AC18-1 Editition

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IN FOCUS:

Sri Lanka: the China effect Fuel cost control North African tiles Guangdong in focus Plus news, views, analysis and much more!

News

Contents: AC 18-1 News

Features

4 Inside Asia

22 North African tile markets

Bangladesh: an expo update.

6 Welcome

Morbi: gas woes continue.

Yogender Malik looks at how expanding consumption rates and the possibility of extending exports could lead to a drive in investment and expansion in the ceramic tile industries of Algeria, Moroccoa and Tunisia.

8 Across The Continent

32 Sri Lanka: the China influence

Openings, closures and industry moves from across Asia.

14 International News Our eye on the international arena.

18 Material Matters Raw materials news and views.

20 Comment & Analysis

Pollution police hit the brick sector again.

40 Province Profile: Guangdong

In the latest of our exclusive Chinese Province Profiles, we turn our attention to Guangdong – a region that was once the doyen of China’s ceramic industry, but one which has undergone massive transformation.

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The strategic location, and expanding markets, of Sri Lanka are proving a key attraction for many ceramic manufacturers, and, not surprisingly, China is at the vanguard of future investment and the locals might not like it. Rohan Gunasekera looks at how the increasing Sino-influence might play out…

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Analysis 54 Talking Shop AC looks at how the determination of China’s ceramic industry to move from coal-fired to gas-fired kilns may look environmentally sound but the realities of supply shortages are causing huge headaches to the country’s tile sector. AC investigates…

56 Insight

Analysis and insight into Vietnam.

60 The Hunter And The Hunted

William rolls up his sleeves and takes an optimistic view of the year ahead…for a minute anyway!

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Inside Asia BANGLADESH SHIFTS EXPO TO DECEMBER 2019 Ceramic Expo Bangladesh has shifted its next event to 4-8th December, 2019, from 11-14th December, 2018, due to national parliamentary elections. It will be entitled as Ceramic Expo Bangladesh-2019. However, the organiser, Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA), said the expo will remain an annual event as decided earlier and will be held annually from the next year.

WEM Bangladesh Limited, event manager of Ceramic Expo Bangladesh-2017, claimed over 8,000 visitors, including more than 500 buyers, visited the exhibition, held during

November 30-December 2, 2017, at International Convention City Bashundhara (ICCB), Dhaka. The event also included several seminars on ceramic production and trade everyday. “Almost all of the manufacturers, suppliers and providers of machinery, equipment, rawmaterials and services who exhibited their products received orders or made potential deals,� Nasimur Rahman, Director, Marketing, WEM Bangladesh, told Asian Ceramics.

The organiser BCMEA has plan for an expanded exhibition next year for providing larger space to ceramic manufacturers and suppliers to the ceramic industries.

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Morbi ceramic industry is facing the SEE US AT: grim prospect of losing business with the public sector company Gujarat VA LE NC IA, S PA I N Gas Limited (GGL) suddenly increasing natural gas prices. Industry watchers feel the rate hike will have an adverse impact on existing orders in view of the fact the hike burden cannot be passed on to the customers. It may be mentioned that GGL has hiked piped natural IN FOCUS: Sri Lank a: the China effect gas prices for ceramic units in Morbi by Rs 2.50 per Fuel cost control North Afric an tiles standard cubic meter (SCM) to Rs 27.37 per SCM. Guangdong in focus Plus news, views, analy sis and much more!

The new rates came into effect from last week. “We will have to face loss in profit and in some cases we will be in complete loss as the gas company has hiked the prices without any intimation. Our profit margins are between 5% to 12% and rise in gas rates has increased the production cost by 7-10%. Earlier, the government and gas company used to interact with us before revising the prices but this time they increased it without consulting the industry,” said K G Kundariya, president of Morbi Ceramic Association. Domestic demand is slow at present but the industry has over Rs 3,000 crore export orders on hand which they have to fulfil in next two months and more than 5,000 export inquiries are pending. Ceramic units are not in a position to pass on this extra burden to their customers.

C E V IS A M A

CERAMIC INDUSTRY IS THE LARGEST CONSUMER OF PIPED NATURAL GAS

Kundariya said, “We are not in a position to pass on our burden to the customers. This might not be acceptable to them also and in this condition, we have to take load on us. We have over Rs 3,000 crore of exports orders in hand at this time and to sustain our credibility in international market, we have to fulfil them in time.” The city consumes about three million SCM a day and because of the new rates, the industry will have to bear an additional burden of over Rs 1 crore on gas bill on a daily basis. Nilesh Jetpariya, president of wall tiles division of the association, said, “Ceramic industry is the largest consumer of piped natural gas and our daily consumption is about three million cubic meter. All of a sudden price hike by the gas company will lead ceramic units to face financial loss of about Rs 1.20 crore per day.” Morbi in Gujarat is the third largest manufacturing hub for ceramics in the world after China and Italy and accounts for 90% of the total ceramic production in the country.

There are about 750 units of ceramic which produce 1,820 million square meters of wall, floor and vitrified tiles and sanitaryware products. The ceramic association is planning to make a representation to the petroleum minister of Gujarat and government officials over gas prices issue. The industry is also considering increasing the prices of ceramic products for new orders in domestic market.

CONTACT DETAILS EDITORIAL Publishing Director Andy Skillen Email: askillen@asianceramics.com Direct line: + 44 (0) 208 123 0196

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

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

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Duravit opts for third Riedhammer kiln • Fujian laments 70% sales drop • Glocera gives Rajasthan a boost • Ca cut • System Lamina innovation is applied in Motto Group • Developers push for less import regulation • Export EGYPT

Duravit opts for third Riedhammer kiln The installation of a third Riedhammer shuttle kiln at the firm's Egyptian factory underlines the strength of the successful partnership between the Sacmi Group and Ceramica Duravit, the world-leading manufacturer of high quality, beautifully designed sanitaryware. This recently tested Riedhammer SSK 440/198-8 has been installed alongside existing sanitaryware firing/re-firing kilns.

Equipped with 8 modules having effective internal dimensions of 15 x 4.4 x 2 metres, the kiln has a cordierite/mullite refractory lining, a feature that avoids

the maintenance on exposed fibres that can sometimes lead to product defects. Moreover, it’s equipped with a rapid cooling system that ensures the entire first firing cycle is completed within 14 hours.

Following its purchase of the

first machines back in 2005, Duravit has, then, once again gone for Sacmi-Riedhammer technology, a decision brought about by the extreme flexibility, reliability and usability of these solutions. In fact, the company is already planning to install a fourth shuttle kiln in Egypt, now the most important overseas market for this outstanding German sanitaryware player.

Located in the Industrial zone of 10th of Ramadan City, Duravit Egypt has an installed capacity to produce 2 million big pieces of sanitary ware per year. Duravit entered into sanitary ware manufacturing in Egypt in 1999 by acquiring 51 % share of an Egyptian

sanitary ware producer, which had commenced sanitary ware production in 1997.

Duravit invested in a new partnership in 2002, with a sister company manufacturing acrylic products.

Duravit shower trays, baths and wellness products are now manufactured by this new company.

Duravit Egypt has supplied sanitary ware products to a number of prestigious projects in the country and region. In addition to catering to domestic market, Duravit Egypt is also a significant exporter of sanitary ware products to other regional countries.

CHINA

Fujian laments 70% sales drop Construction trends, that have shown to have accelerated in 2017, have seen a restriction on the use of exterior wall tiles on high rise buildings in some cities, and as such this has had a major negative effect for suppliers. With Fujian the main producer of such tiles, it is not surprising to learn that in figures made available to AC, that the industry has suffered hugely in the last 12 months.

Indeed it is now estimated that exterior tile production in the Province declined by over 70% during 2017. In fact, some observers have stated companies should feel themselves fortunate if they have only suffered a drop of 50% in their output. It is not just the manufacturers that are feeling the squeeze, but also the ceramic contractors and wholesalers that are having a difficult time in Fujian. Not surprisingly given the surfeit

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of stock that suddenly was available, price competition has intensified as a result, and this is further exacerbating the situation.

Such claims have been backed up by the general manager of Fujian Rongzhou Ceramic Co., ltd., WU Zhenming, who said that different ceramic companies and different types of exterior tiles have been influenced to varying extents.

Some ceramic companies have managed to offset some of the sales difficulties by developing new types, but overall the decline seems irreversible.

Lin Ying, the sales manager of Zhengyifang Ceramics Co., Ltd., said that small colorful exterior tiles had not been affected as much as they can be applied in both high rise and low rise buildings. Elsewhere, HE Xinzhang, a sales manager at Haoshan Building Materials Co., Ltd., estimated that sales

of exterior wall tiles at his company had declined by 40%, but colorful, smaller tiles had seen a comparatively small reduction. That said, he added, the diminishing market in both Fujian and Guangdong means that it is inevitable that many production lines will ultimately be forced to close.

Of course, that does lead to the question as to what these companies will now do to get themselves out of this difficult situation. One possibility is the production of rustic tiles, for which Fujian is already well recognized and the possessor of the largest market share in the nation. Presently, however, these companies mainly supply rustic tiles for low-end customers and have relatively low value-addition also. In other words, the prices for their rustic tiles are very low. A such, any companies currently producing exterior wall tiles and

who wish to enter the rustic tile market, will undoubtedly look to supply more value-added products that can garner better prices in the market, opening more opportunities as a result. Indeed, the influx of established ceramics makers from one sector into the rustic market may actually drive a whole phase of research and development.

Another option to changing the lines of exterior wall tiles, would also be to develop more niche exterior tiles, rather than the current mainstream offering. Although sounding counter-intuitive, the current governmental trend to develop “characteristic” towns around the country will undoubtedly create openings for highly customized tiles. Of course, such sales will take longer and be more specialized, but the opportunity is likely to be there for some time yet.

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atalan presses its leadership advantage • Morbi makers “relieved” over GST ts climb as Pakistan seeks tiles • Al Hael re-brands and aims for the top...

INDIA

Glocera gives Rajasthan a boost Global Ceramics Pvt. Ltd. (Glocera), one of India's fastest growing sanitaryware companies, has had its manufacturing facility at Ghiloth ceramic zone inaugurated

by Sh. Surender Pal Singh, Minister of Mines & Petroleum, Government of Rajasthan.

The occasion also witnessed another memorable moment as the gas connectivity to the factory was inaugurated in the same ceremony. Shedding light on the growing environmental hazards, Global Ceramics has been working on environment friendly strategies since the beginning which keeps it ahead in the business race. The usage of clean fuel (natural gas), which would be facilitated by Rajasthan State Gas Limited (RSGL), is going to set an example for competitors.

The ceremony was attended

by Sh. Hari Ram Gupta,

Chairman, Global Ceramics Pvt. Ltd., along with other company directors namely, Sh. Ved Prakash Gupta, Sh. Manoj Gupta and Sh. Niraj K Gupta along with various respectable bureaucrats of the region.

Sh. Ravi Agarwal, Managing Director, Rajasthan State Gas Ltd, who was present at the same ceremony stated the day as a memorable one as natural gas was the only key component missing till now to make Ghiloth ceramic zone as one of the favourite ceramic hubs of investors and manufacturers.

The manufacturing facility which has the capacity to produce over 3,500 sellable products per day would also be generating direct and indirect employment to more than 450 people. The company is eyeing this opportunity to make its mark in India and abroad as it

also plans to sell the products to various nations.

Mr. Niraj K Gupta said, "India is growing at a remarkable pace and we want to contribute to the same. As the world is looking up to our nation as an example, we want to be a part of the same journey from our segment. We are going to produce the best quality products at competitive rates and would like to spread the Indian culture via our business."

Honourable Minister Sh. Surender Pal Singh while complimenting Global Ceramics Pvt. Ltd. for their initiative and RSGL for speeding up the process of providing natural gas to industries as well as consumers also explained how Rajasthan is setting an example by providing clean fuel to the maximum areas as per Honourable Chief

Minister, Smt. Vasundhra Raje's vision. He also shared his vision of converting Ghiloth ceramic zone into one of the best ceramic zones in the country. He congratulated Global Ceramics Pvt. Ltd. on the production of its remarkable products and commendable growth.

According to the company, Glocera strives to bring in international, contemporary and luxurious bathroom furniture, tiles and sanitaryware with designs inspired from various parts of the world including Italy, Spain, Egypt, Turkey, Taiwan, Brazil and China under one roof with unparalleled quality, services and prices.

Glocera has a wide network of experienced professionals to help you embrace an extravagant affair with your bathing space.

VIETNAM

Catalan presses its leadership advantage Vietnamese group Catalan Ceramics has chosen the very best Made in Italy technology to complete an investment plan that ambitiously aims to extend the range towards high-end medium-to-large tiles. A completely new Sacmi-supplied production line for large glazed ceramic tiles, which spans from press to kiln outlet, is currently being installed.

The beating heart of this new line is the tried and tested Sacmi PH 7500, the largest, most powerful press installed in Vietnam. It produces about 8,000 m2 of 800 x 800 mm tile per day. Alongside this new press, Catalan Ceramics has installed a 5-layer ECP 285

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horizontal drier. Downstream from the drier lies the innovative DHD-D 1208 digital decoration unit by Sacmi Digital. Once decorated, the product is sent to the FCC single-layer roller kiln – a solution characterised by outstanding reliability, versatility and low consumption – via the automated loading unit, which is synchronised with the press. Also supplied in 2017 was a new Sacmi PH 6500 dual cavity press for similar formats.

Catalan Ceramics, which, this year, celebrates its tenth anniversary, thus puts the seal on a successful partnership with Sacmi that began in 2007.

Over the years, nine presses have been supplied to them.

The arrival of the PH 7500 and PH 6500 (now being started up) raises that number to 11.

Moreover, 12 driers, 12 kilns and a series of conveying and end-of-line solutions have been installed: these include a press loading unit, a vertical magazine and an automated sorting line.

Quality, productivity and size diversification constitute the core policies of Catalan Ceramics, which is installing the new line at the Bac Ninh manufacturing plant. Thanks to such investments, this Vietnamese player has, over the last decade, has become one of the country's top five companies. Now, with this latest order, it aims to boost

capacity still further and gain further market penetration, strengthen its domestic market leadership and significantly increase export quotas.

Indeed, this recent order does far more than make this SouthEast Asian player the owner of Vietnam's largest press: it also boosts its output capacity to nearly 20 million m2/year.

News, views and analysis www.asianceramics.com

AC 18-1

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News

INDIA

Morbi makers “relieved” over GST cut Ceramic industry entrepreneurs in Morbi heaved a sigh of relief as the GST council in its meeting in Guwahati, Assam, pruned GST rate on ceramic tiles from 28% to 18%. Morbi district has been on the political boil since August 2015 due to the Patidar quota agitation and, more recently, because of the high GST slab as well as the complex compliance system.

The ceramic tile makers, who are facing low demand due to GST and sluggish real estate market, expect business sentiment to improve after the GST rate reduction. Interestingly, more than 90% of ceramic tile unit owners are Patels and said to be traditional BJP supporters.

Another major business cluster, some 65km from Morbi, is Thangadh in Surendranagar district, which is renowned for making sanitaryware products, especially low-cost water closet pans (toilet commodes). A little disappointed over the revised rate of 18%, entrepreneurs in this 100-year-old industrial hub

say they had demanded 5% but even the 18% rate would help ease their problems to an extent.

Thangadh courted infamy for killings of three dalit youths in police firing in 2013; the inquiry report has not yet been made public fearing law and order problems. The latest announcement to slash GST rates on ceramic and sanitaryware products along with 176 other items from 28% to 18% is expected to mollify business communities in these regions ahead of assembly polls.

Morbi ceramic entrepreneurs wield significant influence in areas such as Morbi and Tankara in Morbi district and Halwad taluka of Surendranagar district. Halwad falls under Dhrangadhra assembly constituency.

The industrial cluster, with an annual turnover of Rs 28,000 crore and with over 700 units, has so far recorded a decline of 40% and 50% in production and exports on account of high

GST rates. Industry players say that the reduction of GST on ceramic tiles, as demanded by the Morbi ceramic industry, will spruce up production and improve demand.

"As a result of the move to cut GST on ceramic tiles, the sentiment in three constituencies — Morbi and Tankara in Morbi district and Dhrangadra in Surendranagar district — will turn positive," said K G Kundariya, president, Morbi Ceramic Association. "Local industrialists have traditionally played a key role in making BJP candidates win on these seats."

Ceramic industry entrepreneurs have been supporters of the BJP and even deploy their workers as well as infrastructure during elections.

Morbi ceramic factories have two or more partners and around four-five entrepreneurs and 30-40 workers come from each village in Morbi.

"Several ceramic units remain closed during polls and industrialists along with their manpower help local

candidates during campaigning as well as on the day of voting," Kundariya said.

"There was unrest among tile makers over 28% GST and keeping financially influential ceramic business owners unhappy could have been a bad idea for the ruling BJP ahead of the polls," said an expert who closely monitors the political history of Morbi.

Ever since the Patidar reservation stir picked up momentum from August 2015, Morbi has emerged as the epicenter of the agitation in the state. On August 25, 2015, violence broke out in many parts of the state after police lathi-charged a Patidar rally in Ahmedabad. Large-scale violence had broken out in Morbi with angry mobs torching dozens of Gujarat State Road Transport Corporation buses and setting fire to the offices of local MLA Kanti Amrutiya and Union agriculture minister Mohan Kundariya. The Army was deployed to control the violence.

INDIA

System Lamina innovation is applied in Motto Group The new, modern production line of Motto Tiles, the ceramics company based in Morbi (Gujarat), founded in 2003 and led by young and enthusiastic Chairman Mr. Mahendra Patel, will be equipped with System Lamina technological solutions for the production of large-size ceramic slabs in the 1200x2400 mm size with a variable thickness from 6 to 20 mm.

The LAMGEA 22000t press is at the center of the plant which, at full operation, will reach a production output of 12.000 sq.m. per day, increasing Motto Group’s total production capacity to 80000 sq.m. per day.

The Indian company plans to launch the 1200x2400, 800x2400, 800x1600 and 1200x1200 mm sizes on the market, with a wide choice of thickness possibilities.

The products will have

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perfectly flat, compact and resistant surfaces and engraved graphic patterns up to a depth of 2 mm.

Motto Group’s stands out on a global level for its commitment to research, innovation and design and System technology has also been chosen by Motto Group for the ink-jet printer, to make high definition and unique decorations. Creadigit 8 color bar systems will be used to decorate surfaces with maximum flexibility and with possibilities for personalization.

Motto Group is a leader in new product development and design in India and the Creadigit system helps in this regard.

Motto Group started a new production facility with System Lamgea 22000t in October 2017, with the new line flanked by one dedicated to more traditional sizes. Motto Group launched

1200x2400, 800x2400, 1200x1200 and 800x1600 sizes in a recent important ceramic exhibition held at Gandhinagar in November 2017, during which Motto Group received the Best Product Display Award at the Exhibition amongst more than 300 exhibitors.

Widening the product range with the introduction of new, larger sizes, Motto Group aims to strengthen its position both on the domestic market and in international markets. “We export to 40 countries in the world and, through the

adoption of System’s innovative industrial processes, we expect to increase total production by around 30-40%. The reliability of the LAMGEA press and its simple maintenance are the factors that have led us to choose it from the different technologies available on the market” Motto Group stated.

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News

PAKISTAN

Developers push for less import regulation Chairman of the Association of Builders and Developers of Pakistan (ABAD) has said that the government should reduce regulatory duty (RD) on Iranian products to enhance trade ties with Iran.

In an interview with Iranian news agency, Arif Yousuf Jeewa said that Iranian tiles and other products are high in standards and should be promoted in Pakistan. “The quality of Iranian tile and

ceramic is very good. We have checked it carefully and found it according to all international levels,” he said.

He added that Iran's commercial attaché in Pakistan Morad Ne'mati Zargaran along with his delegation comprising tile manufactures had visited the office of ABAD to discuss prospects of enhanced trade ties between Iran and Pakistan.

He said that MoU was also signed with the Iranian

exporters to this end. “We will approach the government of Pakistan to reduce Regulatory Duty (RD) on the Iran tiles, instead of importing tiles from European countries we would like to import tiles from Iran which is our immediate neighbor,” said the Pakistani trader. “We would like to use the product of our brotherly Islamic state not only because Iran is our neighbor but the quality of

the Iranian products is very high. Being businessmen we prefer high quality products to satisfy our buyers,” added Arif Yousuf Jeewa.

“We are very hopeful to get a positive response from the government in this regard.

We have also agreed with Ne'mati that we will hold a joint meeting with Pakistan’s commerce minister to have better trade ties with Iran,” said the Pakistani trade activist.

IRAN

Exports climb as Pakistan seeks tiles Iran exported 8.5 million square metres of ceramic tiles worth USD 20 million to Pakistan during an eight month period of 2017 to November 21.

According to Iran's commercial attache to Pakistan, Morad Nemati Zargaran, the export value will reach $30 million by the end of the current fiscal (March 20, 2018).

If the target value is achieved, Iran's tiles and ceramics exports to Pakistan will register

a 50 per cent growth by the end of this year compared to the 12-month period last year, Nemati Zargaran said.

"Tiles and ceramics are Iran's second most exported commodity to Pakistan after bitumen and oil," he added.

Last year, Iran's exports of tiles and ceramics to the neighbouring country stood at $22 million.

Pakistan's demand for tiles and ceramics stands at 100 million square metres

per year, of which only 20 million square metres are produced domestically, said Nemati Zargaran.

Exports to Pakistan come as Iran's ceramics and tiles industry is hit by recession.

In February, more than 150 million square metres of tiles and ceramics in excess of demand were piled up in warehouses across the country, Chairman of Iran Ceramic Producers Syndicate Behnam Aziz-Zadeh was

quoted as saying.

"Local producers are operating at less than half their production capacity," AzizZadeh said.

According to the official, the two main factors causing the market recession include the ongoing stagnation in the construction sector as well as the ceramic and tile industry's overproduction due to unrestrained issuance of factory licences during the 1990s.

OMAN

Al Hael re-brands and aims for the top Ceramic Al Hael Company International (CACI) has the launch of its new brand identity.

Valued at around RO40mn, CACI is one of the largest ceramic and porcelain tiles manufacturers in Oman.

The ceremony was held under the patronage of H H Sayyida Dr Muna bint Fahad bin Mahmoud al Said, and was attended by several senior government officials, business leaders §and dignitaries.

In its first stage, the company will provide nearly 500 job opportunities for Omani nationals. The CACI factory is located in Sur industrial area over a 200,000sqm land and equipped with eight of the world’s best Italian production lines in terms of equipment and

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technology. The factory has an annual production capacity of 15mn sqm of ceramic and porcelain tiles with the latest designs and world-class quality to meet the different needs of customers.

Salim bin Abdullah al Wahaibi, CEO of Ceramic Al Hael, said, “The CACI factory aims to provide 100 per cent Omani products with world-class standards, increasing incountry value. We want this factory to be ranked as the best in the Middle East.”

“The project will create job opportunities for Omanis and train them in the latest skills in the ceramic manufacturing industry. This will serve Oman’s objectives of development and diversification of

sources of income,” Wahaibi added.

Ezzat Aisawi, CACI factory project manager, said that the project has achieved a completion rate of 95 per cent and the actual production phase will start during the first quarter of 2018.

Marwan al Nadabi, human resources manager at CACI said, “Fulfilling the company’s commitment to Omanisation, the number of Omani employees at the factory will reach 500 during the first year of operation, which now stands at 50 per cent of the total number of employees.”

Experts from the world’s largest ceramic manufacturing company are currently training Omani staff on site,

during installation and pilot operations. Contracts have been signed with the largest international factories in Europe and the Middle East to train technical personnel.

News, views and analysis

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News

INDIA

Orissa seeks to close illegal kilns A public interest litigation in Orissa High Court has sought its intervention against the mushrooming of illegal brick kilns in areas under Barang and Sadar blocks of Cuttack district.

The PIL has expressed concern over unchecked operation of brick kilns close to human habitations and alleged that these posed threats to human life and caused environment pollution.

Achutyananda Swain, a lawyer, filed the PIL on January 5.In his petition, Swain alleged that the illegal units had come up at Kamarpada, Sasolo, Bamphakud, Banpur and Bayalish mouzas.

The units operate by digging up earth from December to May to manufacture bricks.

Each unit, spreads over two to five acres, produces around 10 to 15 lakh bricks during this period. In the process, they

render the land unsuitable for agriculture by degrading its fertility.

The regular movement of vehicles to transport the bricks from these kilns also damages the rural roads, apart from causing air pollution. Swain said he resorted to the PIL after complaints to Barang and Sadar tehsildars, state pollution control board secretary, subcollector and collector had not yielded results. The petition

has sought the court's direction to close the kilns which, according to experts, cause rises in temperature around it as well as land degradation and air pollution.

The PIL assumes significance after the district administration had, last May, directed all tehsildars to form special squads and take action against illegal brick kilns with the help of the state pollution control board's regional officials.

International News

Sunda Ceramics gets Twyford up and running Ghana

T

wyford Ceramics factory, a newly established tiles manufacturing company, has received the endorsement of the President of Ghana Nana Akuffo Addo at Shama district in the western region.

The ceramics factory, which is into the production and distribution of tiles, is estimated to have cost upwards of US$ 77.26 million and will operate at a designed production capacity of 14.4 million square metres per year with annual sales projected to be US$ 82.8 million.

Speaking before the commissioning, the President Nana Akuffo Addo praised the investors for putting up the factory. ''I congratulate the chair person, board, management and directors of Sunda International for the decision to establish the factory here in Shama. It will not only reduce our country’s ceramic tiles import bill but will also create employment for the young men and women resident here’’.

The President praised the company for sourcing all its raw materials locally and providing employment for the teaming youth in the area.

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''I am also happy to note that 95% of the factory’s raw material needs will be sourced locally. The promoters of this project should work towards increasing this figure to a 100%’’ The President urged Twyford Ceramics to play by the rules of the industry and assured the company of his open door policy to resolving any challenges that may arise in the course of their operations. ''The experienced minister for trade and industry will work with you to address any challenges that may arise, and if indeed it becomes necessary, which i hope it will not, to go higher up the chain of authority, i want you to know that my doors will always be open. I do on the other hand insist, that on your part, that you play according to the rules and regulations of the sector and the laws of the country as a whole’’.

Group chairman of Sunda international Mr. Y.C Shen announced that Twyford ceramics was set up in Ghana because of the enabling business environment created by the government through the one district one factory program for which they have taken advantage to do business in Ghana.

''Industrialisation is the main driver of every economy all over the world. As Ghana is trying to industrialise, we at Twyford ceramics factory are happy to be a part of the new industrialisation policy of this new government’’.

He announced that an estimated one thousand eight hundred and sixty four (1864) jobs have been created for Ghanaians by the new ceramics factory. And he called for government support for smooth operations of their business. ''Considering all the benefits of the project to the government and people of Ghana, we at Twyford ceramics factory are asking for all the support that we can get from the government to ensure a smooth operation for the benefit of all’’.

Mr. Y.C Shen lauded government of Ghana for the one district one factory policy which he said had been introduced in China several years ago. ‘'Your government’s policy of ‘one district, one factory’ encourages investors to set up a factory in every district of Ghana which we believe is the best idea to move Ghana’s development forward and fast.

Forty years ago, China was not more developed than

Ghana today. The then Chinese government made a similar policy of rural industrialisation and the results is what we see in developed China today’’.

The group chairman also disclosed that Twyford ceramics factory’s designed production capacity is 14.4 million square meters per year with the sales amount estimated to be US$ 82.8 million.

This will therefore reduce importation of tiles into Ghana from a whopping US$ 90.66 million to a mere US$ 7.86 million per year with a further potential to dramatically reduce the demand on foreign currency and therefore stabilising the local currency.

News, views and analysis

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News

International News

Brexit: a back door opening for China?

United Kingdom

B

rexiteers often speak of the bright new dawn that awaits ‘Global Britain’ once the country becomes an independent trading nation outside the European Union.

But Stoke-on-Trent’s pottery firms are becoming increasingly concerned with the Government’s approach to post-Brexit trade arrangements, and how they could affect UK manufacturers.

They fear that once we leave the EU we could be flooded with cheap Chinese imports – ceramics, steel and other products – which could cost thousands of British jobs.

MPs will today get to debate the Taxation (Cross-border Trade) Bill – otherwise known as the Customs Bill – which will set out how the UK’s standalone customs and excise regime will work.

The British Ceramic Confederation, which represents dozens of manufacturers, says the bill, in its current form, does not contain sufficient ‘trade remedies’ to guard against Chinese dumping.

The BCC and other members of the Manufacturing Trade Remedies Alliance (MTRA), including UK Steel and British Glass, have lobbied MPs

ahead of the bill’s second reading, suggesting amendments which could address their concerns.

Dr Laura Cohen, chief executive of the BCC, says manufacturer want similar safeguards to those that currently exist under the EU. She said: “Effective EU trade remedies have helped our sector to recover and grow in recent years.

“We’re deeply worried that the Customs Bill’would create UK trade remedies that are significantly weaker than the EU or any other major economy.

“If Government take on board our proposed changes, we’d be much happier.”

While the MRTA has welcomed the Government’s plans for a Trade Remedies Authority, it says the bill is too vague about how the TRA will deal with cases of ‘state distortions’ such as Chinese dumping.

The MRTA is also against the creation of economic interest and public interest tests, which could ‘greatly reduce producers’ access to effective trade remedies’.

Jon Cameron, group finance director at Middleport-based Steelite International, says his company backs the BCC’s stance on

Di Yuan plans for a new generation Ethiopia

D

asian ceramics

He added: “At Steelite, we are fortunate in that we export a significant amount of our products. But there will certainly be an impact on our UK sales.

“The hospitality industry is having to cope with higher costs due to the Living Wage and food prices, and so one of the areas where they will be looking to make savings is on the tabletop.”

Stoke-on-Trent Central MP Gareth Snell is planning to raise the manufacturers’ concerns during the Commons debate.

He said: “This isn’t just going to affect ceramics – it could have a big impact on Michelin.

China is able to produce tyres at a lower cost than a Michelin retread, which is better for the environment.”

Stoke-on-Trent North MP Ruth Smeeth said: “These anti-dumping laws give our local ceramics industry vital protection against cheap and inferior products from China and elsewhere.

"It’s vital that the Government ensures the Potteries has the protection it needs post-Brexit to protect jobs and give local firms a fair playing field.”

System Ceramics to present at Qualicer Spain

i Yuan Ceramics (Ethiopia) Ltd. unveiled a youth business StartUp Program in parallel to the launching of their new ceramic products.

The Company - which was established in 2016 in Ethiopia with a planning amount of 218 million USD - will invest 70 million Birr as a start-up fund to benefit 1000 youths directly.

On the occasion, General Manager of the Company, Wong Xiaobo stated that the program not only brings jobs to the youth, but it can mobilize them to be job creators. He also talked about the program's potential to stimulate the spark for entrepreneurship, and entrepreneurial trend within the youth of Ethiopia.

According to the Company, 100 brand stores will be setup

16

the trade remedies issue.

He said: “We fully support the BCC’s response to the Customs Bill.

“We are the biggest pottery manufacturer in the UK, and 75 per cent of our products go abroad, and so we welcome the fact that the Government wants to maintain free trade with the EU and other countries.

“However, we do need to maintain a level of common sense when it comes to imports. The concern is that the Customs Bill will effectively give carte blanche for very cheap imports into the UK. “We saw what happened to the pottery industry in the 1980s and '90s when companies moved production abroad. And only recently, the steel industry has experienced something similar.

“We need a level playing field. In China, they have different wages and different health and safety rules, as well as state subsidies.”

Mr Cameron says Steelite and other tableware manufacturers could be affected by cheaper imports if under-pressure hotels and restaurants choose to buy Chinese rather than British after Brexit.

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in Ethiopia for 1000 beneficiary youths as part of the project, and the Company will guided them into the operation and management of these stores by means of capital investment, personnel training, store designing with the ultimate goal of empowering them to run their businesses. 700 thousand Birr will be given per store, and it is expected the stores will create up to 3000 jobs both directly and indirectly.

President of Oromia International Bank, Abie Sano, on his part indicated that any industry have to harmonize themselves to the realities of the society in which they operate in. He noted that the Bank (OIB) promised to give the young beneficiaries bank guarantees so that the Company will supply them the ceramics products on credit basis.

A

t Castellon in Spain, the ceramic division of System will be attending the technical sessions of Qualicer 2018, the international ceramic congress with a paper entitled: “Improvement of printing quality through satellites formation control”.

The study-research has been carried out at System by the R&D laboratory and it illustrates a general model concerning drop formation process in piezoinkjet digital printing systems, which involves drop speed and satellites number. The developed model has been validated by means of experimental analysis performed on a printing system reproducing an industrial machine and considering a wide variety of inks and printhead.

The main features of the model

involve directly ink rheology and printhead geometry to the final goal of printing quality.

The R&D department of System Ceramics represents one of the most relevant technological center worldwide, where highly-skilled staff carry out tests and research of great relevance.

At Qualicer 2018 the paper will be illustrated on February 13th at 12.30 pm inside the C session dedicated to Ceramic Tile Manufacture.

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Raw Materials News

Raw Material News

Proposals for heavy metal release tests Europe // Glazes Three successive tests should be conducted instead of one to measure migration of heavy metals into food from tableware ceramics, according to a final report from the European Commission's Joint Research Centre (JRC).

Successive tests more adequately reflect migration in repeatuse scenarios, the EU's science hub said, as the first test gives "an unrealistically high estimate" of the migration after a few uses, while results are less variable at second and third migration.

The recommendation is among the conclusions of a five-year project the JRC undertook to investigate suitable testing methods for metals leaching from ceramics and glass food contact materials (FCMs).

The 1984 ceramics Directive sets migration limits only for lead and cadmium, at 4mg/kg and 0.3mg/kg food respectively. However, scientific data has shown the need to lower these and to consider limits for other metals, the JRC said.

It was tasked by DG Sante to conduct the research after several member states, including Germany, asked the Commission to lower migration limits for ceramic FCMs in view of evidence showing high exposure of consumers to lead and cadmium from food related sources. Member States and stakeholders also favour a harmonised legislation for glass FCMs, the JRC said.

The tests were carried out by the European Reference Laboratory for Food Contact Materials (EURL-FCM) between 2013 and 2017 using more than 6000 data points on hundreds of samples.

Most mainstream ceramic materials already meet low values of migration; in particular for lead, but traditionally produced ceramic articles do not, the report says.

For ceramics, the report concludes that when the limits are based directly on health considerations, tests should mimic repeat-use scenarios. It suggests three successive tests for 24 hours at 22°C using 4% acetic acid, which, as a simulant, compares well to conditions of use to a worst case (acidic) food".

The current analytical methods can quantify lower levels for lead and cadmium in simulant solutions and of a variety of other metals, the report says, concluding "there are no further scientific or technical hurdles" to lower migration limits. On this basis, it says, the Commission "may be reflecting on appropriate next steps."

Other findings include a limited effect from storage of articles on migration of metals from ceramics. Tableware used occasionally is "covered fairly adequately by a repeat test," it says. Although the data set for bakeware is limited, early results indicate that the same test could be used.

For crystal, a repeat test with acetic acid for two hours at 22°C is an "adequate reflection of exposure and allows completing the repeat testing for compliance in one working day".

A long storage leads to a re-increase in the value of the migration from glass, however. Therefore a shorter time and a consideration of both the first and the third migration each with their own limits is a valid option, the report says.

Tamil Nadu maintains mining moratorium ZIRCON // India A ban on mineral sands from Tamil Nadu will remain in place, during a court-ordered inspection of inventories, in an ongoing spat over alleged illegal mining.

The results of the warehouse inspection, ordered by the state’s high court, are expected to be completed by the end of March.

A spokesman for the Tamil Nadu Department of Geology said the case is currently scheduled to be heard on June 28, although there have been a number of delays already.

The inspections, which began this week, are the latest development in a saga which has stalled mineral sand exports.

The legal dispute over mineral sand mining in Tamil Nadu has been ongoing since 2013, but matters reached a head at the end of last year, when the state government issued a temporary ban

on exports.

Beach sand deposits in Tamil Nadu contain ilmenite and rutile, feedstocks for titanium dioxide production, as well as zircon and garnet.

Grant Smith, director of Australasian Minerals and Trading, which has purchased and shipped large volumes of mineral sands from Tamil Nadu in the past, told IM "we hope that these inspections and the accompanying report will be concluded and presented to the court well in time for the next hearing on 28 June".

Smith noted that prior to the ban, annual production stood at around 600,000 tonnes of ilmenite and 500,000 tonnes of garnet.

Smith suggested that should the ban be lifted "production could restart almost immediately," saying that "equipment had been maintained in good order".

Sheffield Resources and Hainan Wensheng sign agreement ZIRCON // Australia/China Sheffield Resources and Hainan Wensheng have signed their first underwriting agreement, including the former’s zircon sands at its Thunderbird mineral sands project in Western Australia. The agreement said the minimum zircon concentrates the Sheffield will have to supply is 27000 tons per year, 54% of its first phase zircon concentrate annual output. It is valid for five years and will be renewed on a yearly basis.

Once Thunderbird’s concentrate annual output exceeds 50000 tons per year, both parties might be likely to increase contract volume.

In the announcement Sheffield mentioned the cooperation with Hainan Wensheng on Thunderbird project as the very important step forward. As the largest zircon sands project with possibly the

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highest grade products in recent decades, Thunderbird is now under geological exploration and construction planning and production is expected to start in Q1 2018.

“We are quite happy about the business relationship between Sheffield and Wensheng. Wensheng is the largest sands concentrator in China and has comprehensive and nationwide sales networking, representing the premium brands in sands industry.” said Bruce McFadzea, general manager of Sheffield Resource. “Strong demand for premium-quality zircon and ilmenite products will be seen in Thunderbird project. And such demand is expected to boost more underwriting agreements in the next few months, extending the success in 2007.”

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News Anaylsis

News

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asian ceramics

Brick kilns under pressure

T

he Supreme Court-mandated Environment Pollution (Prevention and Control) Authority (EPCA), in a recent meeting with authorities of Delhi-NCR, said that polluting brick kilns will be given one last window to operate — from March to June 2018 — after which they will be shut down permanently.

Officials estimate that there are currently around 2,080 brick kilns in Delhi-NCR, including 700 in Ghaziabad, Gautam Budh Nagar and Hapur districts.

“Anybody converted to zigzag system, certified by the pollution control boards and cleared by EPCA is allowed to operate during the winter season. From March 1 to June 30, the brick kilns which have not converted, but have given affidavits that they will convert or they will operate only till June 30 on the old technology will be allowed to operate. After June 30, no brick kilns which are operating on old technology will be allowed,” EPCA member Sunita Narain said.

The technology involved in zigzag kilns forces the air to spend more time inside the kiln. This ensures that there is a good transfer of heat, the emissions remain low, and that a high percentage of good quality bricks are produced. According to experts zigzag technology reduces pollution by 70-80%.

“A three-member team will be formed with one representative each from the Centre for Science and Environment (CSE), Central Pollution Control Board (CPCB), and an outside consultant. They will compile a report on the conversions that have happened. It has to be ensured that the conversion is complete,” Narain said.

The brick industry is one of the five largest industrial consumers of coal, and there are serious environmental concerns associated with the production of fired clay bricks. Even though there have hardly been any study to quantify how much brick kilns contribute to Delhi’s air pollution, experts say that this sector contributes a significant portion to

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the PM2.5 levels.

As a measure under the Graded Response Action Plan (GRAP) for ‘very poor’ and ‘severe’ categories of pollution, which came into force on October 17 for the first time, all brick kilns in NCR have been ordered shut down. Only those utilising zigzag technology have been exempted.

At present, under EPCA directions, state pollution control boards are identifying each brick kiln in NCR areas with GPS locations and are verifying if they are running on cleaner technology.

If it’s zigzag compliant, the brick kiln’s name is sent to EPCA, which in turn issues a “consent to operate letter” to the kiln.

The Supreme Court, in an order in 1996, had directed all kilns operating in Delhi to be shut down. As a result, the brick kilns moved to areas bordering the capital like Ghaziabad, Noida, Bhagpat and Meerut.

Coal: the big issue

The use of large quantities of coal in brick kilns contributes significantly to emissions of carbon dioxide, particulate matter, including black carbon, sulphur dioxide, oxides of nitrogen and carbon monoxide, says a report recently published by India’s Department of Environment.

The pollutants not only have an adverse effect on the health of workers, local population, and vegetation, but also contribute to global warming. “Coal is a combination of different chemical components, which produce heat in exothermic reaction. Some components of the coal such as ash do not produce any heat, but after combustion it remains in the kiln.

Ash can be divided into two types namely fly ash and bottom ash.

Fly ash is the one of the pollutants which is emitted as Suspended Particulate Matter through flue gas,” it reads.

Along with fly ash unburnt carbon is also emitted through flue gas.

Due to unburnt carbon, flue gas can be seen as black in colour.

Energy efficient kiln can achieve 100 per cent elimination of unburnt

carbon and can also reduce the fly ash percentage. New technologies such as the Vertical Shaft Brick Kiln, Tunnel Kilns and Hybrid Hoffmann Kiln are substantially cleaner than the currently used Fixed Bull Trench Kilns. These improved technologies consume less energy and emit lower levels of pollutants and greenhouse gases.

During the study, 30 brick kilns were visited in Kathmandu, Lalitpur and Bhaktapur districts. About 110 brick kilns (Kathmandu 15, Lalitpur 32 and Bhaktapur 63) are in operation in Kathmandu Valley.

“Pollution control devices have not been installed by any brick kilns, but some simple steps have been taken into considered during kiln construction and operation by some,” it says.

Total 9,334 workers are working in the industry of which 2,772 are female. These industries are using coal as the main fuel, consuming 12,409 tonnes of coal and 1,881 tonnes of other local fuels. Dust generated and blown due to air movement was also seen as a major issue among employees and neighbouring locals. Although most kilns meet the national standards, black smoke is still seen in some chimneys during firing. Average SPM concentration of BTK was 326 mg/Nm3; VSBK was 144 mg/Nm3 and Hoffmann was 374 mg/Nm3.

These values are within the current standards. However, they are not within proposed standards (the standard currently under process for enforcement) and also not in level of the existing brick kiln technology that have emerged in the world, according to the report.

In addition to the Environment Protection Act and Environment Protection Rules, the constitution has also emphasised on the right to clean environment.

The Government of Nepal has promulgated the standards on Chimney Height and Emission for the Brick Kiln Industries.

The Ministry of Population and Environment is working on new brick emission standards, it says

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Analysis: North Africa

North Africa sets for tile growth Yogender Malik looks at how expanding consumption rates and the possibility of extending export markets could lead to a drive in investment and expansion in the ceramic tile industries of Algeria, Morocco and Tunisia.

I

n the last few years, the three major North African ceramic tile markets outside of Egypt (which we have considered in separate articles), have grown relatively modestly. Perhaps as a combination of political stability and financial insecurity, these expanding population bases have not really matched their personnel development with industrial growth and construction activity. However, things seem on the turn and the next decade could see unprecedented levels of consumption. Already, investments have been made in expansion, and there could well be a substantial increase in this situation as the countries look to become more self sufficient, and also begin to exploit more fully the export possibilities just across the Mediterranean, as well as to sub-Saharan Africa. With heavy clay investment also improving, this is a clear sign that building and construction has signaled a brighter future. Undoubtedly then, ceramics seem set to follow?

Currently, Morocco, Algeria and Tunisia together account for 175 million square metres of ceramic tile consumption.

North African ceramic tile producers have immensely benefited from the steady construction sector of the region. The trend continues, despite the disruption in one of the key market, Libya, which has been rocked by the civil war in Libya.

The improvement in the socio-political conditions and the North African industry’s capacity for recovery is confirmed by the various reports. These reports reveal that 2016 saw a sharp increase in the number of large construction projects (both in commercial and residential segments). A number of these

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projects will become operational in 2018 and lead to steady ceramic tile demand in the respective countries.

Huge investment in tourism and hospitality sector to diversify the economies in North African countries is expected to play a key role in the growth of ceramic tile consumption in the region in next few years. Moroccan government is heavily investing in tourism sector with an aim to become a top-20 tourism destination by 2020. Similarly, Tunisian authorities’ investment in areas of medical and cultural tourism and ecosystem has led to growth of ceramic tile consumption in the country at steady rates in last few years.

Morocco

Largest ceramic tile market in the North Africa, Moroccan ceramic tile consumption registered a growth of about 5 % (actual figures 4.85 %) in the year 2016.

Catered by ten large and mid-scale producers, Moroccan ceramic tile manufacturing industry has struggled in last two years, mainly on account of high production cost. Despite, a steady demand of ceramic tiles in domestic market, local tile producers are unable to meet the demand, primarily because of high production cost due to high natural gas prices in the country.

Cumulatively accounting for about 90 million square metres of installed capacity, most of the ceramic tile producers operate at low capacity utilistion rates. In 2016, the domestic demand at 86 million square metres registered a growth of 4.8 % as compared to 2015. However, a big part of total demand is met through imports from Egypt, Spain and China. In 2016, Morocco imported 24 million square metres of ceramic tiles.

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Analysis: North Africa

Super Cereme

Morocco in focus (m. sq metres)

Natural Gas prices have been one of the largest impediments, which has hampered the growth of ceramic tile manufacturing in Morocco. According to Super Ceram’s , CEO Fouad Benzakour, “ Moroccon ceramic producers have been handicapped by the high cost of energy. Regional competitors in ceramic tile manufacturing in Egypt and Algeria get natural gas at about 500 Dh/ ton. Even in the Europe the natural gas cost about 4000 DH/ Ton, but we in Morocco get the gas at about 12,000 Dh/ Ton. In order to save on the fuel we had to invest in a new kiln, which is equipped with technology for recycling hot air. Though, the new kiln would save us about 1,000 tons of fuel/ year, but the capital investment for this equipment was substantial.”

Morocco in focus (m. sq metres) Year

Production

Consumption

Exports

Imports

2016

68.1

86.4

6.2

24.5

2015

66.3

82.4

7.5

23.6

2014

66.2

79.1

8.9

21.8

2013

64.6

76.8

9.1

21.3

2012

61.6

76.5

5.7

20.6

2011

57.9

70.6

4.6

17.3

2010

59.0

66.8

3.4

11.2

2009

56.0

64.1

5.1

14.0

2008

51.7

60.6

4.2

13.1

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Location: Kenitra, Casablanca, Tetouan and Berrechid Country: Morocco Markets: Domestic and export markets Installed Capacity: 120,000 square metres of tiles per day Other: Largest ceramic tile producer in North Africa ( Egypt not included ), Super Cereme is also the most advanced ceramic tile producer in the region. In addition to domestic Moroccan market, the company exports to a number of African countries. The company is a subsidiary of Yana Holding, one of the largest business entities in Morocco. In 2013, Super Cereme acquired its compatriot, Ceramica Ouadrass’s ceramic tile manufacturing business. The company is also contemplating setting up of its fifth manufacturing plant. It has not shared the timeline of this project, as the decision of this was to be based on just concluded anti: dumping probe.

Ghorghiz Cerame Location: Tetouan Country: Morocco Installed Capacity: 5 million sqm/ year Markets: Primarily domestic market Other: Established in 2003, Ghorghiz Cerame operates two manufacturing plants in Tetouan. With an installed capacity of 5 million square metres of wall and floor tiles, the company is among the top ceramic tile manufacturers in the country. Owned by one of the well known and established business families, Merroun Family, the company has raised its capital from 55 million dirham to 70 million dirham in 2017 in order to increase the efficiency of its production facilities.

Faienceries Algeria Location: Industrial Zone of Rouiba, Algeris Country: Algeria Installed Capacity: 12 million sqm per annum Markets: Domestic and export markets.

Other: Faienceries Algeria is the largest producer of ceramic tile industry in Algeria with an installed capacity of about 34,000 square metres per day from its five production units. Since its creation as a small company producing ceramics by the founder Zetchi Said, the company has grown to become one of the leading Algerian producer of wall tiles and floor tiles. Today, its innovative products and processes of superior quality are recognized throughout the Algerian territory.

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Analysis: North Africa

Import concerns

Huge imports of ceramic tiles have upset the domestic tile producers in recent years. All the major producers have been taking various measures to reduce the cost of production by going through technology upgrades. Imports of tile from Spain, which gained momentum after 2010 have cornered a large share in the Moroccan ceramic tile market in last three years. Spanish ceramic tile producers in particular have a large share of total tile exports in Morocco. In 2016, Spanish exports to Morocco amounted to 78.9 million Euros , a jump of 13.6 % as compared to 2015, when Spanish producers exported 69.6 million Euros worth of ceramic tiles in Morocco.

Major producers , who have been urging the government to impose anti dumping duties on ceramic tile imports from Spain received a jolt in last November, when Ministry of Industry and Commerce of Morocco published a notification which closed the anti-dumping case against the ceramic tiles industry in Spain, without any measures for the industry. Moroccan ceramic tile producers have made a number of attempts to get anti- dumping investigation on ceramic tile imports from Spain. However, after several attempts, on May 12, 2016, an anti-dumping investigation was opened against the Spanish ceramic tile industry, which culminated in rejection of the plea of domestic producers in November 2017.

Super Cerame

Super Ceram dominates the Moroccan ceramic tile production industry with an installed capacity of about 50 % of entire domestic industry. Super Ceram is a subsidiary of leading business conglomerate of Morocco, Yana Holding. Founded in 1948 , Yana Holding has interests in the real estate and construction sector. In recent years, the group has diversified Into many sectors including water supply ,asbestos cement, food , cables, structural steel, cement, renewable energy, construction, distribution , hydro, the rail industry (LRIS), paper and cardboard (GPC), petrochemicals , and tourism.

Super Cereme operates four state of the art ceramic tile producing plants at Kenitra, Casablanca, Tetouan and Berrechid in Morocco. With an installed capacity of 120,000 square metres of ceramic tiles per day, Super Cereme is one of the largest global tile producers. In 2016, Super Cereme achieved a turnover of 1 billion Dirhams. The company has opted for both, organic and inorganic growth to attain the current size.

In 2013, Super Cerame acquired another major ceramic tile manufacturer, Ceramica Ouadrass SARL. Based in Tetouan, Ceramica Ouadrass has an installed capacity of 30,000 sqm of tiles per day. Ceramica Crème paid about 265 million dirhams ( € 23.5 million) for this acquisition. In contrast to some of its ceramic tile manufacturing peers in the Middle East, Super Cereme has targeted African markets. The company exports ceramic tile products to more than 20 African countries. It has tied up with major property developers in these countries.

According to the management, “The Company continues to invest in R & D and new designs to create innovative products in order to consolidate our leading position in domestic and export markets. To achieve this we initiated a programme in 2014 and invested 85 million dirham in research and development, including technological research and in design as well as human resources to create new technologies.”

Super Cereme is planning to open 3 new showrooms in Rabat, Tangier and Agadir in 2018. During the course of the year,

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Saf Cer Group Location: Setif Country: Algeria Installed Capacity: 8 million sqm/ year Markets: Domestic and export markets.

Other: Set up in 1987 as a ceramic floor and wall tile producer, the SARL S.A.F.CER group (Societe Algerienne de Fabrication des carreaux Ceramiques et produits rouges) is one of the leading ceramic tile producers in Algeria. The company ventured into brick production in 2005. With two facilities located in the Algerian cities of Sétif and Constantine, the group is now one of the leading players in the Algerian building materials industry, renowned for its high quality products sold in both the domestic and international markets.

Modern Ceramics Location: Algeris Country: Algeria Installed Capacity: 4 million square metres annum Markets: Domestic market Other: Located at Algeris, Modern Ceramics is a mid scale ceramic tile producer in Algeria. With an installed capacity of 4 million square metres of ceramic tiles, the company mainly caters to domestic market.

Cathargo Ceramics Location: Sfax Country: Tunisia Installed Capacity: 12.48 million sqm Markets: Domestic and exports ( primarily Libya) Other: Largest ceramic tile producer in Tunisia, Cathargo Ceramics operates two state of the art plants in close vicinity at Sfax. Cathargo Ceramics is a subsidiary of leading business entity, Poulina Group Holding. A large proportion of Cathargo’s tile output is consumed by parent company. Cathargo’s parent company, Poulina Group Holding S.A. operates in the real estate, public works and infrastructure, wood and household appliances, mass consumption goods, packaging, steel works, trade and services, building materials, and poultry sectors primarily in Tunisia, Libya, Algeria, France, Morocco, Senegal, and China.

The company engages in the real estate activities; and construction of buildings. It also manufactures and distributes household appliances, including refrigerators, stoves, and washing machines; and industrial equipment, such as freezers and mini bars.

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Analysis: North Africa

the company will also renovate its showrooms in Casablanca, Kenitra, Marrakech and Oujda. In addition to these, the company may announce construction of a fifth plant with an investment of 300 million DH. In fact, this 20,000 square metres/ day project is in pipeline for more than a year but, the company is awaiting the results of a survey before starting the construction of this plant.

The management is also awaiting findings of an anti-dumping investigation.

Once completed, the fifth plant will take the overall installed capacity of Super Cerame to 140,000 square metres or 50 million square metres per annum.

Somocer (The Modern Society of Ceramics)

Ghorghiz Cerame

Sotemail (Sister concern of Somocer)

Located in the industrial area of Oued Laou in Tetouan, Ghorghiz Cerame was established in 2003. The company has an installed capacity of about 5 million square metres of ceramic tiles.

Ghorghiz operates two tile production units in Tetouan ( one is currently shut down).

The common problem faced by Moroccon ceramic tile producers has affected the profitability of Ghorghiz Cerame.

The company which posted revenues of 150 million dirham for a number of years could register revenue of 134 million dirham in 2016. The management has injected 15 million dirham in 2017 to increase the productivity of its plant.

Algeria

Algeria, the second largest country in Africa is the second largest ceramic tile producer and market among North African countries. Catered by nine ceramic tile producers and significant imports, Algerian ceramic tile demand has registered average growth rates in recent years. Low crude oil prices have had some negative effect on the ceramic tile industry growth as the country’s economy to a large extent is dependent on oil and natural gas exports.

The pace of construction activities started gaining momentum in Algeria in the second half of 2017. Large scale construction activities in commercial segment and government’s initiatives of building 2.2 million housing units by 2019 under affordable housing scheme in order to address the current housing shortage is also expected to play a key role in the ceramic tile demand in the current and next year.

Average growth in ceramic tile industry and huge imports ( though the import level has stabilized ) have discouraged huge investment by existing players in ceramic tile industry. Though, the domestic manufacturing situation is more optimistic in comparison to Morocco. As a few factors have given a boost to domestic tile manufacturing industry in last three years. For example, since the second half of 2014, Algerian government has mandated that property developers with projects that are part or wholly financed by the state to use locally produced building materials rather than imported products. This has had a positive impact on the domestic ceramic tile industry.

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Location: Monastir Country: Tunisia Installed Capacity: 5.7 million square metres per annum Markets: Domestic and exports Other: Starting with a very small output in 1989, Somocer has gone on to become the second largest ceramic tile producer in Tunisia. Currently, with an installed capacity of 5.70 million square metres of floor and wall tiles from its five production lines, Somocer is the second largest producer of ceramic tiles in Tunisia. The company has a technical tie up with Italian group La Faenza.

Location: Monastir Country: Tunisia Installed Capacity: 4.5 million square metres per annum Markets: Domestic and exports Other: Sotemail, a sisiter concern of second largest ceramic tile producer, Somocer has an installed capacity to produce 4.5 million sqm of ceramic tiles. Established in 2011 in technical collaboration with Italian company, Industry Ceramiche Di Faenza SPA, Sotemail produces porcelain tiles for the domestic and exports market.

Algeria in focus (m. sq. metres) Year

Production

Consumption

Exports

Imports

2016

40.5

53.4

5.2

18.1

2015

38.1

52.0

4.8

18.7

2014

36.2

50.5

4.4

18.7

2013

36.1

49.1

3.9

18.2

2012

33.7

47.8

4.2

18.3

2011

30.3

45.6

3.6

18.9

2010

32.8

42.0

3.4

12.6

2009

31.0

39.3

2.8

11.1

2008

27.9

37.3

2.6

12.0

Major ceramic tile producers in Algeria (m. sq metres) Company Faienceries Algeria

Location

Capacity

Various locations

12

SAF CER Group

Setif

8

Modern Ceramics

Alger

4

Bati Ceram Sarl

Setif

3

Ceramique Hippocampe Sarl

Tipaza

3.2

El Harrach Alger

3

Societe Milevienne De Ceramique

Costantine

4.5

SAFCF

Boumerdes

2.8

Corso Ceram Sarl

Boumerdes

3.6

C Gres Compacto

Hassi Ameur Industrial Area, Oran

3

Zet Ceram

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Analysis: North Africa

The modernization of building construction and growing demand among consumers for higher quality ceramic tiles has kept the imports at a significant level for past few years. Though, the volume of imports has stabilized in last few years, but it still form a large proportion of total domestic demand.

Spanish companies have a good presence in Algerian ceramic tile market. In fact, Spain is the largest exporter of ceramic tiles in the country. According to data from ASCER, Spanish tile producers exported ceramic tiles worth 123 million Euros to Algeria in 2016. Though, year on year, it was a decline of more than 5 % as compared to 2015(Spanish producers exported about 130 million Euros worth of ceramic tiles in 2015), yet, Algeria remains one of the key export markets for Spanish ceramic tile producer.

In 2016, Groupo Porselanosa, a leading Spanish ceramic tile producer opened a large showroom in Oran to facilitate the imports of ceramic tiles in the country.

Tunisia in focus (m. sq metres) Year

Production

Consumption

Exports

Imports

2016

30.8

37.2

2.7

9.1

2015

31.2

37.3

2.5

8.6

2014

30.9

37.5

2.2

8.8

2013

27.4

33.3

2.4

8.3

2012

26.2

32.0

2.1

7.9

2011

25.4

29.5

2.6

6.7

2010

23.2

27.4

2.9

7.1

2009

23.0

26.7

2.7

6.4

2008

21.2

24.7

2.5

6.0

Tunisia

Faienceries Algeria

Founded in 1969, Faienceries Algerian group is the largest producer and market leader in ceramic tile industry in Algeria with an installed capacity of about 34,000 square metres per day from its five production units. The company has leading position in several provinces, including Algiers, Bejaia, Blida Bordj Bou Arreridj , Chlef, Constantine, Oran, Ouargla, Sidi Bel Abbas, Tiaret Tizi Ouzou and Ghardaia.

SAF CER Group

S.A.F.CER Group ( Societe Algerienne de Fabrication Ceramique et Produits Rouges) is active in the ceramic building materials industry for half a century and it is one of the most important companies in this field in Algeria. Currently, it owns three operating units producing a wide range of wall and floor tiles in Setif. In 2014, the company commissioned a state-of-the-art plant for the production of red and white body porcelain tiles. Coming up with an outlay of about 50 million Euros, the new plant can produce porcelain tiles with sizes up to 1.20 m.

In addition to ceramic tiles, SAF CER Group is one of the leading heavy clay producers in the country. In 2016, Saf Cer’s heavy clay subsidiary ( Briqueterie Safcer) commenced production of a heavy clay production plant with a production capacity of 210 000 t/year of hollow bricks, ceiling blocks and blocks in Didouche Mourad (administrative district of Constantine).

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Notwithstanding its small scale, Tunisian ceramic tile manufacturing industry has undergone significant changes during the in recent years. Domestic demand had increased by average levels. Major producers have added capacities and streamlined their operations resulting in increase of capacity.

However rising imports and lack of demand in some of the export markets for Tunisian producers ( most notably Libya) has led to low capacity utilisation in the domestic industry.

The Domestic industry has made various representations to different government authorities to take necessary actions against huge influx of ceramic tiles in the country in order to safeguard the interests of domestic producers. In early 2016, the authorities initiated anti-dumping investigations, which have not concluded till the time of writing of this article. by eight mid sized companies and a number of small units in Nabeul, Tunisian ceramic tile industry has an installed capacity of about 38 million square metres of ceramic tiles. Polina Group’s subsidiary company, Carthago Ceramic is the market leader in Tunisia with a share of 32.74% of total installed capacity. Sisiter companies, Somocer and Sotemail, with a cumulative installed capacity of 10.2 million square metres per annum of ceramic tiles occupies the second position with a share of 26.75% of ceramic tile installed capacity in Tunisia.

Major ceramic tile producers in Tunisia (m. sq metres) Installed capacity

% of total Tunisian Installed capacity

12.48

32.74

Somocer

5.7

14.95

Sotemail

4.5

11.80

MPC Essid

3.5

9.18

GCCB

3.2

8.39

FTT La Ceramic

1.9

4.98

Socer

1.85

4.85

Nofasud

0.9

2.36

Others

4.1

10.75

Company Cathargo Ceramics

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Analysis: North Africa Table 1 2011 2012 2013 2014 2015 2016

30.3 33.7 36.1 36.2 38.1 40.5

Table 1

Ceramic tile output: Algeria (m. sq metres)

2011 2012 2013 2014 2015 2016

Table 1

57.9 61.6 64.6 66.2 66.3 68.1

Ceramic tile output: Morocco (m. sq metres)

2011 2012 2013 2014 2015 2016

22.1 24.8 27.4 30.9 31.2 30.8

Ceramic tile output: Tunisia (m. sq metres)

Table 1 2011 2012 2013 2014 2015 2016

45.6 47.8

Table 1

Table 1

49.1 Ceramic tile consumption: Algeria (m. sq metres) Ceramic tile consumption: Morocco (m. sq metres) Ceramic tile consumption: Tunisia (m. sq metres) 50.5 2011 2012 2013 2014 2015 2016

52 53.4

70.6 76.5 76.8 79.1 82.4 86.4

2011 2012 2013 2014 2015 2016

29.5 32 33.3 37.5 37.3 37.2

1 1 1

Cathargo Ceramics

With an installed capacity to produce 12.48 million sqm of ceramic tiles, Cathargo Ceramics is largest tile producer in Tunisia. Founded in 1988, Cathargo Ceramics is a subsidiary of one of the largest industrial group in Tunisia, Poulina Group Holding. Cathargo produces floor and wall tiles from its two plants in Sfax.

1 Cathargo also operates a ceramic tile production facility in Algeria. With an installed capacity of 8000 square metres of floor and wall tiles, this plant is one of the most advanced ceramic plants in Algeria.

The company has a holding of 60 % in Algerian plant with balance 40 % held by Algerian group, Boulanaouar.

Located at Setif, this plant is catering Algerian tile market since 2010.

Somocer

Somcer, The Modern Society of Ceramics is a limited company created in 1985 and bought by the Abdennadher Group in 1989.

At the time of acquistion, it had an installed capacity of 360,000 square metres of ceramic tiles.

Currently, with an installed capacity of 5.70 million square metres of floor and wall tiles from its five production lines, Somocer is the second largest producer of ceramic tiles in Tunisia. The company has a technical tie up with Italian group La Faenza, which has enabled it technological superiority over

30

asian ceramics

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1

the competitors.

Somcer’s subsidiary/ sister company, Sotemail, ventured into ceramic tile manufacturing in 2011. Established in 2011 in technical collaboration with Italian company, Industry Ceramiche Di Faenza SPA, Sotemail produces porcelain tiles for the domestic and exports market. Initially Sotemail had an installed capacity of 1.5 million square metres of tile. But, as the local demand started to outstrip supply, the company carried out a major expansion within three years of its establishment. The expansion added 3 million square metres per annum of the installed capacity. The expansion cost the company about 39 MD. The new production lines set up in the expansion has high levels of automation and enables Sotemail to produce extra large tiles in traditional and digital formats.

1

Nabeul

It would be unfair, if we did not mention and include the town of Nabeul in the description of the Tunisian ceramic tile industry.

Before the 2011 revolution, Nabeul had more than 350 workshops and factories, with tile production being the largest employment sector in the area. However, following the 2011 revolution, many workshops have closed down and, apart from industrially and serially made tiles destined for tourists, workshops which produce handmade tiles with traditional motifs are reducing in numbers.

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Analysis: Sri Lanka

Enter the Dragon‌ Sri Lanka weighs up the China effect

The strategic location, and expanding markets, of Sri Lanka are proving a key attraction for many ceramic manufacturers, and, not surprisingly, China is at the vanguard of future investment and the locals might not like it. Rohan Gunasekera looks at how the increasing Sino-influence might play out‌

D

emand for tiles in Sri Lanka is so strong that local manufacturers have been unable to meet it and are losing market share to imports, despite protective tariffs and recent capacity expansions.

Imports are either cheap products from India and China or more expensive ones directly imported for projects that qualify for duty free concessions. The longanticipated post-war economic boom appears to be finally taking off in the island with a new coalition government that has put in place policies to support stable and faster growth.

Foreign investment has begun to pick up. Chinese investments dominate with a few big ticket projects while Indian investors are also

32

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AC 18-1

interested. Although the government is keen to attract foreign direct investment into manufacturing, such investment, even by Chinese producers seeking to get around trade sanctions, is considered unlikely in the ceramic sector, given high production costs, especially of energy, and raw material supply difficulties. Instead, Sri Lankan tile producers have themselves begun to import to cater to domestic demand. A more interesting phenomenon is also taking place, where Sri Lankan producers sell in India under their own brands by outsourcing production to Indian firms.

Market machinations

The total market in 2017 was around 14 million square metres, of

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Analysis: Sri Lanka

… which local industry supplied 4.8 million floor tiles or about 35% local with 65% imported. The wall tiles market was about 2.9 million square metres of which only one million or only 34% was local. A large part of growth in demand is due to construction projects which enjoy duty free facilities.

While the market is active, local manufacturers like Lanka Tiles and Rocell Bathware are struggling to sell their production at prices they expected to sell. The local ceramic industry is a near monopoly of the Royal Ceramics group which acquired rival producers Lanka Tiles and Lanka Walltiles and operates the sole sanitaryware plant, Rocell Bathware and controls Lanka Ceramics, the dominant raw material supplier. The only other independent tile producer is Mack Tiles, set up by the Macksons group, the biggest tile importer.

According to Mahendra Jayasekera, Managing Director of Lanka Tiles Ltd., much of the growth in demand is met by imports with local manufacturers seeing growth slowing and losing market share.

“While the market has grown, the rate of growth has slowed down,” he told Asian Ceramics. “So we are compelled to lower prices, sacrificing margins. Construction activities taking place especially in the Western Province have made an impact on demand for tiles. But what we see is that most of these big construction sites are importing their requirements of tiles duty free from China, India, and Italy. So local manufacturers are at a disadvantage because we cannot offer duty free prices for these projects which get duty free concessions.”

According to Sri Lanka Central Bank Governor Dr Indrajit Coomaraswamy ongoing policy reforms of the government focus on boosting exports as well as attracting FDI. A key plank of the agenda is maintaining flexibility in the exchange rate to boost competitiveness.

BOI optimism

The Board of Investment (BOI) has estimated FDI to have reached US dollars 1.5 billion in 2017, which will be a key milestone and could possibly be a turning point in FDI inflows.

The commencement of the Hambantota Industrial Zone in the south and the continuation of the Colombo Port City project are expected to bring significant FDI flows from 2018 onwards. Annual FDI flows of US dollars 2-3 billion are expected in the coming years.

Demand for tiles is coming mainly from a host of high-rise hotels, apartment and office blocks and shopping malls being built or planned in and around the capital Colombo. Many of these projects qualify for duty free imports under Board of Investment concessions and hence import their tile and sanitaryware requirements, a sore point with local manufacturers. They had successfully lobbied the previous government for import protection and to get a slice of the demand from projects by getting a preference for local sourcing.

But the new coalition government is firmly committed to opening up the economy and lowering trade barriers, which include protective import tariffs.

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WE ARE COMPELLED TO LOWER PRICES AND SACRIFICE MARGINS Among the big hotel projects are Grand Hyatt Colombo which is owned by the government and nearing completion with the opening expected in 2018. The government is seeking foreign investors to operate it as a 5-star hotel with 458 rooms and 100 serviced apartments, once completed.

An example of imported tiles and sanitaryware meeting project requirements is that of Altair, a 68-story luxury residential complex which fronts the Beira Lake in Colombo. It is luring apartment buyers with numerous value additions including Italian Botticino marble flooring and Duravit sanitary ware from the Philippe Starck designer range. Altair offers 400 apartments. The building, a combination of a straight and a sloping stepped tower that gives it a very distinctive appearance and has become a landmark for locals and tourists, is scheduled for completion in July 2018. Of Altair’s 1.5 million square feet of space, 828,000 square feet or 55 per cent is residential space. Of the balance, 36,000 square feet is allocated for retail while 636,000 square feet, or 42.5 per cent is public space.

The hotel sector has been booming since the war ended and dozens of projects have either been completed or are in the construction or planning stage, all adding to ceramic products demand. The Sri Lanka Tourism Development Authority (SLTDA) expects some 11,645 rooms to come online by end-2018.

Tourism boost

Fitch Ratings forecasts robust tourist arrivals and expects tourist arrivals to grow by a compound annual growth rate (CAGR) of 15% over the next four years driven primarily by the rapid increase in the inflow from Indian and Chinese markets.

Aggregate tourist arrivals from India and China have trebled over the past five years, and accounted for more than 30% of the total tourist population in 2016.

Fitch also believe the influx of international hotel brands such as Shangri-La, Sheraton, ITC, Marriott and Movenpick will strengthen the industry’s image among international tourists while uplifting competitiveness and overall service standards. The sector attracted the second-largest foreign direct investment (FDI) in 2016, which amounted to USD141 million or around 18% of the total FDI during that period.

AC 18-1

asian ceramics

33

Analysis: Sri Lanka

The proposed development of a “Western Megapolis” urban agglomeration – a regional infrastructure development initiative covering the Colombo district, where the capital is,and two adjoining districts – could further augment construction industry growth.

The initiative has attracted over Rs300 billion in investments over the last two years, and the government expects to attract investments up to USD40 billion over the next 15 to 20 years into this project, although firm financial arrangements have not been announced yet.

Jones Lang LaSalle Property Consultant (Lanka) believes that since early 2010, soon after the war ended, Sri Lanka has made up for more than 25 years of stagnant building activity across most sectors, from high-end residential housing to commercial office spaces. In 2015 and early 2016 Sri Lanka’s real estate market expanded rapidly, continuing a medium-term growth trend fuelled by an increased demand for residential property from the nation’s wealthy and middle-class populations, growing demand for Grade A office and commercial spaces from local and foreign corporates, and increasing interest in the country as a tourist destination.

With high levels of interest from international hospitality players including the Shangri-la Group, ITC Hotels, Starwood Hotels and Resorts, Marriott International, Hyatt Hotels Corporation and Moevenpick Hotels, many major global hotel chains are looking to have a presence in the country.

Policy improvements

Government policy initiatives will also support real estate sector growth especially in residential property with the launch of the 500,000 home ownership programme for low and middle income families. The private sector is to be invited to construct 100,000 housing units at LKR. 5 million per unit for middle income category and a further 250,000 housing units at LKR. 1 million per unit for low income category over the 2017-2019 period. Land and amenities will be provided free of cost by the Government for these projects. The government’s condominium policy also helps, with the removal of freehold right restrictions from the ground floor and allowing foreigners purchasing condominiums to raise 40 percent of the cost from a domestic bank. .

According to Jones Lang LaSalle, upcoming mixed use development projects like Cinnamon Life and ShangriLa, located in the CBD area, will inevitably increase the overall supply of office space

34

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in Colombo. Furthermore, currently some 3,000 apartments are being developed in the luxury category and these projects are due for completion in the next 2-3 years. JLL is tracking a hotel supply pipeline in Colombo of close to 4,500 rooms, largely concentrated towards the luxury segment and upper upscale segments (branded hotels classification based on pricing and product).

Hotel inventory in Colombo expected to double over the next 3-4 year period although developers do face constraints like high construction costs due to the high levels of import of construction materials and high labour costs.

Despite the stiff competition from imports, local tile and sanitaryware manufacturers are expanding capacity.

Thajitha Perera, General Manager of Mack Tiles Lanka, owned

by Macksons Holdings, the biggest import of tiles, says they have just added another full production line with a capacity of 8,000 square metres a day at an investment of nearly $3.6 million. Full capacity is now 14,000 sq metres a day. “We will be producing glazed porcelain tiles of sizes 60x60 to 80 x 80,” he told Asian Ceramics. The new plant is a mix of machinery from Italy and China. “We are looking forward to mainly supplying the local market. Now imports are 50% of the total market requirement.

Larger format tiles are most in demand. If bigger, there will be logistical problems to handle tiles.”

Mahendra Jayasekera of Lanka Tiles said local manufacturers saw demand grow in 2017 after a slow down the previous year.

“The main point is, demand has grown for tiles at lower prices, both floor and wall tile. While local manufacturers struggle to establish price points for their own products, imported product is coming in to Sri Lanka unabated at lower prices.”

For local manufacturers, the entire floor and wall tile market went up 5% in 2017. In the market for tiles from the domestic ceramic sector, demand is fairly stable. Growth is basically coming from development projects with high rise buildings, warehouses, business complexes on the rise and no big growth in home building.

Jayasekera said it was with this trend in mind that Lanka Tiles started importing tiles. “Because when we import, we can get the project to buy through us at duty free prices.

We are a reliable supplier as we have the supply connections.

That market (project market) we have been able to capture somewhat by getting product made in India and China. Now we are aggressively marketing these imported products to the high rise apartments.”

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Analysis: Sri Lanka

Although still only about 10% of total sales, this market will grow.

Imports will not threaten local production or cannibalise their market because anyway, someone else will do it. “The market is being captured by imported products, Jayasekera said. “Till recently, local manufacturers had 60% market share. Today we local manufacturers are down to 28 – 30%.”

The market shares of Rocell, Lanka Tiles and Mack Tiles are likely to continue to erode because if the market is growing at 1015%, local manufacturers are not expanding capacity by the same speed, meaning they are constantly losing market share. “So it is better to be an importer and manufacturer than only remaining as a manufacturer and lose market share,” Jayasekera said.

He says the industry is happy with arrangements for antidumping duties planned by government. “But we have to closely watch implementation and see how vibrant the government will be in implementing anti-dumping duties. That will be a precursor to reducing import duty on a lot of items.

Jayasekera believes that imports will continue, whether or not import tariff protection which local industry has enjoyed for years, is removed. “It is just that imports will be coming at higher price because of protection,” he said. “With other countries offering lower prices due to economies of scale, imports come at lower prices inspite of the protection we have.”

Tariff removals

The protective tariffs are likely to be phased out, given the new government’s commitment to liberalising trade. “We can’t piggy back on protection for ever and ever,” said Jayasekera.

“For protection to be justified, we should be able to tell the government we can supply the entire demand but we are nowhere near it. By Lanka Tiles outsourcing production, working with foreign suppliers, we are in a position to face the phasing out of protection. Government policy is to reduce import duty protection.”

But if local manufacturers continue to lose market share, the government will have to relook at it.

For the moment, though, protectionism still prevails for the ceramic sector, accordigg to stockbrokers Bartleet Religare Securities. It noted that in the governemnt’s 2018 budget presented last November, protectionist measures remained despite government rhetoric.

“With the present government keen on liberalizing many protected local manufacturing industries, the ceramic sector had the threat of having the cess on imported tiles removed,” it said in a research note. “However, the industry remains protected, albeit many para tariffs were removed from the present budget. The budget however indicates the need for sufficient local competition in increasing efficiency and innovation.”

Lanka Tiles is going to add 30% capacity with an investment of Rs 1,5 billion with machinery already arriving and construction going on. Commissioning will be in July2018.

At Lanka Walltiles, there’s no major capacity expansion, but management is modifying the factory to produce a better product portfolio with an investment of $1.5 -2 million.

“Because for wall tiles, the world over, demand is slowing,” explained Jayasekera. “The distinction between floor and wall tiles is fast disappearing. Now the trend is for people to put floor tiles on walls. If you take surface finish and visual quality, there’s hardly any difference because of digital technology. The wall tile business is slowing versus the floor tile business.”

Royal Ceramics Lanka (RCL) is the market leader in both local

36

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GOVERNMENT POLICY INITIATIVES WILL ALSO SUPPORT REAL ESTATE SECTOR GROWTH tile and bathware segments with a market share of about 70% for floor/wall tiles and around 50% for bathware, according to Bartleet Religare Securities.

“RCL is poised to take advantage of the country’s development drive in terms of hotels and condominium constructions that are in the pipeline. An ongoing 35% capacity expansion at Eheliyagoda plant would cater to the demand in larger format tiles,” a research note said.

According to RCL, production capacity at its Royal Porcelain complex in Horana, increased by 15% last year. The expansion included the capability to produce glazed vitrified tiles as well as full body glazed porcelain tiles and ceramic glazed tiles and production of glazed porcelain tiles of larger sizes including 60x60 cm, 60x120 cm and 45x90 cm. A further Rs 50Mn was invested in coloured body with dry mixing technology. This enabled the factory to produce the coloured body tiles which are in high demand in the market and were formerly available only via the Royal Ceramics factory.

Capacity at the Royal Ceramics factory will increase by 35% following a Rs 1.2bn investment in 2017. One of the advantages of the expansion will be the factory’s ability to increase production of full body porcelain floor tiles for which there is a high demand in the market.

At RCL’s sanitary ware manufacturing plant, the Rocell Bathware complex in Homagama, capacity was increased by 30% last year by adding two casting lines with an investment of Rs. 580 million.

RCL says it believes the proposal that the cess on imports should be removed is a further threat to a market already flooded with cheap low quality imports. The lack of ‘anti dumping levies’ in Sri Lanka continues to be an issue as low quality items manufactured in large factories (primarily in China) are ‘dumped’ into the local market below the cost, RCL says. The depreciation of the rupee, high inflation and increases in interest rates and taxes lowered the demand in the market and caused a cost increase in manufacturing.

Sanitaryware considerations

According to Bartleet Religare Securities, the import cess for sanitaryware which is Rs 35/kg was removed in the recent budget. “This would result in imported sanitary wear items further

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Analysis: Sri Lanka

being discounted in the market.

The sanitaryware segment of RCL caters to niche clientele, however, we believe would face gruelling challenges from the import segment going forward.”

BOI chief Dumindra Ratnayaka says that FDI has begun to increase and that Chinese manufacturers are particularly keen on the island to set up export-oriented industries.

Chinese investors are looking for ways to get around trade sanctions imposed on them. A particular attraction for foreign investors is the free trade deals Sri Lanka has with India and Pakistan giving duty free access to these markets, and duty free access to the European Union under the GSP Plus deal that was restored last year.

But, although domestic ceramic manufacturers are expanding capacity, it is doubtful if the sector can draw foreign investors, even from China, which has pledged to set up an industrial zone in Hambantota, close to the southern port the operation of which has just been given to state firm CMPorts or China Merchant Port Holdings. This is mainly because of high costs. Sri Lanka is considered to have the highest energy costs in south Asia and that’s a deterrent for investment in an energy intensive sector like ceramics. Furthermore, getting raw materials in the island could be difficult.

Jayasekera of Lanka Tiles says that from an industry point of view, he doubts if Chinese investors will set up ceramics plants in the island for the simple reason that sourcing bulk raw materials would be difficult. “I doubt Chinese ceramic manufacturers will set up shop because it is not an attractive proposition. But such investments will happen in other industries to access international markets. It will be a fillip to the economy and will drive demand all round.”

One particular problem is that Sri Lanka’s clay deposits are becoming harder to access, being fairly densely populated. “We don’t have a large commercially viable deposits which can be exploited and importing raw material is prohibitively expensive due to ocean freight,” explained Jayasekera. “Given our cost of production, even with duty free facilities, it would be difficult to compete in India in the same market.”

Instead, Lanka Tiles is focusing on exporting to India where it plays in a very niche market. The company supplies specific projects in India and not the retail market and mainly to the southern parts of the subcontinent like Chennai in Tamil Nadu and Bangalore and other parts of Karnataka.

Although non-tariff barriers do deter Sri Lankan exporters to India who have been lobbying for their removal, Jayasekera believes that even if NTBs are removed they would still find it difficult to export.

“NTBs are there but, relatively speaking, we can’t export to India not because of NTBs but because our cost of production is high.

It’s a niche market we supply. At higher prices, specific products

38

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we can supply.

“Our plan is to grow our business not by exporting tiles from here but by getting our brand made in India and to sell in India,” explained Jayasekera. “Our production capacity in India not even a drop in the ocean. If we want to be a big player, we have to be a big producer. We can be a big player only if we produce in India.

Lanka Tiles has outsourced production to an Indian firm in Gujarat. “Even if you are a big producer in China, it would be hard to access the Indian market because it is a protected market,” said Jayasekera.

“The difficult factor is mainly quality, consistent quality. Consistent quality is a huge issue in India. For the last eight months I’ve been trying to find a good supplier.”

Lanka Tiles gives input to its Indian supplier. “Every time we make products for us in India we have our staff going to India and helping them with quality control.”

Sri Lankan ceramic producers Royal Ceramics Lanka Eheliyagoda plant catering to demand for larger format tiles has a capacity of 5,000 m2 per day and produces homogeneous full body porcelain tiles and glazed porcelain tiles. The Royal Porcelain complex in Horana produces 11,000 m2 per day, specialising in glazed floor tiles Rocell Bathware Complex in Homagama produces 245,000 pieces a year of vitreous china and fine fire clay sanitary ware. Rocell Pty Ltd operates showrooms in Australia Lanka Walltiles Meepe factory complex has a capacity of 8,000 sq metres per day.

Lanka Tiles Factory in Ranala produces glazed, vitrified and ceramic floor tiles with an output of 12,000 sq metres per day. Lankatiles Private Limited is also in Bengaluru India and is used for distributing tiles to the Indian market Lanka Ceramic Operates mines in Meetiyagoda, Owala, Balangoda and Dediyawela for kaolin, feldspar and ball clay.

Mack Tiles Lanka Capacity of 14,000 sq metres a day

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Analysis: China

Province profile:

Guangdong environmental concerns drive development

In the latest of our exclusive Chinese Province Profiles, we turn our attention to Guangdong – a region that was once the doyen of China’s ceramic industry, but one which has undergone massive transformation.

I

n 2017 there were 211 ceramic tile enterprises in Guangdong province, having a total of 961 ceramic tile lines between them ( including 13 western roof tile lines) with total daily capacity of 12,490.15 k sq metres of ceramic tiles and 1,255 k.pcs of western roof tiles. Among the 961 lines, 182 are rustic tile lines with daily capacity of 1,961. k sq metres, 249 polished glazed tile lines with daily capacity of 3,334.4k sq metres, 101 interior wall tile lines with daily capacity of 1,780.5k sq metres, 304 polished tile lines with daily capacity of 4,460.5k sq metres, 6 large-size panel lines with daily capacity of 53k sq metres, 60 exterior wall tile lines with daily capacity of 451,000 m2, 13 western roof tile lines with daily capacity of 1,255k.pcs, 16 microcrystalline tile lines with daily capacity of 117k sq metres, as well as 30 other tile (small floor tile, paving tile, water permeable tile, endurable tile, polished crystal tile and black tile) lines with total daily capacity of 332.25k sq metres.

Inkjet invasion

In addition, there are 821 inkjet ptinters operating in ceramic tile enterprises of Guangdong and 129,094 people working in ceramic tile enterprises, of these 108,781 are directly for production.

Compared with 2014 when there were 1,062 production lines with total daily capacity of 13,288,000 sq metres, the number of production lines in 2017 is reduced by 101 and production capacity is reduced by 798.1 k sq metres.

In addition to the change of data mentioned above, significant changes also took placed on aspect of product structure, production technology and brand promoting. At the same time and as a leading production area in China in terms of environmental protection,

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Guangdong implemented more strict policy for environmental protection, hard and strict efforts have been made for implementation of “conversion of coal to gas” policy in some areas, for example, quite effectively in Qingyuan production area.

After concerted efforts and measures by the Foshan government during the period of 2007 through 2008 for pollution control of ceramic tile enterprises as well as many years environmental protection achievement following that, including moving and transformation of ceramic tile industry, Foshan has moved into a period for a full development of its economy and its brand is now seen as one of quality. Brand popularity of most enterprises in the other production areas of the Province are more limited to the vagaries of their own regional markets.

One big spur for Foshan also is that because of the implementation of policies in Pearl River Delta area to limit construction for new lines of ceramic tile, many ceramic tile enterprises in Guangdong production area are turning to technical innovation in order to transform, upgrade and increase profit margins,

Foshan City

Foshan, Guangdong is of course well-known in the ceramic tile industry and enjoys the reputation as “Ceramics Capital of South China”.

Since 1983 when Shiwan Llihua Company under Foshan Ceramics Group introduced from Italy the first modern production line of ceramic tile in China, Foshan began to be engaged in the development of ceramic tile industry and, after that, following the spring wind of reform and open policy, it went aboard the “highspeed train” of China’s real estate industry and, with hard efforts all the way, has acquired glorious achievement.

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Analysis: China

Foshan production area has experienced many phases, and now faces, perhaps, some of its biggest challenges.

The internet has radically transformed the overall marketing approach for the city, and supplied a much greater information flow. In addition, the Belt and Road policy seems to be having an adverse effect. The question for Foshan companies is how to they retain that seemingly previously invincible position going forward?

Transformation

Pressed by requirements for urbanization and environmental protection around, Foshan government issued the Announcement about Accelerating the Process of Foshan Ceramic tile industry Transformation and Upgrading around 2007 and officially started rectification measures for its ceramic tile industry. In 2009 Guangdong government issued a policy for industrial rectification by means of relocation of ceramic tile enterprises, ordering an overall relocation of its ceramic tile enterprises. According to the policy, a large number of ceramic tile enterprises in Nanzhuang, Shiwan, and Zhangcha districts moved out and relocated in Qingyuan, Sanshui and Zhaoqing. There were 298 ceramic tile enterprises in Foshan then listed to be subject to adjustment for upgrading, 220 among them moved out or transformed and, by December 2010, there were only 62 ceramic tile enterprises remained in Foshan.

Later after that, the remaining enterprises, scattered in Nanzhuang, Shiwan and Zhangcha, facing growing pressures of environmental protection requirements as well as public opinions thereof, also chose to move out, then by 2017, Huanqiu Ceramics line in Shiwan district - the last tile line in this area, was dismantled, and at the same time, ceramic tile enterprises in Xiaotang industry area all moved out.

It is of course good to see that the moving of those ceramic tile enterprises out of Foshan area provided space to accept a new, modern ceramics industry and increased prosperity for those companies headquartered there. Instead of there being a concentration of factories, therefore, it has become now a centre of ceramics exhibition halls, such as China Ceramic Town, China Ceramics Headquarter Base, Nanzhuang Huaxia Ceramics Exhibition Mall, Ceramics International, and the Mosaic Tile Mall. Instead of scattered ceramic production of pumping out dust and pollution, there are now the gleaming headquarters of key, leading ceramic brands from the region. Foshan has come of age.

Out in front

The latest statistics show that currently within the Foshan production area there are 61 production lines for rustic tile (including wood grain tile and modern rustic tile), having a daily capacity of 566,000 m2; 60 lines for production of glazed tile (including marble tile), having a daily capacity of 682,000 m2; and 60 lines for polished tile (including ink-jetted polished tile), having a daily capacity of 574,500 m2, with rustic tile, glazed tile and polished tile each having one third of the total

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production capacity. In addition, many ceramic tile enterprises in Sanshui area have achieved production line upgrading through technical innovation, manyadvanced lines of multiple functions having been put into operation for large plate tiles, all indicating a leading position of Foshan production area in terms of technical innovation.

As a pioneer of China’s ceramic tile industry, the Foshan production area, has been playing a role as a bench for mark for other large production areas and, during its 30-year development maximized its position as the country’s leading light.

Encouragingly for Foshan, despite all the regulatory changes and the growth of the market in other Provinces, its underlying advantages still exist. Neither a reduction of production capacity nor the development of the ceramic tile industry has weakened it in any way.

In fact, on the contrary, after going through such major reorganization and transformation, the Foshan production area has grown to be more sensitive about market and more capable of dealing with crises than it ever was originally.

Foshan is also in leading position when it comes to technical innovation for equipment. For example, the large-tonnage press is produced and was first used here in Foshan recently. The most advanced 12-channel inkjet printer of the world is also produced and has been first used here. Technology of dry ceramic grain and liquid glue also is produced here. In addition, production line for large-size panels, ceramic tile production line with multiple functions, three-storey drying kiln with a function to dry 3 types of products simultaneously and so on.

Accelerated progress from “quality-driving” to “brand-driving”

As the ceramic tile industry is approaching a turning point, competition is intensifying, and conventional enterprises are now facing a necessity for a comprehensive transformation. A large number of conventional enterprises in Foshan production area have of course already completed this change from “quality- driven” to “brand driven”, and now development has intensified even further.

The most striking progress taken place in Foshan production area in recent years is the transition of many ceramic tile enterprises; a transformation from conventional production of ordinary products to production of brand products, which consists of different types by different enterprises. The first type is by enterprises that already have their brand products but still keep on search for innovation and better quality. These enterprises remain at the forefront and, while insisting on a base of innovation and good quality, make more efforts in terms of brand development and marketing.

The second type of transformation has been taken by longestablished enterprises that have large capacity, solid quality and basic brand functionality. The third major type of company that has undergone transformation are those working for OEM manufacturers

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Analysis: China

or those using partially-made products for finishing and sale of final tiles. Each of these has probably undergone the greatest change as they have invested most heavily in marketing and brand development and moved much more into self-manufacture.

Zhaoqing City

The concentration of ceramic enterprises in Zhaoqing began to emerge around 2003 and after over ten- year development it has grown substantially. Nowadays its ceramic production is mostly located in several industry areas that are well-known in ceramic tile industry, such as Dinghu, Yongan, Gaoyaojinli, Deqing, Sihui, Baitu, and Guangning areas, where 58 ceramic tile enterprises are located, totally having 249 production lines with total daily capacity of 3,557.4k sq metres.

In the period from 2008 to 2010, Guangdong experienced a round of environmental protection missives. At that time, Zhaoqing was a new production area and its environmental protection was primarily in compliance with the required level in the whole production area.

However, for tiles this was clearly not nearly strict enough. As such, in 2014 there was a second round of correction that achieved much great effects both in terms of physical implementation and also how it affected the country’s tile companies. This was subsequently following in both 2016 and 2017 when Zhaoqing and other ceramic production areas in China underwent further rounds of environmental restriction.

Then on 1st October, 2017, the local government of Zhaoqing production area officially started an overall implementation of strict control of nitrogen oxide and sulfur dioxide emission by ceramic tile enterprises. This has pressed ceramic tile enterprises there to invest even more for environment purposes. Some enterprise leaders have even stated that various law-enforcing authorities often came to their factories without any previous notice for inspection, especially after hours or at night, almost everyday. Pressed by such growing strict control, ceramic tile enterprises in Zhaoqing are working hard not only for production but also for environmental protection and of course this is putting pressure on the sector.

Product structure

After three years of development Zhaoqing production area now has more sensitive capability to foresee market trend compared to how it was set up in 2014. There has been a particular effect on product structure, for example, with a greatly increased production capacity of rustic tile and the, increasingly popular, full-body rustic tile.

Our investigations have shown that polished glazed tiles have exhibited a growing popularity and many production areas hastened to change product structure of their production lines in 2014 accordingly. This meant that the product spread in Zhaoqing has been kept steady with polished tile, interior wall tile and other tiles (polished glazed tile, rustic tile and microcrystalline tile) each having one third of market. By 2017, however, this had changed somewhat and the expanding product range is now more in line with market trends. Fully polished, glazed tiles and rustic tiles now dominate.

Qingyuan City

Qingyuan was founded in 1988 and, as a region with largest territory area

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but comparatively poor economy in Guangdong province, it has been given close attention and emphasis ever since by government at different levels. In August 2008, Foshan Chancheng (Qingxin) Industrial Park jointly constructed by Foshan and Qingyuan was put into operation to accept ceramic tile enterprises coming from Foshan.

Early in 2002 Qingyuan’s first industrial park, Yuantan Ceramic Tile Industrial Town, was completed in Qingcheng district Qingyuan city and some leading ceramic tile enterprises came to locate there, such as Dongpeng, Wonderful, Hongyu, New Zhongyaun and Monalisa.

At that time Qingyuan, as a less-developed area, need ceramic tile enterprises to come and locate there urgently in order to push development of local economy. However, ceramic tile industry is of high energy consumption and high pollution and caused pollution problems during its development in so many years, and local people complain that ceramic tile enterprises damaged the environment.

Therefore, in 2012 Qingyuan was determined not to approve new ceramic production or associated items any more.

At the moment Qingyuan have two large concentrated ceramic production bases. One is Yunlong Ceramic tile industry Base located in Heyun town of Qingxin district, and another one is Tanyuan ceramic tile industrial park located in Qingcheng district. In addition, there are some ceramic tile enterprises scattered nearby, and now its ceramic tile industry has a steady development.

Coal to gas

When the first ceramic enterprise moved into Qingxin Industrial Transfer Park (Yunlong Ceramic tile industry Base located in Heyun town of Qingxin district) in 2008, this Industrial park was defined as “a clean park” and was subject to higher requirements than that of other production areas for environmental protection. It is one of the few industrial parks, for example, that has gone to the effort of supplying dust suppression on the roads of the region. A small point, but one that nonetheless demonstrates detail and commitment.

Implementation of “conversion of coal to gas” was started here in the park, also in 2008, but at that time price of gas was quite high, at over RMB 4/cu. metre After a government notice was issued in 2012 for the practical implementation of a “conversion of coal to gas” policy across the entire ceramic tile industry, the cost of fuel was increased by over 30%, and according to the leader of Qingyuan ceramic tile industry, the cost of ceramic tile production was increased by RMB 3-4/ sq metre.

By 2015, the price of natural gas had been decreased twice by National Development and Reform Commission to be lower than RMB 2/ cu. metre or a little more and as a result, the cost burden for the ceramic tile enterprises was mitigated to certain extent. However there had still been 3-4 years of hard times for the companies during the raised fuel price period. But now that Qingyuan has emerged from that difficult time, it is now keen to see all other regions adopt an identical policy.

“Qingyuan ceramic tile enterprises will lose advantages in competition if natural gas is not used by every ceramic enterprises in Guangdong”, a enterprise leader in Qingxin Industrial Park stated. “Our main concern is unevenness rather than usage of natural gas.” In fact many companies have expressed their opinion that if natural gas is used by all ceramic tile

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Analysis: China

Number of other manufacturers (capacity ranges, sq metres/day)

enterprises, everybody’s cost is increased, and a fair competition like this among ceramic tile enterprises can be helpful for implementation of “conversion of coal to gas” policy.

According to the “Five-year plan” of Qingxin Industrial Park for a clean production (Qingxin government document No.32 in 2016), technical measures for “conversion of coal to gas” on the first production line of ceramic tile enterprises located in the Park had to be completed before May 15, 2017, and measures for 15 lines together had to be completed before the end of that month.

Today, 15 ceramic tile enterprises in the Park have achieved the target of the first phase, and the local government had a plan to

No. inkjet printers by capacity range

achieve the target of “conversion of coal to gas” on 60% of all their production lines before end of 2017 (and we are currently awaiting confirmation on that), and on 100% of all the lines before end of June 2018.

Except for Yunlong Ceramic tile industry Base located in Heyun town, Jiamei Ceramic located in QingyuanYuantan Ceramic tile industry Town, as a model enterprise, has done all works for “conversion of coal to gas” on all production lines, while enterprises such as Qingyuan Nafana, Qingyan Monalisa and Guanxing all achieved “conversion of coal to gas” on part of their production lines.

There is still a way to achieve this target.

Leading tile companies (capacity >140,000 sq m. /day) City

County / District

Company

Tile line & capacity (k.m2/d)

Total capacity (k.m2/d)

Number of inkjet printers

Foshan

Nanhai

Guangdong Monalisa New Materials ( Group ) Co., Ltd.

2 large-size panel tile lines: 16; 4 rustic tile lines: 75; 9 polished glazed tile lines: 160; 1 interior wall tile line: 9

260

18

Foshan

Sanshui

Sanshui New Pearl Ceramic Tile Production Base

12 interior wall tile lines: 90; 13 rustic tile lines: 110; 6 exterior wall tile lines: 50

250

52

Zhaoqing

Gaoyao

Guangdong Summit Ceramics Co., 21 polished tile lines: 197; 1 large-size panel line: 3 Ltd.

200

15

Jiangmen

Enping

Enping Xinjincheng Ceramics Co., Ltd.

3 polished tile lines: 90; 6 polished glazed tile lines: 108

198

12

Yunfu

Yu’nan

Guangdong Xinshunjing Ceramics Co., Ltd.

6 polished tile lines: 180

180

Jiangmen

Enping

Enping Xiangda Ceramics Co., Ltd. 6 polished glazed tile line: 180

Foshan

Nanhai

Guangdong Winto Ceramics Co., Ltd.

Qingyuan

Qingcheng

Qingyuan Shenghua Ceramics Co., 4 polished tile lines: 116; 2 polished glazed tile lines: 52 Ltd.

168

4

Jiangmen

Enping

Enping Baiqiang Ceramics Co., Ltd.

3 polished tile lines: 90; 4 polished glazed tile lines: 72

162

8

Zhaoqing

Guangning

Zhaoqing New Jingsheng Ceramics Co., Ltd.

3 polished glazed tile lines: 75; 4 polished tile lines: 80

155

3

Zhaoqing

Dinghu

Guangdong Kwok’s Mingjia Ceramics Co., Ltd.

3 marble tile lines: 24; 2 microcrystalline tile lines: 16; 4 rustic tile lines: 40; 2 interior wall tile lines: 30; 3 polished glazed tile lines: 36; 1 small floor tile line: 8

154

10

Zhuhai White Rabbit Ceramic Co., Ltd.

19 exterior wall tile lines: 152

152

4

Zhuhai

180

5 interior wall tile lines: 75; 8 polished tile lines: 64; 3 paving 175 tile lines: 36

9 25

Qingyuan

Fogang

Guangdong Bohua Ceramics Co., Ltd.

3 modern rustic tile lines: 36; 2 polished tile lines: 30; 2 interior wall tile lines: 40; 3 polished glazed tile lines: 40

146

18

Qingyuan

Qingcheng

Qingyuan Ouya Ceramic Co., Ltd.

3 polished tile lines: 36; 4 polished glazed tile lines: 40; 1 marble tile line: 12; 3 interior wall tile lines: 54

142

15

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Analysis: China

Product innovation

Compared with other production areas of Guangdong province, Qingyuan’s ceramic tile industry is not only subject to a cost pressure from the fuel transition, but also some other higher production costs. For example, consider freight. From December 19, 2016 to July 31, 2017, the standard for trucks was adjusted in Qingyuan from 55 tonnes to 49 tonnes – a far stricter requirement than that seen elsewhere. This added even more pressure on the region as it increased the number of freight journeys by 10%. What is more, rising labour costs in Qingyuan have also caused issues.

Upgrading products therefore is critical to the long term competitiveness of the region. Investments in companies are forecast to have increasingly long pay-back times at present unless things change. As such, the change to far greater automation is well underway and purchase of inkjet printing is one of the most important factors in ensuring that higher priced tiles can be produced.

Yunfu City

Presently, there are 23 ceramic tile enterprises in Yunfu city and 70% of them are located in Renchun town and Shuitai town of Xinxing county.

It is known that these two towns both have advantages in respect of geographical location and per capita land possession and since the beginning of ceramic enterprise transfer in 2007, they became one of

the main acceptation places for ceramic enterprises being transferred from the Pearl River Delta.

Ceramic tile enterprises in Xinxing county didn’t form a completed industrial chain at the beginning period, their main products are polished tiles and suffered poor profitability. Then following development of regional ceramic tile industry, they began to have more polished tile lines and kept on enriching their product structure.

It is worth noting that most of ceramic production capacity in Xinxing county is providing OEM services for other brands. Before 2016 a rather large part of ceramic tile enterprises in Renchun Industrial Park and Liangtian Development Zone were specifically providing OEM services for polished tiles. But while seeing a growing fierce price competition of polished tiles as well as a shrinking market share, many enterprises here began to make active effort for optimization of product structure and resolutely took some technical measures to alter polished tile production lines for production of polished glazed tiles. It is disclosed by local informed people that the alteration of production lines for this purpose was started from the second half of 2016 until beginning of 2017 when the altered lines were put into operation again.

Our statistics show that there were totally 41 polished tile lines and 5 polished glazed tile lines in Yunfu production area in 2014, while in 2017 the number of polished tile lines had reduced to 23 and the

Leading tile companies (100k - 140k sq m. /day) City

County / District

Company

Foshan

Gaoming

Zhaoqing

Total capacity (k.m2/d)

Number of inkjet printers

Foshan Shuncheng Best Ceramics 5 polished tile lines: 50; 4 polished glazed tile lines: 40; 3 Co., Ltd. rustic tile lines: 30; 2 marble tile lines: 20

140

15

Gaoyao

Zhaoqing Chunyi Ceramics Co., Ltd.

8 inkjet printing polished tile lines: 140

140

8

Qingyuan

Qingcheng

Guangdong Haoshen Ceramics Co., Ltd.

5 polished tile lines: 75; 3 marble tile lines: 54

129

6

Zhaoqing

Gaoyao

Gaoyao Marshal Ceramics Co., Ltd. 3 interior wall tile lines: 57; 1 polished glazed tile line: 25; 1 rustic tile line: 18; 2 marble tile lines: 27

127

15

Foshan

Gaoming

Foshan Shuncheng Ceramics Co., Ltd.

3 interior wall tile lines: 120

120

15

Yunfu

Xinxing

Guangdong Xinjiaxin Building Materials Co., Ltd.

4 polished tile lines: 80; 2 polished glazed tile lines: 40

120

4

Jiangmen

Taishan

Guangdong Jinteli New Building Materials Co., Ltd.

1 polished glazed tile line: 20; 3 polished tile lines: 100

120

2

Qingyuan

Qingcheng

Guangdong Hongwei Ceramics Co., Ltd.

4 polished glazed tile lines: 30; 2 rustic tile lines: 16; 2 paving tile line: 36; 3 polished tile lines: 33

115

9

Foshan

Sanshui

Foshan Sunshine Ceramics Co., Ltd.

5 polished tile lines: 100; inkjet printing polished tile line: 10

110

1

Qingyuan

Qingcheng

Guangdong Jiamei Ceramics Co., Ltd.

3 polished tile lines: 30; 4 interior wall tile lines: 40; 2 110 microcrystalline tile lines: 10; 3 polished glazed tile lines: 30

Zhaoqing

Gaoyao

Gaoyao Chunmei Ceramics Co., Ltd.

7 polished tile lines: 105

Zhaoqing

Gaoyao

Zhaoqing Jiatao Ceramics Co., Ltd. 2 polished tile lines: 40; 3 polished glazed tile lines: 45; 1 rustic tile line: 10; 1 marble tile line: 10

105

6

Zhaoqing

Gaoyao

Zhaoqing Aomilong Building Materials Co., Ltd.

4 polished tile lines: 68; inkjet printing polished tile lines: 34

102

2

Yunfu

Xinxing

Xinxing Yingfa Ceramics Co., Ltd.

6 polished tile lines: 102

102

Zhaoqing

Gaoyao

Zhaoqing Zhongheng Ceramics Co., Ltd.

1 microcrystalline tile line: 10; 2 polished tile lines: 30; 3 interior wall tile lines: 60

100

5

Qingyuan

Qingcheng

Guangdong Huixiang Ceramics Co., Ltd.

2 polished tile lines: 40; 2 polished glazed tile lines: 36; 1 marble tile line: 12; 1 modern rustic tile line: 12

100

6

Jiangmen

Enping

Enping Xin’anma Ceramics Co., Ltd.

3 polished tile lines: 100

100

Jiangmen

Enping

Enping Zhengde Ceramics Co., Ltd.

5 polished tile lines: 100

100

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Tile line & capacity (k.m2/d)

13

105

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Analysis: China

number of polished glazed tile lines increased to 17.

We also learned that in the past many ceramic tile enterprises here were mainly working for ordinary polished tiles, either producing their own brands or providing OEM services. With the growing fierce completion among polished tiles, they turned to polished glazed tiles for purpose of long term development.

As the market share of polished tiles declined, many ceramic tile enterprises turned to place their hope on polished glazed tiles.

However, the sales of polished glazed tiles on the whole has not been as good as was expected, and, as ever, fierce competition has resulted i na declining price from over RMB 30/piece for 800×800 mm tiles to nowadays RMB 15 approximately.

Another point deserving mentioning is that environmental protection policy in Renchun and Shuitai is less strict. Also the local government does not require the compulsory usage of natural gas in its ceramic tile enterprises, as long as their emissions can meet the standard required.

Enping City

Enping’s ceramic tile industry took shape in the beginning of the 1980s and it has grown substantially since. A “ShahuPuqiao Industrial Leading tile companies 80 - 100k sq m. /day) City County / Company District

Park for New Building Materials” was established around 2016 in Enping along state highway 325 and Kaiyang expressway and as of today, more than ten large ceramic tile enterprises, including Jiajun, Baiqiang and Xinjincheng, have moved and located in this industrial park.

However, despite these initiatives, production capacity expansion in Jiangmen has been relatively stagnant since 2014 and there have been few production lines constructed and put into operation in the last three years. On the contrary, when faced with complicated market circumstances as well as due to poor operation and environmental protection problems, more and more ceramic tile enterprises have into troubles leading to kiln suspensions or shutdowns. In fact some enterprises have even gradually withdrawn from ceramic tile industry altogether. For example, Jingyu Ceramics was sealed up and shut down in 2014, Zhengde Ceramics was suspended for rebuilding and re-constructon and Jiahong Ceramics was shut down in 2015, Huafeng ceramics and Huidefeng Ceramic were shut down and then rented out in 2016, and Jinwang Ceramic was shut down and put up for for acquisition in 2017.

At the same time, “environmental protection” became the key phrase involved with the development of ceramic tile enterprises in

Tile line & capacity (k.m2/d)

Total capacity (k.m2/d)

Number of inkjet printers

2 polished tile lines: 23; 4 rustic tile lines: 60; 1 large-size panel line: 15

98

6

Foshan

Sanshui

Guangdong Overland Ceramics Co., Ltd.

Zhaoqing

Gaoyao

Zhaoqing Gubaosi Ceramics Co., Ltd. 2 polished glazed tile lines: 36; 3 polished tile lines: 60;

96

3

Qingyuan

Qingcheng

Qingyuan Nafuna Ceramics Co., Lyd.

10 polished tile lines: 95

95

6

Zhaoqing

Gaoyao

Zhaoqing Yongsheng Ceramics Co., Ltd.

7 polished glazed tile lines: 91

91

6

Qingyuan

Qingcheng

Guangdong Guanxing Ceramics Co., Ltd.

3 polished glazed tile lines: 36; 2 rustic tile lines: 20; 1 interior wall tile line: 22; 1 large-size panel line: 13

91

17

Foshan

Nanhai

Guangdong Xinruncheng Ceramics Co., Ltd. (1st % 2nd factories)

4 polished tile lines: 45; 2 rustic tile lines: 20; 2 polished glazed tile lines: 25

90

5

Foshan

Nanhai

Foshan Homei Ceramics Co., Ltd.

2 polished glazed tile lines: 20; 1 small floor tile line: 10; 3 interior wall tile lines: 60

90

11

Zhaoqing

Deqing

Zhaoqing Jinshuntong Ceramics Co., Ltd.

3 interior wall tile lines: 90

90

9

Jiangmen

Enping

Guangdong Quansheng Ceramics Co., Ltd.

4 polished glazed tile lines: 72; 1 marble tile lines: 18

90

6

Foshan

Sanshui

Guangdong Gold Medal Ceramics Co., Ltd.

1 interior wall tile line: 30; 4 polished glazed tile lines: 50; 1 large-size panel line: 6

86

20

Zhaoqing

Dinghu

Zhaoqing Yinuo Enterprise

3 polished glazed tile lines: 47; 1 rustic tile line: 12.5; 2 interior wall tile lines: 25.5

85

15

Qingyuan

Qingcheng

Qingyuan South Building Material And Sanitary Ware Co., Ltd.

4 polished glazed tile lines: 30; 2 rustic tile lines: 22; 3 polished tile lines: 33

85

3

Qingyuan

Qingcheng

Guangdong Best Ceramics Co., Ltd.

3 interior wall tile lines: 84

84

8

Qingyuan

Qingcheng

Guangdong Xinyipai Ceramics Co., Ltd.

3 polished tile lines: 42; 1 polished glazed tile line: 11; 1 interior wall tile line: 30

83

8

Foshan

Sanshui

Guangdong Bode Fine Building Materials Co., Ltd.

4 rustic tile lines: 32; 3 mcrocrystalline tile lines: 18; 4 polished tile lines: 32

82

10

Zhaoqing

Gaoyao

Zhaoqing Shenghui Ceramics Co., Ltd.

4 rustic tile lines: 80

80

11

Zhaoqing

Gaoyao

Gaoyao Hongrun Ceramics Co., Ltd.

2 interior wall tile lines: 60; 2 rustic tile line: 20

80

14

Zhaoqing

Gaoyao

Gaoyao Langfeng Ceramics Co., Ltd.

4 polished tile body lines: 80

80

2

Zhaoqing

Guangning

Zhaoqing Baolilai Ceramics Co., Ltd.

3 polished tile lines: 80

80

Qingyuan

Qingcheng

Guangdong Hongyu New Materials Co., Ltd.

4 polished glazed tile lines: 40; 4 polished tile lines: 40

80

Jiangmen

Enping

Enping Xindeli Ceramics Co., Ltd.

4 polished tile lines: 80

80

Jiangmen

Enping

Enping Jinwang Ceramics Co., Ltd.

4 polished tile lines: 80

80

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Saint-Gobain Formula partners with Bongioanni Stampi to deliver high quality roof tiles Since 2015, Saint-Gobain Formula worked with Bongioanni Stampi to help the ceramics rooftiles manufacturer transition to plaster moulds in order to achieve a higher quality of ceramic roof tile.

Background

Bongioanni Stampi is a leading production manufacturer based in Italy that supplies moulds and equipment for multiple plants and presses for basic tiles and accessory tiles. They supply customers all over the world with their equipment, enabling them to be competitive in the market.

What happened?

The 2008 construction market crisis impacted many manufacturers globally. The most affected were those in the rooftile industry, specifically Europe. The crisis lead to manufacturers facing strong competition but the highest was inside EU. This greatly affected Southern Europe as their margins were squeezed due to rooftile production being too high for the current market.

Manufacturers needed to find new ways to compete as well as being able to keep up with the needs of their customers, by developing new models with high quality standards that would impact their businesses positively. It was at this stage that Saint-Gobain Formula got involved and partnered with Bongioanni Stampi to move their current process to plaster moulds.

The Challenge

For many rooftile manufacturers, the pressing process uses gum moulds instead of plaster moulds. Compared to plaster, gum moulds are considered easier to use because they do not require a high level of maintenance and their life span is longer. However, the quality of the finished pieces is not to a high standard and will require more engobe and glaze treatment to the surface to achieve sufficient quality.

While plaster moulds need specific production workshops, tooling and the ‘know-how’, the pieces made using this method are of much higher quality compared to the gum moulds. The challenge was to make the plaster workshop commissioning as efficient as possible and to move customers away from gum moulds.

How does this work?

Automated plaster preparation, with the option of running different programmes, is recommended when implementing the plaster process. The usual equipment allows predetermined mixes with

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regard to batch size, mixing time, plaster to water ratio and also a mixture of two plaster components.

This allows the manufacture of moulds with a plaster to water ratio matched to the various designs of accessory and flat tiles, whilst maintaining an optimum working consistency.

The plaster process is more flexible when it comes to production planning.

Fabrication can be adapted easily to the delivery needs and market demand by the ease of changing the model of rooftiles produced.

Small adjustments on design can also be made easily and directly by retouching the matrix.

Theflexibilitythattheplasterprocess can offer makes manufacturing in the 21st century more efficient and is easily adopted into processes and production. By introducing plaster into your rooftile manufacturing process, you can ultimately reduce your overall cost. There would be initial investment required however; the cost is balanced out as you reduce the thickness of the tile. Bongioanni Stampi was able to save costs related to energy consumption, transport, raw materials and internal clay recycling.

Another benefit of switching to the plaster process is that you are able to solve quality issues related to design such as surface defects due to water marks.

The outcome

There are a number of benefits by implementing the plaster process into ceramics rooftile manufacturing production. Overall, it will improve the product mix, creates a significant quality difference versus competitors that are using gum moulds. The visual effect of the rooftile is a lot smoother and offers high resilience to moss in the future. Properties, such as complex water and snow circulation (top and bottom of the mould) to protect the insulation adds real value.

Saint-Gobain Formula and Bongioanni Stampi worked in close collaboration to make sure the best possible solution was achieved for their customers. Bongioanni Stampi and Saint-Gobain Formula were able to provide their technical knowledge and expertise to conduct relevant tests to maximise the benefits.

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49

Analysis: China

Jiangman. This is especially when the national inspection group for environmental protection came and stationed in Guangdong province at end of 2016, and ceramic tile enterprises located in Jiangman began to face irregular inspections. During this period, it became quite commonplace to hear that some ceramic enterprises were instructed to carry out programmes of rectification because of problems such as open air stock piling of raw material or a lack of effective measures for dust control and so on.

Some companies that there were 79 ceramic tile lines in Shahu Puqiao Industrial Park for New Building Materials before 2017, but 54 of them did not have environment evaluation approval. As such, all have been forced to shut down in the period for enforcement of environmental protection law.

In order to meet production requirements and at the same time avoid punishment due to not obtaining environmental evaluation approval, some enterprises took measures to alter polished tile lines for production of polished glazed tiles in order to keep pace with a market change. Unfortunately, this came at a time when competition among polished tiles was more fierce and market share of polished Leading tile companies 64 - 80 sq m. /day) City County / Company District

tiles is declining, while during process of the production line alteration for polished glazed tile, many enterprises expanded production capacity by means of wide kilns.

Heyuan City

Heyuan, due to its excellent resources of high whiteness ceramic raw materials, has natural advantages for development of ceramic tile industry, and is regarded as the first selection for their production by some high-end product brand enterprises. Located in Heyang are many production bases for some of the most famous tile brand products, including two production bases for Eagle Brand Ceramics, one production base for New Zhongyuan Group, one production base for Hengfu Ceramics, and production bases for famous export brand Romantic as well as Douglas of once top popularity.

Thanks to great influence of these famous brands, Heyuan has built up its reputation in China’s ceramic tile industry. One spokesman for a local ceramic tile enterprise suggested that the clay here has such good whiteness that it is highly suited to the production of excellent polished tiles, and is inspiring the development of a number

Tile line & capacity (k.m2/d)

Total capacity (k.m2/d)

Number of inkjet printers

2 rustic tile lins: 18; 4 interior wall tile lines: 53; 1 border tile line: 5

76

5

Zhaoqing

Gaoyao

Gaoyao Tegaote Ceramics Co., Ltd.

Zhaoqing

Guangning

Zhaoqing Fuqiang Ceramics Co., Ltd. 4 polished glazed tile lines: 76

76

8

Qingyuan

Qingcheng

Qingyuan Yingchao Ceramics Co., Ltd.

4 polished tile lines: 60; 1 polished glazed tile line: 16

76

1

Foshan

Sanshui

Foshan Wincun Exquisite Building Material Co., Ltd.

5 polished glazed tile lines: 75

75

5

Yangjiang

Yangxi

Yangxi Bode Fine Building Materials Co., Ltd.

2 polished glazed tile lines: 45; 1 interior wall tile line: 30

75

10

Guangdong Wonderful Ceramics Co., Ltd.

10 rustic tile lines: 75

75

14

Dongguan Jiangmen

Enping

Guangdong Jiajun Ceramics Co., Ltd. 1 microcrystalline tile line: 10; 2 polished tile lines: 26; 1 interior 75 wall tile line: 15; 2 polished glazed tile lines: 24

Jiangmen

Enping

Enping Fengze Ceramics Co., Ltd.

2 polished tile lines: 40; 2 polished glazed tile lines: 34

74

2

Zhaoqing

Dinghu

Zhaoqing Weida Ceramics Co., Ltd.

3 polished glazed tile lines: 40; 3 marble tile lines: 33

73

6

Zhaoqing

Gaoyao

Guangdong Gaoyao New Times Ceramics Co., Ltd.

2 rustic tile lines: 40; 3 interior wall tile lines: 30

70

6

Shaoguan

Xinfeng

Guangdong Xiinfeng Jinfengda Ceramics Co., Ltd.

3 polished glazed tile lines: 70

70

Qingyuan

Qingcheng

Qingyuan Baoshima Ceramics Co., Ltd.

2 polished tile lines: 25; 3 polished glazed tile lines: 45

70

5

Qingyuan

Qingcheng

Qingyuan Langu Ceramics Co., Ltd.

6 polished tile lines: 70

70

Yunfu

Xinxing

Xinxing Jinmali Ceramics Co., Ltd.

2 rustic tile lines: 50; 1 interior wall tile line: 20

70

Jiangmen

Enping

Enping Huachang Ceramics Co., Ltd.

8 rustic tile lines: 70

70

12

Qingyuan

Qingcheng

Guangdong Honghai Ceramics Co., Ltd.

8 polished glazed tile lines: 68

68

9

Foshan

Nanhai

Foshan Lihua Ceramic Co., Ltd.

2 rustic tile lines: 24; 2 marble tile lines: 28; 1 interior wall tile line: 15

67

8

Zhaoqing

Gaoyao

Zhaoqing Ruilang Ceramics Co., Ltd.

4 polished glazed tile lines: 55.4; 1 marble tile line: 11

66.4

12

Foshan

Nanhai

Foshan Xinlianfa Ceramics Co., Ltd.

3 rustic tile lines: 30; 3 marble tile lines: 36

66

5

Jiangmen

Enping

Enping Xiangying Ceramics Co., Ltd.

2 polished tile lines: 44; 1 polished glazed tile line: 22

66

1

Zhaoqing

Deqing

Zhaoqing Donghui Ceramics Co., Ltd. 2 interior wall tile lines: 65

65

10

Zhaoqing

Gaoyao

Zhaoqing Lord Ceramics Co., Ltd.

2 rustic tile lines: 25; 2 interior wall tile lines: 40

65

12

Foshan

Gaoming

Foshan Gaoming Vigorboom Ceramics Co., Ltd.

4 polished glazed tile lines: 55; 1 rustic tile line: 9

64

6

Zhaoqing

Dinghu

Zhaoqing Linghang Ceramics Co., Ltd.

3 polished glazed tile lines: 44; 1 polished tile line: 20

64

4

Qingyuan

Qingcheng

Qingyuan Qiangbiao Ceramics Co., Ltd.

4 polished tile lines: 64

64

Jiangmen

Enping

Enping Yijian Ceramics Co., Ltd.

1 rustic tile line: 18; 2 polished glazed tile lines: 46

64

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AC 18-1

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51

Analysis: China

of premium products. Indeed, perhaps there will be a chance to export some of the clay within China’s other ceramic regions, and potentially overseas.

Despite this advantage, however, it seems that companies are not seizing the initiative. Perhaps other issues remain – fuel costs and labour mainly – as from 6 ceramic tile enterprises and 29 production Leading tile companies 64 - 80 sq m. /day) City County / Company District Foshan

Nanhai

Guangdong Sanfi Ceramics Group Co., Ltd.

lines in Heyuanarea in 2014, by 2017 there were only 3 enterprises, 4 factories and 15 production lines with a daily production of 127k sq metres of tiles. Beijiali Ceramic has closed down, Douglas’s factory has never managed to achieve smooth production – and remains in difficulty - while Hengfu Ceramics is planning to move to Sanshui of Foshan.

Tile line & capacity (k.m2/d)

Total capacity (k.m2/d)

Number of inkjet printers

2 interior wall tile lines: 28; 2 rustic tile lines: 14; 3 polished tile lines: 18

60

20

Foshan

Sanshui

Foshan Jihe Ceramics Co., Ltd.

4 polished tile lines: 60

60

Zhaoqing

Dinghu

Zhaoqing Zhonghong Chuangzhan Ceramics Co., Ltd.

3 polished tile lines: 30; 2 polished glazed tile lines: 30

60

2

Zhaoqing

Sihui

Sihui Jinhang Ceramics Co., Ltd.

3 rustic tile lines: 60

60

8

Zhaoqing

Gaoyao

Gaoyao Jinxiu Ceramics Co., Ltd.

4 polished tile lines: 60

60

Qingyuan

Qingcheng

Qingyuan Shunchang Ceramics Co., Ltd.

3 polished tile lines: 50; 1 polished glazed tile line: 10

60

Qingyuan

Qingcheng

Qingyuan Ganglong Ceramics Co., Ltd.

4 polished tile lines: 60

60

Qingyuan

Qingcheng

Qingyuan Shenglida Ceramics Co., Ltd.

5 polished tile lines: 60

60

Qingyuan

Qingcheng

Guangdong Tianbi Ceramics Co., Ltd. 4 polished tile lines: 40; 2 inkjet printing polished tile lines: 20

60

Yunfu

Yun’an

Yun’an Yingbang Ceramics Co., Ltd.

2 endurable tile lines: 60

60

Yunfu

Xinxing

Xinxing Yuhui Ceramics Co., Ltd.

5 polished glazed tile lines: 60

60

5

Yunfu

Xinxing

Xinxing Jianxing Ceramics Co., Ltd.

6 rustic tile lines: 60

60

6

Jiangmen

Heshan

Jiangmen Heshi Ceramics Co., Ltd.

4 polished tile lines: 60

60

1

Foshan

Sanshui

Foshan New East Dragon Ceramic Co., Ltd.

6 exterior wall tile lines: 42; 1 microcrystalline tile line: 7; 1 polished glazed tile line: 10

59

3

Qingyuan

Qingcheng

Qingyuan Xinjinshan Ceramics Co., Ltd.

1 interior wall tile line: 28; 1 rustic tile line: 28

56

5

Jiangmen

Enping

Enping Tuobo Building Materials Co., Ltd.

1 polished glazed tile line: 22; 1 marble tile line: 18; 1 polished tile line: 16

56

2

Foshan

Nanhai

Icoto ( Guangdong ) Ceramics Co., Ltd.

2 rustic tile lines: 5; 8 exterior wall tile lines: 50

55

2

Zhaoqing

Dinghu

Guangdong Xiejin Ceramics Co., Ltd.

2 interior wall tile lines: 43; 1 rustic tile line: 12

55

13

Foshan

Sanshui

Foshan Xinhuatao Ceramics Co., Ltd. 3 marble tile lines: 24; 3 polished tile lines: 30

54

3

Jiangmen

Enping

Enping Jingpeng Ceramics Co., Ltd.

2 polished tile lines: 54

54

Jiangmen

Enping

Enping Jiahong Ceramics Co., Ltd.

3 polished tile lines: 54

54

Foshan

Sanshui

Foshan Oceano Ceramics Co., Ltd.

3 polished tile lines: 21; 2 polished glazed tile lines: 20; 1 rustic tile line: 12

53

6

Zhaoqing

Dinghu

Zhaoqing Jinbijia Ceramics Co., Ltd.

3 polished tile lines: 45; 1 rustic tile line: 8

53

1

Yunfu

Xinxing

Xinxing Hongji Ceramics Co., Ltd.

4 polished tile lines: 52

52

Foshan

Chancheng

Guandong Grifine Ceramics Co., Ltd. (1st % 2nd factories)

1 rustic (wood finish) tile line: 5; 1 polished glazed tile line: 5; 1 marble tile line: 5; 1 polished tile line: 5; 2 rustic tile lines: 16; 3 inkjet printing polished tile lines: 15

51

5

Foshan

Chancheng

Guangdong Qianghui Ceramics Co., Ltd.

6 polished tile lines: 50

50

6

Zhaoqing

Deqing

Zhaoqing Xinhe Ceramics Co., Ltd.

1 polished glazed tile line: 21; 1 rustic tile line: 21; 1 marble tile line: 8

50

2

Zhaoqing

Gaoyao

Gaoyao Shunsheng Ceramics Co., Ltd.

2 rustic tile lines: 30; 1 interior wall tile line: 20

50

3

Zhaoqing

Gaoyao

Gaoyao Guangfu Ceramics Co., Ltd.

2 interior wall tile lines: 50

50

8

Zhaoqing

Guangning

Zhaoqing Huifeng Ceramics Co., Ltd.

3 polished glazed tile lines: 50

50

6

Heyuan

Dongyuan

Guangdong Gaoweijing Sci & Tech Co., Ltd.

3 marble tile lines: 30; 3 microcrystalline tile lines: 20

50

5

Qingyuan

Qingcheng

Qingyuan Juncheng Ceramics Co., Ltd.

2 polished tile lines: 20; 3 polished glazed tile lines: 30

50

4

Yunfu

Xinxing

Xinxing Jinyili Ceramics Co., Ltd.

5 polished glazed tile lines: 50

50

5

Jiangmen

Enping

Enping Junhao Ceramics Co., Ltd.

2 interior wall tile lines: 50

50

8

52

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The Leading Trade Fair for Advanced Ceramics Industry

Date March 25th~27th, 2018 Venue Shanghai Everbright Convention & Exhibition Center Contact

Tel: +86-20-8327 6389 iacechina@unifair.com www.cn-aceexpo.com

Tel: 4000 778 909 irisexpo@163.com

IACE CHINA 2018 The 11th Shanghai International Advanced Ceramics Exhibition & Conference

ORGANIZERS: Industrial Ceramics Sub-Committee of Chinese Ceramic Society; Engineering Ceramics Sub-Committee of Chinese Mechanical Engineering Society; Unifair Exhibition Service Co., Ltd.; Shanghai Iris Exhibition Services Co., Ltd.

Talking Shop

Talking Shop

Gas shortages provide challenges AC looks at how the determination of China’s ceramic industry to move from coal-fired to gas-fired kilns may look environmentally sound but the realities of supply shortages are causing huge headaches to the country’s tile sector. AC investigates…

Since 2016, the ceramic companies in Zibo production base have started to replace coal with gas as their fuels. In November 2017, as Zibo entered the heating season, their production of ceramic tiles started to be affected by the gas-supply shortage severely.

On 4th December, the price of natural gas increased from 2.45 yuan/ cu. metre to 3.03 yuan/ cu. metre. Actually, it was the third time that the price had risen in the last quarter of the year. The first time was in 8th October, the day when the ceramic companies started to limit their production for a week. This was followed by a second rise on 18th November. However despite the rises, the irony is that since the 8th October, the ceramic companies have started to face a shortage in the supply of natural gas.

It has been stated that the increasing price of natural gas is caused by the rising price of liquefied natural gas (LNG). As the price of LNG continued to grow last year all ceramic companies had to face cost increases. In fact some began to plan for stopping their kilns before the full effects of these price rises kicked in.

One company stated that the price of LNG has increased to 8500 yuan/ton. In other words, the price of LNG at the end of 2017 was around 5.86 yuan/cu metre However, the ceramic companies were getting LNG at a price of 5.96 yuan/cu metre, essentially double that of natural gas. As a result, some ceramic companies chose to use a combination of LNG and natural gas, evenly split, to have better control of spiraling production costs. “But as the price of LNG continues to grow, The long-running trend of increasing prices of LNG will push up our production costs in natural gas.”

At present, the average price of natural gas has increased to 4.5 yuan/ cu. metre. Therefore, the production costs of producing a ceramic tile of 300×600 (mm) will grow by 0.6 yuan. This has actually driven some manufacturers in Zibo over the edge in terms of profitability, and they are now fulfilling contracts at a loss rather than lose them. When margins are already paper thin, even a slight increase can cause a major problem.

Production stoppages

But many other ceramic companies had decided to limit their production or even stop production beforehand. “Now, our company is limiting production. After we restart the production, the price of natural gas may increase to 4.8 yuan/cu metre” one company insider said.

Though the price of natural gas has been increased several times, natural gas is still in short supply. Therefore, ceramic companies can not gain enough natural gas to support their production. When you consider that the peak demand for natural gas from China’s ceramic

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companies is still some way away, and will be governed by an increase undoubtedly in environmental legislation, then this shortage is likely to become even more intense, and perhaps force prices even higher as a result.

Supply shortages

In China, winter is the “heating season” meaning that the Chinese government and all industries face a challenge to ensure sufficient supply of natural gas. Indeed, currently, many municipal governments are now implementing an emergency plan for natural gas security.

The basic guideline of this plan is to ensure a steady gas supply to residents and domestic homes by disconnecting the gas supply to industrial companies and limiting gas supply to commercial companies. Of course from a production point of view, this is a difficult situation for factories and can lead to shutdowns and suspensions of activity.

Consider this: since 2016, Shanxi, Hebei, Henan, Guangdong, Shandong, Sichuan have been working hard on the changing of coal to gas at all the factories in their provinces. The air is cleaner, for sure, but the gas supply has not kept pace with demand. Throw in the issue of diverting the fuel to residential properties in winter, and you can see how quickly costs spiral. This constant ebb and flow for ceramics manufacturers is causing havoc in relation to longer-term planning.

Hebei

By October 2017 the gas price in Hebei province had already been increased and on 15th November, Hebei entered the heating season.

This had the effect that the gas price rose to 3.5 yuan/ cu. metre and the LNG price was close to 4 yuan/ cu. metre.

On the 28th November, the pressure winith the gas pipe network lowered from 4kg to 0.5kg indicating a dramatic drop-off in supply. As such the government launched an emergency plan to disconnect the overall gas supply to industrial companies. As AC goes to press, it is believed that the plan will remain open until further notice.

Shandong

Since 2016, ceramic companies in Shandong Zibo have started to replace coal with gas. In November, the time when Zibo entered the heating season, the gas price in Zibo was pushed up by 0.6 yuan/cu. mettre, up more than 24%.

At the beginning of this month, the gas price had increased from 2.45 yuan/ cu metre to 3.03 yuan/ metre due to the shortage of supply.

This had the effect of limiting production from the many lines and lowering output considerably. Some companies have even taken the

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Talking Shop

steps of collaborating over when to activate their lines and actively manufacture. This essentially means competitive factories forced to work together to determine as to which of them would be allowed to ‘use’ that day’s ‘quota’ of gas. Clearly this is an untenable situation for the long run.

Sichuan

At the beginning of this year, Jiajiang government required all ceramic companies to change their fuel from coal to gas.

Now, for the companies that use 10 million cu. metre per year, the gas price has risen from 1.75 yuan /cu. metre to 1.95 yuan / cu. metre. For the companies that use 5 million /cu. metre per year, the gas price increases from 2.05 yuan/cu. metre to 2.25yuan /cu. metre In this condition, some ceramic companies have held onto only one production lines.

Henan & Shanxi

On 28th November, the Department of environmental protection of henan province launched an emergency notice to deal with the heavy air pollution. This led to the fact that on the 30th November, more than 20 cities in Hebei, Shanxi and Henan issued or extended an orange alert for air pollution.

On the same day, 10 cities in the central and middle part of Hebei launched the regional II Emergency Response. It is expected that 18,000 companies will take peak production and stop production to reduce emissions.

Henan goes ultra-low

On the 19th December, the government of Henan province issued a Work Plan for Air Pollution Prevention and Control in Henan Province (essentially a consultation paper). This Work Plan requires 60 ceramic companies to achieve the what are termed “ultra-low”

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THE AVERAGE PRICE OF NATURAL GAS HAS INCREASED TO 4.5 YUAN/CU. METRE emissions before October 2018. If the companies get the plan done before June 2018, they will be rewarded by not being as penalized for gas flow reduction during the low production periods in the winter of 2018/early 2019.

The plan claims that Henan province will push forward the ultralow emissions in seven important industries, including steel, cement and ceramic industries. On the ceramic side of things, the emissions of particulate matter discharged by spraying dryer tower and kiln, sulfur dioxide and nitrogen oxide should be reduced to less than 10 gram/ cu metre, 35 gram/cu. metre and 100 gram/ cu. metre respectively.

According to the Implementation Plan for Peak Production of Industrial Enterprises in Autumn and Winter of 2017-2018 in Henan Province. 47 ceramic companies located in the BeijingTianjin-Hebei air pollution "transmission channel"("2 +26" cities) and Luoyang and Pingding administrative area have to stop production from November 15th 2017 to March 15th 2018.

And the other 14 ceramic companies located in the provincial cities and provincial counties have to stop production from November 15th 2017 to February 15th and resume production

by February 25th 2018. Another 122 ceramic companies which have used natural gas and coal gas as fuels will see no disruption to production.

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55

Insight

VIETNAM Table 1

Table 1 2013 2014 2015 2016 2017

2013 2014 2015 2016 2017

358 452 455 475 485

Ceramic tile capacity (m. sq metres)

Table 1 2013 2014 2015 2016 2017

60 73.5 78 125 145

Porcelain tile capacity (m. sq metres)

Table 1 14.7 14.85 15.05 24 25

Sanitaryware capacity (no. pieces)

2013 2014 2015 2016 2017

260 361 354 395 399

Ceramic tile production (m. sq metres)

1

1

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Insight

Table 1 2013 2014 2015 2016 2017

42 57 59 110 119

Porcelain tile production (m. sq metres)

Table 1

Table 1 2013 2014 2015 2016 2017

10 12.5 12.2 17.1 22.4

Sanitaryware production (no. pieces)

Table 1

2013 2014 2015 2016 2017

250.5 360 410 438 502

2013 2014 2015 2016 2017

Domestic tile consumption (all tiles, m. sq metres)

8.6 9.2 10.5 12.5 17.9

Domestic sanitaryware consumption (m. pieces)

1

1

Table 1 2012 2013 2014 2015 2016

Table 1

179.29 219 270 211.4 181.5

2012 2013 2014 2015 2016

Ceramic tile export value (US$m.)

Sanitaryware export value (US$m.)

1

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77.8 107.2 130 95 94.5

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Connecting Global Competence

International importance. Global relevance.

A global milestone. International innovations in additive manufacturing, powder metallurgy, electro and carbon ceramics are changing the world of tomorrow. At ceramitec 2018.

600 exhibitors and 65 trade lectures from all over the world will be presenting the 15,000 trade visitors the material out of which the future is made. Become a part of this world of innovations.

ceramitec 2018 – international component in a global future

Hunter and the hunted

s t h g u tho

as g n i r e t l a f s i d a o R e n O lt e "T h e On e B l a n" it s n ot a co m p re h e n sive p

We are due a good one…year, that is….

Dear Diary,

review of 2017, as I look forward to 2018 – Although a little late this year I thought it sensible to do my after the trying and tumultuous 2016 and 2017. and yes we must be due a good year and deservedly so for as we are still learning to deal with the new hope could we best Unfortunately, the signs so far are not the East, a Nuclear North Korea and China's attempts normal – Brexit, Trump Politics, an extra unstable Middle make you curl up in bed and wait for 2019 instead. to enough It's . at Hegemony with Chinese Characteristics Or am I being too pessimistic? economy (never mind its safety and the longevity My concerns for the world in general and specifically the ting forces which to a greater or lesser extent compe various of sition of the human race) stem from the juxtapo ly provide friction and uncertainty throughout the year. are on at worst a collision course and at best will certain obvious – the spoiled child bully that still is In no particular order, therefore, I have to start with the most s are all out there – whether its narcissism, specific The . stration Donald Trump and his dysfunctional admini positions, denial of climate change, inability to think corruption, poor choices for key political & administrative international community which is most worrying. the to attitude the before making crass statements; but it is on Jerusalem the US ambassador to the UN, Nikki Following the UN disagreeing with the US's declaration ged the UN with words to the effect 'We own you, do challen ially Haley made a crassest rebuttal which essent from how belligerent this is it was directed at longwhat we want or face the consequences'. Now quite apart neutral countries, big & small. People were rightly more the and foes term America allies as well as traditional potential impact of changing the accepted position upset but quite subdued (given the circumstances and the accepted the USA has lost its place as the world now have es countri on Jerusalem). I take this as a sign that thing to suspect someone is selfish and following leader and has become measly and isolationist. It's one it. It really doesn't matter either how military confirm sly expres them their own agenda – it's another to have spending. Warfare is now very much asymmetric powerful the US wishes to become with Trump increasing net result will be countries slowly but surely The m. terroris & uge and has tended to cyber attacks, subterf in a US basket. looking to make new alliances and not have all their eggs titor and challenger more so than Russia since compe a's Americ China should benefit, of course, its now a global power with some influence; Russia more China via its exports and regional ambitions is becoming nemesis. But there are problems for China too – nal traditio its ilizing interested in oligarch riches and destab the economy buoyant and addressing middle-class middle-class politics are rising and the CCP has to keep addressed this issues of free speech and aren't these If on. so issues such as pollution, health-care and Road (OBOR or Oh, bore!) is faltering as its not democratic freedoms will rise to the fore. The One Belt One the real costs and benefits are; 'Do we really what ring wonde are es a comprehensive plan and more countri are in debt for a bridge built with Chinese materials want a Chinese flag over the new port and how come we trade deals with countries not terrible ones better on eyes his has and Chinese labour?' Given Trump still if US retail started to look for suppliers at home, (in his eyes). China also has to wonder what would happen . Especially when you have to continue regard that in year easy or nearer to home. It isn't going to be an g of certain areas of Beijing of migrant labour dragging people out of poverty back home. The recent clearin ty there is no guarantee this can continue impuni with gly seemin reminds us that whilst the State can act Also as one witty blogger has pointed out – we may without popular reaction. You can only censor so much. ce the politics of countries from Taiwan to influen to trying been have passed 'Peak Panda' – China has educational institutions and governments on the Australia & the USA through paying to influence the media, deeply hurt' if anyone does are people e Chines the one hand and playing the '...feelings of found out and countries being is This views. ed preferr CCP's the pro 100% things that aren't with China. When dealing when t accoun into ce are rightly crying foul and taking this influen lines. your fluff you see to get people more stage big the you play on

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

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China International Ceramics Technology, Equipment, Building Ceramics & Sanitaryware Exhibition

By CCPIT BUILDING MATERIALS SUB-COUNCIL

CERAMICS CHINA 2018 to meet over

Come to

1000 global exhibitors with new tech,new idea and new gear!

2018.05.30-06.02 China Import and Export Fair Complex Guangzhou

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Hunter and the hunted

The uncertainty about North Korea looked like turning to nuclear war as it has pursue and intercontinental missile d nuclear weapons s. The Trump threatening to press his big red button and however the fact it seems like torch North East Asia, North Korea now actually has a nuclear deterrent actually India & Pakistan (& Israel) may be for the best. developed nuclear weapon s and the mutual fear this cre back up a little. I support a ates makes governments nuclear-free world but the par adox is nuclear fear makes likely. The next few months talking more, not less may well see South Korea & North Korea together - wor situation around – otherwise, king out how to turn the there will be international fall outs over sanction breaking can do without. This could and so on which we again see America lose influ ence – it looks sometimes guys' to give it relevance. like it needs regional 'bad Europe and the UK will hav e another year of trying to unt angle themselves from Bre has brought no benefit and xit - a situation which still appears to have no plan , aim or target. I predict at som few years when the public e point in the next in Britain sufficiently realize s the problems in Britain are governments not the rest of the faults of British the EU maybe sensible hea ds will prevail and at least a in sympathy with the EU for clear plan to work mutual gain will replace the talking heads who pander outraged through alarmist stat to the ignorant and ements and untruths. We can but hope. Britain's eye has internationally for so long now been off the ball now that it's a good job there is another Royal Wedding to the world remembers where be trotted out so that it is and can speak about the country without having to res incredulity. ort to skepticism and India has gradually gotten over some of its money trou bles and slowly addresses inequalities. I think the que tax and some of its stion I resort to with India with regard our industry is will it in exports not just in domesti be able to compete more c markets. Indian business practices can be infuriating people. It's not that products for international business aren't good – it's having to dea l with the penny-wise/poun bureaucracy. In general, I'd d foolish attitude and say at its simplest buyers beli eve that the Chinese want onto the next one whereas to do a deal and move Indians want to keep discuss ing the deal to extricate the world moving ever faster in last possible cent. In a how business is done – this is unbearably – quaint.

Looking at the rest of the reg ion quickly – Mad Dog Dut erte has pretty much been mostly useless in the Philipp left alone to get on being ines. Whilst he hasn't solved the drug problem and has in the Muslim south its clea exacerbated the crisis r that it isn't going to spill ove r elsewhere – for sure he's given he's unstable China mig bad mouthed the US but ht have taken greater control in the South China sea but hasn't been a sufficiently org there anised objection to this for the friction to boil over – yet. can say that Indonesia still struggles financially, Banglad Otherwise we esh is moving through the field confidence and the rest of of runners with more ASEAN is pretty much 'how you were' and such lack of embraced we've had too mu drama really has to be ch excitement – its not bee n of benefit and not been con reaction and idealism, embra structive. Rather than cing reality and pragmatism are the way to go. If we can cooperation and trade then build greater business increasing prosperity in the rea son will keep all the unstab we can get on with getting le charlatans out and on.

So, all the best for 2018 no doubt the ceramic industry will give us all some things profit from. to talk about and hopefully May your 2018 be successful

also….

All the best, William Hunter

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

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I N D IAN CE RAM I CS I N D IAN 2018 C AS I H M E D A B A D , I N D IA I N D I A N M A R E C C E RAM I CS 8 1 2 0M E DABAD, I N DINIA FOCUS: 2018 AH A H M E DA BA D , I N D IA : S U C Se e u s at I N FO S e e u s a t I N FOCUS: I A CE C h in a U n i c e ra

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EXHIBITION PREVIEW

EXHIBITION PREVIEW

CeramBath 2017 Data: trendsetting for 2018

Let’s me et again on April 18-21, 2018!

International Exhibitors International Exhibitors are mainly from America, German, Italy, Spain, Japan, Mexico, Malaysia, Brazil, Swiss, UAE and so on.

Domestic Exhibitors Domestic exhibitors covers 22 provinces and cities from Foshan, Zhaoqing, Kaiping, Jiangmen, Qingyuan, Guangzhou, Heyuan, Zibo, Linqi, Q ingdao, Jinan, Fujian Province , Hebei Province, Zhejiang Province, Sichuan Province, Jiangsu Province, Guangxi Province, etc.

According to the quantity and area data, exhibitors from CeramBath have covered the world’s major producing countries as well as domestic major production area of ceramic and bathroom.

From the general tendency, CeramBath has constructed a bridge for international exhibitors accessing to Chinese market and its role in helping international exhibitors extend China domestic market channels is becoming more significant and obvious.

Based on Buyer Data The 29th and 30th CeramBath, which were respectively held on Apr. 18-21 & Oct. 18-21, 2017, successfully attracted 54,397 and 60,930 visitors, with the further 12% growth. The number of oversea visitors in the 30th CeramBath occupied 9.7% of the overall visitors number.

Overseas Buyers Both the 29th and 30th CeramBath received thousands of visitors from 134 different countries and Comparison of CeramBath visitors districts.

Korea ranked the 1st place and accounted for 14% in the overall visitors number, India 11%, Pakistan 7%. In general, oversea visitors are mainly from Southeast Asian, American and European countries and districts.

China ceramic industry faced serious situation still in 2017. However, the number of CeramBath visitors increased continually, and the influence enhanced among the emerging markets like Southeast Asia and East Europe.

At the same time, many visitors from the US (one of the Top 10 Ceramic Import Countries in 2016) also choose CeramBath as the platform to purchase their target products.

Chinese ceramic exporting volume dropped due to the decrease of lowend products exports.

More buyers prefer to find the suppliers who can offer top quality

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products with considerable price. In the future, middle and high-end products will attract more attention from oversea buyers, and these market share will improve too.

In the aspect of business nature, visitors from decoration and real estate companies increased steadily. In the future, these two kinds of companies will become the main sale targets Leading visitor sources for the ceramic and sanitaryware companies to expand their markets.

Industry trends Seen from the two sessions in 2017, large-size ceramic tiles sprung up one after another. Especially during the 30th session, more enterprises joined the production team, introducing the sizes like 1200 × 2400mm and 3200 × 1600mm. At the same time, sizes specially designed for public decoration such as 450 × 900mm, 900 × 150mm and other less common specifications also appeared while words like modern rustic tile, stereoscopic, silk effect grasped more popularity.

From the data of 2017, modern rustic tiles and the products of largesize category are more hot-spotted and have entered the mainstream.

It is foreseeable that the market attention and market share of these two kinds of products will be further enhanced. On the other hand, the traditional products such as polished tiles, micro-crystal tiles and glazed tiles are still the major profitable products on the market and will still occupy a relatively high market share for a long period of time.

Regarded as the most large-scale and influential ceramic and bathroom exhibition in Asia, the biannual China International Ceramics & Bathroom Fair, Foshan (CeramBath) will enter its 31st session in the coming April,2018.

More information:

The 31st China International Ceramic & Bathroom Fair, Foshan Date: Apr. 18-21, 2018 (32nd CeramBath: Oct.18-21, 2018) Exhibitors: Around 750 Exhibits: Ceramic Tile, Sanitary Ware, Baths, Mosaic Exhibition Area: 370000m2 Venues: China Ceramics City, China Ceramics Industry Headquarters, Foshan International Conference & Exhibition Center Organizer: Foshan China Ceramics City Group Co., Ltd. Guides: People’s Government of Foshan City Hosts: China Building Ceramics & Sanitaryware Association, China Ceramics Industrial Association Supports: China Building Materials Circulation Association, Foshan Bureau of Commerce

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