Asian Ceramics - AC19-3

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AC19-3

BANGLADESH TILES: BOOM OR BUST?

IN FOCUS: Turkish sanitaryware Brickmakers in the dock Tableware trading Plus news, views, analysis and much more!

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News

Contents: AC 19-3 News

Features

4 Inside Asia

28 Bangladesh tiles

Focus on: Turan Seramik

6 Welcome

Coal-gas closures threaten Morbi units.

8 Across The Continent

Openings, closures and industry moves from across Asia.

16 International News Our eye on the international arena.

22 Material Matters

The ins-and-outs of ceramic raw materials.

26 Comment & Analysis Rising regulations hit Sri Lanka.

In the last ten years, the tile industry of Bangladesh has seen a dramatic increase. As demand for product continues to rise, Jahir Ahmed asks if the sector will attract even more investment, or if it will become an increasing export target for others in the region…

40 Turkish sanitaryware

Geographically advantageous, and with a heavily, technically invested manufacturing base, Turkey’s sanitaryware sector continues to evolve into a global powerhouse. However, with a slowdown in the EU, will the country’s leading players look further afield to maximise their output? Yogender Malik investigates…

48 Tableware trading

Rohan Gunasekera discusses how the continent’s tableware manufacturers are taking a range of differing approaches to distributing product as market machinations compel a more fluid approach…

52 The scourge of brick pollution

Making bricks is serious business in Bangladesh. While exact numbers are hard to come by, estimates suggest the industry there employs more than one million people who churn out 23 billion bricks each year at some 7,000 kilns.

However, new reports are focusing on the damage the sector is causing as AC finds out…

52 28

Analysis

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56 Talking Shop

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AC 19-3

Moynul Islam, Senior Vice President of Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA) and Vice Chairman of leading tableware manufacturer, Monno Ceramic Industries Ltd, explains about the potential of BCMEA’s exhibition and Bangladesh as a hub to Asian Ceramic’s Southeast Asia Editor Jahir Ahmed.

60 Insight

Analysis and insight into Indonesia.

62 The Hunter And The Hunted

William Hunter pulls up his chair, gazes out of the window at a sodden Chinese landscape, and wonders when, not if, the real estate bubble will burst…

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Inside Asia TURAVIT – TURAN SERAMIK Turan Seramik, which operates under the brand name TURAVIT is one of the leading sanitary ware producers in the country. Based in the Turkish province of Ordu, the company has an installed capacity of 750.000 pieces of sanitary ware per year after the company’s latest expansion in 2016. The company made an investment of USD 3 million in this expansion. The company produces and sells mainly sanitary ware products and bathroom furniture; as well as outsourcing complementary products such as concealed cisterns, flushing mechanisms, seat covers and accessories.

The product portfolio of the company includes a range of complete four piece sets, as well as many individual items which include, basins, squat pans, under-counter basins, urinal bowls, a variety of wall basins, and the very modern range of round and square bowls. The company focuses on the mid- end segment of sanitary ware products.

The company claims to export more than 30% of its production capacity through its strong partners in Middle East, CIS Countries; Northern Africa and East Europe; expansion in Western Europe is the main focus of the company in 2019. With timely investments in state of the art technology Turavit has strengthened its place in sector as one of the most significant brands with its increasing growth figures.

Welcome

CONTACT DETAILS

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EDITORIAL

ndia’s National watchdog on environmental matters decided in mid-March to ask ceramic units in Morbi, using coal as a fuel, to immediately shut down. This will affect about 390 of 1,000 units. Not surprisingly, many industry players said they may appeal against the order.

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

New Delhi bench of National Green Tribunal (NGT) also said in its order that a committee headed by a retired High Court judge and members consisting of experts from Central Pollution Control Board (CPCB) and Gujarat Pollution Control Board (GPCB) will conduct a survey and submit a report to NGT and pressed upon the fact that industry be made to pay for the pollution they are causing.

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

PNG (pipe natural gas) is considered to be friendlier to environment compared to coal. However, one cubic metre of gas costs Rs 36, compared to Rs 20 in case of coal. K G Kundariya, former president of Morbi Ceramics Association – Vitrified Tiles Division, acknowledged that NGT has passed such an order, although the final copy will be available in about two days. "We may go for an appeal against the order by NGT. We feel that some of the aspects presented by the industry may not have given proper importance by the tribunal," said Kundariya, adding that while most units have shifted to NGT, those using coal as a fuel are not causing pollution the way it is projected.

According to one industry observer, “In my opinion, It's a good move. There will be a short-term impact but it will help to clear finished goods inventories, which are currently very high.”

IN MY OPINION, IT'S A GOOD MOVE. THERE WILL BE A SHORT-TERM IMPACT

It is thought that such a ban of coal gas would affect up to 10% of double-charge/GVT producers and 70% of the wall tile sector. The sanitarwyare sector, however, would remain unaffected. In fiscal terms, this could mean that if manufacturers opt to pass on the costs, there will be somewhere in the region of a 10% rise in wall tile prices. Consequently, it could well be that the less viable factories are forced towards closure, improving the overall quality of the industry and resulting in a more stable set of market conditions. Admittedly domestically this will work, but how it will hit the embryonic export industry is more uncertain, particularly with the Gulf States already starting to impose duty on product coming in.

As with all things in Gujarat, nothing is guaranteed. However, some order amongst the chaos has long been called for. Let’s see how the next few months pan out…

Happy Reading!

Valerie Adamson Email: vadamson@asianceramics.com Direct line: + 44 (0) 208 133 5273 Production and design Tim Mitchell Email: tim@bowheadmedia.com Direct line: + 44 (0) 208 123 0839

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

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

Bowhead events OVERSEAS OFFICES China Professor Wen 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

Andy Skillen Publishing Director

HEAD OFFICE Bowhead Media Ltd, The Old Casino 28 Fourth Avenue Hove, East Sussex BN3 2PJ

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AC 19-3

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

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EU markets proving a lucrative target • Tile exports on the rise • Regulations under revie • Heavy clay making “s ceramic cluster • Roca looks for accessories tie-up • Coal-based units on the rise? • Jaquar increases installed capa Thangadh...

BANGLADESH

EU markets proving a lucrative target Talking to BSS, Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) General Secretary Irfan Uddin said China is leading the global ceramic market, especially in the EU markets, but Bangladesh is now expanding its stake.

“China used to export ceramic items paying 12 percent duty which has been hiked recently that made Chinese ceramic costlier and has paved the way for Bangladeshis ceramic,” he added.

Buoyed by boosting export to the European markets, ceramic items of Bangladesh registered 127 percent growth in foreign currency earning.

Top buyers of European Union (EU) and other countries have started to move to Bangladesh for ceramic items that pushed export earnings of the sectors to a healthy growth of $ 5.65 crore in the first eight months of the current fiscal, according to statistics of Export Promotion Bureau (EPB).

Referring to Bangladesh’s duty free access to EU market, Irfan Uddin also director of FARR Ceramics said: “If we grab the opportunity, it will be a big boost for our industry.”

He hoped that the export earnings would exceed $ 10 crore after the end of the fiscal.

Industry insiders said different factories are running operation in full- swing for getting work orders from foreign buyers and most of the companies have received work order for one year.

INDIA

SRI LANKA

Tile exports on the rise forced ( or motivated) Indian ceramic tile producers to look for exports market in an increasing manner.

Efforts of Indian producers

An extended slowdown in domestic industry and huge capacity addition by Morbi based ceramic tile producers in recent years has

have started to bear the fruits as Indian has joined the list of five largest ceramic tile exporters club in the just concluded year.

Leading destinations for Indian tile exports (m. Euros) Country

8

At present, 20 companies are running operation in large scale to produce clay jars, clay flower pot, tiles, sanitary ware, tableware, bathroom fittings, dinner sets, tea sets, coffee mug, clay jewelry etc.

Bangladeshi ceramic items are being exported to over 50 countries including USA, China, Japan, Poland, India, Indonesia, Croatia, Romania, Turkey, Russia, Spain, Norway, New Zealand, Denmark, Italy, Australia and UK etc.

Jan- Nov 2018

% change over last year

Jan- Nov 2017

2017

2016

2015

Saudi Arabia

152.01

-5.22 %

160.38

172.44

177.68

174.20

Mexico

49.69

-11.11 %

55.91

60.32

27.63

0.16

Iraq

44.46

-9.59 %

49.17

53.82

32.89

30.36

UAE

53.17

26.93 %

41.89

46.80

37.66

38.25

Oman

44.39

15.53 %

38.42

42.05

33.55

18.18

Kuwait

26.68

-27.48 %

39.55

41.82

32.55

18.89

Nepal

41.55

34.45%

30.91

34.92

26.41

18.14

Brazil

18.71

1.63 %

18.41

20.80

15.62

43.52

Sri Lanka

25.63

42.47%

17.99

20.08

18.21

12.88

Yemen

15.76

0.39%

15.70

16.83

10.01

2.12

Total Global

809.22

20.53%

671.40

736.67

598.19

498.67

asian ceramics

AC 19-3

Regulations under review Sri Lanka will review regulations on ceramic and tile industry mining and transport that are holding the sectors back, Finance Minister Mangala Samaraweera said, presenting a budget for 2019.

"We will review these regulations and laws that are a barrier to these industries, keeping the environmental concerns in mind," Samaraweera told parliament.

Sri Lanka ceramic and tile industries have complained that permits are needed from 16 different agencies, which have made it almost impossible to mine raw materials.

As a result, they are reduced to buying from third parties.

Tile industrialists have also said that they face difficulties in getting permission to dig clay from silted tanks, which is encouraged by the Department of Irrigation.

But the process takes a long time and rains come by the time permission is granted.

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slow” progress • Vitra’s fourth plant comes on-line • Slowdown fears in Morbi acity by twofold • Bau Truc pottery under threat • Morbi sanware overtakes INDIA

Heavy clay making “slow” progress Indian heavy clay industry, which is second largest globally is making slow progress towards automation.

AC interacted with some of the key stakeholders of the industry during Indian Ceramics event in Gandhinagar to know about the state of industry and progress towards modernisation.

With an estimated 123,000 brick producing units in the country, Indian heavy clay industry has started to make small steps towards modernisation of their

production process, but the pace of technology adaptation has been abysmally slow.

Speaking to AC, Anand Damle, Managing Director of De Boer Damle India Limited told, “ India’s heavy clay industry has been one of the most unorganised sectors in the industry. Comparatively cheaper labour in the country has discouraged existing brick producers to invest in automation, but situation is changing. Though, the

transition from manual operations to automated ones will not happen overnight in India. It is a slow process and will gain momentum when quality products in heavy clay industry start to gain market share. Currently, a vast majority of heavy clay producers are of the opinion that why we should invest such a large sum in equipment, when labour is available at cheap rates.”

Damle’s company has installed 11 production lines

in the country and is currently participating in two more projects, which are expected to be commissioned by the end of the current year.

De Boer Damle India is joint venture between Netherlandsbased De Boer Group – world’s leading supplier of soft mud brick installations – and Anand Damle. It was the first European company to have established its manufacturing base in India in the heavy clay machinery sector in the year 2009.

TURKEY

Vitra’s fourth plant comes on-line With an output of 5,2 million pieces/year in Bozüyük, Vitra is one of the world's leading sanitaryware manufacturermarketers. A long-standing SACMI customer, the company has recently completed a major investment at its headquarters in Bozüyük, with SACMI supplying a complete fourth manufacturing plant. This joins the three existing plants on the site, making it Europe's largest sanitaryware production facility.

Begun in 2015 with the delivery of a casting cell (featuring 2 AVMs with robots, 3 dryers, 2 Gaiotto glazing units with GA2000 robots and a Riedhammer shuttle kiln), the project is now nearing full capacity following the installation of no less than 8 new cells incorporating 16 AVM casting machines. Each cell is controlled by robots that, in addition to governing all the casting, demoulding and handling tasks, load the pieces onto the SACMI FPV pre-dryer. The innovative FPV uses tangential ventilation to remove significant amounts of water from the pieces in just

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60 minutes (as opposed to the 8-12 hours required with routine air-drying), ensuring they're mature enough to be loaded automatically onto trolleys and sent downstream, with consequent savings in terms of space, energy and emissions.

Eager to achieve complete automation of the line, Vitra has ensured it's ready for the future installation of automatic laser-guided handling vehicles.

Already, ergonomic design criteria and total automation of de-moulding, pre-drying and on-trolley piece set-down ensure workers no longer have to perform any manual piece handing. In addition to the new casting machines - which bring the total number of cells

working at the plant to 12 - the facility has seen the installation of a further 6 drying chambers, each of which can hold 12 loading trolleys, giving the drying and firing departments a considerable boost. Then there is the 135-metre Riedhammer tunnel kiln; one of the most modern and powerful in its category, it features the EMS system for fume control and heat management/retrieval.

Vitra exports over 75% of its output to 75 countries worldwide via its core brand Vitra and other major brands.

Its main goal? To apply SACMI solutions that guarantee outstanding levels of automation and quality to strengthen its foreign market positioning

vis-à-vis the production and marketing of back-to-wall and wall-mounted WCs. Last but not least, this investment saw close collaboration with the SACMI Sanitaryware technology team (which handled all plant flow design and engineering), ensuring meticulous attention to conditions in the workplace, consumption and logistical efficiency. Once the plant is running at full capacity – expected in the first few months of this year – Vitra will be able to manufacture new WCs for the medium-high end international market at the rate of 1,000 a day.

News, views and analysis

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AC 19-3

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9

News

INDIA

Slowdown fears in Morbi ceramic cluster India’s ceramic capital Morbi is going through its worst year in terms of capacity addition in last ten years. Morbi, which on an average witnessed an addition of more than 50 ceramic tile production lines every year will see an addition of only 12 new production lines in the coming year.

Asian Ceramics spoke with a number of existing ceramic tile producers during the three day Indian Ceramics Asia event in Gandhinagar during 27th February- 1st March to know the reason behind the India’s ceramic capital’s worst performance in recent history.

Slowdown in domestic market, cut throat price competition among producers and less

than expected growth in export markets have contributed in varying degrees for the lesser number of new units in the current year.

Nilesh Patel of Morbi based Finolite Ceramics told AC, “ Last one and a half year period has been one of the most intense in terms of price competition in Morbi’s ceramic industry.

A sizable number of ceramic producers have been offering their products at abysmally low prices in order to gain or retain their market share. This has forced other producers to follow their prices. These circumstances have resulted in wafer thin margins for a majority of producers, especially in 2 feet by 2 feet segment of ceramic

tile industry. Low profitability in last one year has deterred new production lines in the industry.

This situation is likely to remain till September of the current year, when the new government will make its policies clear.”

A number of other Morbi and Himmatnagar based ceramic tile producers repeated the same rationale behind the low number of new production lines in the current year. Some of these producers also added that natural gas pressure ( producers are not getting requisite amount of natural gas) , pricing and inadequate physical infrastructure are also some other issues in addition to cut throat pricing by ceramic producers have been some of

the other factors, which have deterred new investment in the industry.

Bhavin Patel of Morbi based Calystone Granito Private Limited told AC , “ In last three years, a significant capacity in Morbi’s industry was added to cater to export markets. Though, export of ceramic tiles from country has registered very steady growth numbers, but we have reached to a saturation levels in export markets. In 2019, we are expecting the same export numbers, which the industry registered in the year 2018.

This factor along with limited domestic off take has resulted in low capacity addition in the current year.”

INDIA

Roca looks for accessories tie-up Spanish sanitaryware major Roca is on the lookout for a suitable faucet and plastic product manufacturing unit in north India and it will retail imported bathroom tiles in India, a top official of its Indian subsidiary has said.

The official said that bathrooms are becoming technologyoriented, with sales of Bluetoothenabled showers showing an increasing sign and the parent Roca planning to launch voicecontrolled toilets.

"Our faucet and plastics (toilet seats and other items) business is logging good growth and are on the lookout for buying a manufacturing unit in north India," K.E. Ranganathan, Managing Director, Roca Bathroom Products, told reporters here.

Asked about the investment/ ticket size for the acquisitions, Ranganathan said for the faucet business it will be around Rs 4050 crore and for the plastics Rs 15-20 crore.

Ranganathan said the production capacity at its various plants are sufficient and by 2022, evaluation will be done whether to go for a greenfield project or

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AC 19-3

expand in the existing facilities.

He said the business is picking up after the dip in 2018 due to the introduction of Goods and Services Tax (GST), The Real Estate (Regulation and Development) Act, 2016 and the effects of demonetisation.

The company has launched its first product display studio in Tamil Nadu here, so that endcustomers and architects can see and experience the products at leisure, while sales will be done by the dealers.

According to Ranganathan, the company has launched six such display studios and there will be one studio each in Bengaluru and Hyderabad soon.

The Spain-based Roca is nearly a Rs 15,000-crore group and the share of the Indian company is around Rs 1,200 crore.

According to Ranganathan, Roca in India is present in all the segments in the Rs 2,000-crore Indian sanitaryware market -luxury (Armani Roca), premium (Roca, Johnsson Suisse), mass premium (Parryware) and budget (Johnson Pedder).

He said the company will

soon come out with kids and elderly people-friendly range of bathrooms.

Queried about voicecontrolled toilets, Raimundo Garcia-Figueras, Senior Managing Director, Asia

Pacific, Roca, said the company is developing the product on its own and would soon launch the same.

Ranganathan said the sale of electronic urinals/ toilets are on the rise in India.

INDIA

Coal-based units on the rise?

Frequent rises in natural gas prices, inadequate pressure and rising price competitiveness is forcing Morbi based ceramic producers to go for coal based gasifiers in an increasing manner. Currently, about 67% of the Morbi based units are running on coal based plants, while 33 % of the units are solely dependent on natural gas as a fuel source.

It would be worthwhile to mention that in June 2018, Gujarat High Court had directed the Gujarat Pollution Control Board to take appropriate action against ceramic units who use coal gasifiers particularly those using Type-B gasifiers in violation of norms and consent

terms. The court had said such a move was necessary to ensure that no further damage is caused to the environment by such ceramic industries in Morbi and Wankaner.

Though, in a relief court had directed the regulatory body to consider the request of the ceramic manufacturer association to provide trial run of the new technology that can help to reduce damage to environment to some extent which is caused at present by coal-based gasifiers.

In light of court’s directive, new coal based gasifiers units are using an advanced technology, which leads to less environmental pollution.

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57

News

INDIA

Jaquar increases installed capacity by twofold Sanitary ware producer, Jaquar Group has increased its installed capacity by two fold in last two years. The company, which acquired existing sanitary ware producer, Euro Sanitary ware business in 2017 has an installed capacity of about 2.4 million pieces of sanitary ware products per year.

Speaking to AC, Jaquar’s Deputy General Manager, Mohan Sharma told, “ We have made significant investment in sanitary ware plant to increase the scale and

scope of operations. Along with increasing the installed capacity, we have modernised the production process which has enabled us to produce high and mid-range of sanitary ware products. Currently, we are introducing a new kiln from a leading European technology supplier to further increase the scope of premium sanitary ware products.”

Jaquar had acquired this sanitary ware factory from Euro Ceramics Ltd for INR 1 billion (about $15.5 million) in early

2017. The plant, located at the Bhachau area of Kutch district in Gujarat, is spread over 17 acres. At the time of acquisition, Euro Sanitary ware had an installed capacity of about 1.2 million pieces of sanitary wares.

Jaquar has invested about INR 750 million over the last two years and raised the overall installed capacity to 2.4 million pieces per annum. The plant produces a range of designer sanitary ware products in partnership with design firms such as London-based Danelon

Meroni and Bangalore-based Foley Design.

The Jaquar Group, established in 1960, was originally into manufacturing of faucets. Currently the company sells showers, shower enclosures, flushing systems, wellness products, concealed cisterns, water heaters, and lighting solutions, besides sanitary ware products. The company operates a total of seven manufacturing facilities, including one in South Korea.

VIETNAM

Bau Truc pottery under threat Truong Thi Gach, 82, of the Cham ethnic group, is from a very long line of ceramic artisans.

Her great-great grandmother made pottery, and now, her own greatgranddaughter works in one of the oldest pottery villages in Southeast Asia, located 10km from the central coastal city of Phan Rang in Ninh Thuan province.

“I learned how to make pottery from my mother and my grandmother when I was 10 years old,” Gach said. “I taught my daughters and granddaughters since our Cham culture only allows women to make pottery.”

Located on National Highway 1A, the Bau Truc Pottery Village in Ninh Phuoc district is famous for ceramics made from clay from the Quao River.

“Villagers take the soft clay and mix it with sand to create a base material,” Gach said.

“These techniques have been passed down from generation to generation."

Cham pots are shaped by hand and are not made on a rotating electric wheel. The pots are dried under the sun for four to six hours before being fired outdoors over straw or wood.

The entire process, from beginning to end, is done by hand: from drying and soaking the materials in water to mixing sand and kneading

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AC 19-3

the clay, to decorating the pots before firing.

“That’s what makes our products unique," Gach said.

“We place the product on a chair or table and walk around it to shape it.”

Simple tools like anvils, moulds and wet cloths are also used. The patterns on the pots, which are freely decorated, often depict tree branches or shells, made with traditional techniques that colour the pottery in old, mysterious styles, according to Gach.

Images of snails or paintings featuring the daily life of Bau Truc Village’s people are often used for decoration as well.

Because the potters do not use kilns, their handmade jars are especially good for keeping water cool.

Pots from the village have natural colours: varying from reddish-brown, pink-red and dark gray with brown streaks, which are all characteristic of Chăm culture.

Upon entering the village gate, visitors can see pottery lining the streets and in front of houses, and can stop to learn techniques at workshops and take home their handmade items.

The village’s most popular items are reliefs featuring Cham women, kings or dancers, and products for spiritual worship or everyday household utensils.

Jars, decorative lamps, reliefs, and statuettes of Apsara (female dancers) and Shiva, one of the three main gods in Hinduism, are also sold at the village.

Future prospects The village, which has existed since the reign of Cham King Po Klong Garai (1151-1205), holds a ceremony every year to honour Po Klong Chan, the founder of the village.

Today, however, Bau Truc potters are trying desperately to survive.

Some 85 percent of the total 400 households in the village earn their living from making pottery.

However, the villagers fear they will have to stop working as potters because of the unstable output, low income, and lack of interest from traders.

Though the village has a variety of works in different sizes and colours, as well as fine art works and souvenirs, they have to compete with other craft villages with a long storied history, according to Phu Huu Minh Thuan, Director of the Bau Truc Pottery Village Cooperative.

Many products have simple designs that cannot match the variety and modern style of ceramics made by the famous Bat Trang Pottery and Binh Duong Pottery villages.

“Our monthly production is about 1,000 items, a small number compared with Bat Trang or Binh Duong,” Thuan said.

The artisans’ income is only around 2.5 million VND (110 USD) per month.

“That’s why many households no longer make pottery, even though they still love the traditional work. They have to look for other jobs with better earnings,” Thuan said.

To save the village’s craft, Thuan has recommended several solutions to provincial authorities, including financial support to register an official village trademark, and more trade promotions at seminars and conferences.

Ninh Thuan authorities are also planning to compile a dossier on Cham pottery in a bid to earn UNESCO cultural heritage recognition.

However, the provincial authorities urgently need support from government agencies, especially the Ministry of Culture, Sports and Tourism and the Vietnam National Institute of Culture and Arts Studies in HCM City, according to Thuan.

In 2017, the pottery made in Bau Truc Village in Ninh Thuan was recognised as a national intangible cultural heritage by the Ministry of Culture, Sports and Tourism

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News

INDIA

Morbi sanware overtakes Thangadh Morbi’s ceramic industry, which is known for its prowess in ceramic tile segment has made steady progress in sanitary ware production in last few years. Currently, Morbi has more than 130 sanitary ware production units. Almost 90 % of these units have come into operations in last five years.

Steady increase in sanitary

ware production in the town has enabled Morbi to emerge as the largest ceramic sanitary ware cluster in the country, placing the erstwhile largest sanitary ware cluster Thangadh to number 2 place.

While, sanitary ware units in Thangadh are still producing the most basic sanitary ware products for mass market, Morbi based sanitary

ware producers have been producing mid and premium range of sanitary ware products. These producers are giving a tough competition to organised sector producers, much like the ceramic tile industry.

The country’s organised sector sanitary ware producers didn’t face much problems from the competition

of Thangadh cluster as more than 90 % of the output from Thangadh was meant for cheapest segment, where organised sector had minimal presence. But, Morbi based sanitary ware producers are producing mid and high end sanitary ware products, which are posing stiff competition to oragnised sector ceramic sanitary ware producers.

SPECIAL REPORT

Jingdezhen: a return to greatness?

For centuries, the most coveted porcelain from China came out of Jingdezhen's workshops, fashioned from clay made smooth by trained hands, fired in kilns and then transported across the globe.

The works, notably the blue-and-white vases and jade-green celadon bowls, graced the courts of the British, Persians and French.

This was one of China's first globalized commodities and greatest export to the world.

The industrial revolution in the West ended China's supremacy, as cheaper porcelain born out of mass production took over the market.

The fall of the Qing Dynasty (1644-1911) and wars in the early 20th century broke the artisan culture and lowered its status in global trade.

The craftsmanship, however, never left Jingdezhen, a river town in East China's Jiangxi Province, and the tradition is being revived at the roots. Studios and workshops have popped up around town and in the surrounding valleys. Some of the new artisans hope to profit from their skills since the country's middle-class boom brings a greater demand for porcelain.

Ryan Labar, an US ceramic artist, said coming to Jingdezhen is like "a son returning home."

The 43-year-old set up a studio three years ago in Taoxichuan, a renovated porcelain factory that unifies industrial heritage, ceramic and arts and crafts galleries and studios as well as restaurants, cafeterias and hotels.

Partnering with a young Chinese businessman, Labar established Lab Artz, a 260-square-meter workshop where he plans to house more artists and offer classes on ceramics.

"There is a can-do attitude in China that pushes new ideas into reality," said Labar, who is fond of using traditional methods to make contemporary art.

Labar said his works, unlike traditional Chinese works that have concrete shapes, are very abstract. Though he has not sold a piece in Jingdezhen, his works are a hit in museums, hotels and galleries in Beijing, Shenzhen and Hong Kong, with the highest piece priced at 100,000 yuan ($14,515).

There is a term for young artists like Labar: jingpiao, or floating population in Jingdezhen. According to Zhong Zhisheng, the city's Party secretary, 30,000 jingpiao are currently living in Jingdezhen, including 5,000 foreigners.

The city now boasts of 6,773 ceramic enterprises and workshops.

Some 150,000 people work in porcelain-related industries, nearly a quarter of the urban population.

"Jingdezhen is still the global ceramic innovation and exchange center, " said Zhong.

"The dream of revival is always in the hearts of the Jingdezhen people."

Some 1,200 students, urban elites, foreign tourists and even entertainment celebrities, swarmed to Jinkeng this year, a small village eight kilometers to the east of Jingdezhen. The tranquil village, surrounded by mountains, boasts elements that intrigue people's

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curiosity such as fields and gardens, an ancient village, classes, archaeology and porcelain.

Huang Wei, a doctoral student of art history from Tsinghua University and a former lecturer at the Jingdezhen Ceramics Institute, discovered 15 porcelain kilns sites in 2014 in Jinkeng, dating back to the Song Dynasty (960-1279). She then set up an eco-agriculture cooperative and a Dongjiao (east suburb) School, spreading the knowledge of heritage protection and also allowing local farmers to benefit from the preservation of culture.

"Development on the basis of culture is the future direction for Jingdezhen, while education is the key," said Huang, who provides simulated archaeology excavation and porcelain repair classes, conducts farming and porcelain-making experiential activities and sells organic farm produce.

"What we are doing here is trying to integrate the porcelain production, study, research and tourism," said Huang, adding that Jinkeng is an epitome of Jingdezhen's future development.

Huang's exploration on the integration of heritage protection and community development was highly lauded by European scholars at a seminar on heritage protection at the University of Copenhagen in December 2018.

Liu Zili, who is also a key planner of Jingdezhen's porcelain industry development, pins high hopes on the commercialization of Jingdezhen's unique culture.

"The porcelain-making tradition and culture have never been interrupted in the past millennium. This is what porcelain lovers around the world pay tribute to," Liu explained.

"Jingdezhen should be an art center for the world," said Liu. "We don't expect Taoxichuan to be a crowded scenic spot but a paradise for craftsmen, designers and artists."

Taoxichuan has already seen the potential of cashing in on culture. Its sales revenue reached 101 million yuan in 2018, up 36 percent year on year. "We have only renovated one factory, and there are nine more to come," said Liu. Besides keeping the tradition, Liu said the introduction of modern technology is inevitable.

The Yishan Industrial Park, a subsidiary of the Jingdezhen Ceramic Culture Tourism Group, imported seven automated production lines from Germany, which can offer mass production services for 300 handmade porcelain workshops, which in turn can offer innovative designs.

"Our future products will be tailored and smartly produced with 3D printing and high-pressure grouting technologies, which can meet the demands of the young generation," said Liu. The bold exploration for future growth in Jingdezhen has impressed Takeshi Yasuda, a renowned Japanese potter who has lived in the city for 14 years.

"The future of Jingdezhen lies not on export but on meeting the rising demand of the Chinese," said the 75-year-old potter.

"Jingdezhen has walked its own path in the post-industrial society."

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International News

BETA to invest in brick factory Zimbabwe

B

ETA Bricks, Zimbabwe’s largest clay brick maker is investing about $10 million in building a factory in Goromonzi – about 40 kilometres east of Harare – as it seeks to double capacity to meet growing demand, chief executive officer Godfrey Manhambara has said.

The factory — with annual capacity of 180 million bricks — is expected to be completed in two years and will create about 400 direct jobs. The company’s three factories in Mt Hampden in western Harare have annual capacity of about 170 million bricks.

“Beta Bricks will be investing between US$8 and US$10 million in core and support plant and equipment over the next two years towards establishment of the Melfort plant,” Mr Manhambara said in e-mailed responses to questions by The Herald Business.

“At its completion, the plant will be the most advanced brick

factory in Zimbabwe and one of the largest in sub Saharan Africa.

The latest technology in clay brick manufacturing and systems will be incorporated in the factory.”

Apart from direct employment, the offshoot businesses are also expected to create more jobs.

The growing demand for bricks, partly driven by increased construction activity across the country, has seen brick makers struggling to satisfy the domestic market.

Speculators also took advantage of pricing distortions arising from the fixed exchange rate, which pegged the United States dollar against all forms of local currencies at par.

Mr Manhambara said the site of the factory had suitable soils for brick production and its proximity to key markets as well as road and rail infrastructure made it an ideal location.

“We have also responded positively to Goromonzi Rural District Council’s re-branding exercise in line with the

‘Zimbabwe is open for business’ mantra,” said Manhambara.

“Beta Bricks is therefore expecting and very hopeful of getting maximum enabler support from ZESA, Zimbabwe National Road Authority, the central Government and the local district council to ensure that this project is timeously executed.”

Beta Bricks is currently the market leader in the clay bricks supply industry. It is projecting further growth in demand in the short to medium term as the restructuring of the economy over the next there to four years is expected to drive sales.

“Beta Bricks will consolidate its leadership position even further and will maintain its position as the second largest clay brick manufacturer in Sadc,” Mr Manhambara said.

Beta Brick is a subsidiary of Beta Holdings, which also incorporates Beta Concrete and BETA Logistics. Beta Bricks is the first brick manufacturing entity in Zimbabwe to receive

international certification for integrated International Standards Organisation (ISO) management systems.

These include ISO 9001:2008 (Quality Management System), ISO 14001:2004 (Environmental Management System) and OHSAS 18001:2007 (Occupational Health and Safety Management System).

In addition, all Beta Bricks products are also approved by the Standards Association of Zimbabwe. Beta Bricks is the flagship of the Beta Group being the largest subsidiary both by production and market share.

The company offers a range of clay bricks ranging from the popular common brick and over 21 different types of face bricks.

The company currently operates a Steele 50 and Steele 75 plant as well as a specials (facebrick) plant in Mt Hampden.

The Mount Hampden factories are operating at 90 percent capacity producing about 170 million bricks annually.

Tariffs to stay….for now United Kingdom

T

he British Government has agreed to maintain defences against Chinese dumping of pottery after Brexit – but industry leaders say more protections are needed.

Trade Secretary Liam Fox announced that anti-dumping measures for ceramic tableware and tiles would be among 43 existing trade remedies rolled over once the UK leaves the European Union.

The measures will allow the UK to impose duties on artificially cheap Chinese ceramic imports in order to protect British manufacturers – including those in Stoke-on-Trent.

Dr Fox, who made the decision to maintain the trade remedies after lobbying by the British Ceramic Confederation and MPs, said the measures would provide UK industry with ‘a level playing field’.

But the BCC still has major concerns that the UK will move to

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unilaterally slash tariffs in the event of a no-deal Brexit, which it says could put thousands of ceramics jobs at risk.

After Dr Fox made his announcement in the House of Commons, Stoke-on-Trent South MP Jack Breretonasked him about the need to protect British ceramic producers from ‘unfair’ t rade practices.

Dr Fox said: “While we want our imports to fall given the cost to consumers, protection is necessary when countries are following policies that are designed to undermine the concepts of international trading law. We will resist those. We are rolling over the protections for the ceramics industry today because it is very vulnerable to the practices of dumping, overproduction and subsidy which we so deprecate.”

Under the current EU trade remedies, duties of up to 36.1 per

cent for tableware and 69.7 per cent for tiles can be imposed on Chinese imports, which benefit from state subsidies.

These duties are applied on top of the underlying tariffs, which the BCC fears could be slashed to zero if the UK leaves the EU without a deal.

Dr Laura Cohen, chief executive of the BCC, said: “What’s crucial is what’s missing from Government’s announcement. We still do not know what they are going to do with those underlying, most favoured nation tariffs, onto which trade remedies are added.

“If Government drops these to zero in a no-deal Brexit, then ceramic tiles and tableware, and many thousands of other goods manufactured in this country will be in jeopardy, because a flood of imports will cause untold damage to our domestic markets.

“We are proud British manufacturers and this is a

moment for our Government to stand up for our manufacturing, rather than give a leg up to foreign businesses.”

But Dr Fox’s announcement was welcomed by Mr Brereton, who lobbied for the ceramic trade remedies to be maintained.

He said: “This is hugely reassuring news for the ceramics industry in Stoke-on-Trent. I am delighted that we have persuaded the Government of how important it is to defend our manufacturers against the unfair trading practices of some other countries.

“I have been clear that trade remedies that reproduce the protection our potteries currently have from overseas dumping of goods must be in place from day one after Brexit. I am pleased that these measures will apply from the very start after a transition period, if one is agreed, or immediately in the event of a no-deal Brexit.”

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SITI completes Ancora purchase Italy

S

ITI B&T Group S.p.A., manufacturer of complete systems for tiles and sanitary ware, listed on the AIM Italia market has announced that it has reached an agreement for the acquisition of 20% of the capital of Ancora S.p.A., the group company active in ceramic tile finishing thus consolidating its 100% shareholding.

“With the acquisition of the minority share in Ancora we complete the purchase of this company dedicated to the finishing of ceramic products - commented Fabio Tarozzi, Chairman and CEO of

SITI B & T Group - which has been an example of success in relaunching a historic brand. Thanks to synergies with our Group, it has more than doubled its turnover since 2014 last year before the acquisition -.

The product range of Ancora has allowed the Group to be identified, with even greater force, as "Full Provider" of the entire ceramic production line through proprietary technologies, resulting in being the supplier with the widest range of products on the market”.

In 2017 Ancora S.p.A. generated a turnover of 32.4 million Euro (36.9 million Euro in 2018),

achieving an EBITDA of 4.1 million euro. The Net Financial Position at 31.12.2017 was 6.6 million Euro and the shareholders' equity of 5.9 million Euro.

The transaction was carried out for a value of 1.6 million Euro, of which 0.8 million Euro payable in 12 months.

The Company has a staff of 79 employees, of which 14 in the research and development department alone and is the owner of 58 active patents with investments in R & D of over one million Euro per year.

Ancora S.p.A. makes R&D a

competitive strength, as seen with the recent introduction on the market of innovative products among which we highlight: the first line in the world of dry lapping (surface finish) (Polidry ®); the most complete and flexible slab finishing line on the market, with lapping, cutting, squaring and application of protective treatments (Luxury ®) and a completely automated squaring line through laser technology, all having supervision and control systems of evolutionary production efficiency compared to Industry 4.0.

Viglacera on track to complete My-Xuao plant Vietnam

V

iglacera, Vietnam's leading state-owned manufacturer of glass, sanitaryware and tiles, has placed its trust in SACMI to raise the capacity of its manufacturing facilities in the south of the country. In addition to the longstanding facility in Binh-Duong, in fact, a new plant is now being completed in the My-Xuan A industrial park in Ba Ria-Vung Tau province, not far from Ho-ChiMinh City.

Finished in record time, the new facility will, once fully operational, produce 750,000 pieces/year.

SACMI - which established a permanent presence in the country in 1993 with SACMI Vietnam - took

part in the tender for the Viglacera plant and was awarded the task of supplying and installing the kilns.

The new Riedhammer-supplied TWS105/360/100G, a cuttingedge sanitaryware kiln, is already at a highly advanced testing stage.

Some 105 metres long and 360 cm wide (an extremely broad infeed capable of handling any product type, from the simplest WCs to large one-piece items), the kiln can fire up to 53 tons of product per day, with total consumption never exceeding 635 kcal per kg.

SACMI is also supplying the entire automated kiln car guidance system, which frees workers from having to think about moving the cars so they can focus on loading/

unloading the ceramic items; then there's the 9 metre long DWS 9/360/100 W dryer, installed on the return track.

The second keystone of the Viglacera order is the HWS 6/500/140G PF shuttle kiln.

Featuring pulse firing technology, which drastically reduces consumption to just 760 kcal per kg, this Riedhammer-developed gem is configured to produce 365 pieces over an 18-hour cycle. After the ramp-up phase, the shuttle kiln will execute second firings and manufacture trims, ensuring unrivalled finished product quality and optimising the output from the main kiln.

The entire product mix, all in

vitreous china, is to be sold on the internal market, including several special fine fire clay items to be manufactured by Viglacera using the advanced shuttle kiln.

In addition to excellent energy performance, this Riedhammer kiln has been designed to maximise temperature consistency in the cars (with in-car divergences of no more than 7 °C and accurate heat profiling throughout the firing range) while a cordierite roof lining improves quality further by preventing dust from contaminating products. The same high-performance ceramic fibre is used to insulate the walls, ensuring faster firing cycles and, therefore, further fuel savings.

due to a "lack of confidence in the markets due to Brexit uncertainty".

"This was compounded by operational issues which caused problems in the second half of the year," it added.

In 2019, RAK Ceramics UK is planning to move into the housebuilding and contracts markets.

It has also signed a lease on a new warehouse in Birmingham, bolstering its capacity and allowing the business to streamline its

distribution overhead.

"The substantial increase in overheads during 2018 derive from higher distribution costs with a marked increase in third party haulage costs following the operational issues we suffered in the second half of 2018," the company said.

"This also coincided with the planned increase in our own vehicle fleet that we were unable to take full advantage of during the time.

RAK sales “disappointing” United Kingdom

S

ales were "disappointingly flat" at the Hampshireheadquartered UK arm of a ceramics giant whose products are installed in the likes of the Burj Al Arab and Dubai Airport. The company said the performance was down to a lack of confidence sparked by the Brexit vote, although profits increased during the financial year.

RAK Ceramics is headquartered in the United Arab Emirates and

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serves clients in more than 150 countries. Its UK arm is based in Petersfield.

Accounts filed under RAK Ceramics UK Ltd revealed the business turned over £12.7m in the year to 31 December 2018, compared to £12.8m a year earlier.

Pre-tax profits nudged up to £148,636 from £125,003.

In a statement accompanying the results directors said "sales were disappointingly flat" largely

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News

Jaquar looks for market share United Kingdom/India

I

ndian bathroom brand Jaquar has revealed that UK partner retailers could access between 30% and 50% margin by selling its products as it strives to take market share from its European competitors in the UK. Rajesh Mehra, the owner of the challenger brand, which was established in India in 1960, told kbbreview that its UK team and business was now in place and he was “confident” of achieving £10 million revenue over the next three years in the UK with the “ right partners”.

He said the UK was a “priority market” for the business as it sought ambitious growth across Europe, Africa, Middle East and Asia Pacific.

“To grow internationally, it is very important that you are well accepted and successful in Europe,” Mehra said.

“Within Europe, the UK is definitely one of the most promising markets; one of the key markets and that’s why we are very committed, very keen to develop this market for our products.”

At the ISH trade show in Frankfurt recently, Jaquar introduced for the first time a new collection called Laguna, designed by Matteo Thun and

Antonio Rodriguez, as well as products in its design-led Artize range, which it launched at the start of last year.

Jaquar is a newcomer to the UK, soft-launching about three years ago with distribution and other partners, but Mehra said that was not an effective approach and now the brand handles everything from distribution to marketing and after-sales itself.

“To provide the best experience to our local customers, the best way is to do everything ourselves.”

The business, which has a 270,000sq m manufacturing site in Manesar, India, and a workforce of almost 10,000, has a team of 10 people in the UK operating from York.

It will soon open a showroom in London called Jaquar World to showcase its collections to architects, developers and retailers, with another one earmarked to open in Leeds later in the year.

Darren Chisholm, Jaquar’s UK sales manager, told kbbreview that the brand was looking for “partners” who understood “the package we are offering, in terms of margin, marketing support and exclusivity”.

“If you take Birmingham, the

second biggest city in the UK with a population of more than Northern Ireland, there may be about 25 to 30 retailers, and our target would be to work with three to four of those,” Chisholm said, refusing to commit to a minimum or maximum number of UK retailers it would work with.

“The key word is partners. It is very easy as a company and as a brand to go to the UK and open thousands of customers and grow revenue, but we want the right partners and we offer good incentives, between 30% and 50% depending on the arrangement.

“But it’s got to be a two-way street. We will support and help them, but we want their input to help us access the right direction for us to grow our business,” he added.

As for Brexit, Mehra is unfazed. With the brand’s manufacturing facilities in India, Jaquar typically stocks between four to six months worth of inventory at its warehouse unit in north-west London.

Matteo Thun/Antonio Rodriguez furniture from Jaquar India was one of the first – if not the first – country to agree to the terms of a possible bilateral post-Brexit trade deal with

the UK, a position that Mehra believes could puts Jaquar in a strong position to grow market share.

In addition, he said that one of Jaquar’s biggest strengths was the fact that it offers complete bathroom solutions, “a convenient onestop shop” under one roof in a “coordinated design language” from sanitaryware to concealed cisterns shower panels, showers and steam cabins.

“This is a unique convenience,” claimed Mehra, who explained to kbbreview that the concept of the bathroom has shifted from a utility space to an experiential zone, and Jaquar aimed to cater for that shift through its designer collections.

A member of the BMA, Mehra was also keen to point out Jaquar’s support for the Unified Water Label and other countryspecific standards.

“Customers are more informed these days, and that’s a good thing for high-quality brands and showrooms.”

On why UK dealers should work with Jaquar, Mehra said the brand could add credibility to their studios as a result of its products and comprehensive customer-care service offering.

Wienerberger looks to Tamil Nadu Austria/India

A

ustria-headquartered bricks manufacturer Wienerberger hopes to set up a factory at Cheyyar, Tamil Nadu. Its application for a minor mineral mining licence has been pending decision for two years.

The €3.12-billion Wienerberger AG (‘AG’ means it is a listed company) has factories all over the world, but its only plant in Asia is near Kunigal village, some 70 km west of Bengaluru, which went on stream in 2009.

The wholly owned Indian subsidiary is a mid-size company, but is growing at 3040 per cent a year.

The Kunigal plant produces 70,000 large, hollow bricks a day, each as big as nine regular bricks, laid out in a 3x3 matrix.

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The factory was built with an investment of ₹250 crore and is fully robotised.

Wienerberger India’s Managing Director Monnanda Appaiah has told BusinessLine that the company chose Kunigal because of the easy availability of the principal raw material – clay.

The region abounds with about 70 dead waterbodies, each not less than 100 acres in size and Wienerberger has chosen two of them.

Scooping clay out from the dry ponds also helps rejuvenate them. The operations are energy intensive. Apart from 350 tonnes of coal for the kilns, the factory consumes 9 million units of electricity, almost all of which comes from solar or wind, Appaiah said.

At Cheyyar, the company has

acquired 70 acres of land, half for mining clay and the other half for the factory. There is a lot of demand for the company’s products in Tamil Nadu and hence the plan for the new plant.

Brick-making is generally assumed to be a cottage industry, where the operations involve nothing more than compacting clay into bricks and firing them in coal- or woodfired kilns. But at Wienerberger, the operations are pretty hitech, involving analysis of the clay for chemical properties (the more alkaline, the better) and physical characteristics (size of the grains).

Other material such as rice bran, granite slurry, are added to impart weight-bearing properties. Operations such as mixing, making a dough of clay,

extrusion into hollow bricks, drying and firing are all fully automated.

For structures up to 3 storeys high, if Wienerberger’s bricks are used, pillars are not needed as the walls can bear the load. The company also makes bricks that can just be glued together without mortar. The superglue is imported.

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Tile consumption growth slows United States

W

hile the US economy continues to enjoy an excellent state of health, the US ceramic tile market is struggling to maintain growth. Tile consumption rose by just 1.2% last year to an estimated 288 million sq.m (around 4 million sq.m more than in 2017), well below the levels of growth of the last eight years. This is due partly to the slowdown in the real estate and building renovation sector and partly to the growth of LVT, which is capturing market share from ceramic tile. At the end of 2017,

tile accounted for 14.3% of the US floorings market in value compared to the 9.3% of LVT, which however is advancing at a rate of around one and a half percentage points a year.

In this context, competition in the ceramic tile market is becoming tougher for all competitors. The US industry bore the brunt of the slowdown last year. Domestic sales of US tile dropped by 5 million sq.m (down 5.6% from 89.4 to 84.4 million sq.m). This marks the first year-over-year decline in domestic shipments since 2009, reducing the market share of local products to

29.3% of total US tile consumption.

On the other side, imports increased from 195 million sq.m in 2017 to 205 million sq.m in 2018 (year-end figure), a result, however, which is attributable to just three countries: China, which has extended its leadership with a 6.5% increase in exports to the USA compared to 2017; Spain, which has seen 25.8% growth from 23 to 29 million sq.m despite a 13% fall in average price (CIF&Duty) in the space of two years; and Brazil, which exported 14.7 million sq.m to the USA (4 million sq.m or 37.7% more than in 2017).

The other big exporters are having a tougher time. Mexico has continued to see a decline in sales (4.6% down on 2017 to 35.2 million sq.m), and while Italy remains the top exporter in terms of value it lost 3.6% in volume to 34 million sq.m. Similar falls in exports were experienced by Turkey (11.9 million sq.m, -2.4%), Peru (5.4 million sq.m, -12.5%) and Colombia (1.5 million sq.m, -20.8%).

Although volumes are still low, India performed strongly in 2018 with 123% growth in exports to the USA to reach 1.6 million sq.m.

Chinese-funded Tile factory commissioned Ghana

C

hina's Fujian Sentuo Steel has commissioned an 80-million-U.S. dollar ceramic tiles manufacturing company in Tema, 25 km east of Ghana's capital Accra, which is believed to help reduce the west African country's import burden of ceramic tiles.

In his speech at the inauguration the Fujian Sentuo Ceramic Tile Co.,

Ltd, President Nana Addo Dankwa Akufo-Addo described the facility as a significant investment in the economy of Ghana.

The president said he was happy that the new plant would employ about 1,300 Ghanaians from start, with the number expected to rise to about 5,000, while 90 percent of the raw materials needed by the factory would be sourced locally.

He urged members of the Kpone community where the factory is located to cooperate with the Chinese investors to ensure the success of the company.

"The purpose for setting up this project is to take advantage of the situation. The varied benefits of producing wall and floor tiles locally are substantial, including import substitution and value

addition," said Xu Ningquan, managing director of the Fujian Sentuo Steel.

He lamented that almost all the floor and wall tiles used in the Ghana were, until about a year ago, imported from China, Europe and the United States even though Ghana is able to provide 80 percent of the raw materials for local tiles production.

Cadoux presents high grade option Australia // KAOLIN FYI Resources has successfully produced outstanding grade recovery of 99.999% purity alumina during ongoing product development and test work for its flagship Cadoux Kaolin project in Western Australia.

The product was produced via the company’s standard process flowsheet, with the product grade independently analysed and verified by Ultra Trace in Perth.

FYI said the test work was designed to provide data and information from the process flowsheet results of the laboratorybased test work as a “replication” of the full-scale process design.

The Perth-headquartered company expressed confidence in the grade recovery, which it believes underpins potential for positive improvements to the project’s economic case.

“Achieving 99.999% or 5N high purity alumina (HPA) is an extremely encouraging result,” FYI managing director Roland Hill said. “Not only is it an incredible outcome to attain this level of purity, it also has a potentially profound impact on the overall project economics.”

A pre-feasibility study for Cadoux Kaolin was completed last September, indicating the project could produce up to 8,000 tonnes per annum of high purity alumina to deliver a net present value of US$506 million over a 25-year period.

The continued test work will help shape the projects bankable feasibility study (BFS).

To support the ongoing BFS and to further de-risk the process

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flowsheet, FYI is constructing a pilot plant.

The pilot plant is aimed at increasing confidence and certainty on the engineered flowsheet design and operational performance of the process circuit before FYI commits to fullscale commercial production.

The BFS is scheduled to be completed by mid-2019 with construction planned to kick off in the December quarter of 2019, subject to securing suitable offtake agreements and project funding.

99.999% alumina, also known as 5N HPA, is moderate in size compared to the 4N market, but is forecast to grow.

4N HPA is a high‐value product that has many broad traditional applications and is increasingly becoming a critical component in the electric vehicle, battery and power storage markets.

5N is a sub-set of the HPA sector with smaller market applications that are generally tailor-made to the special requirements of each customer. However, 5N attracts a significant premium in pricing over 4N due to its use in very complex applications, including aerospace and defence.

Recent estimates by Allied Market Research tipped 4N HPA product to sell in a range from US$30,000-$35,000 a tonne in 2018/19 versus over US$50,000/t for 5N. “We believe the ability to generate such a ultra-high purity product continues to demonstrate the Cadoux Kaolin Project is worldclass potential and we look forward to progressing discussions with possible end use customers,” Mr Hill said.

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News

Raw Material News A zircon review China // ZIRCON FYI Resources has successfully produced outstanding grade recovery of 99.999% purity alumina during ongoing product development and test work for its flagship Cadoux Kaolin project in Western Australia.

In January 2019, China's zircon sand imports increased significantly with a total volume of 129,331 tons, which was the highest in the past two years. Among them, the concentrate was 47,071 tons (a increase of 22,612 tons compared with the 24,459 tons in December), and the average import price is $1,556 per ton; the import of middling and tailings accounts for 64% with a volume of 82,261 tons (a increase of 59,888 tons compared with the 22,372 tons in December) and the average import price is $571 per ton.

During the same month, Australia was the largest importer of zircon sand, with imports of 22,524 tons, accounting for 54% of the total volume. The average import price was $1,574/ton. The next is South Africa, with imports of 12,559 tons, accounting for 27%.

The average import price was $1,513/ton. Imports of Indonesia’s slightly rose to 4,849 tons, with an average price of $1,488/ton. The average import price has a small month-on-month decrease.

The import volume of tailings of zircon sand increased significantly.

The main reason may be that some orders in December were delayed to the customs declaration in January. In January, the Average price Average price January February Hainan Wenchang Zircon (RMB/Ton)

11,800-12,000

Vietnam Zircon (RMB/Ton

11,800-12,000

Remarks

Quantity (t)

Amount (USD)

Unit Price (USD/t)

Total

82,261

46,965,430

571

45,863

22,104,191

482

Mozambique

16,974

13,848,873

816

South Africa

6,309

3,393,569

538

U.S.A

5,843

3,356,111

574

Gambia

2,154

430,710

200

Pakistan

1,414

1,276,803

903

Nigeria

997

601,759

603

Senegal

780

458,325

588

1,600-1,620 2 tons bag/ Bonded Warehouse

Madagascar

725

704,850

972

1,530-1,550 2 tons bag/ Bonded Warehouse

Vietnam

460

128,800

280

KZ

447

412,870

923

Indonesia

239

181,167

758

56

67,402

1,204

11,700-12,000 Incl. Tax

1,500-1,520

1,500-1,520 2 tons bag/CIF

Iluka-MB-USD/Ton

1595-1,630

1,595-1,630 2 tons bag/ Bonded Warehouse

Tronox (Tiwest) (USD/Ton)

1,640-1,650

1,640-1,650 Bulk/ CIF

Tronox(Namakwa) (USD/Ton)

1,600-1,620

RBM-ZUG (USD/ Ton)

1,530-1,550 1,510

Zircon Concentrate Import Data (Origins

Australia

11,700-12,000 Incl. Tax

Indonesia Zircon (USD/Ton)

RBM-ZSG (USD/ Ton)

biggest importer of zircon sand was Australia, with imports of 45,863 tons, accounting for 56%, followed by Mozambique and South Africa, with imports of 16,974 tons and 6,309 tons.

In the past two months, imports of zircon sand for the United States have decreased significantly. In January, the imports of zirconium sand were less than 6,000 tons.

The largest import ports of zircon sand concentrate were Qingdao Customs and Xiamen Customs, with the imports of 20156 tons and 10006 tons respectively, and the average import prices were $1559/ton and $1532/ton.

In January 2019, the imported zircon sand tailings were mainly imported from Haikou Customs, with imports of 35,627 tons, accounting for 43.3%. The average import price was $608/ton.

When it comes to opacifier, then the fact that the country’s ceramics factories opened relatively late this year and the operating rate is only 60%-70% compared to the same period last year, then it is not surprising to learn that the market has been under pressure. This is especially the case with the northern zirconium silicate market, compared to the southern market which is basically opened and the sales tend to be normal, it still undergoes an inactive period with low turnover. Zirconium silicate price is basically the same as the year before and the follow-up price is mainly stable.

1,510 2 tons bag/ Bonded Warehouse

Ukraine

Iluka to keep price constant China // ZIRCON An announcement from lluka has stated that the company’s zircon sand production in 2018 was 349,000 tons, compared to a sales volume of 379,000 tons, which itself was nearly the same as that of 2017.

China is a major consumer of zircon sand and during the last year, Iluka exported 230,000 tons of zircon sand to the country in

24

asian ceramics

AC 19-3

2018, accounting for 61% of the total sales volume.

Price of Iluka zircon sand increased significantly in 2018, with the FOB price has reaching $1580/ton in the fourth quarter of last year.

The company’s statement also said that the price of zircon sand will remain the same in the second and third quarters of 2019.

Iluka expects to produce 330,000 tons of zircon sand in 2019, which includes 40,000 tons of middling and tailings.

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AC 19-3

asian ceramics

25

News Anaylsis

News

26

asian ceramics

Rising regulations hit Sri Lanka

S

ri Lanka's ceramic tile makers are snarled in a plethora mining and transport regulations blocking access to raw materials and increasing costs, officials said amid a call for greater protection.

Sri Lanka's ceramic firms are struggling to get raw materials, with a plethora of mining and transport regulations making it difficult to access raw materials.

A company trying to mine clay has to go through 16 different agencies, making it extremely difficult for ceramic firms even to mine their own land, industry officials said.

Owners of clay deposits were also barred in practice from digging deeper by authorities, though there appeared to be no regulations against it.

Aravinda Perera, a board member of the Sri Lanka Ceramic and Glass Council, an industry body, said companies have resorted to buying raw materials from third parties due the regulatory burden.

For sanitary ware, clay is imported. There are no import taxes on the material, at the moment, he said.

There were also long processes to get permission to transport, for both clay and silica, which is adding more regulatory burdens, ceramic and glass manufacturers told reporters.

Again, firms were relying on third parties, which were adding to costs and making Sri Lankan products less competitive in world markets.

Observers say it is better to develop a simplified system of clear regulation so that the companies themselves can mine their own land since it will be easier to monitor and enforce the rules when fewer players are involved.

Meanwhile, the industry called for a hike in protectionist Hamilton-List tariffs to give them more profits and get market share from importers.

Higher import duties to give bigger profits to local firms were started in the US by Alexander Hamilton.

It was taken to Europe by Friedrich List, a German, who was part of a school of thought called

AC 19-3

the German Historical Economics, which paved the way for more state interventions and nationalism.

Germany eventually ended up in National socialism (Nazism).

Philosophers had pointed out that a process which started as discrimination against foreigners naturally ended with discrimination against minorities within a country.

HIGH COSTS MAKE IT DIFFICULT FOR LOW INCOME EARNERS TO BUILD HOUSES Sri Lanka already has an import duty of 30 percent or a cess 100 rupees per square metre, whichever is higher. The cess had been reduced from 200 rupees.

Imports are also charged port and airport levy on top of freight.

Reporters pointed out that high costs of toilet fittings and tiles was making it difficult for low income earners to build houses, with the bathroom now becoming the costliest room of a house.

Import taxes force a homeless person to borrow more than otherwise, and pay more interest reducing his disposal income for decades.

Industry officials said they realized that people wanted to move away from squatting pans to proper toilets. However, squatting pans are also taxed.

Competitiveness of the entire export industry in the country and services ranging from hotels to information technology was also undermined by high building costs, reporters pointed out.

Protection given to steel markers in Sri Lanka was pushing up construction costs across the board, making Sri Lanka uncompetitive.

The Ceramics and Glass Council was set up with support from the US Agency for International Development's 'The Competitiveness Initiative', to carry out a 'Unified Strategy for Industrywide competitiveness'.

However, the body had now become one of Sri Lanka's strongest protectionist lobbies, undermining the competiveness of an entire nation by pushing up building costs.

Sunil Wijesinha, a former head of Dankotuwa Porcelain and an expert in Japanese management techniques, helped bring the industry together in a bid to boost collaboration and lower cost through initiatives like joint procurement.

Even Board of Investmentapproved export firms, which were allowed to import construction material duty free for factories and hotels, were forced to buy ceramic items at artificially high prices through a so-called 'negative list'.

The Ceramics Council called for a renewal of the negative list.

Sanjeewa Narangoda, from Fernwood Porcelain claimed that some imported tableware had poisonous substances like cadmium. Badly fired products could also leech lead from the glaze, analysts say. He called for more stringent regulations and quality controls at the import.

Spot checks carried out by Sri Lanka Standards, was not enough, he said.

Reporters pointed that the import of lower quality tiles or other products was encouraged by high import duties. Sri Lankan firms also sell 'factory rejects' though making public calls for quality.

Economic analysts, however, say selling factory rejects at a lower price is a completely capitalist and free market idea, unless they are incorrectly fired and leeching led.

They say 70 years after independence from British rule, a buyer who has earned their salary through hard work should have the freedom to decide how to spend their money and whether they want to buy a higher or lower quality product or a factory reject as long as they knows what they are buying.

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EXHIBITION REPORT EXHIBITION REPORT EXHIBITION REPORT EXHIBITION REPORT

China Ceramics City

China Ceramics City (known as CCC) is located in Foshan, Guangdong.It is the first large-scale trade and information service platform of ceramic & bathroom in China. Integrating trading, exhibition and business service, CCC gathers more than 200 famous brands at home and abroad inside with categories of ceramic tile, sanitary ware, tap & fitting, mosaic and other customized products, which represents the highest level of the sector in China.

By the end of 2018, CCC has received about 500,000 international buyers and 3000000 domestic buyers, and successfully held China International Ceramic & Bathroom Fair

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(CeramBath) for 32 sessions. Plus, CCC is regarded as the top trade window of China ceramic & bathroom industry and the first procurement destination for global buyers all over the world.

CCC Web: www.eccc.com.cn CeramBath Web: en.cerambath.org Email: chinaceramicscity@eccc.com.cn Facebook: China CeramicsCity Add: No.2, Jiangwan 3rd Road, Chancheng District, Foshan, Guangdong, China.

AC 19-3

asian ceramics

27

Analysis: Bangladesh

Boom or bu Bangladesh tile markets

In the last ten years, the tile industry of Bangladesh has seen a dramatic increase. As demand for product continues to rise, Jahir Ahmed asks if the sector will attract even more investment, or if it will become an increasing export target for others in the region‌

M

any in the global ceramic tile markets, particularly, the main sourcing regions of Asia and Europe, are watching an amazing development in Bangladesh the current decade as the tile markets of the country has jumped to a very high level of consumption growth and the domestic investors did not think twice to exploit the demand. During the period, the market has expanded to over 200 million square metres a year, parallel to the stable growth of Bangladesh’s economy by 6-7 percent plus a year, pushing ahead the building of new houses and renovation or remodeling and adding tiles to their options of choices for flooring and bathroom comforts.

At the moment more than two dozen tile manufacturers having plant and machineries supplied from the leading Italian and Chinese sources are armed with enough mental strength to meet the 80 percent of the domestic market and produce 180-200 million sq meters of wall and floor tiles a year, and also leaving some exportable surplus for shipment abroad. However, the local market, protected by around 200 percent import related customs duty and other taxes and barriers, ensures more profits compared to exports. Because of rising domestic demand, there

28

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AC 19-3

is enough scope for further growth of the tile sector, according to Moynul Islam, Senior Vice President of Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA).

Moynul told Asian Ceramics that most of the tile manufacturers operate the world class SACMI technology that ensures highquality, cost-effective output and opportunities to manufacture floor and wall tiles of endless and innovative designs supported with cleaner and cheaper natural gas.

The Asian tile markets in recent years observed boom and bust in many of the tile manufacturing and consuming-exporting countries, specially, in China, Indonesia, Thailand and Vietnam, but the manufacturers in those countries still continue to stay in the market despite ups and downs in the domestic and export markets. Bangladeshi manufacturers believe they still hold the key to prosper better and they have less reasons to worry about any fault as the market is protected in spite of pressure from the World Trade Organization with which Bangladesh has agreement to provide reasonable access to the foreign suppliers, while Bangladesh economy is vastly export dependent and need access to other markets in vice versa.

The tile manufacturers believe that as long as Bangladesh will remain deficit in its foreign trade, WTO will continue its soft

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Analysis: Bangladesh

ust? corner. Currently Bangladesh has a foreign trade of about 100 billion US dollars a year, while its imports account for about 60 percent of the trade. The country’s main exports, apparels, account for some 80 percent of the exports. In the last financial year 2017-18, ended on June 30, Bangladesh exported US$36.66 billion worth of goods, in which the share of apparels was US$30.6 billion, compared to ceramics’ US$52 million, almost entirely from tableware shipments.

Bangladesh’s success in apparel exports, which is the world’s second largest after China, has been contributing greatly to the diversification of exports and some of the garment manufacturers are seeing ceramic tile industry as suitable area for diversification of their export income. One of the leading garment exporters and tile manufacturers, DBL Group, which has a production capacity of 15 million sq meters a year, has been investing largely in the sector, prompting others, as the double digit housing and building construction growth countrywide has triggered the history’s highest expansion in tile sector this decade, and expected to grow by 100 percent in next 6-7 years.

This has attracted many suppliers of technology and machinery-equipment to approach the apparel exporters seeking diversification. The country as a whole is also under pressure to diversify its exports and reduce dependence on export garments.

Although, it is still very small compared to Bangladesh’s total industrial procurement of machinery and raw materials that needs spending of a huge amount of US$20-25 billion a year, the increasing demand for ceramic tiles in the domestic

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markets has attracted the domestic investors along with some foreign investors, such as, UAE investment RAK Ceramics Ltd, Lebanese-Bangladesh joint venture Star Ceramics Ltd and several Chinese invested/promoted manufacturers, to buy a substantial range of machineries, it is observed when Chinese machinery suppliers showed high interest in meeting potential investors during BCMEA ceramic exhibition held in Dhaka in 2017 (the show is due to be held this year in next December).

In little more than half a decade Bangladesh’s ceramic tile sector has doubled in size. Currently, the domestic market size is about US$400 million a year. The sector’s value addition of more than 60 percent, according to BCMEA. Domestic tiles cater 7080 percent of the local demand, said BCMEA President Shirajul Islam Mollah.

Bangladesh now manufactures various glazed and unglazed floor, wall, stair and outdoor tiles of a wide variety of finishes, polishing, semi-polishing, mat and different types such as, normal ceramic, porcelain, vitrified, glaze vitrified, homogeneous, Nano-polished vitrified, rustic, non-glazed gres porcelain, rectified, slim, cladding, terracotta, etc. Also glazed, semi-glazed and unglazed clay roofing tiles. In recent years, some plants were set up to produce granite tiles of various finishing and sizes for multiple building and furnishing uses and for furniture tops.

At present, 28 companies make tiles, mostly, in and around Dhaka’s industrial hubs. They have employed about 20,000 workers directly, about a third of the workers are females. The ceramic tile manufacturers’ total investment is estimated to be about US$700 million, according to the industry sources.

AC 19-3

asian ceramics

29

Analysis: Bangladesh

Summary of Bangladesh tile sector: position in financial year (July-June) 2017-2018 US$1=Bangladesh Taka 80 (estimated exchange rate of 2017-2018) Number of Industries Product

Investment/ Project Value

Yearly Production Capacity

Direct Employee

195.30 Million Sq Metres

19,845

Import

Export

Local Sale

Turnover

Million Taka

Million Taka

Million Taka

Million Taka

9,827.60

18.50

31,434.00

31,452.50

Market Share % Local

Foreign

76.18

23.82

(Million BDT) 28

49,750

Tiles

(More (US$621.87 (US$122.84 (US$0.231 (US$392.92 (US$393.15 factories in million) million) million) million) million) pipeline) Source: BCMEA. Note: The main source of imported tile is China. A few are shipped from Italy, Spain, India, Indonesia, Malaysia, Thailand, Vietnam and others.

Economic drivers

With a projected annual GDP growth of 7.5 percent, Bangladesh has emerged as one of the fastest growing countries of the world. The World Bank, IMF and globally renowned international research organizations have put forth a bright prospect for Bangladesh’s economy, consumption of building materials and construction of dwelling houses and other buildings throughout the country in the next decade. IMF outlook for the next 5 years suggest that Bangladesh’s nominal GDP would rise to about half a trillion US dollars.

IMF projected Bangladesh, with a big population of about 170 million, as a very high growth economy that has been heading towards entering the mid-range GDP per capita of US$2,500US$10,000 in 2024 (India is due to enter in 2021). The economic outlook of IMF estimates that Bangladesh’s current nominal GDP of US$313.51 billion will rise to US$445.63 billion in 2023, while the current nominal per capita income of US$1.88 thousand will increase to US$2.57 thousand (almost near to US$2.79 thousand of the present day Vietnam that experienced a boom in consumption of tiles following a steady 6 percent plus/minus growth of GDP since late last decade).

A third of Bangladesh’s households has emerged as a potential middle class consumers of building materials and constructing and renovating houses and installing improved bathroom, kitchen and floor, and many of them are using ceramic products, according to the tile manufacturers. Due to rapid urbanization and migration of wealthy people to the cities and towns construction of apartment houses is a growing trend observed in all cities and more than 100 high-growth district towns and commercial centres.

At the moment, Bangladesh requires 3 million structured accommodations, said BCMEA Senior Vice President Moynul, quoting REHAB (Real Estate and Housing Association of Bangladesh). Moynul told Asian Ceramics that the demand for tiles and sanitarywares has boomed to meet the current explosion of urban population and construction of improved houses in the villages.

Import substitutes

Companies like Great Wall Ceramic Ltd, Akij Ceramics Ltd, DBL Ceramics Ltd, RAK Ceramics Ltd, Star Ceramics Ltd, ChinaBangla Ceramic Ltd, Mir Ceramic Ltd and several similar others are manufacturing a wide range of import substitute tiles.

They sell wall tiles of different qualities at US$3-5 per sq metre, almost at half compared to the imported Chinese wall tiles.

Local floor tiles are sold at US$7-15 per sq metre, also at half of the prices of imported Chinese tiles of more or less similar

30

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AC 19-3

IN JUST OVER 5 YEARS, THE TILE INDUSTRY HERE HAS DOUBLED IN SIZE qualities and designs.

However, imported Chinese tiles have many attractive variations and qualities for the middle and upper middle end consumers, like those of other good quality tiles imported from Spain, Malaysia, etc, and sold at much higher prices than those of the Chinese ones.

Great Wall Ceramic said, over the years it has developed expertise and design skill at such a cutting edge rate that it believe itself to offer more to the Bangladesh market than any other world class tiles manufacturer. “This is because we take great care in understanding our customers and seeking out their hidden desires, and this also separates us from others in the industry,” said the company. “We believe in our work as an art-form and consider each tile, we produce, to be a unique masterpiece,” added Great Wall.

Great Wall has long been known for its product quality, innovative design and customer service. A vibrant and versatile collection of different wall and floor tiles contain ceramic, rustic, stone, glazed polish and homogenous categories in many sizes.

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Analysis: Bangladesh Bangladesh ceramic tile markets position Current (2019) exchange rate: US$1=Bangladesh Taka 83 (estimated) Sl

Financial Year (July-June)

Export

Import

Local Sale

Million

Value

Growth

Value

Growth

US$

Million Taka

%

Million Taka %

Domestic Market Share

Value

Growth

Market

Local

Million Taka

%

Consumption % in Mn Taka

Foreign %

1

2017-18

0.23

18.5

(85.69)

9827.6

(18.26)

31434.0

0.22

41261.6

76.18

23.82

2

2016-17

1.58

129.3

(30.30)

12022.4

34

31364.1

14

43386.5

72.29

27.71

3

2015-16

2.36

185.5

49.11

8971.1

19

27421.8

48

36392.9

75.35

24.65

4

2014-15

1.6

124.4

61.34

7564.7

34

18500.9

04

26065.6

70.98

29.02

5

2013-14

0.99

77.1

(36.28)

5625.0

19

17111.9

60

22736.9

75.26

24.74

DATA Source: NBR, EPB, BCMEA Members Note: The main source of imported tile is China. A few are shipped from Italy, Spain, India, Indonesia, Malaysia, Thailand, Vietnam and others.

It has been continuing developing its presence and footprint in regional market and in near future, has a vision of exporting tiles to the neighbouring South Asian markets. It said it will also continue the exploration of any opportunities to make valueenhancing acquisition.

Akij Ceramics has become another strong players in Bangladesh tile markets. It claims it has a ceramic and porcelain facility sprawling over 49,500 sq metres per day. “This is the country’s one of the largest capacities with multiple lines of production ensuring availability of international standard and wide ranges of designs and sizes,” said the company. Akij said its tiles come in various sizes in a wide range of colors and textures to complement bathrooms, living rooms, corridors, study rooms and kitchens, born out of an inspired creativity of those who feel that rooms should be an extension of the beauty reflected. It said it uses international standard machines to deliver the best and competitive designs along with the complete guarantee of lifelong durability of its floor and wall tiles which are made in “standard universal measurements.”

DBL Ceramics said it has started its journey with an unparalleled commitment to bring elegant and premium quality ceramic tiles to cater the needs of all sorts of building and diverse architectural needs. “The state of the art technology and machinery from world renowned Italian brands help us to ensure the promised quality,” claimed the company. DBL is one of the newest tile manufacturers in Bangladesh. It has started its operations at the end of 2016. DBL’s creations comprise both innovation and exclusivity.

“We take pride in our fully automated factory and production facilities ensuring that every process follows the highest level of precision,” the company said. DBL’s range of tiles includes polish, porcelain, technical porcelain, decor tiles, etc, in a variety of designs and shades to suit every decor with ‘HD’ printing.

In continuing to redefine product innovation processes and creating a wide range of diversified designs, DBL said it has introduced ‘Sugar Effect Tiles’ and ‘Technical Porcelain Tiles’ in Bangladesh.

32

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Mir Ceramic said it produces different types of ceramic tiles, such as, double fired wall tiles, single fired floor tiles and porcelain/homogeneous tiles strictly conforming to “CEN (Committee European de Normalization) standard.” The tiles have no pinholes and waviness, resulting in smooth and glossy surface of the glazed side. “Our porcelain tiles have the highest bending strength and lowest water absorption with strict dimensional uniformity,” said the company.

Technology upgrades

In the newly set up ceramic tile factories in Bangladesh, complete plant or kiln and machinery are coming mostly from China and Italy, although, Bangladesh is still a traditional market of such supplies from Europe, mainly, Italy and other West European sources.

The tile manufacturers buy more machinery from China, but the supplies from Italy and other European machinery sources remain continued as the demand is rising with setting up of new plants and expansion of the existing ones. Operators at one of the leading tile manufacturers, Star Ceramics Ltd, believe that the mixed technologies can ensure required edges.

Star operates longest kiln with length of 182 metres from SACMI-FMP Model; at the same time, it has the country’s biggest polishing line from KEDA of China. KEDA Clean Energy Co Ltd, located in Shunde, Foshan, Guangdong, China, is known in Bangladesh for its hi-tech technology and supply of machinery for clean energy, ceramics, wall materials, stone, and high-end machine spare parts.

Star is an exclusive user of Nano technology and plant for 900x600mm and 1200x600mm tiles. Its machinery and equipment are procured from all major sources of Europe and East Asia. Star’s daily production capacity is 22,000 sq metres of tiles.

However, the companies using European technologies, specially, kiln, press, glazing machine, etc, from SACMI of Italy and other established Western brands, enjoy some extra

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Analysis: Bangladesh

advantages while convincing the wealthy customers of tiles who are fond of Italian and Spanish tiles. Also the quality of products manufactured with the Italian plant and machinery have greatly reduced the markets of imported tiles shipped from, China, India, Thailand and other Asian sources. In the past, the domestic markets absorbed a wide variety of tiles shipped from Europe, Latin America and Asian countries.

Now the domestic manufacturers are preparing for exports, particularly when the local markets face any high level of unsold or surplus inventories. They are looking for supplying to the bordering states of eastern India since past several years, but the tariff and non-tariff barriers created by India are yet to be removed by the Indian government despite enough liberalization of bilateral trade relations between the two closest neighbours.

Bangladesh now has tile manufacturing factories in almost all corners of the country with easiest cross border trucking roads. The markets of eastern and northern West Bengal state, and other bordering states, particularly, Assam, Meghalaya and Tripura, are already well connected through land and river routes.

Success stories

The typical example of success in manufacturing tiles in Bangladesh can be seen in two decade old RAK Ceramics (Bangladesh). “Bangladesh is a market with potential and we expect to harness this potential and provide our customers with world class products” said RAK while positioning its focus and strategy on the Bangladesh markets. “We have strengthened and grown our competitive advantages, helping us create the

Bangladesh’s imports of ceramic tiles and heavy clay and refractory ceramics from China, in thousand US$, as estimated/compiled

by ITC Bangladesh's imports from China

Product code

Product label

6907

China's exports to world

Value in 2015

Value in 2016

Value in 2017

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

20,966

6908

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

15,332

6902

Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods (excluding . . .

6905

Bangladesh's imports from world

Value in 2015

Value in 2016

Value in 2017

Value in 2015

Value in 2016

Value in 2017

3,692,697

1,761,469

4,448,302

21,875

30,576

54,893

4,632,303

3,749,040

0

19,433

28,737

349

3,812

1,355,795

1,084,430

1,272,513

9,664

25,586

20,501

Roofing tiles, chimney pots, cowls, chimney liners, architectural ornaments and other ceramic . . .

62

44,130

35,933

39,136

181

217

562

6904

Ceramic building bricks, flooring blocks, support or filler tiles and the like (excluding those . . .

44

907,457

527,083

615,756

100

9,094

5,019

6901

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

88

27,110

37,690

36,391

219

282

69

Sources: ITC calculations based on UN COMTRADE statistics.

Bangladesh’s imports of ceramic tiles and heavy clay and refractory ceramics from all countries, in thousand US$, as estimated/ compiled by ITC imported value in 2013

imported value in 2014

imported value in 2015

imported value in 2016

imported value in 2017

Code

Product label

6907

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

17,472

21,875

30,576

54,893

6908

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

13,383

19,433

28,737

349

6902

Refractory bricks, blocks, tiles and similar refractory ceramic constructional goods (excluding . . .

13,893

9,664

25,586

20,501

6905

Roofing tiles, chimney pots, cowls, chimney liners, architectural ornaments and other ceramic . . .

42

181

217

562

6904

Ceramic building bricks, flooring blocks, support or filler tiles and the like (excluding those . . .

105

100

9,094

5,019

6901

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

204

219

282

69

Sources: ITC calculations based on UN COMTRADE statistics.

34

asian ceramics

AC 19-3

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SACMI Deep Digital heads for Castellón de la Plana Concurrently with Cevisama 2019, SACMI IBERICA has inaugurated its own showroom, designed to display all the latest ceramic manufacturing and decoration developments that are leading to full 4.0 digitalization and supervision at every single stage of production.

Moreover, every investment in SACMI technology is complemented by an 'integrated ecosystem' to provide long term after-sale services On display in the SACMI Iberica showroom, the Deep Digital line integrates and introduces a system for digital control of all surface enhancement tasks, from glazing and decoration to the deposit of grains, flakes and other elements. The line will feature three machines: two digital DHD1208 machines equipped, respectively, with Seiko and Dimatix heads (a new feature to maximise the versatility of the platform), and the new DDG1422 (Digital Dry Glazing) machine, which deposits grains and flakes using SACMI-developed digital colour bars that give slabs unmatched on-tile tactile and depth effects.

Completing the displayed line are the VELA 1100 FC glaze application system and a modern CAM 1404 airless booth. The result?

A comprehensive digital line featuring everything needed to ensure ultra-high quality material application and outstanding reliability, userfriendliness and easy maintenance. Following the same logic, the line incorporates - by combining radiation and convection factors an innovative material surface temperature stabilisation system. Last but not least, the line supervisor guarantees digitalization of the entire process and 4.0-logic control of its various stages.

Moreover, the showroom includes a collection of samples provided

by SACMI. These illustrate the innumerable decoration opportunities offered by this latestgeneration line in terms of colour development.

They also highlight how glaze can be combined with inkjet, oil base with water base, liquid with solid, etc.

The potential is remarkable: even products already structured at the forming stage (e.g. with the insertion of through-body veining, a must for the manufacture of modern kitchen tops) can be put through subsequent stages of decoration.

Tops with through-body veining are selected upstream - before entering the Deep Digital line with the aid of the new SACMI SVV patented vision system; the slabs can then undergo further decoration procedures thanks to perfect inter-system synchronisation (the accuracy of which is guaranteed by perfect identification of every single slab and coordinated digital control of all stages).

At the same time, SACMI IBERICA will be displaying the latest innovative sieving and de-ironing equipment by the Cuccolini brand.

The occasion also offers an opportunity to show potential customers the new SACMI “SPACE” (SACMI Portal for After-sales and Customer service Excellence), a true “integrated ecosystem” of after-sales support offered by the SACMI Customer Service Division.

This includes advanced service packages (Daily Lifetime Support, Life Extension, Academy and Advanced Lifetime Support), designed to maximise the performance and value of an investment in SACMI technology over time.

Analysis: Bangladesh

foundations to deliver consistent growth. Favorable housing and commercial real estate market demand drivers coupled with a stronger and more agile business models position us extremely well for the years to come,” it said.

“RAK tile plant’s capacity utilization was 84 percent in 2017, when the production totalled 8.70 million sq metres, an increase of 23.16 percent over the previous year driven by capacity expansion in 2016. Quantity sales for 2017 was 8.39 mn sq metres an increase of 29.48 percent over the previous year,” said RAK. Now the capacity of RAK has expanded further.

RAK manufactures and sell normal and porcelain tiles, including fully vitrified/porcelain gres porcellanato tiles. The company has over 2,500 models active in the ceramic and porcelain tile business and regularly adds several new designs to the product portfolio. It manufactures tiles in a very wide range in the sizes from 20cmX30cm up to 60cmX60cm in Bangladesh.

However, RAK enjoys various facilities, including advantageous procurements, finances and expertises, available at its UAE headquarters and plants located in many countries.

Half a dozen Chinese invested ceramic companies are successfully producing floor and wall tiles in the deficit Bangladesh markets with attractive profit margins.

As the Bangladeshi consumers are continuously dependent on imports to meet the diversity of their customers’ choices and the local manufacturers have certain limitations in setting up of larger tile plants to produce at lower cost, more Chinese investments Bangladesh’s ceramic tile manufacturers Manufacturers

Year of startup

Factory location

Products

Annual production capacity

AB Ceramic Industries Ltd

2013

Dipuli, Birkender, Kahaloo, Bogra, Bangladesh

Ceramic floor and wall tiles

6.5 million sq metres

Domestic markets

AG Ceramics Ltd

2018

Jagodishpur, Madhabpur, Hobigonj, Bangladesh

Ceramic floor and wall tiles

12 million sq metres

Domestic markets

Akij Ceramics Ltd

2012

Trishal, Mymensingh, Bangladesh

Ceramic and vitrified porcelain floor and wall tiles

13 million sq metres

Domestic markets.

Plans export.

ATI Ceramics Ltd

2002

BK Bari, Vawal, Mirzapur, Gazipur, Bangladesh

Ceramic and homogeneous floor and wall tiles

5 million sq metres

Domestic markets

Bangladesh Hardland Ceramics Co Ltd

2014

Jagodishpur, Itakhola, Madhabpur, Habigonj, Bangladesh

Ceramic floor and wall tiles

16 million sq metres

Domestic markets

Bangladesh Taiwan Ceramic Ind. Ltd

2015

Char Ramjan, Sanaullah, Sonargaon, Narayanganj, Bangladesh

Ceramic and homogeneous floor and wall tiles

4 million sq metres

Domestic markets

China-Bangla Ceramic Industries Ltd

2002

Tarabo, Rupganj, Narayanganj, Bangladesh

Ceramic and homogeneous floor and wall tiles

7 million sq metres

DBL Ceramics Ltd

2016

Dhanua, Sreepur, Gazipur, near Dhaka, Bangladesh

Ceramic and homogeneous floor and wall tiles

15 million sq metres. A part of capacity awaits commissioning

Domestic markets

Dhaka Shanghai Ceramics Ltd

2005

Zirani Bazar Savar, Dhaka, Bangladesh

Ceramic and homogeneous floor and wall tiles

5 million sq metres

Domestic markets

Fu-wang Ceramic Industry Ltd

1996

Hotapara, Sreepur, Gazipur, near Dhaka, Bangladesh

Ceramic and homogeneous floor and wall tiles

6 million sq metres

Domestic markets

Great Wall Ceramic Industries Ltd

2006

Gilarchala, Sreepur, Gazipur, Bangladesh

Ceramic and porcelain floor and wall tiles (has sanitaryware unit – Charu Ceramic)

13 million sq metres

Domestic markets.

Plans export.

Hi-Tech Ceramic Ind Ltd

2018

Idilpur, Modhupur, Tangail, Bangladesh

Ceramic floor and wall tiles

8 million sq metres

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Domestic markets

Domestic markets

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Analysis: Bangladesh

are arriving in Bangladesh. The latest operator, Southeast Union Ceramic Industry Limited (SEUCIL) that started production last year is the first of the new generation tile manufacturers with larger production plant to manufacture about 15 million square metres of normal ceramic and porcelain floor and wall tiles.

The Chinese invested and Bangladesh’s largest ceramic tile factory SEUCIL has started its initial commercial operation in the last financial year and is expecting full capacity utilization this year. Located in Bagerhat, near the Mongla seaport in southwestern Bangladesh, the factory, runs on coal instead of gas used by most of the ceramics factories in Bangladesh, has an initial production capacity of 25,000 sq metres of ceramic and porcelain tiles per day, and is raising the utilization of capacity to 40,000 sq metres per day this year.

“SEUCIL has an investment of US$120 million under a Bangladesh-China joint venture, in which the Chinese have 60 percent stake and providing most of the production experts and several dozens of highly skilled technical personnel,” said Liu Yu, the Managing Director of SEUCIL. “The company aims at capturing a major stake in the growing domestic market of Bangladesh,” Liu added.

The tile factory provided job for over 1,100 workers, of which around 400 are females. SEUCIL claims its tile production facility is environment-friendly with safe production technology and adequate waste treatment facility. All raw materials including coal are imported from China, Malaysia, Indonesia, Vietnam and India to meet the demand of the plant.

Gas issues

When the gas supply is augmented, the planned more tile factories will come up, said the sources in BCMEA. From the current year, imported LNG is being supplied to the industries.

The government is actively working to augment gas supply from the domestic gas fields and with imported LNG. Bangladesh’s new and third seaport, Payra, located in the southern coastal district of Patuakhali and near the beach resort town of Kuakata, is being developed to facilitate, among others, imports of LNG from the Gulf countries, particularly, Qatar. The

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under construction Payra port is already in operation with some infrastructural facilities installed recently and being used by the coastal ships.

The Payra port, about 250 km from Dhaka, will be connected with the multipurpose Padma Bridge, about 50 kilometres south of Dhaka city, which will be opened for traffic fully next year. The 4-lane road-railway Padma Bridge will have natural gas transmission pipeline and power grid connector. The full-fledged port activities in Payra will start by 2023, said the Government. Bangladesh’s two other seaports are Chittagong and Mongla.

Like privately owned Chittagong LNG terminal, Payra will also have a privately operated LNG terminal linked with national gas grid. However, Padma Bride with a new road will facilitate gas pipeline up to Payra port from the national gas grid.

Natural gas continues to remain the main factor for viability of a ceramic plant in Bangladesh in competition with ceramic manufacturers of other countries. Bangladeshi manufacturers’ main advantage is based on cheaper gas and labour and protection of domestic industries by the government by imposing a tariff barrier with three digit import duty. The tile manufacturers have an additional advantage because of deficit domestic market. However, Bangladesh’s only disadvantage is shortage of rawmaterials locally. Most of the rawmaterials are imported from China, India and other Southeast Asian countries.

The cheaper price of the premier quality gas is the number one attraction to the investors in ceramic manufacturing.

Gas price in Bangladesh is currently one of the lowest in the world at about US$4 per mmBtu, which is about a half of the Southeast Asian countries and China, the main competitors in the domestic markets of Bangladesh.

Bangladesh currently has a gas reserve of some 14 trillion cubic feet, while the present daily gas production is around 2,400 mmscfd, against the demand of about 4,000 mmscfd. The new industries, now in pipeline to expand the existing demand of gas, will be catered mostly by the imported LNG, the supply lines of which are now under expansion, according to the government sources.

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Analysis: Bangladesh Bangladesh’s ceramic tile manufacturers Manufacturers

Year of startup

Factory location

Products

Annual production capacity

Markets

Hua Thai Ceramic Industry Ltd

2003

Hotapara, Sreepur, Gazipur, near Dhaka, Bangladesh

Ceramic and homogeneous floor and tiles

5 million sq metres

Domestic markets

Kanika Commercial Ltd

2017

Bhatpara, Dobaoi Bazar, Putijuri, Bahubal, Habigonj, Bangladesh

Ceramic floor and wall tiles

2.5 million sq metres

Domestic markets

Khadim Ceramics Limited (KCL)

1996

Dholipara, Khadimnagar, Sylhet, Bangladesh

Heavy clay tiles, roof tiles, pavers, ceramic bricks

1.1 million sq metres of heavy clay tiles

Domestic and export markets

16. Madhumati Ceramics Ltd

1993

Ganda, Savar, Dhaka, Bangladesh

Ceramic and homogeneous floor and tiles

5 million sq metres

Domestic markets

17. Mir Ceramics Ltd

2003

Mawna, Sreepur, Gazipur, near Dhaka, Bangladesh

Ceramic and porcelain floor and wall tiles

10 million sq metres (expansion to 13 million sqm in early 2019)

Domestic markets

Mirpur Ceramic Works Ltd

1962

Kalshi, Section-12, Mirpur, Dhaka, Bangladesh

Heavy clay tiles, roof tiles, pavers, ceramic bricks

10 million sq metres of heavy clay tiles

Domestic and export markets

Monalisa Ceramics (Bd) Ltd

2015

Boherar Chala, Gilaberaid, Sreepur, Gazipur, Bangladesh

Ceramic and homogeneous floor and wall tiles

5.5 million sq metres

Domestic markets

Pa-Wang Ceramic Ind Ltd

2017

Gondagram, Banani, Bogra, Bangladesh

Ceramic floor and wall tiles

3 million sq metres

Domestic markets

RAK Ceramics (Bangladesh) Limited

2000

Mawna, Sreepur, Gazipur, Bangladesh

Ceramic and porcelain floor and wall tiles and sanitarywares

12.5 million sq metres

Domestic markets.

Plans export.

Sanita Ceramics Pvt Ltd (Sanita Tiles & Sanitary Ware)

2017

Ramgonj Road, Tupamari, Nilphamari, Bangladesh

Ceramic and homogenous floor and wall tiles and sanitarywares

6 million sq metres

Domestic markets

23. Sheltech Ceramics Ltd

2018

West Elisha Union, Bhola Sadar, Bhola, Bangladesh

Ceramic floor and wall tiles

7 million sq metres

Domestic markets

South East Union Ceramic Ind Ltd (SEUCIL)

2017

Nowapara, Katakhali, Fakirhat, Bagerhat, Bangladesh

Ceramic and porcelain floor and wall tiles

9.5 million sq metres.

Expanded capacity up to 15 mn sqm

Domestic markets

Star Ceramics Ltd

2015

Riaznagar, Baghasura, Madhabpur, Habigan, Bangladesh j

Ceramic and homogeneous floor and wall tiles and sanitarywares

8.5 million sq metres

Domestic markets

Sun Power Ceramics Co Ltd

2002

Hotapara, Sreepur, Gazipur, near Dhaka, Bangladesh

Ceramic and homogeneous floor and wall tiles

6 million sq metres

Domestic markets

X Ceramics Ltd

2010

Boherar Chala, Gilaberaid, Sreepur, Gazipur, Bangladesh

Ceramic and homogeneous floor and wall tiles

5 million sq metres

Domestic markets

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AC 19-3

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39

Analysis: Sanitaryware

Turkish sani an ever-more expansive outlook

Geographically advantageous, and with a heavily, technically invested manufacturing base, Turkey’s sanitaryware sector continues to evolve into a global powerhouse. However, with a slowdown in the EU, will the country’s leading players look further afield to maximise their output? Yogender Malik investigates…

S

trategically located in the Eurasia region, Turkey is a dynamic country with a robust economy and a young population, often described as the “China of Europe.”

The country has emerged as power house of ceramic manufacturing in the region. It is among top producers in both the major segments of ceramic industry.

A number of sanitary ware producers from the country are counted among the highest quality ceramic sanitary ware producers on the global scale. Huge investments in acquiring state of the art technology and regular plant up gradations has enabled these sanitary ware producers to cater to premium and economy segments of sanitary ware industry of domestic and export markets.

In a decade’s timespan, the country has become the largest ceramic sanitary ware producing country in Europe with a total installed capacity of 24.8 million pieces of sanitary wares at the end

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of 2017. The country produced 20.1 million pieces of sanitary ware in the year with a capacity utilisation of more than 80 %. In the same year, Turkish sanitary ware exported 8.03 million pieces of sanitary ware products to more than 80 countries across the globe. Country’s sanitary ware export to production ratio of 39.95 % is among the highest in major sanitary ware producing nations.

According to the data from Turkish Statistical Institute, Turkey exported ceramic sanitary worth USD 230, 845 thousand dollars in the year 2017. The industry registered a growth of 8.97 % (in value terms) over the export figures of USD 211,830 thousand dollars registered in the year 2016. Germany, England, Israel, Italy, USA and France are the main export destinations for sanitary ware producers.

These five export destinations are among the highest users of high end or premium products users of sanitary ware products, indicating Turkish sanitary ware producers’ prowess in these segments.

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Analysis: Sanitaryware

itaryware According to President of Turkish Ceramic Federation, Erdem Çenesiz, “Turkey is 4th largest producer of sanitary wares in the world. We are also the 4th largest global exporter of sanitary ware products and largest exporter of sanitary wares in Europe. Our sanitary ware sector has the potential to rise to third place in the world by maintaining the current growth trend.”

About 30 large and mid-size producers are operational in the Turkish sanitary ware sector. Two of the leading ceramic sanitary ware producers- VitrA (Eczacıbası Building Group) and Creavit are among the largest global ceramic sanitary ware producers. Eczacıbası Group’s company VitrA, with its 5.0 million pieces per annum capacity is the largest integrated ceramic sanitary ware production plant in the world. The company is in the process of increasing its installed capacity by 1 million pieces. The new capacity is expected to get operational during next few months. The other major producer, Creavit has an installed capacity of 4 million pieces of sanitary ware per year after its recent expansion.

Export driven

Turkish ceramic sanitary ware producers have emerged as one of the most important ceramic sanitary ware exporters in last one and a half decade in Europe and neighbouring region. Regular capacity expansion, steady domestic and export demand, strategic location, availability and adoption to advanced manufacturing technology, highly skilled manpower and availability of key raw materials for sanitary ware production in the country has provided the domestic producers a competitive edge in sanitary ware production and exports.

According to Bahadir Kayan, Chairman of Turkish ceramics, “The abundance of natural resources in Turkey ensures high-quality of ceramic products. These raw materials are also exported for ceramic production outside Turkey. Because of this rich history of ceramic manufacturing industry in the country and the quality of raw materials, Turkey is considered as the ‘Land of Ceramics’. Turkey also has some of the most sophisticated technology and innovative products on the market. Turkish ceramic producers work closely with some of the world’s most talented designers to create exciting new products that are beautiful, durable and functional.”

Turkish Ceramics is an association of Turkish ceramic industry producers was established in 1997 to raise awareness of Turkish ceramics internationally and communicate the quality of Turkish

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ceramic tiles and Sanitary ware.

On a query, what does the future hold for the sector, Bahadir Kayan says, “The internet has changed people’s access to information and allowed consumers to become more educated about the number and quality of products on the market. It is becoming increasingly important for us to focus on the way we communicate with customers online to ensure they are selecting products which enhance their lives. To continue setting ourselves apart from competition throughout the world, Turkish ceramics, and the companies we represent, will continue to collaborate with designers, deliver sustainable products and focus on providing quality service to our customers.”

In addition to regular investments in new technology and modernisations, availability of raw material for sanitary ware production has been an enabling factor behind Turkey’s emergence as an international powerhouse in sanitary ware manufacturing.

The clay reserves of Turkey, especially for ceramic production are estimated to be nearly 200 million tons. Approximately 90% of these 200 million tons of clay reserve are in Sile-Istanbul region, which is in proximity of majority of the sanitary ware producing units in the country. Kaolin, another key input for sanitary ware industry is also available in the country in vast amounts. The reserves of Kaolin in Turkey are estimated to be nearly 89 million tons. Feldspar reserves in Turkey are estimated to be 330 million tons. Important feldspar reserves are located in Aydın and Mugla, the south-western part of the country.

Recent investments

Turkish sanitary ware producers are one of the highest investors in the state of the art technology. Capacity additions and modernisation exercises by existing sanitary ware producers is a regular feature of Turkish ceramic sanitary ware industry. Currently, below mentioned sanitary ware producers are (or just completed) undergoing expansion/ modernisation exercise.

Largest sanitary ware producer from the country VitrA is currently undergoing a massive capacity expansion exercise, which will increase the company’s installed capacity by 20 %.

Expected to be completed in next few months (by mid-April of 2019), the expansion will take the overall installed capacity of the company to 6.0 million pieces of sanitary wares, from the current 5.0 million pieces per annum.

AC 19-3

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41

Analysis: Sanitaryware

Another leading name in Turkish sanitary ware industry Creavit, which is the brand name of Canakcilar Group has become the second largest sanitary ware producer in the country on account of its recent expansion in 2017. Company commenced commercial production with enhanced capacity in September 2017. Post this expansion, Creavit has an installed capacity of 4 million pieces of sanitary ware per year.

In November 2018, another major sanitary ware producer Ege Vitrifiye completed a major expansion programme of its sanitary ware unit with an investment of 40 million Turkish Lira.

The company had an installed capacity of 1.44 million pieces of sanitary ware per year, before the expansion. Ege Vitrifiye exports about 70 % of its output, mostly to Europe. The new investment will boost the company’s manufacturing capacity in medium to high end of sanitary ware products for European Union market. This expansion will boost company’s WC output by some 400 pieces a day in a range of widely differing types: back to wall, wall-mounted, monobloc, two-piece, rimless, etc. Latest investment by the company that already exports almost two thirds of its output to 62 countries – will augment productivity and quality even further and strengthen the company’s position in export markets.

Speaking at the opening of the new production facility, Ege Vitrifiye General Manager Merter Savas said, “With this investment, we plan to increase the capacity of the toilet bowl production by 150 thousand annually. We have used Italian and Turkish technology in this expansion. The new investment has been commissioned by our team in a short period of 5 months.

It consists of the most modern technology in the world's sanitary ware production. Currently, 85 percent of our sanitary ware products are made by high pressure casting and 15 percent by classical methods.”

In 2018, Ege Vitrifiye begged the coveted “European Product design Award” in the bathroom category for its Catamaran series of sanitary wares. Designed by the Italian designer, Caludio Papa, catamaran series comprises of five pieces including two WC pans, two wash basins and a urinal. Inspired by the sea, each one of these products carries its concept into the bathroom.

Bartin based, Bartin Seramik, which is engaged in sanitary ware production since 1994 has invested in a state of the art automated glazing equipment in the first half of 2018. The company with an installed capacity of 1.2 million pieces of sanitary ware products has been targeting the export markets in European Union.

Bartın Ceramic Marketing Manager Huseyin Sonmez says, “Primary goal of the company is to increase its reach and brand awareness of Alvit brand in international markets. Increasing input costs because of rising natural gas prices and new mining law, which has increased the cost of raw materials for sanitary ware industry are some of the key challenges facing the Turkish sanitary ware industry.”

Overseas investments

Limited domestic market and huge production capacity has forced Turkish sanitary ware producers to look for overseas markets. In recent years, Turkish sanitary ware producers have entered into a number of arrangements with sanitary ware producers in other countries, setting up exclusive showrooms in these markets. A few of the leading producers have been eyeing the overseas manufacturing route.

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A FEW PRODUCERS HAVE BEEN EYEING OVERSEAS MANUFACTURING Major sanitary ware producers Company Eczacibasi Vitra

Location Bilecik

Number of Plants

Installed Capacity/ annum

1

5.0 million pieces

Kale Group

Semedeli

2

1.8 million pieces

Creavit

Zonguldak

2

4.0 million pieces

Akgun Group

Adapazari, Sakarya and Eskisehir

3

1.60 million pieces

Duravit Turkey

Istanbul

1

250,000 pieces

Searmiksan

Turgutlu

1

800,000 pieces

Alvit

Bartin

1

1.2 million pieces

Eskisehir Organized Industry Area

1

400,000 pieces

Elit Mobilya Seramik ( Sanvit ) Turan Seramik

Ordu

1

500,000 pieces

Turkuaz Seramik

Kayseri

2

3 million pieces

Viba Seramik

Eskisehir Industrial Zone

1

500,000 pieces

Idevit Seramik

Tuzla

1

700,000 pieces

Bozvit-Bozuyuk Vitrifiye San. Ve Tic. A.Ş

Bilecik

2

800,000 pieces

Gural Vit

Kuthaya

2

2.3 million pieces

Ege Vitrifiye Inc

Izmir

1

900,000 pieces

Saribaslar Seramik

Cerkezkoy Velikoy Industrial Zone

1

750,000 pieces

Bocchi

Kocaeli

1

400,000 pieces

Dogvit Seramik

Maltepe

1

400,000 pieces

ECE Banyo

Corum Industrial Park, Corum

1

1.5 million pieces

Eskisehir Seramik ( Lapino)

Eskisehir

1

400,000 pieces

Sanovit

Eskisehir

1

350,000 pieces

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Analysis: Sanitaryware

Country’s largest sanitary ware producer VitrA invested in a new sanitary ware manufacturing capacity outside Turkey in 2014, in line with its overseas growth strategy. VitrA, which is also a major ceramic tile producer runs three ceramic tile manufacturing plants in Germany, Russia and France. In case of sanitary ware, the Russian plant was the first overases investment by the company.

VitrA officially inaugurated the Russian sanitary ware production plant in May 2014. Coming up with an investment of € 21 million, the plant is located in Serpukhov, some 100 km from Moscow.

The Russian sanitary ware plant has an installed capacity to produce 250,000 pieces of sanitary wares per year.

VitrA

A group company of the Eczacıbaşı Group, one of Turkey’s most prominent industrial groups, VitrA is the largest sanitary ware producer in Turkey. With a current installed capacity of 5 million pieces, the company is among the largest global ceramic sanitary ware producers.

Eczacıbaşı Group’s building products division operates 16 production facilities in Turkey, Germany, France and Russia.

VitrA’s sanitary ware products are distributed to over 75 countries across five continents. Company’s manufacturing facility at Bilecik has an installed capacity to produce 5.0 million pieces of ceramic sanitary ware, 3 million faucets, 2.5 million bathroom accessories and 20.1 million square meters of tiles on yearly basis.

Established in 1977 but completely overhauled in 1995, this mega complex is one of the world’s largest sanitary ware production facilities in capacity, technology and quality at a single location. In addition to Turkey, the company has ceramic production facilities in Russia, France and Germany.

The company is largest exporter of ceramic sanitary ware from Turkey, accounting for 52 percent of the total export volume

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of sanitary ware products in 2017. The company claims to be the fourth largest supplier of ceramic sanitary ware products in France, UK, and Germany. VitrA’s dominance of exports of sanitary ware exports to these three countries can be understood from the fact that it accounts for 65, 80, and 84 percent of the total ceramic sanitary ware exports from Turkey to Germany, France, and England.

In 2018, VitrA initiated the second phase of its ceramic sanitary ware manufacturing plant, which will increase the company’s capacity by one million units to six million in early 2019.

Creavit- Canakcilar Group

Canakcilar Group, which operates under the brand name Creavit is the second largest ceramic sanitary ware company on the basis of installed capacity. Based in the Turkish province of Zonguldak, the company has an installed capacity of 4.0 million pieces of sanitary ware per year after the company’s latest expansion in 2017. The company made an investment of USD 25 million in this expansion. The company produces and sell sanitary ware, bathroom furniture and complementary products such as bathroom and kitchen mixers, concealed cisterns, seat & covers and accessories.

The company claims to export 40% of its production capacity through its strong partners in Europe, Asia, Africa, America and Australia. With timely investments in state of the art technology Creavit has strengthened its place in sector as one of the most significant brands with its ever increasing growth figures.

Gural Vit

Formed in 1995, Gural Vit has emerged as one of the leading sanitary ware producers in the country. The company has an installed capacity of 2.3 million pieces, including a range of

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Analysis: Sanitaryware

complete five piece sets, as well as many individual items which include, symmetrical and asymmetrical basins, squat pans, under-counter basins, urinal bowls, low-level pans, a variety of wall basins, and the very modern range of circular, round and square bowls. The company focuses on the mid- end segment of sanitary ware products.

Kalevit

Kalevit Saniter Seramik Sanayi A.S was founded in 1993 by the leading ceramic tile producer Kale Group to serve the growing sanitary ware market in the country. Kalevit Sanitary ware has an installed capacity of 1.6 million pieces of sanitary

wares per year. The company manufactures a range of high quality, functional, aesthetic and accessible products bathroom products under the Kale brand. The company produces and market ceramic sanitary ware, complementary products, bathroom and kitchen fixtures and accessories, shower systems, acrylic bathtubs and shower bases and shower and bath stalls.

The parent company, Kale Group laid its foundation with Canakkale Ceramic Factories Corporation in 1957. Kale Group is considered one of the first companies in the ceramics industry in Turkey. The company has grown manifold over the course of time with investments in machinery and equipment

Turkish ceramic sector exports by destination 2016 Country

Quantity ( in Kg)

Value ( in USD)

Germany

210,796,387

136,202,052

United Kingdom

161,753,252

United States

2017 Quantity ( in Kg)

Value ( in USD)

646

210,914,275

134,359,678

637

0.1

-1.4

83,636,634

517

177,826,933

86,668,645

487

9.9

3.6

197,308,739

77,608,758

393

234,887,159

86,583,248

369

19.0

11.6

Israel

196,906,159

65,026,078

330

220,601,481

71,613,799

325

12.0

10.1

France

83,423,045

50,323,830

603

101,768,589

60,030,461

590

22.0

19.3

Canada

124,278,946

40,864,944

329

145,660,834

43,231,586

297

17.2

5.8

Italy

52,835,530

32,278,225

754

38,825,760

33,657,406

867

-9.4

4.3

Saudi Arabia

34,177,202

19,164,417

561

40,765,688

28,914,321

709

19.3

50.9

Netherlands

36,250,652

22,393,762

618

42,267,634

24,069,132

569

16.6

7.5

Romania

61,867,875

21,414,718

346

65,425,609

22,864,434

349

5.8

6.8

Sweden

24,541,501

18,379,203

749

27,014,123

20,334,988

753

10.1

10.6

Belgium

31,378,067

14,258,100

454

44,283,552

19,373,475

437

41.1

35.9

Iraq

39,708,038

24,101,564

607

33,428,559

19,097,858

571

-15.8

-20.8

Greece

36,432,046

14,711,442

404

45,616,067

18,138,847

398

25.2

23.3

UAE

17,444,241

12,322,554

706

27,379,635

15,969,321

583

57.0

29.6

N. Cyprus

30,948,577

11,762,611

380

46,363,304

15,067,547

325

49.8

28.1

Azerbaijan

17,976,514

12,254,696

682

23,251,092

14,739,796

634

29.3

20.3

Iran

19,156,637

14,696,874

767

22,328,464

14,611,596

654

16.6

-0.6

Algeria

14,299,990

9,115,838

637

18,346,466

12,188,752

773

28.2

55.6

Georgia

27,836,719

13,324,573

479

29,408,300

13,975,448

475

5.6

4.9

Others

405,106,504

251,811,947

622

459,270,932

278,167,001

606

13.4

10.5

1,814,426,621

945,652,819

521

2,055,634,456

1,035,657,341

504

13.3

9.5

Total

$/ Tonne

% change $/ Tonne

Quantity

Value

Source- All Exporters Associations Database

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www.asianceramics.com

Analysis: Sanitaryware

manufacturing, defense, chemistry, electrical appliances, energy, IT, transportation, tourism and food industries. Kale Group comprises of 17 companies, and is regarded as one of the most Table important industrial enterprises of Turkey. The 1 company has an installed capacity to produce 1.6 million 2011 18.77 products, 66 million square meters of pieces of sanitary ware 2012 20.36 2013 (32 million 22.12 square metres of floor tiles, 27.5 million ceramic tiles 2014 24.33 2015 24.7 square meters of wall tiles and 6.5 million square meters of 2016 24.8 2017

24.8

Installed sanitaryware capacity (m. pieces)

Table 1 2011 2012 2013 2014 2015 2016 2017

granite ceramic tiles). The company is Europe's 3rd and the world's 12th largest ceramics producer on the basis of installed capacity in both the segments.

In 1999, Kale Group had signed a partnership agreement with Spanish major Table 1Roca Group. But in 2009, Kale Group bought Roca’s stake in the partnership. In the parting agreement, Kale 2011 16.92 18.57on Roca to sell its products in Turkey.

Group put 2012 restrictions 2013 19.01 2014 doesn’t 20.43 have such restrictions in Spanish market.

However, Kale 2015 2016 2017

19.84 19.98

20.01 Actual sanitaryware production (m. pieces)

Table 1 104,267 114,396 117,101 126,322 122,219 123,018 123,289

Actual sanitaryware production (tonnes)

2011 2012 2013 2014 2015 2016 2017

6.78 7.03 7.54 8.01 7.97 7.99 8.03

Sanitaryware exports (m. pieces)

1

1 Table 1

Table 1 2011 2012 2013 2014 2015 2016 2017

41763 43303 46444 49339 49093 49178 49412

Sanitaryware exports (tonnes)

1

www.asianceramics.com

2011 2012 2013 2014 2015 2016 2017

173.3 186.9 203.2 221.8 193.1 211.8 230.8

Sanitaryware export value (US$m.)

1

AC 19-3

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47

e p c i l v ea re

are

distrib

e e r f ution calls for

k n thi

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tab

lew

se…

S

Analysis: Tableware

Rohan Gunasekera discusses how the continent’s tableware manufacturers are taking a range of differing approaches to distributing product as market machinations compel a more fluid approach…

T

ableware producers are pursuing sales through more direct channels in response to shifting consumption patterns and buying behaviour as well as the spread of digital technology, with the role of traders or middlemen diminishing in importance.

Asian tableware manufacturers have long been contract or OEM manufacturers for established European, American and Japanese brands with little opportunity to establish their own names in international markets and among consumers although they have had success in their own, home markets. Asian tableware companies say the industry is getting tougher and tougher, especially given the inexorable rise in cost of production. Energy costs are going up day by day, and it is the same with labour cost as well as certain raw materials like clays and pigments.

Asian tableware manufacturers competing with China’s multitude of producers, large and small, have always complained how difficult it is

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to match Chinese prices. But now with the cost of production in China itself going up, as labour and energy costs there rise, the waves of low cost products from there flooding other markets may soon subside, as Chinese prices also go up.

Many Asian tableware producers import a lot of their raw material, especially specialty clays and pigments, and have seen import costs go up with the sharp depreciation of their currencies against the US dollar and other key trading currencies. “But we can’t increase our selling prices in the same manner because of the competition, especially from origins like China and other mass producers,” was how one producer explained to Asian Ceramics.

Thinner margins

As a result, tableware manufacturers are finding that profit margins are getting thinner and thinner, which also militates against using traders. While trading organisations can make life easier for buyers

www.asianceramics.com

Analysis: Tableware

and sellers, they can also add to costs, sometimes quite significantly.

“We can’t afford to give any margin to the middleman,” was how one producer put it. “Ten or 15 years ago, we needed the orders from traders. Our cost of production was much lower – labour, fuel, raw materials – and we had good margins and economies of scale.”

Some producers especially in the high end of the market, have had to scale down production which, coupled with lower margins put them in a tough position. While some producers may still be selling through middlemen, brand owners in developed markets increasingly are known to place orders direct with producers. Also, a few high-end porcelain producers with their own established brand names use their spare capacity to produce for other brands, albeit in a small way.

The entire tableware market has changed and the trend of big, discerning buyers placing large orders, such as a 95 piece or 65 piece dinner set, is no longer common. Instead, the trend is for smaller orders, say a five piece set. The shift in buying patterns is the same whether it is in developed, mature markets like the United States or Japan or in developing countries.

Several factors are driving this trend such as the number of people in families getting smaller and smaller, going down to a maximum of four, along with the trend towards more casual dining. For example, this means a family will buy only what they need, such as four dinner plates, four salad plates and four cups and saucers.

And while urbanisation helps drive demand for ceramic products like tiles and sanitaryware, in some ways it seems to be working in the opposite way when it comes to tableware, because of space constraints brought on by the shift to living in tight, high-rise buildings or small apartments.

This is particularly pronounced in countries like Japan where increasingly, people find they don’t have much space in their homes.

As a result they have become very selective in purchasing not only tableware but other products as well, being forced to think about space when buying things.

Furthermore, being certified as lead and cadmium free, mandatory for developed markets and increasingly so even in other markets, can be costly. That’s one reason the best brands, whether international or local, are more expensive than others.

An indirect approach

Some Asian tableware exporters with excess capacity are trying to expand business by trying to increase indirect exports, such as through orders from gift or food and beverage exporters like tea sets and porcelain jars or ornamentalware. Manufacturers are also wary of OEM work as they need to see consistency of orders for a stable business, such as signing up for long periods of say, 2-3 years.

Some of the big porcelain tableware exporters from Asia like Sri Lanka, Bangladesh, Indonesia and Thailand established their reputations by manufacturing and exporting for top Japanese brands.

Japan’s Noritake now has its main porcelain tableware plant in Sri Lanka while Narumi also from Japan exports most of its bone china from its Indonesian plant. South Korea’s Hankook has set up PT Hankook Ceramic Indonesia. While these companies supply the market mostly through their parent firms, other regional companies do OEM work, apart from selling in local markets.

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Sango Ceramics in Central Java in Indonesia is a family owned company that make and exports fine china, porcelain, stoneware and bone china. Products are distributed to Europe, and North America as well as across Indonesia and regional markets like Hong Kong, Taiwan, Singapore and Malaysia, and South Africa and Australia. Its in-house services include testing of lead and cadmium releases to comply with standards set by the US Food and Drugs Administration (FDA).

In Thailand, Patra Porcelain is big manufacturer of high-quality porcelain and bone china tableware whose strategic partners for which it does contract work include Royal Copenhagen and Nikko.

It also exports under the Patra brand. Crown Ceramics Company Limited exports most of its range of stoneware, vitreous china and terra cotta wares under prestige customers’ brands in North America, Western Europe and Asia, as well as supplies under its own brand. It has supplied to the likes of Disney, Starbucks, Lenox, and Mark & Spencer.

Noritake Lanka Porcelain (Pvt) Ltd., in Sri Lanka is the biggest tableware manufacture in Japan’s Noritake Co. Ltd., operating under its tableware top business segment. Its manufacturing plan is in Matale, in the central hills, close to clay deposits, and it has showrooms in the capital Colombo.

Noritake’s high-end tableware products, with their exclusive image, are not exported through independent traders or middlemen, said Noritake Lanka Porcelain (Pvt) Ltd. executive consultant and director/ General Manager Nimal Perera. The buyers, from the upper end segment, are particular about how the product is made, especially with regard to use of chemicals.

All exports by Noritake Lanka comply with international standards, such as the US FDA, Japanese Industrial Standards and European and Australian standards. “We comply with all international standards. We can export to any country in the world,” said Perera.

“All colours and pigments 100% lead and cadmium free. We use best quality raw material and pigments, our products are superior.”

Jude Fernando, consultant and Board member of Noritake Lanka Porcelain (Pvt) Ltd. explained that Noritake Lanka Porcelain receives all export orders from the head office in Japan and ships over half its products back to the Japanese market, its main market, and the rest to other markets in developed countries or like India and the Maldives.

Overseas marketing is done by Noritake Japan. Noritake has its own showrooms in many markets like Japan, Australia and Sri Lanka and authorised agents as in South Africa.

“We sell only high-end items and make three types of bodies – bone china, fine china and white porcelain,” explained Fernando.

The firm also makes a high white porcelain known as LX13. What’s made in Sri Lanka are packing styles such as gift packing, which depend on client requirements.

Noritake Lanka used to produce a million pieces a month but production has now been scaled down to about 500,000 pieces as it downsized with the decommissioning of two old kilns and cut costs.

The higher production at that time had been sustained by some big orders, such as those from airline customers which have now reduced. The company comes under the Board of Investment and imports raw material duty free.

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Analysis: Tableware

“Now the trend is high quality, more variety, small quantity – items that are difficult to produce, the designs difficult, with a greater number of colours,” said Fernando.

One of the main problems faced by manufacturers like Noritake is the influx of lower quality tableware into the market. “Even though we have Sri Lanka Standards Institution (SLSI) quality standard for tableware most imports are not checked properly and do not go through proper inspection processes, before being released to the market,” said Fernando.

Noritake Co. of Japan is using Sri Lanka’s geographical location and in the center of the Indian Ocean and its developed port infrastructure and lower shipping costs in its tableware distribution.

Full contact

The other major tableware exporter in Sri Lanka is Dankotuwa Porcelain and Royal Fernwood, both in the Ambeon Group. Dr. Sajeeva Narangoda, Chief Executive Officer of Dankotuwa Porcelain and Royal Fernwood, says the trade prefers to work directly with manufacturers, sidelining middlemen as such agents and distributors. ”Significant growth is experienced through e-commerce and m-commerce or mobile commerce channels,” he said. “These channels have direct access to the customer. Significant growth is seen in casual dining. Current customers are price conscious at all levels and this is further fueled with the growing availability of manufacturers. We also see another growing market which the gifting market of porcelainware. They request for smaller volumes.

Mostly items of utility value and convenience with quicker lead times.

Therefore, there is significant growth in smaller set compositions.

However, they tend to request for longer credit terms.”

Sri Lanka enjoys duty free access for exports to USA (on application), India and Norway. Exports from Sri Lanka to EU under the GSP Scheme is at a concessionary duty of 8.4% - that’s 30% concession from the standard 12% duty.

Dr Narangoda said manufacturers of today are more aware of consumer demands and regulations and therefore maintain ethical as well as environmental standards. “Metal content concerns are for Lead and Cadmium (Pb & Cd) release. Standards we maintain are California Prop 65 standards for exports to USA. British Standards (BS EC500 as well as ISO6486/2) for exports to Europe. Dankotuwa and Royal Fernwood products are safe for all aspects of dining, as the raw materials used for white products are Lead (Pb) and Cadmium (Cd) safe and does not contain bone ash. The pigments used are also Lead free.”

Usually private labels or OEMs bring in volume-based sales, thereby increasing productivity with enhanced yields, Dr Narangoda said. “Further, it provides the manufacturer with continuous orders although at lower prices. Manufacturing for OEM/ private label is important when the manufacturer does not have an established brand in the relevant market. Dankotuwa Porcelain and Royal Fernwood Porcelain manufactures superior quality porcelain tableware for reputed international brands such as Portmeirion, Oneida, Macy’s, Country Road, Lenox, John Lewis, Crate & Barrel, Migros, Jashanmal, Ralph Lauren, the Walt Disney Company and Dilmah.”

In Bangladesh, Shinepukur, Monno, Bengal Fine, Standard, Peoples and National Ceramic are considered as major players in ceramic tableware market. Monno Ceramic is the largest ceramic tableware manufacturer, having developed a strong export market and producing private labelled and designer products for prestigious department stores, high end retailers and speciality shops. It began by producing porcelain tableware and expanded into manufacturing Fine Bone China.

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URBANISATION SEEMS TO BE WORKING AGAINST THE WAY TABLEWARE IS USED With retail sales to consumers not growing fast enough, tableware manufacturers see an opportunity in institutional sales like the booming hotel industry and the trend towards dining out. New hotels are being built at a rate in many parts of Asia, with Sri Lanka being a good example, as it recovers from its long ethnic war, as well as in countries like India and the Maldives. Manufacturers say they can cater to hotels either under their own brand or the hospitality chain’s brand name.

A large proportion of top-end and luxury hotels concentrate their purchases on high-quality from well-known brand manufacturers as a way of demonstrating their reputation for up-market, elegant hospitality and a superior international profile. Specialist consultants and promotional experts, such as interior architects and designers, are frequently involved in the process of searching, furnishing and purchasing for these top-end hotels, in order to give them an ’unmistakeable‘ or ’exclusive‘ overall character.

Hotel chains and formula hotels with their huge number of vastly differing images and operating practices, including low-budget hotels right through to hotels with several stars, mostly have a centralised purchasing department for tableware. Longer-term framework contracts are concluded with suppliers, largely based on a tendering process for fixed quantities and volume requirements. In many cases, orders are placed for tableware specially manufactured for the hotel, with, for example, the emblem of the particular hotel group on them. As a result of the large quantities involved in the orders, there is normally direct purchasing by the hotel chain from manufacturers and their marketing agencies.

Cost vs Value

Although cost remains a crucial factor in purchasing for these medium-sized and larger hotels, it is also true that good-quality tableware is essential as it reflects the image that the individual hotel wishes to present.

www.asianceramics.com

Analysis: Tableware

Starred restaurants also seek to score points over other comparable restaurants in their segment with superior tableware from well-known brand manufacturers or hand-finished items from craft workshops. The larger starred restaurants prefer to buy direct from the manufacturers and their marketing agents/subsidiaries, or through directly negotiated wholesale contracts.

Many suppliers of porcelain and ceramic products are looking for direct personal discussion with existing and potential corporate clients. This is evidenced by the large number of mentions for regional trade shows, the field sales force and trade fairs abroad as important channels of communication.

Contract business is of greatest importance for dining products.

Five years ago, around a quarter of companies were already achieving a 10-20 percent share of total turnover through sales to businesses. For about one in ten companies, contract business accounted for over 20 percent of company sales. Today, almost half of the companies report at least a 10 percent share of total turnover from their contract business. Contract business is particularly strong in porcelain and ceramic items, high-quality hand-finished products and designer (brand) items for the table. Contract business has been boosted by the building of increased numbers of larger fourstar and five-star hotel complexes.

Customisation: a new way forward?

While consumers across the world are seeing a growing number of “Made in India” labels on the goods they buy, Indian shoppers are witnessing a subtler change. Increasingly, multinational companies are selling products that are not just made in — but that are made for — India. Entire generations of Indian consumers, who once felt grateful simply for being able to experience the same brands as the rest of the world, are now realizing they can ask for products that cater to their wants and needs. And they stand a good chance of getting what they want.

The willingness of big brands to customize their products was never the issue. What has changed is that the Indian market has finally reached a critical mass — after the U.S. and China, this is the largest consumer market in the world — that justifies the investment. Things have changed. As Indian consumers became more aware of trends and advancements in technology, they began to demand similar sophistication. More important, they wanted products built to their needs. That meant not just automobiles, household appliances and consumer electronics, but also mobile phones, foods and apparel. Earlier, there was a reverence for anything foreign because local products were of terrible quality, but as the market developed, the focus started shifting from the product to the brand. Customers started patronizing a brand only if the product suited them. So, the need arose for companies to adjust their products to customers’ requirements.

It isn’t only about holding on to existing customers. If altering a product’s design or introducing a variant will help a brand reach out to an additional customer group, most companies would think it worth the investment.

Product customization is the result of a definite consumer need that has to be served without sacrificing profitability. And consumers will always want something different. There is no such thing as too much customization.

When it comes to the Tableware Market, the Indian Consumers are one of the most diverse in the world and these seemingly seamless market is full

www.asianceramics.com

While the world’s top tableware brands have for some time now relied on low-cost Asian producers to make products under OEM or private labels, some brands remain hesitant, partly for reasons of quality and image and also to protect proprietary knowledge.

“We are not promoting outsourcing business,” said one official from a top Asian tableware brand. “Because if you outsource products there are disadvantages. In the short term OEM work is alright, to make money. But if you think of the long run – outsourcing is not good business. Because when you outsource, your technology will transfer to an outside party, especially the body and glaze formulas, and decorating techniques, and some customer information as well. In time to come, there’s a chance of the OEM producer directly contacting the end-customer.”

Furthermore, he points out that outsourcing may not always yield the expected quality, as the brand owners does not have much control over the OEM contract manufacturer.

“Sometimes, the quality we expected from contract work may not be forthcoming, which affects your brand name in the long run. Just one order or container going with incorrect quality sometimes may spell the end of your brand name. Even if you make money in the short term, if you tarnish your brand name, it is not easy to rebuild a brand that’s decades old.” of niches. Even before the rapid socio economic changes that took place over the last decade in India, the vast cultural diversity and the multitude of eating habits and varied lifestyles have been a reflection of the socio –economic background of the consumers ensuring the Home needs segment is one of the most vibrant Market segments in India. The country has now witnessed the creation of many new markets and a further expansion of the existing ones. The Market is huge and dynamic, where niche and regional marketing is the mantra to succeed. The Tableware’s role has clearly evolved during the last decades: at first its purpose was merely functional, but currently it has become essential to the haute cuisine staging.

In the Tableware market the Utensil and the Crockery Market have evolved a lot. This has been one of the fastest growing segments over the last decade and has created more value for new brand.

Also, this market is fairly competitive and challenging which is largely untapped and has latent demand which is now being harnessed. The market is exploding with innovation, need for enhanced convenience in the household is driving the rapidly growing demand. The increased purchasing power and evolving lifestyle has made the market extremely attractive. Due to high degree of urbanization, proliferation of nuclear families and technological advancement, there have been far-reaching changes in the nature of the products, overall the Indian markets have evolved over the years. All these factors combined builds a humongous potential for the market along with infinite opportunities to expand and serve numerous consumers.

Technological advancements in any particular field too plays a vital role for its survival & this industry is no different. Technology has played an essential role helping us reach beyond the conventional boundaries. The hottest trends are reflective of what’s on the customer’s mind as they’re choosing how to equip and furnish their homes. The Industry has seen a drastic change, as the world is getting smarter and better, people have now started making new choices and moving towards the modern way of approach.

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51

Analysis: Heavy clay

CHOKING

BANGLADESH? pollution report damns brick sector Making bricks is serious business in Bangladesh. While exact numbers are hard to come by, estimates suggest the industry there employs more than one million people who churn out 23 billion bricks each year at some 7,000 kilns. However, new reports are focusing on the damage the sector is causing as AC finds out…

D

emand for bricks is on the rise, following the growth of the construction industry amid an infrastructure boom.

But whatever the dividends those kilns deliver to this rapidly developing country, the thousands of slender, cylindrical chimneys attached to them exact a heavy and offsetting toll. They punctuate the horizon in cities and towns across Bangladesh — including some 1,000 in the suburbs of the nation’s capital, Dhaka — and they contribute mightily to what is considered some of the worst air pollution in the world.

“The air that touches my skin feels extremely dirty,” said university student Scionara Shehry, “so I use a scarf all the time to shield my hair and face from it when I’m on the roads.”

She is far from alone. During the dry season, when brickmaking is going full tilt, dust and smoke from wood- and coal-fired kilns mingle with clouds of pollution rising from trash fires and vehicle engines, hanging over the city like fog. The kiln operations alone — while representing just 1 percent of the country’s GDP — generate nearly 60 percent of the particulate pollution in Dhaka, according to Bangladesh’s Department of Environment (DOE). Many of those kiln operations — including some 530 sites producing more than 2 billion bricks annually in northern Dhaka — are so-called fixed-chimney kilns, which use inefficient technology with little to no pollution controls.

And these represent only the brickmaking businesses that regulators have managed to count. An untold number of other, haphazardly regulated brickmakers churn heavy clouds of smoke and dust skyward each year.

Worldwide, ambient particulate matter ranks as the sixth leading risk factor for premature death, according to the 2018 “State of Global Air” report, produced by the research nonprofit Health Effects Institute in Boston and the Institute for Health Metrics and Evaluation at the

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University of Washington in Seattle. Those risks are particularly acute in Dhaka, where fine particle pollution like PM2.5 — microscopically small at 2.5 micrometers in diameter or less and a byproduct of combustion — is relentlessly inhaled by residents.

The WHO ranks Dhaka among the top 50 out of almost 3,000 cities with the highest annual mean concentrations of PM2.5, which is considered a potent and efficient killer. In winter, the city’s daily PM2.5 levels can soar well above 200 micrograms per cubic meter — eight times the level WHO considers safe. Exposure to PM2.5 has been linked to lung cancer and other health problems, and at least one study suggests that it claimed 14,000 lives in Greater Dhaka in 2014.

Two years later, researchers estimated that it was responsible for the deaths of more than 100,000 Bangladeshis nationwide.

www.asianceramics.com

Analysis: Heavy clay “My furniture gets covered in a layer of dust particles within a few hours of cleaning it,” said one North Dhaka homemaker, “and this makes me alarmed thinking how much of the dust is settling in my lungs.”

The Bangladeshi government operates 11 continuous air monitoring stations throughout the country. Three stations are in Dhaka, two in Chittagong, and one in each of the country’s other six divisions. The Department of Environment monitors and reports findings daily for six common pollutants, including PM2.5, PM10, nitrous oxide, sulfur dioxide, carbon monoxide, and ozone.

All in the data

According to air quality data from 2017, nearly half of Dhaka’s available hourly readings were at or above unhealthy levels — and brick kilns contribute significantly to PM2.5 concentrations in the cities close to where they operate. The U.S. Environmental Protection Agency considers the daily concentration of PM2.5 to be unhealthy for anyone at levels above 55.4 micrometers per cubic meter of air and readings well above this are common. Since 1990, annual average population-weighted PM2.5 levels in Bangladesh have increased from around 65 micrometers per cubic meter in 1990 to 101 in 2016, according to the State of Global Air report.

While traffic and burning trash are major contributors to the foul air, it is hard to miss the consequential impacts of the brick kilns. Workers travel from around the country to Dhaka’s brickmaking operations, often bringing their families with them to work from October into March. Men and women carry heavy loads of bricks on their heads, amid swirling clouds of dust, and it is common to see young children toiling at the edges of the brick-drying fields.

Mohammad Esarul Molla, 28, and Mahuda Akter, 22, came to the brick fields with their two young children. Laborers, the couple works eight hours a day in the brick fields. Molla earns $2 to $3 a day for his efforts. Akter brings in just under $1 a day. Like many of the itinerant laborers here, they accept the conditions they must work in.

“I don’t think the work in the brick field is dangerous,” Molla said.

“I haven’t faced any breathing problems or had any diseases from working here so far, as the smoke goes up through the chimney and doesn’t come to ground level.” Akter even says she likes the work, which provides needed income for her family.

Ripa, a young mother in her 20s who gave only a first name, said she has been working at a brick kiln for five or six years. While she says she notices the dust around her, she insists it doesn’t cause any health problems. Masudur Rhaman, of Ibrahim Medical College in Dhaka, however, estimates that those who work in or live near brickfields with coal- or wood-fired kilns are 10 to 20 times more likely to suffer lung diseases than those who don’t. “Working in dust particles [from kilns] is an occupational hazard,” he said.

Legislation passed in 2013 aims to prevent new kiln construction in residential, agricultural, and environmentally sensitive areas and convert the standard kiln model, which features an oval firing chamber with a chimney in the middle, into something deemed more efficient.

While this often means upgrading to a zigzag kiln design, where bricks are stacked in a rectangular circuit to form chambers guiding the heated air around them, no concrete standards exist for what this must do for emissions. Rather, according to the United Nations Development Program (UNDP), the Government of Bangladesh uses technology-based standards, as opposed to emissions-based, to determine if a kiln can be considered environmentally-friendly.

Zigzag and out?

If constructed properly, zigzag kilns do improve efficiency and can potentially reduce particulate emissions by 80 percent or more. But due to a lack of proper resources, skill, and regulatory authority, as well as low-level corruption within the Department of Environment, it’s likely that few have been satisfactorily upgraded.

www.asianceramics.com

Still, officials are encouraging kiln operators to make the switch, and say they no longer issue environmental clearance certificates to new kilns that use the traditional methods to fire bricks.

“In eight to 10 years we will phase out or close all the conventional kilns,” said Ziaul Haque, deputy director of law at the Department of Environment, adding that the government also plans to limit the number and size of new kiln facilities.

Munjurul Hannan Khan, a representative of the Ministry of Environment, Forest, and Climate Change and director of the agency’s Clean Air and Sustainable Environment project, suggested oversight is improving. “We are monitoring [the conversion of brick fields] closely and discouraging unregistered brick kilns from operating in the area,” he said. The ministry oversees environmental clearance for old brick fields, monitors compliance, and fines or closes non-compliant brick kilns, Hannan Khan added.

According to a Department of Environment report, 4,390 kilns in the country were using modern technology as of last year, and about 65 percent of the facilities had been converted to environmentally-friendly versions. The department also reported that it fined 605 illegal brick kilns between 2013 and 2017 and closed or dismantled 32. But with only vague wording to describe its updates, the state of the country’s “modern” or “environmentally-friendly” kilns is far from clear. In her experience with brick kilns in neighboring India, Cheryl Weyant, a Ph.D. student in environmental engineering at the University of Illinois at Urbana-Champaign, says the implementation of less-polluting technology is in the “very beginning stages.”

While the 2013 legislation officially banned traditional brick kilns and placed restrictions on where new facilities could be built, many brickmakers say they’d go out of business if they followed all the rules.

“We are not against protecting the environment,” said Abu Bakr, secretary general of the Bangladesh Brick Manufacturing Owners Association, “but if this act is implemented it won’t be possible to have brick kilns anywhere in the country and millions of people working in this industry will become jobless.”

In a 2017 interview with The Daily Star, Bangladesh’s leading English-language newspaper, Raja Shankar, described as another kiln business representative, said that kiln conversion can cost from $96,000 for the simplest model to $6 million for the most advanced.

Because brick-making is not recognized as a formal industry in Bangladesh, [kiln owners] are not eligible for concessional loans of financial institutions for small and medium enterprises,” said Tanvir Ahmed, an environmental specialist with World Bank Bangladesh.

According to a joint report from UNDP and the Bangladesh DOE, brickmaking here is better described as a “semi-formal” industry due to factors including its seasonal employment, outdated technology, and lack of large-scale cooperation.

Without access to needed financial assistance, as well as the barrier of existing on leased land, thousands of kilns continue to operate illegally without upgrading their production process, Ahmed said.

To reduce PM2.5 and other emissions from brick kilns in a meaningful way, environmentalists say the Bangladesh government must enforce laws more stringently, recognize brickmaking as a formal industry, and promote financial policies to support kiln conversions.

“We know a lot,” said Atiq Rahman, executive director of the nonprofit Bangladesh Center for Advanced Studies, referring to the impacts of particulate pollution, “but knowledge is not enough.”

A dead cert

According to the report, air pollution will cause around 7 million premature deaths globally next year and have a major economic impact.

Bangladesh has been struggling with air pollution for a long time.

Dhaka, the country's capital, often finds its place among the most polluted cities in global indices.

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Analysis: Heavy clay

Brick kilns and vehicles run on fuel with higher level of sulfur have been identified as the major sources of air pollution in the country.

But Md Ziaul Haque, director (air quality management) of the Department of Environment (DoE), said there was confusion in the report which placed Bangladesh at the top in the country category.

“The average air quality of Dhaka and the entire Bangladesh are different. The air in rural areas and other districts is much healthier than in Dhaka,” he said.

According to the report, four of the five most polluted countries in the world are in South Asia. Bangladesh is followed by Pakistan, India, Afghanistan and Bahrain.

The quality of air in Iceland, Finland and Australia are among the healthiest, the report shows.

Delhi is the most polluted capital city while Dhaka is second in that category followed by Kabul, Manama and Ulaanbaatar of Mongolia, according to the report.

The report said seven of the top 10 most polluted cities in the world are in India. Gurugram is followed by Ghaziabad and Faisalabad (Pakistan). Indian cities of Faridabad, Noida, and Bhiwadi come next in the category.

The city ranking shows Asian locations dominating the highest 100 average PM 2.5 during 2018, with cities in India, China, Pakistan and Bangladesh occupying the top 50 spots.

In a statement, Yeb Sano, executive director of Greenpeace Southeast Asia, said, “Air pollution steals our livelihoods and our futures, but we can change that.

“In addition to human lives lost, there is an estimated global cost of $225 billion in lost labour, and trillions in medical costs.

This has enormous impacts on our health and on our wallet”.

Talking to The Daily Star, DoE Director Ziaul said in Bangladesh, brick kilns were the major source of air pollution followed by construction work.

He claimed that the government has taken various steps to reduce emission of harmful smoke from brick kilns, including promoting cement blocks for construction work.

In a report by US-based Environmental Protection Index (EPI) on the environment performance by the government of 180 countries, Bangladesh ranked 179, having slipped down by 40 places from the year 2010 to 2018. The report was published in September last year.

According to the DoE and the World Bank, brick kilns make up 56 percent of the country's air pollution.

The government had enacted a law in 2018 to make these kilns environment friendly, but a recent report indicated that of the 7,772 brick kilns in the country, 2,123 have not converted to the required modern and environment-friendly technology.

Meanwhile on Monday, David Boyd, special rapporteur on human rights and the environment, insisted that air pollution was a “silent, sometimes invisible, prolific killer” which affected women and girls more than men.

“Air pollutants are everywhere, largely caused by burning fossil fuels for electricity, transportation and heating, as well as from industrial activities, poor waste management and agricultural practices,” he said at the Human Rights Council in Geneva.

Air pollution is present both inside homes and outside and is responsible for the premature death of seven million people each year, including 600,000 children, according to the special rapporteur's UN environmental annual report.

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“Every hour, 800 people are dying, many after years of suffering, from cancer, respiratory illnesses or heart disease directly caused by breathing polluted air,” he said, before highlighting that effective measures could have prevented those deaths.

Why PM2.5?

The report focuses on PM2.5 as a representative measure of air pollution. PM2.5 refers to particulate matter (ambient airborne particles) which measure up to 2.5 microns in size, and has a range of chemical makeups and sources. PM2.5 is widely regarded as the pollutant with the most health impact of all commonly measured air pollutants. Due to its small size PM2.5 is able to penetrate deep into the human respiratory system and from there to the entire body, causing a wide range of short- and long-term health e¬ffects.

Particulate matter is also the pollutant group which a-ffects the most people globally. It can come from a range of natural as well as man-made sources. Common sources of PM include combustion (from vehicle engines, industry, wood and coal burning), as well as through other pollutants reacting in the atmosphere.

Small steps

One piece of good news that has started to emerge is that the authorities are starting to at least take some of the action they have promised. In early March this year, The Department of Environment (DoE) demolished three illegal brick kilns on the banks of Turag River in Ashulia of Savar.

During the daylong drive, a DoE team, led by Executive Magistrate Tamzid Ahmed, also partially dismantled nine other brick kilns and fined the owners Tk 95 lakh in total for not having legal documents, reports our Savar correspondent.

The brick kilns are M/S Raju Bricks, MSB Bricks, Surma Bricks, Styling Bricks, Dhaka Bricks, two units of M/S Ashraf Bricks, SS Bricks and Meghna Bricks.

SS Bricks is owned by the local union parishad chairman.

Tamzid said the brick kilns were set up on Turag banks, though there is a High Court directive against it. Legal action will be taken against the owners, he said.

Green alternatives?

Eco-friendly bricks in the form of concrete blocks are gaining popularity in Bangladesh as a means to mitigate the environmental damage caused by conventional brick manufacturing.

House Building Research Institute (HBRI), a component of the Ministry of Housing and Public Works, has been working for over 40 years to develop a substitute for conventional bricks in the construction industry.

HBRI senior research officer Md Akhter Hossain Sarker told the Dhaka Tribune that so far, a total of 30 businesses have begun commercially producing the blocks developed by the institute, “When we make people understand the harmful effects of the soilburning bricks, they become interested in using concrete blocks,” Akhter said.

According to the Bangladesh Brick Manufacturing Owners Association, around 7,000 soil-burning brick kilns produce around 25 billion bricks every year, consuming over 1.27 billion cubic feet of topsoil.

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Analysis: Heavy clay

“For a country like Bangladesh, whose economy depends heavily on agriculture, this is very bad,” Akhter said. “Every time topsoil is extracted from a certain piece of land, it goes barren for at least three years, which means nothing can be grown there during that period.”

None of the eco-friendly construction materials used by HBRI require the clay-rich topsoil. “These are made from soil dredged from the bottom of rivers, sand, cement, and iron netting,” Akhter said.

The institute has developed 25 types of bricks without using clayrich topsoil from arable lands.

The name of some of the eco-friendly bricks are: Compressed Stabilized Earth Blocks (CSEB), Interlocking CSEB, Concrete Hollow Block (CHB), Thermal Block (TB), Aerated Concrete, and Ferrocement Sandwich Panel (ACFSP).

Akhter said that although such concrete blocks were first used in Bangladesh in 1980, the quantities produced were not enough for the micro-industry to become commercially viable.

“Nowadays, a range of national and international companies have been encouraged to produce environment-friendly bricks developed by us,” he said.

Akhter said several companies have begun commercial production, including the CONCORD Group of companies - which manufactures pavement blocks and bricks for walls and roofs - and Mir Ceramics, which produces environment-friendly tiles for flooring, walls and stairways.

In Dhaka and Chittagong alone, a property development company called Building Technology and Ideas Ltd has erected over 60 buildings using environmentally friendly materials and with the support of HBRI.

Financial incentives

In recent years, the government has taken several initiatives to promote the use of building blocks made from alternative materials, with Prime Minister Sheikh Hasina even directing government agencies to build their own structures with alternative bricks.

As a part of this, HBRI has been training local masons and encouraging brick kiln owners in several districts around the country to use these alternative building materials.

“HBRI has been providing training to people who want to learn about environment-friendly technology,” Sarker said. “We have already trained 4,000 constructions workers and 1,000 civil engineers on the topic of concrete bricks”.

HBRI has recently undertaken a three-year project titled “Promoting Sustainable Building in Bangladesh” in association with Switch Asia – a banner program of the European Union – as part of which people and builders will be encouraged to use alternative bricks in construction work.

At a recent program held in Dhaka, urban planners and public officials said concrete blocks should be used as a substitute for bricks in construction to maintain environmental balance and to protect agricultural land.

Housing and Public Works Minister Mosharraf Hossain, who also has an eco-friendly brick factory in Mirsarai, told the event that now is the “right time” to stop using conventional bricks.

“Using concrete blocks instead of bricks is a great idea for sustainable development,” he said.

“The government should impose higher taxes on brick making factories and provide a ten-year tax holiday for concrete block factories.”

Existing brick-making laws indirectly discourage conventional brick making by banning the use of topsoil from agricultural land, which is defined as “any land which produces crops more than once a year”.

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Challenges remain

HBRI researchers said the main challenges are raising the awareness of people about eco-friendly bricks, as relatively few people know that these can result in both lower construction costs and reduced environmental impact.

Prof Adil Md Khan, general secretary of the Bangladesh Institute of Planners (BIP), said that in order to make the eco-friendly bricks commercially viable, it is important to train construction workers and ensure that the quality of the blocks is maintained.

Seasonal slumps

It has been found that air quality of these cities plummets between November and April when brick kilns operate and when there are a lot of particles in the air.

The DoE installed equipment at 11 places in the eight cities to collect daily data to prepare the Air Quality Index (AQI), which gave a score between zero and 500, zero being the best.

The equipment collected various data, including airborne particles, Sulfur Dioxide, Carbon Monoxide, and Nitrogen Oxides, all of which are harmful for health.

The AQI of 0-50 was categorised as good, 51-100 as moderate, 101-150 cautionary, 151-200 unhealthy, 201-300 very unhealthy, and 301-500 severely unhealthy.

In 2018, Narayanganj had 105 days with its AQI over 301 (severely unhealthy). Dhaka had such air on 83 days, Gazipur 72 days, Rajshahi 45 days, Khulna 39 days, Chattogram 13 days, Barisal 9 days, and Sylhet 8 days, the survey report said.

On January 20 this year, Narayanganj scored 475, Gazipur 400, Dhaka 382, Chittagong 361, Rajshahi 356, and Barisal 335.

Ziaul Haque, DoE director for air quality management, said that in 2017-18 fiscal year, half the air pollution in Dhaka was caused by brick kilns while construction work contributed around 25 percent and vehicle emission 10-12 percent.

The case is roughly the same in other cities, he added.

DoE permission is mandatory for brick kilns. But 2015 data show at least 1,957 of them did not have it. There were 6,895 brick kilns in the country at that time.

Ziaul claimed that they were taking measures to stop the rapid sprouting and growth of brick kilns in the country.

“If we can use alternatives to bricks or use modern technology to manufacture bricks, the pollution level would fall,” he said, adding that they were working to formulate a revised code to phase out kilns that use age-old methods to bake the bricks.

The government is now promoting modern technology for brick kilns like Hybrid Hoffrman and Tunnel technology.

Hybrid Hoffman Kiln (HHK) technology was developed and is widely used in China. The HHK combines use of green bricks produced by mixing powdered fuel with clay; and utilisation of waste heat by transferring the heat to an adjacent tunnel.

Tunnel kiln is a continuous moving ware kiln in which the clay products to be fired are passed on cars through a long horizontal tunnel. The firing of products occurs at the central part of the tunnel. The tunnel kiln is considered to be the most advanced brick making technology. The main advantages of tunnel kiln technology lie in its ability to fire a wide variety of clay products.

Making bricks using these methods requires less coal or wood, hence less pollution.

For example, a conventional brick kiln requires 20 tonnes of coal to make 1,00,000 bricks, way more than 13-14 tonnes needed to make equal number of bricks using modern technology.

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Talking Shop

Talking Shop BCMEA showcases Bangladesh hub Moynul Islam, Senior Vice President of Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA) and Vice Chairman of leading tableware manufacturer, Monno Ceramic Industries Ltd, explains about the potential of BCMEA’s exhibition and Bangladesh as a hub to Asian Ceramic’s Southeast Asia Editor Jahir Ahmed.

AC: How is the preparation going on for the 14th for promoting Bangladesh as a new Asian hub edition of Indian Ceramics Asia 2019? Please for exports and imports of tablewares, tiles, update us on the status of the show with respect sanitarywares, rawmaterials, machineries to exhibition area size, expected number and others? Despite huge domestic capacity of exhibitors & visitors, country pavilions, expansions and import barriers, imported expected international participants? products cater a significant part of the domestic Asian Ceramics: BCMEA's maiden show, demands in Bangladesh. How do you assess CERAMIC EXPO Bangladesh - 2017, was a this situation? successful event at its base in Dhaka. You are Moynul Islam: Bangladesh government has plan going to hold CERAMIC EXPO BANGLADESH to attract more export buyers for Bangladeshi - 2019, this year from December 05-07. What is commodities by supporting such exhibition that we your current and future plans in organizing this are going to develop as a hub for export ceramics. exhibition and exploring expected benefits?

Already foreign companies have arrived here for Moynul Islam: BCMEA has been performing very manufacturing and more foreign producers are successfully since its inception as an apex body willing to invest in Bangladesh to manufacture Moynul Islam by bringing benefits for the ceramic industries their brand products. The manufacturers here are in Bangladesh and promoting exports abroad, catering domestic needs of the markets and there supporting the member manufacturers’ employees and workers and, are import permissions for the products which are not yet produced of course, the people of Bangladesh by providing quality ceramic but to be produced soon. Import substitute tile and sanitaryware products at affordable prices. While the BCMEA members are sectors have huge potential. travelling abroad for selling their products and buying the technology AC: Are you going to provide space for local and foreign and machinery they realised it will be a good opportunity for the manufacturers both for display of their ceramic products? Do the manufacturers of ceramic machinery and materials if they come and Bangladeshi tableware manufacturers and exporters are getting promote their products in Bangladesh. Due to visa problem a lot of enough benefits as the event has target to attract foreign buyers? new entrepreneurs are not able to travel. So, it’s easy and convenient Moynul Islam: We allow both, domestic and foreign participants. for them to set up new factories in Bangladesh if the machinery and Foreign exhibitors display their products for the domestic producers raw material suppliers meet the new investors in Dhaka through an and new entrepreneurs who will see what will be the final products and organized exposition event, such as, CERAMIC EXPO Bangladesh. for that what machinery they should consider. For existing producers, AC: How many exhibitors and targeted visitors, having potential they will learn what materials they should use to produce next level buying capacity or influence, are expected to visit the exhibition of quality. By seeing our new concept of machinery and finished this year? products lots of materials and machinery producers, as well as Moynul Islam: Our honorable Prime Minister Sheikh Hasina has a tableware buyers, now participating and buying at Ambiente, Messe dream to see Bangladesh as a developed country, and setting up Frankfurt, are showing interest in us and expected to be here in Dhaka. new industries is one of the factors for economic developments.

That’s Bangladesh, always bringing new innovations and ideas.

We are expecting many potential exhibitors will participate in the AC: How do you evaluate the current export trends and how show and there will be lots of visitors to meet the BCMEA member the exporters are performing in the traditional markets and manufacturers. I see a long term success of such exhibitions, even penetrating into the other countries? from the international buyers and sellers’ points. We have targeted Moynul Islam: The exporters, particularly, tableware manufacturers triple number of participating companies this year, that is, more than are expanding markets beyond traditional regions of Europe and 150 foreign and local exhibitors. We are promoting strongly to attract North America as the demand is rising. Recently, due to natural gas more international buyers, numbering more than 300 companies, and supply crisis there were slower investment in ceramic industries over 12,000 foreign and domestic visitors as well, in a floor space of of Bangladesh, but currently, it is being solved. Already imported 12,000 square metres.

LNG and LPG gas supplies have created a new opportunity for AC: What is your idea about making this exhibition as a platform new investment. At this moment, all the tableware producers have

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Talking Shop

not enough capacity to cater domestic and international demands and within a short period same will happen for tiles and sanitaryware producers, who concentrated on the basic and mass markets, as domestic markets show a robust growth following rapid expansion of Bangladesh’s economy at 7-8 percent a year.

AC: Last time some foreign rawmaterial suppliers exhibited their products, while foreign machinery suppliers had booths for meeting the local buyers. Are you going to attract the machinery suppliers to exhibit their machinery and other products since Bangladesh's ceramic manufacturing is growing steadily every year and requires latest technologies that match the local manufacturers?

Moynul Islam: Bringing machinery for display is not yet possible due to customs regulations but we shall look into it seriously. Thanks for bringing this point for my attention.

AC: What is the sizes of annual spending on rawmaterials and machineries, respectively, in Bangladesh? What are the sizes and growths of the imported rawmaterials and machineries per year?

Moynul Islam: Bangladesh has no domestic sources for machinery and equipment and basic rawmaterials for the ceramic industry. Plant and machineries and almost all of the rawmaterials for export ceramics are imported for the industry that manufacturers roughly around half a billion US dollars worth of ceramic tiles, sanitarywares, tablewares, electric insulators and refractories.

AC: What is the size of investment in the existing ceramic factories and how much investment is being made in the underconstruction projects and for those in pipelines?

Moynul Islam: The existing investment in ceramic sector has exceeded US$1 billion. The investment is growing steadily as the demands for tiles and sanitarywares are rising steadily in this deficit market.

AC: Bangladesh's tableware sector continues to expand as export manufacturers, while, in recent years, a substantial expansion of capacity has been made in tile and sanitaryware sectors to exploit the rising domestic consumption, what is the future outlook for the Bangladeshi ceramics?

Moynul Islam: The future is bright as our government declared 10 percent cash incentives on exports. Bangladesh still requires 3,000,000 structured accommodations, as per REHAB (Real Estate and Housing Association of Bangladesh), apart from traditional huts, so, demand is in rise for tiles and sanitarywares.

AC: How do your Association members cope with the challenges in sourcing rawmaterials from domestic and import sources?

Which imported rawmaterials and supplying countries are most prominent and what about their market shares?

Moynul Islam: BCMEA maintains close contact with the government for fiscal supports to meet the shortage of domestic rawmaterils as the ceramic industry is export oriented and export substitute that need tariff and tax concessions. With the help of international exhibitions of SUMMARY (Financial Year of July 2017-June 2018) Direct Yearly Product Number of Investment/ Industries Project Value Production Employee (Million BDT) Capacity Tableware

20

22,000

Tile

28

49,750

Sanitary ware

18

14,410

Gr. Total

66

86,160

IMPORTED LNG AND LPG HAVE CREATED NEW OPPORTUNITIES FOR INVESTMENT ceramic technology and rawmaterials it’s getting easier to procure rawmaterials, and all suppliers have local agents to support. We noticed materials are coming mostly from India, Malaysia, Thailand and China. European sources need to be more competitive to remain as reliable and established suppliers of raw materials. For machinery, China and Europe are the main sources.

AC: What are the other major challenges, including that of gas supply and price, before BCMEA in supporting the existing potential growth of the ceramic industry that expects a booming domestic consumption in the coming years as Bangladesh's economy is expanding by over 7 percent a year?

Moynul Islam: BCMEA has been in negotiation with government to keep the energy cost at bearable level, while this sector is in developing mode. Ceramic sectors are playing a small role but will be giant in near future as expected if the cost of energy, particularly, gas, continues to be affordable, as the ceramic production is highly energy intensive. The sector employs about half a million workers directly and indirectly. Some 40 percent of over 47,000 direct regular workers are female. The sector’s value addition is about 65 percent.

In financial year 2017-18, ended last June, the ceramic sector posted an export income of about US$52 million, according to the government run Export Promotion Bureau of Bangladesh.

AC: What are the annual growths and market sizes of tile, sanitaryware, and tableware sectors in terms of figures, including quantity and value, and what are the existing production capacity and real production, in quantity, of the each sector?

Moynul Islam: The domestic ceramic market has a double digit growth. In last 10 years the local output has expanded by some 200 percent. There are three main product sectors with 20 tableware, 28 tile and 18 sanitaryware factories, the production capacities of which are about 255 million pieces, around 200 million sq metres and some 9 million pieces, respectively. Capacity utilization on average is about 70-80 percent. Almost all of the major players are organized under BCMEA. Import (Million BDT)

Export (Million BDT)

Local Sale (Million BDT)

Turnover (Million BDT)

Market Share % Local Foreign

254.50 Million Pcs 195.30 Million Sq.M 8.35 Million Pcs

18,900

267.00

3,782.70

4,779.80

8,562.50

94.71

5.29

19,845

9,827.60

18.50

31,434.00

31,452.50

76.18

23.82

8,353

947.20

00.20

7,163.50

7,163.70

88.32

11.68

----

47,098

11,041.80

3,801.40

43,377.30

47,178.70

---

---

Source: BCMEA. Jahir Ahmed, Asian Ceramics, 17 February 2019

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Reliable Platform of Over 30 Years' Great Influence!

June 18th~21st, 2019 Canton Fair Complex, Guangzhou

Sponsored by: China Ceramic Industrial Association

Organized by: Unifair Exhibition Service Co., Ltd.

Co-Sponsors: China Building Materials Federation, China Building Ceramics & Sanitaryware Association, CCPIT Building Materials Sub-Council

Tel: 0086 – 20 – 8327 6369 / 6389 Email: ceramicschina@unifair.com Facebook: @Ceramics China Twitter: @ceramics_china Web: www.ceramicschina.com.cn

Insight

INDONESIA Table 1

Table 1 Tiles Tableware Sanitaryware Roof 2le Suppliers

Year

47% 19% 5% 5% 22%

ASAKI membership (total 63 companies) Tiles

Tableware

Sanitaryware

Q1 2018

Capacity

570 574 578

Usage

350 370 360

Tile capacity and usage (m. sq metres) Roof tile

Suppliers

Capacity

Usage

Table 1

Table 1 2014 2015 2016 2017

2016 2017 2018

2014 2015 2016 2017 2018

832912 861341 1073972 1262016 319280

Total tile imports (tons)

242 218 199 192 205

Imported tile price (US$/ton)

1

1

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Table 1 Table 1 Tiles Tableware Sanitaryware Other Tiles

28 48 10 14 28

2016 2017 2018

Imported tile price (US$/ton) Tableware

5.1 5.2 5.6

Imported tile price (US$/ton)

Sanitaryware

Other

Tiles

Table 2 Philippines Malaysia Thailand Other Asia, nes USA Australia Rep. of Korea United Kingdom Viet Nam

2,040,274 1,480,454 1,429,653 1,001,540 437,153 457,616 472,805 279,832 235,650

Table 1

Leading unglazed tile export destinations (2018, sq metres)

Viet Nam India Malaysia Italy Spain

1,365,078 521,915 247,716 47,330 43,941

Leading unglazed tile import sources (2018, sq metres, exc. China)

1

1

Table 1 2015 2016 2017 2018

Table 1 10,839,951 14,337,539 23,390,370 29,229,930

Leading unglazed tile import sources (2018, sq metres, exc. China)

2015 2016 2017 2018

714,757 649,200

531055

Leading unglazed tile447544 import sources (2018, sq metres, exc. China)

1

1

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Hunter and the hunted

st u m e l b b u b e t a t s e l a e r ’s a n i h C “ s ” t g n i t s h r u b o t g e s o l c e u b tho

So, What Is Wrong with China?

Dear Diary,

more challenges this year than previously In an earlier article I mentioned that China is facing a lot since they have the potential to impact more and it might be a good idea to elaborate on these a little has fueled a lot of the world’s growth ption consum e Chines as region the mind business globally never in recent years. the past, Deep Throat (https://deep-throat-ipo.

Some of you might have followed a blog I’ve linked to in the amount of debt China is stacking up. of idea some get to it g blogspot.com/) – I’d suggest readin Anyway, let us have a look at some of China’s problems. have bitten off a little more than he can First, President of Everything for Life & Emperor Mr. Xi might ed if people turn on you when surpris be don’t well chew. If you take the credit for everything going l of all aspects of media and spin contro and attitude itarian author ing increas Xi’s Mr. . things go wrong rence smack of someone getting bellige or rship dictato of act every on every challenge facing China and nt international waters. I’d turbule h throug my desperate, not someone calmly steering a great econo t to cover up at least some of attemp an is strong ring appea and l contro in is suggest trying to show who the following problems. intention of backing down. Whatever I The trade war with the USA – it’s clear that the US has no imbalances but more to the point – trade want ’t doesn n istratio may think of Donald Trump his admin logy which give China an unfair techno of rs they don’t want intellectual property theft or forced transfe them? blame can who – ng advantage, bluntly speaki e programs – Greater Bay Area, One Secondly, ‘Made in China 2025’, as with a lot of Chines explanation after years of them being no with d droppe get to seem es initiativ etc.

Belt One Road Chinese innovation to spearhead the implied China in Made um. celebrated and promoted ad nause transfers and IP theft. The USA has logy techno Chinese economic growth. In reality, it required those these issues Made in China will resolve can’t China If WTO. the with aint raised at Section 301 compl be severely curtailed at best. must be close to bursting – it has been used Again, we’ve reported before China’s real estate bubble their zenith and its unrealistic to expect them d reache about have to fuel Chinese growth but the prices re on jobs and salaries. Remember too pressu to continue – especially with less international trade and ing prices – how will they react when collaps or ion recess of nce experie no that most Chinese now have things turn sour, when negative equity bites? tried to stop this it is likely the US will brand The RMB is falling in value – if the Chinese government istration is more likely than previous ones admin t curren the doubt China a currency manipulator – no reserves, allowing the value to fall makes to take that approach. Maintaining the value uses up foreign imports more expensive. or more. Again, we’ve noted previously that China consistently claims that the GDP is rising by 6.5% admit the figures are grasped from the air there is little to back these claims up. Some officials even – one real and one for the government, then ts accoun two es operat and given every Chinese company nigans operate at all levels in Chinese shena it doesn’t take a great leap of faith to assume that such bad in China and bad news has to look can one no that is rule basic A economics and government. do this whilst it isn’t obvious to only can You forces. be ignored, denied or blamed on hostile foreign growth is no longer working fund of debt to everyone that is plain wrong. If, as is suspected the use Trying to cut debt could lead true. be well might all at g growin isn’t then the rumour that the economy Xi’s attempt to control explain well might to a recession which would lead to social problems. Which y. There is also a countr the leaving from money stop to have will China everything. Never mind that to taxes raise can’t they since to debt in belief that the local governments are deeply that would be hard for the raise funds; once again this could lead to social problems Central Government to ignore or solve. individuals struggle to It is also suggested that as private companies and private to person (usually person and g’ bankin w ‘shado on rely to get bank loans they have

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

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Hunter and the hunted

family) loans or other darker sources of cash; once aga in this is apparently collaps alternative available. ing and there is no The stock market is also falt erin g.

De sign ed to fun nel fun the darling for private investo rs as it seemed to rise inexor ds into state-owned companies it became private investors, the stock ably. But the prices – are the markets appealed as they y genuine? For were like a casino – which the government was manip the Chinese love – but ulating the market value and it the government would only prop up the value so much. became obvious after a couple of scares that So, people exited the marke is it how the Chinese try to get their money out of China t (its little wonder – and want safe havens and bolt holes; that’s why proper they are preparing for things getting worse ty pric through the roof as the Chine se buy it up). As a result, the es in certain international cities have gone stocks so again a struggle re is little money being inve for funds. sted in Chinese This is a real problem as for many years the basic idea Owned Enterprises (and the for the Chinese economy wa ir debt and obligations to exs and private insurance and staff etc.) would decline and that the Statepensions and so forth would the private sector take Communist Party’s desire to control everything. So, there over. But this clashes with the Chinese big Chinese companies are is simply SOEs but with the hea a conflict and it is fairly obvious that the – think Huawei or Alibaba (it d officers appearing to be priv recently admitted that Jack ate individuals Ma doubted that!). The problem is the SOE’s are bloated and is a party member – like anyone ever at the Deep Throat blog will wasteful and not that profita edu ble Now finally the real deal bre cate you about the state of Alibaba’s financial reporting. – again a look aker for China – the Three Cart Horses. China has an which is set to decline. It has ageing population ma healthcare and pensions and ssive obligations to look after the ageing population in terms of that means fewer workers will have to pay tax to do it policy worked far too well) – and accept less coverage (the One Child themselves – as I’ve said the government hasn’t really set Ch things up so private, never mind foreign companies cou inese services. Also, there is the issue of healthcare costs for ld provide such the working population and the children. You can imagin education costs for e to pay or what they will hav what will happen once the citizens realise how much extra they will have e to do without because the re isn’t the money to pay for Now, trade war apart most it. of these issues are domest ic and the result of China not in the way that was expect ed. modernizing whatever was supposed to Letting China enter the WTO and awarding China the encourage China to leave behind its so-called commu Olympics or ‘open up’ and adopt more inte nist pol rnational practices. It hasn’t. and has proven to not be so China adopts only that which icies and interested in honouring con benefits itself tracts or obligations which position. At the same time it thinks harms its China has been belligerent esp its United Front to try to influ ecially in the South China Sea ence overseas educational and has used inst politics and governments of other countries whilst admoni itutions, media and even interfere in the that questions the path China shing anyone in the interna tion have been deeply hurt’ the is taking or how it treats its citizens…’the feelings of the al community y will Chinese people punish countries that questio wail whilst at the same time attempting to undermine say Taiwan or n the treatment of Uyghurs, booksellers or so on. This is Tibetans, human rights law yer res that China has ulterior motive ulting in a push back by various countries – western s, kidnapped powers that realise s for its actions and also from the Belt and Road initiative cou ntries that are supposed to that do not appreciate going be part of into debt bondage or who see Chinese infrastructure project s and labour. Thus, one of Mr. that only benefit Chinese companies and employ mo little benefit in stly Xi’s Combine the debt picture with pet projects could soon look to be less than impressive Chinese staff . the dom est ic cha llenges and the internation very tough 2019 for Mr. Xi al struggles and big negative impact on global the Peoples Republic of China. Unfortunately, that cou it could be a ld trade. It will be very interes manage to agree on but it will ting what if any trade deal the have a very be China that most needs one of its oft claimed ‘win-win US & China ’ scenarios.

Until next time, Your humble servant William Hunter

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In the next issue...

AC19-4 Features include

• Southern Asian porcelain tiles • Heavy clay markets: the pressure of pricing • GCC: tile trends and markets • Sanitaryware trends in China is this your own issue? sub

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OFFI CIAL MAGAZ IN E:

CERAMICS CHINA

AGA Z IN E OFFICIAL M

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G UAN G Z H OU

A IFN H C S C I IN M O A C U US: CER G UAN G Z H O NE: AZ I G A M L A I C I O F FOCUS: IN F I NA H C S C I M A CER

GC C tile trends Chinese sanit aryware Southern Asian porce lain tiles Heavy clay pricing

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FICIAL MAG CSEeRe Au M s aItCS CHIANZINAE: G UAN G Z H O U I S H I N FOCUS: CH I NA

ds Plus news, views, analy GC C tile tren sis and much more! ryware ta ni sa e es s le Chin ti n ai an porcel Southern Asi ng GC C tile tren ci ds ri p ay cl Heavy Chinese sani e! ta or ryware m h uc m and Southern Asi ews, analysis an porcelain Plus news, vi tiles Heavy clay pr icing

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Plus news, vi

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and much m

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

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EXHIBITION REPORT

EXHIBITION REPORT

Indian ceramic industry soon to become No. 1 ICA 2020 3-5 March

• India holds potential to become the largest producer in the world – ceramic market report by Mordor Intelligence • Indian Ceramics Asia gathered 300+ exhibitors from 21 countries with 8400+ key decision makers • The expo included Buyer Seller Forum, Brick and Technical Ceramics Workshop, Exhibitor presentations & Ceramics Job Fair As per the recent market research report by Mordor Intelligence, inaugurated at Indian Ceramics Asia, India’s only B2B exhibition for Ceramic Raw Materials, Ceramic Machinery & Ceramic Technologies from 27 February to 1 March 2019 in Gandhinagar, the Indian ceramic industry holds potential to become the largest producer in the world as it’s looking to almost double the turnover by 2021 due to the construction sector growing at a tremendous rate (approximately 7-8%).

Bhupinder Singh, Chief Executive Officer of Messe Muenchen India shared his inputs: "With the urbanization projects and new construction activities in the country; the quality of participation witnessed in the last three days is a testimony to the optimistic growth of the industry in the years to come. Ken Wong, General Manager of Unifair Exhibition Service further adds: India has always been a significant market due to the impressive manufacturing plans by the government including a promising growth chart for the exhibiting countries enabling more and more companies to travel to this exhibition every year.

300+ exhibitors from 21 countries with 8400+ visitors The exhibition attracted 300+ exhibitors from across the globe including, Bangladesh, Belgium, China, Czech Republic, France, Germany, Indonesia, Italy, Switzerland, Turkey, United Kingdom, USA and many more. It also featured international delegations from Nepal, Sri Lanka, Bangladesh including Middle East and About Messe Muenchen India As part of its international strategy, Messe München has been expanding its portfolio and offers a worldwide network. In India, Messe München founded its wholly owned subsidiary with a registered office in Mumbai in September 2007. Messe München India is one of the leading organizers of trade fairs in India with a vast portfolio of B2B events such as analytica Anacon India, bauma CONEXPO India, drink technology India, electronica India, IFAT India, Intersolar India, India Lab Expo, Indian Ceramics Asia, LASER World of PHOTONICS INDIA, productronica India and has recently acquired Smart Cards Expo. The local trade fairs provide Messe München and its international exhibitors with access to high-potential markets.

Messe Muenchen India works closely with industry stakeholders to deliver well researched and professional trade fairs keeping in mind the priorities of the customers. With its

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African countries. The decision makers were able to align their requirements with the expected technological implementation and plan their long term business objectives. Few of the key visiting companies included Somany Sanitaryware Pvt. Ltd., Roca Bathroom Products Pvt. Ltd, Cera Sanitary Wares Ltd., RAK Ceramics and Bell Granito Ceramica Ltd. Knowledge rich supporting programs The accompanying programs like; Ceramic Job Fair, Brick and Technical Ceramic Workshops, Innovative exchange and Buyer- Seller Forum created a rich environment of deliberation and discussion amongst the industry stakeholders. All the programs were well attended and important interactions became a good knowledge source for the audience in action.

Key exhibiting companies like Sibelco India Minerals Pvt Ltd., Spectek Instruments LLP, Hindalco Industries Ltd. and System Ceramics India Pvt. Ltd presented on various industry topics ranging from raw material solutions, elemental analysis of ceramics to a highlight on sustainable material for ceramics.

The upcoming edition of Indian Ceramics Asia will take place from 3 March – 5 March, 2020 in Gandhinagar at The Exhibition Centre. Visit www.indian-ceramics.com / www. ceramicsasia.net for more information.

For PR and marketing enquiries contact: Mohsin Darvesh at +91-9820919675 or mohsin.darvesh@mm-india.in main office in Mumbai and regional representations in New Delhi, Bengaluru, Hyderabad and Chennai, Messe Muenchen India brings professionals from across sectors together for business, as well as for learning and networking opportunities.

About Unifair Exhibition Service Co., Ltd. Established in 1992, Unifair Exhibition Service Co., Ltd. is one of the pioneering professional exhibition organizing service enterprises in China. It has already organized and staged over 40 world-class exhibitions in different industrial sectors. We have a very strong and innovative team of experienced professionals with an exhibition management and organizing background, as well as huge customer resources, optimal marketing channels and complete service. UNIFAIR is the official organizer of CERAMICS CHINA in Guangzhou, which is the world's most influential and important ceramics exhibition offering customers and buyers extraordinary business opportunities.

AC 19-3

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