheaper places to manufacture. Retail chains products made in cheaper places. And we all know why sively sourced cheaper products only to market aggres and traders looking for fatter margins also enjoyed and and marketed with their values to the fore. ioned champ – brands them in their home markets under their own and multiple news items never mind Unfortunately the reality has been that NGO's, the media es of sourcing and the negative end consumers have taken issue with the ethics and practic ers that feels their favourite consum of impact on brand value. Whether its a Facebook page of the potteries', or an expose home – Trent on 'Stoke tableware brand should only be made in

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

80

asian ceramics

AC 16-8

www.asianceramics.com

ASEANâ&#x20AC;&#x2122;s only dedicated ceramic event that brings the region ceramic manufacturers and international suppliers of raw materials, equipment and machineries, to the top ceramic producing country in ASEAN and one of the largest ceramic consumer in the world - Indonesia.

ASEANâ&#x20AC;&#x2122;S DEDICATED CERAMIC EVENT

Jakarta Convention Center WHY EXHIBIT AT KERAMIKA 2017

Meet the entire ceramic industry professionals across asean countries See the latest technology, products and materials in keramika Expand and strengthen your network across asean Learn the latest opportunities, challenges and regulations in asean countries

TOP 6 ceramic production countries in the world

Annual production of more than 4.5 million sqm tiles in 2014

Largest consumption of ceramic in ASEAN

The 1st choice of Indonesia ceramic industry

BOOK YOUR BOOTH & GET YOUR BEST LOCATION NOW! Mr. Steven Chwee

Mr. Marzuki Herry

Ms. Kartina

Project Director steven.chwee@reedpanorama.com

Project Manager marzuki.herry@reedpanorama.com

Marketing enquiries, publicity & media requests & partnership kartina.lydiawati@reedpanorama.com | +62 21 2556 5016

Co-organized by :

Co-located with :

Hunter and the hunted

ns to make hand bags or that the pursuit of profits that children are being forced to work in appalling conditio - the whole out sourcing practice has been tainted ated devast been has has meant an area of natural beauty sometimes rightly; sometimes not. nies who invest heavily in staff, training, salaries, The other simple issue is why should responsible compa te in products, quality and technical performance be innova compliance of environmental issues and so on AND not, but worse manage to give the appearance that unable to differentiate from companies and brands that do

they do? seems from UK tableware manufacturers looking This is why it seems the V-MARQ has evolved, starting it ts' place of production in order to differentiate produc their to 'signpost national and international customers to re as the intention is to cover such diverse them in the market place'. But V -Mark isn't just about tablewa e. I'm guessing textile brands would have a lot industries as fashion, leather, flooring, cosmetics and furnitur outrages in factories in Bangladesh. A further to gain too by such a verification scheme given the regular support brands that are 'designed in' or not will Q interesting note in the Press Release is that “V-MAR in the place where they claim to be made.” made actually are that ts 'packaged in' but endorse only produc verification and certification scheme will be Which all seems most excellent. If, and its a big IF such a scheme can actually identify the value that such respected by buyers and end customers alike. Whether the lot of competition from customers that are trying a t agains brands and manufacturers have invested in. It is up the retailers that satisfy that basic urge and need. to stretch every dollar they earn by buying on price only and d the first V-Marq. They have been a success It was pleasing to see that Steelite International were awarde Stoke on Trent. So this has to be applauded. story for not only Made in UK or England but for Made in But, what about Asia? t from UK, the US and India (though they can not Lucideon have advised that so far there has been interes two no real surprise but I'm happy to see India is yet say which companies as auditing is ongoing). The first suit? I think its vital they do. For several years mentioned. Should and could other companies in Asia follow tiating from the tag of 'cheap' or at least differen nies now I've hopefully championed Asian ceramic compa pay little or no head to the values mentioned that nies compa the from lves attempting to and distancing themse have been very high quality companies for years above and so desired by discerning buyers. Naturally there to be Japanese, South Korean or maybe Thai. Or in Asia though the ceramic companies that are are likely , Narumi, Hankook or Noritake.

WWRD es; possibly famous brands made in other Asian countri at such verification schemes so that they too look to Asia in nies compa c It should be time though for cerami confidence and highlight attributes such as quality, can ….'positively influence purchasing decisions, inspire of Lucideon CICS says. Which is something I think ethics and sustainable production' as Shaun Bainbridge supports regional and national manufacturing both turn in we would agree on especially as he continues “This domestically and overseas.” nies to champion these values and to compete It certainly would be desirable for more Asian ceramic compa 'We often base our buying decisions on where a less on price points only. For as the V-MARQ web site notes values to a certain region or country. And quality and able product is manufactured, attributing ethical, sustain ing opportunity the region would do well to take buying locally or nationally is increasingly the norm.' A market note of.

Until next time Your humble servant William Hunter

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

82

asian ceramics

AC 16-8

www.asianceramics.com

In the next issue...

AC16-9 Features include

• The Casting Couch: Asia decides • Vietnam sanitaryware markets and makers • Tile decoration: choosing the right option • Brick opportunities in North Africa is this your own issue? sub

scribe online at www.asian

www.asianceramics.co

AC16-9

is this

? subscribe your own issue

online at www.

asianceramics

ceramics.com

m

.com

amics.com

is this your ow

www.asiancer

AC16-9

n issue? subscr

www.asiancer

AC16-9

amics.com

ibe online at ww

w.asianceramics

.com

PAN-ACEA? ?

A E C A N A P PAN-ACEA? VI ETNAM SANWAR E IN

FOCUS

US

FOC ANWAR E IN VIETNAM S

IN FOCUS: He

S: FclayOinCNorU IHN th Afric a eavy casting Sanitaryware options n tio ra Tile deco

VIETNAM SA

NWAR E IN F

OCUS

avy clay in North Africa Sanit aryware casting Tile decoration options

IHN FOCUS:

eavy clay in N orth Afric a Sanitaryware casting Tile decoratio n options

PLUS: news, views, analysis and much, much more!

CAN YOU AFFORD TO MISS OUT?

CONTACT US TO SUBSCRIBE TODAY, OR USE THE FORM IN THIS ISSUE:

T: + 44 (0) 208 123 0839 E: enquiries@asianceramics.com

www.asianceramics.com

26-30 SEPTEMBER RIMINI - ITALY