Asian Ceramics AC20-1 by Bowhead Media Ltd

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AC20-1

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IN FOCUS:

Bangladesh sanitaryware North African tiles Pakistan heavy clay Sri Lankan tableware Plus news, views, analysis and much more!

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Contents: AC 20-1 News

Features

4 Inside Asia

28 North African tiles

Sri Lanka finds a new place at the table.

6 Welcome

Glazing tragedies continue.

8 Across The Continent

Openings, closures and industry moves from across Asia.

Yogender Malik examines how the ceramic industries of Northern Africa, with their links to southern European markets, growth in the Middle East and soaring domestic demand driven by governmental infrastructural investment, are positioning themselves as a major force for the new decade...

40 Sri Lankan tableware

16 International News

Rohan Gunasekera looks at how the country’s ceramic tableware sector is emerging into a new period of optimism following a lengthy time of procrastination and indecision.

22 Material Matters

48 Bangladesh v India: a sanitaryware choice?

Our eye on the international arena.

The ins-and-outs of ceramic raw materials.

26 Comment & Analysis Bangladesh to phase out clay bricks.

Jahir Ahmed looks at the differing market machinations and approaches from two of the continent’s most prominent sanitaryware makers and emerging consumers and looks at the different approaches taken by each…

54 Brick evolution in Pakistan

Pressure continues to be heaped internationally, and now domestically, on Pakistan’s clay brick sector as cleaner technologies are increasingly demanded. Will the country’s industry finally shake off its reputation as one off forced labour and environmental degradation?

Analysis 62 State of the Nation: Gujarat The first of a new section in the magazine, analysing the manufacturing bases of India.

64 Talking Shop With the Bangladesh Ceramic Expo breaking all attendance records, our Southeast Asian Editor, Jahir Ahmed, asked some of the exhibitors how they felt the industry there was developing……

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66 In Advance: The Philippines A new focus on the technical ceramics industry: this month, the Philippines.\

70 The Trade Matrix A new analytical section on trade trends: this issue, US sanitaryware imports

72 Insight

Analysis and insight into Vietnam.

74 The Hunter And The Hunted

William Hunter reflects on the year and wonders if investment in emerging economies is the mantra for a new decade?“death spiral”. www.asianceramics.com

News

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Inside Asia “CLASS” IS PERMANENT… Sri Lanka has always had an excellent, well-deserved reputation for excellence when it comes to the tableware industry. Excellent transport links – further enhanced by collaboration on the New Silk Road – substantive investment in technology and skills and a desire to “punch above its weight” meant this island state has maintained a reputation for quality. Although changing tastes, and competition from ASEAN, meant that for a period the industry came under pressure, it is now rebounding having rediscovered its “mojo”. Whether gearing corporately for large-scale production or, as this photo shows from Midaya Ceramic, establishing a niche for short-run, hand-made products, there is no doubt that the Sri Lankan tableware sector is back with a bang!

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AC20-1

new year, a new decade, a new SEE US AT: look to Asian Ceramics…and yet, CE VI SAMA 2020 sadly, tragically in fact, the same VALE NCIA, SPAI N old problems in one of Asia’s major ceramic manufacturing hubs. NEW SECTI ONS News breaking as AC went to press was that Se e us at INS ID E! AMBI EN another employee of a sanitaryware manufacture TE & U N IC ER A in Gujarat had succumbed to a respiratory disease, IN FOCUS: directly linked to his workplace. Bangladesh sanit aryw are North Afric an tiles One more silicosis patient died in sanitarywares Pakistan heavy clay Sri Lank an tableware hub of Thangadh in Surendranagar district last Plus news, views, analy sis and much more! Saturday. With this, the death toll due to silicosis among ceramic workers has climbed to seven this calendar year. Somabhai alias Shyamjibhai Solanki succumbed to the lung disease while undergoing treatment at Medico Multi Speciality Hospital in Surendranagar town, an official release from the People’s Training and Research Centre (PRTC) said. The 47-year-old was admitted to the private hospital three days ago after he complained of breathlessness. However, he eventually succumbed to the respiratory disease while undergoing treatment, PTRC, a Vadodara-based NGO working in the field of industrial safety and occupational health, further said. This was the seventh death in 2019 due to silicosis in Thangadh, the hub of ceramic sanitaryware industry in Gujarat. The disease is caused by fine silica particles accumulating in lungs of workers. The particles adversely affect functioning of lungs, triggering a collapse of health of a patient by affecting functioning of other organs and liver immunity levels. Solanki was a resident of Vasadva village in Dhrangadhra taluka of Surendranagar district. He had migrated to Thangadh to work in the ceramic industry. He had previously worked in a private ceramic sanitaryware manufacturing factory as a glazer (one who manually spray-dyes moulds of sanitaryware items with glazing material, which among other chemicals contain silica particles) for eight years before he started experiencing health problems in 2009. The following year, he was diagnosed with silicosis. “He had worked in various ceramic units for around 10 years and developed silicosis in the process. He was bed-ridden for the last three years,” Jagdish Patel, director of PTRC said in the release. Solanki is survived by his wife, two daughters and a son. His son had dropped out of school two years ago and has been working in the same sector as his father for the last two years. Dry, dusty Gujarat. When this editor first travelled there in 2005, and effectively brought this completely overlooked region to the world’s attention as a result, conditions on the whole were relatively poor. Sure, some companies had a more modern outlook, but most had under-age labour and sub-standard health and safety. It is terrible to think, therefore, that after the massive expansion the State has seen in the last 15 years, coupled with investments poured in by major manufacturers, suppliers and technology companies alike, that such incidents still happen. Surely, there must be a STOP put to such issues? If this is not a green light to minimise human involvement in such areas, and instead encourage the much faster take-up of automated, robotic glazing, then I don’t know what is. AC COVERS.indd 2

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Companies benefit from late year Expo • North America in the sights for mosaic-maker • Government looks to low Distributors push for certification amnesty • Ceramic industry will be the third-largest export sector by 2024 • Ko distribution agreement • Esmalglass-Itaca completes Ferro purchase... BANGLADESH

Companies benefit from late year Expo Foreign companies, especially machinery and raw materials suppliers, see huge growth potential in Bangladesh’s rapidly rising ceramics sector. Many of the 98 foreign companies which took part in three-day ceramics exposition at Ithe nternational Convention City Bashundhara at the end of 2019, told AC about their business potential in the country They said Bangladesh has managed now to indisputably reach the quality to compete in the global market thanks to efforts of local entrepreneurs. The sector has been growing at 200 percent on an average for the last five years. “I could understand that the ceramics sector of Bangladesh has potential when I first came to the country in 2015 to explore business potential,’’ said Jerome Meakin, sales director of Unimak Machine Industry Company of Turkey. The ceramics sector of Bangladesh is growing very

fast and new factories are being set up. “Though the market size is still small, the future is very good as the purchasing power of the Bangladeshis is increasing,” Meakin said. His company has managed four clients in Bangladesh in the last four years and three are in the pipeline. Giorgio Renolfi, area sales manager at SAMCI, an Italian sanitary and tableware ceramic machine manufacturer, said his company has been supplying machinery to Bangladesh since early 2000 and has over 20 clients. “The improvement of the sector is really impressive. As a result, machinery manufacturers have bright future to do business in Bangladesh as ceramics manufacturers will require quality machine and equipment.” Paulo Vigario, sales director at Mota Ceramic Solutions, a Portuguese company, said his company has been exporting

china clay and bulk clay and other raw materials to the ceramic sector for more than 15 years. Around 25 manufacturers import raw materials from Mota Ceramic Solutions and the volume is increasing rapidly. Vigario said the possibility of exporting finished products to Bangladesh is getting slim as local companies are manufacturing high quality products and exporting tableware. Sunil Agarwal, managing director of Indian Ceramic House, echoed Vigario and is optimistic about business in near future. His company has been exporting colour to the ceramic sector for the last few years. Guangdong Nade New Material Ltd took part in the exposition for the first time but could not manage any client, said Bob Liu, its sales engineer. But he is optimistic about attracting clients in future as the sector is doing well.

About 20 Chinese machinery manufacturers and design and raw materials exporters took part in the fair. Currently, there are more than 60 ceramics factories in Bangladesh and over a dozen are in the pipeline, according to the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA). The country produces tableware, sanitary ware and tiles. The industry produced more than 25 crore pieces of tableware, nearly 20 crore square metres of tiles, and over 83 lakh pieces of sanitary ware in fiscal 2017-18. Bangladesh is almost selfsufficient in these products, a development opposite to the scenario in the 1990s. Local manufacturers cater to 85 percent of the country’s demand, while the rest, most comprising high-end ceramic products, is imported from Japan, China and Taiwan, said Irfan Uddin, general secretary of the BCMEA.

SRI LANKA

North America in the sights for mosaic-maker Lankatiles is targeting the North American market with its latest venture to manufacture mosaic tiles with the technical know-how from Chinese mosaic tile manufacturer, Foshan Shiwan Yulong Ceramic Co. Ltd. This collaboration also involves North American counterpart – Benjamin Malloy as it would be the key market for this product. According to Lankatiles, North America has high demand for mosaic tiles. Lankatiles is a well-established brand in North America for more than 40 years and the company

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is familiar with the intricacies of the market there, which will make it easier to target exports of mosaic tiles to specific buyers. “Lankatiles has been on an aggressive expansion drive over the past few years. Our entry in the mosaic tile category has led us to collaborate with a Chinese mosaic tile manufacturer to gain the necessary expertise to manufacture mosaic tiles in Sri Lanka and to export to North America and other countries,” Lanka Walltiles Group Managing Director Mahendra Jayasekera said.

This new manufacturing capacity will not only generate valuable employment opportunities, but will also add a new dimension to the company’s reputation as a world-class tile manufacturer and fill product gaps in the market. We foresee immense export opportunity for mosaic tiles to North America and other countries and believe this collaboration will truly help the company unlock its potential,” he added. Lankatiles’ tie-up with a

China’s Foshan Shiwan Yulong Ceramic is an opportunity that has arisen as a result of the USChina trade war. The company is already exporting to 12 countries including high quality markets such as USA, Australia, New Zealand, Japan, Canada and certain countries in the European Union. In the company’s most recent expansion, more than 6,000 square metres of production capacity was added at a cost of Rs. 2.5 billion, at its factory complex in Ranala.

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wer gas prices • DTI opts to drop import duty safeguard measures • ohler remains upbeat about sub-continent prospects • EFI secures landmark INDONESIA

Government looks to lower gas prices President Joko “Jokowi” Widodo will look into three options to lower the stubbornly high industrial gas price in Indonesia, which has deterred industries from expanding in Indonesia amid a domestic economic slowdown. The options are: introducing a fiscal incentive, creating a domestic market obligation (DMO) or undergoing an import simplification procedure to reduce gas prices for domestic industries, the President explained. “This problem has been going on since 2016. I need a solution, and those three are the options,”

he told reporters after a closeddoor limited cabinet meeting on Monday in Jakarta. Jokowi’s adminsitration is pushing industrial development forward to revive economic growth, which has slowed to its lowest rate in more than two years: 5.02 percent in the third quarter of 2019. By "reducing or even eliminating" the government’s share of earnings from gas sales – about US$2.20 per 1 million British thermal units (mmbtu) – Jokowi expected industrial gas prices to fall as well. The second solution being studied, he added, was for the

government to impose a DMO policy for gas producers so that prices could be maintained. The government already imposes such a policy on coal miners, who have to sell a quarter of their production domestically at less than $70 per ton. The third possible solution was to ease imports of gas. However, the President did not specify whether this would be achieved through fiscal or non-fiscal measures. There were seven domestic industries heavily reliant on gas, Jokowi added. These were the electricity production, chemical, food, ceramic, steel,

fertilizer and glass industries, which collectively consumed about 80 percent of Indonesia’s gas supply. “I’ve asked my ministers to carefully calculate how to make gas prices more competitive. Look at the issues from the upstream, midstream to downstream sectors,” he said. The President has also asked for an update on the implementation of Presidential Regulation No. 40/2016 on determining natural gas prices. He said he was looking out particularly for field problems with the implementation of the regulation by the seven gasreliant industries.

PHILIPPINES

DTI opts to drop import duty safeguard measures The Department of Trade and Industry (DTI) is going with the recommendation of the Tariff Commission (TC) not to impose a definitive safeguard measure on ceramic floor and wall tile imports. Trade Secretary Ramon Lopez said he has been informed of the TC’s recommendation on the ceramic floor and wall tiles safeguard measure case. Asked if the DTI would reverse the TC’s recommendation, he said the DTI would not do so. In its summary report on the investigation of the case issued on Dec.18 signed by TC chairperson Marilou Mendoza, commissioner Ernesto Albano and newly appointed commissioner Marissa Maricosa Paderon, the body said there is no need to have a definitive safeguard measure on ceramic floor and wall tile imports. This, as the TC found there

was no increase in imports of ceramic floor and wall tiles both in absolute terms and relative to domestic production during the period of investigation. Based on TC’s findings, ceramic floor and wall tile imports only increased in 2014 and stabilized thereafter as it showed a declining trend starting 2015. Having established there was no surge in imports of ceramic floor and wall tiles, the TC said there was no serious injury or threat to the local industry to warrant the imposition of safeguard measures. “Considering that ceramic floor and wall tiles were not imported in increased quantities (whether absolute or relative to domestic production) during the period of investigation, the Commission hereby terminates its formal investigation and recommends that no definitive

general safeguard measure be imposed on importations of ceramic floor and wall tiles,” the TC said. The TC conducted an investigation on the case as the DTI imposed a provisional safeguard measure in the form of a cash bond amounting to P3 per kilogram on ceramic floor and wall tile imports earlier this year. DTI imposed a provisional safeguard measure as its preliminary probe showed an increase in imports from 2013 to 2016. DTI’s probe was conducted following a petition from Mariwasa Siam Ceramics Inc., representing the ceramic tile industry, which claimed imports have increased and contributed to the serious injury of local players. The government is allowed under Republic Act 8800 or the Safeguard Measures Act to impose safeguard

measures or duties on goods when imports of such cause threat or injury to local players.

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News

PHILIPPINES

Distributors push for certification amnesty A group of importers asked the Trade Department to exclude ceramic tiles from the coverage of mandatory certification. The Philippines Ceramic Products Importer Association also pushed for a public hearing to determine whether ceramic tiles pose danger to life, health and safety. It submitted a position paper to the Trade Department’s Consumer Protection Group and would present expert witnesses to attest to the safeness of imported ceramic tiles. The group argued that the new technical regulations imposed by the CPG contained provisions

that were “not practical and not feasible to implement within a reasonable period of time.” “Foremost of this almost impossible provision is the requirement for a PS [Philippine Standard] license for tile manufacturers abroad,” said Philippines Ceramic Products Importer Association president Napoleon Co. The proposed technical regulations require importers to apply for PS license for their suppliers within six months. “From our previous experience in applying for PS license it will be impossible to have all suppliers apply for PS license within 6 months considering the

limited number and capacity of the accrediting laboratories from where they came from,” Co said. Data showed there are more than 200 suppliers of ceramic tiles from different countries to the Philippines. Most ceramic tiles imports are from China, Spain, Italy, Vietnam, Malaysia and Indonesia. The group said ceramic tiles should not be considered critical construction materials and thus should not be subjected to mandatory product certification. It said that unlike cement, steel or wires, ceramic tiles are applied and used more for their

aesthetic value. The Trade Department removed ceramic tiles from mandatory listing in 2015 following findings that these products are not harmful to life and health. Another issue of concern for the ceramic tiles importers was the prohibitive cost of the minimum capitalization requirement of P20 million. “If the intention of the proposed regulation is to weed out fly-bynight traders, the regulation may just require submission of BIR income tax return for the past three years to show that the importers are legitimate,” Co said.

BANGLADESH

Ceramic industry will be the third-largest export sector by 2024 Bangladesh’s Ceramic Manufacturers and Exporters Association (BCMEA), expects that By 2024, the ceramic industry will be the third-largest export sector in Bangladesh by 2024 According to Md Shirajul Islam Mollah, president of the Bangldesh’s Ceramic Manufacturers and Exporters

Association , “ The demand for Bangladeshi ceramic products is very high in the international market due to high quality build and aesthetically pleasing design. Currently, our ceramic products are exported to 50 countries, including Italy, the US, Germany, Norway, Canada, Sweden, Spain, the UAE, the Netherlands,

INDIA

India is among the most important markets for US based premium sanitary ware producer Kohler. The company has been operating in India since 2006 with its range of bathroom products including toilets, lavatories, faucets, bathtubs, whirlpools, and showers. Headquartered in Gurgaon, Haryana, Kohler operateit two manufacturing plants in Jhagadia, Gujarat for sanitary ware and faucets production. . According to David Kohler, President and CEO, Kohler Co, ”Everything we believed about India, in terms of opportunity, fast growth and

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Bangladesh’s ceramic industry, particularly the ceramic tableware sector has made great strides. Ceramic tableware producers have achieved huge success in key European and American markets. Currently, there are 66 ceramic companies producing tableware, tiles and sanitary ware.

INDONESIA

Kohler remains upbeat about sub-continent prospects

Poland, Greece, Tukey, India and Russia. 50 percent of the exports are concentrated to the UK, the US, Germany, Canada and Sweden. In the last fiscal year, ceramic products worth Tk586 crore were exported from Bangladesh. As a single commodity, it occupies the seventh position in export. During last few years,

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dynamic economy, has been true. To us, it is one of the most interesting and creative markets we serve in the world. We think that it has been a great market and we have evolved to be the leading international brand in the market. When we think of our top three strategic markets, India comes right after the US, our original market, and China, where we are the No 1 brand. These are the three most strategic markets for us because of their longterm economic potential. In India, we have been growing at around agrowth in the last five years.”

EFI secures landmark distribution agreement EFI Industrial Printing, world leader in digital printing innovation and PT Teknik have signed a distribution agreement for Indonesia region. From now on, it will distribute EFI inks and provide technical assistance service to companies in the ceramic industry in Indonesia. The agreement, which arises from EFI’s commitment with the expansion and improvement of its channels, will give customers in the region an excellent service. EFI ceramic ink sets include latest water-friendly inks, that are a source of environmental benefits while offering high print

quality and better with the rest of the ceramic process. As Fernando Tomás, Deputy general manager of EFI Building Materials, 'We are proud of this agreement with PT Teknik, as it represents an advance towards proximity with our partners that allow us to excel in the ceramic industry worldwide. For all sales and after-sales inquiries, please, contact: CretaprintSalesOps@efi.com For technical support, please contact: cretaprintcustomercare@efi.com

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News

WORLD

Esmalglass-Itaca completes Ferro purchase The ink and glaze manufacturer EsmalglassItaca has purchased Ferro’s ceramics division for 460 million dollars in an operation which will convert them into the leading company in the ink and glaze sector worldwide. The closing of the transaction is subject to the granting of the regulatory approvals and to the compliance or waiving of the closing conditions. The resulting group is set to become one of the leading frit, glaze, colour and ink manufacturers for the ceramic tile industry worldwide. It is believed that there is the potential for an additional US$32m. in cash based on the performance of the business pre-closing, subject to customary adjustments. With annual sales of approximately $510 million for the twelve months ended September 30, 2019, Ferro’s Tile Coatings Business produces coatings for ceramic tiles used in residential and non-residential construction. Historically, it has been part of the Company’s Performance Coatings reporting segment, along with Ferro’s Porcelain Enamel Business, which will be retained. "This transaction will substantially advance the Dynamic Innovation and Optimization phase of our strategy and strengthen our balance sheet,” said Peter Thomas, Chairman, President and CEO of Ferro Corporation. “It will result in a Ferro more fully focused on highergrowth industries where our market-leading technology, innovation, and customercentric service generate higher gross margins. The transaction also will reduce our manufacturing footprint and end-market exposure in Europe, optimizing our portfolio with more equal balance between Europe and the rest of world and with less exposure to commercial and residential construction markets. Given these strategic

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benefits, and the enhanced balance sheet resulting from the transaction, we are confident that divesting the Tile Coatings Business will deliver substantial value for our shareholders. We also are very pleased that our Tile Coatings colleagues will have the opportunity to grow the business and thrive under new ownership.” Mr. Thomas added that the net proceeds from the sale principally will be used to pay down debt. In this respect, it is clear that a strategic complementarity exists between the two businesses. Lone Star has expressed its intention to maintain two separate and different businesses as it considers this to be the best way for both companies to be able to continue to exploit their additional strengths, whilst also competing more effectively with the products and services that they are able to offer to their clients. It is worth remembering that Esmalglass-Itaca has already managed to successfully integrate three key figures from the sector worldwide: Esmalglass acquired Itaca in 2002 and Fritta in 2015. Vicente Bagán, Co-Ceo of Esmalglass-Itaca explained that “we are convinced that a significant consolidation will take place in the ceramics sector within the next few years which will look to improve overall efficiency, and now, thanks to this operation, we will be better prepared to address these market changes”. Bagán also emphasised “the advantages that being able to share knowledge and experience on all levels (commercial, technical, operational, R+D, etc) will bring to our group”. In this sense he also stressed that “through this acquisition, we have been given the opportunity to transform a particularly fragmented sector”, adding that “this operation will only make sense

if it brings value to our clients”. With regards to job positions, Bagán pointed out that “our group has managed to integrate three companies while also increasing the number of employees to more than the pre-crisis figures”. In fact, the group boasts continued and sustainable growth both in terms of turnover and jobs, and it currently provides employment to more than 1,600 individuals. The new group’s main objective is for it to become more efficient and competitive. In fact, Bagán has suggested that “this is the only way to make an industrial business sustainable.” The Co-CEO of EsmalglassItaca also highlighted the fact that the company is looking to undertake actions that will strengthen its presence amongst its clients, considering them to be its greatest assets. Likewise he went on to state that “we will do everything we can to provide greater value and we are looking to improve the consistency and quality of our products and services on a global level”. It is also anticipated that this transaction will create more efficient and competitive businesses worldwide, therefore enabling the company to meet the needs of its clients, regardless of the particular market segment which they belong to. Finally, Bagán assured that “we have focused all of our efforts on building a human team that is able to adapt to the changes which we will see in our sector over the next few years, as we consider this to be fundamental for the sustainability of our group.” He finished by stating that “thanks to the global presence of both companies, this agreement will boost the EsmalglassItaca-Fritta group’s business with the Ferro Group.” Esmalglass was founded in 1978 in Vila-real as a company

dedicated to the manufacturing and marketing of frits, glazes and ceramic colours. Itaca began its professional activity in 1989 in La Pobla Tornesa, manufacturing and selling ceramic colorants. In 1999, Esmalglass and Itaca decided to join forces and the Esmalglass-Itaca group was created as a leader in technology, products, technical assistance and design. The group went on to acquire Fritta in January of 2015. Ferro Corporation is a leading global supplier of technology-based functional coatings and colour solutions. Ferro supplies functional coatings for glass, metal, ceramic and other substrates and color solutions in the form of specialty pigments and colorants for a broad range of industries and applications. Ferro products are sold into the building and construction, automotive, electronics, industrial products, household furnishings and appliance markets. The Company’s reportable segments include: Performance Coatings (metal and ceramic coatings), Performance Colors and Glass (glass coatings), and Color Solutions. Headquartered in Mayfield Heights, Ohio, the Company has approximately 5,900 associates globally and reported 2018 sales of $1.6 billion.

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SOUTH KOREA/GERMANY

ONEJOON moves for Eisenmann German-technology company "Eisenmann Thermal Solutions" has been saved. Insolvency administrator Joachim Exner has sold the business operations of the company to the strategic investor ONEJOON from Korea. Both locations and all jobs will be preserved. "Eisenmann Thermal Solutions GmbH & Co. KG" specializes in the development, manufacture and sale of industrial furnaces for the production of various materials. As a subsidiary of the Eisenmann Group, the company had to file for bankruptcy in early August 2019. However, Eisenmann Thermal Solutions is not part of the Eisen mann Group's core business, so Exner has implemented a

separate investor solution for this company. The Purchaser of the business operations is ONEJOON Thermal Solutions GmbH, based in Bovenden (Lower Saxony), a subsidiary of ONEJOON Co., Ltd., Korea. ONEJOON is a mechanical engineering company that among other things specializes in the manufacture of furnaces for processing cathode and anode materials in the lithiumion battery industry. The transfer of business operations will take place on January 15, 2020. Both sites (Böblingen and Bovenden) and all of the 200 jobs will be retained. Exner had continued Eisenmann Thermal Solutions GmbH & Co. KG business in

full since the application for insolvency and pushed ahead with the restructuring of the business. "The fact that this was successful is primarily thanks to the employees who have remained loyal to their company with full commitment over the past few months," emphasized Exner, managing partner of the law firm Dr. Beck & Partner. The law firm Dr. Beck & Partner with 8 insolvency administrators and more than 150 employees at 8 locations in Bavaria is one of the leading German insolvency admin istration law firms. In recent years, the law firm has advised numerous wellknown corporate insolvency proceedings, including group insolvencies with an

international focus. Joachim Exner has particular experience especially in the reorganization of corporate groups, e.g. Scherer & Trier, NeumayerTekfor, Jakob Gruppe, Loewe and Metz. Exner is a member of the Gravenbrucher Kreis, the association of the leading German insolvency administrators.

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JAPAN

Murata slims down as World first beckons Murata Manufacturing Co., Ltd has developed the GRM011R60J104M, the world’s first multi-layer ceramic capacitor*1 to feature a maximum capacitance of 0.1μF in 008004 inch size (0.25×0.125mm). Mass production of this new product is scheduled to begin this year. As smartphones supporting 5G become more widespread and devices such as wearable devices become increasingly multifunctional

and more compact, the demand for smaller and higher density electronic circuitry is growing. Among the components employed in this circuitry, multi-layer ceramic capacitors are essential for electronic devices and are used for a wide range of applications such as in smartphones and wearable devices. As the high end smartphones are equipped with around 800 to 1,000 capacitors, there is a considerable need for such

components to be made even more compact. By using the company’s original ceramic and electrode material atomization and homogenization technology, Murata has achieved a mounting surface area approximately 50% smaller and a volume approximately 80% smaller than that of our conventional product (01005 inch size)*2 with a capacitance of 0.1μF. Moreover, the new product has a capacity of around 10

times that of the same-sized product (008004 inch size)*3 initially mass-produced by the Company. In future, Murata will continue to conduct research and development into ceramics and high-precision, microscopic layering technology for electrode materials, expand our lineup to meet the needs of the market, and contribute to the further miniaturization and greater functionality of electronic devices.

INDIA

Lixil Corporation may invest INR 100 crore Japanese sanitary ware producer, Lixil Corporation may invest INR 100 crore to double its installed capacity in next three years according to one of the key executives of the company. The company has invested INR 400 crore at its Vijayawada factory, which has a capacity to produce 1.2 million pieces of ceramics .

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According to Bijoy Mohan, CEO of LIXIL Asia Pacific “In terms of volume and revenue in business, I would expect in India our largest business would be the pre-fabricated bathrooms. That will be the single largest business. It will lead the way for sure, because the value or size of the home or the bathroom is much

bigger. This we believe will be huge for India because of the construction demands, the scale that is required, there is not enough skilled labour to be able to do all of this on site and the speed of construction and regulations like now make it essential to complete a project at a certain period of time.”.

Under its pre-fabricated bathroom system, LIXIL is offering integrated bathroom systems through construction of the entire bathroom in a factory, flooring, tiling, walls, piping everything together and deliver it within 16 hours at the proposed site. LIXIL has been doing this in Japan for the last 50 years.

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Jobs at risk as ceramics firm plans to suspend Tanzania

t least 3000 jobs are in jeopardy as a major producer of ceramic tiles plans to halt production early in 2020 for at least four months to pave the way for accumulated stocks to be sold. Keda (T) Ceramics Co. Ltd, which was previously known as Twyford is planning to stop production due to what it says is decreasing market share and fully-stocked warehouses. Speaking in an interview, Keda Ceramics managing director Tony Wu said the factory has more than 40 million square metres of tiles in stock at its warehouses. “…if we stop the production line for four months, we can sell off half of the stock…if we stop for eight months, then we can be fully sorted out” he said, adding that the problems are due to market conditions. Mr Wu noted that when the factory operates at full capacity, it can produce up to 50,000 sq metres a day. However, it has not been running at such a level and instead has been closer to 42,000 sq metres/day because of the situation. Explaining the reason for this, Mr Bruce Ni – who is Mr Wu’s assistant – said a lot of cheap tiles are imported, mainly from China and India. There are also less exports due to numerous trade barriers including non-tariff barriers that involve in the uplift of import valuation prices. Tanzania needs an average of 20m. square metres of tiles per year, and Keda Ceramics can produce up to 18m. square metres alone – some 90% of local demand. Keda Ceramics created the tiles industry value chain from mining to distribution. Stakeholders of the tile industry’s value chain involve mineral suppliers, transporters, the central government and local authorities, labour, services providers (sch as Tanesco, Tancoal, water authorities etc), wholesalers, retailers and many others. According to Mr N, the whole production chain will be influenced as a result. Government revenue and employment opportunites

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will decrease tremendously, he suggested. “Keda [Ceramics] has created about 1,000 direct jobs and 2,000 indirect jobs” he said, adding that about 95% of the raw materials are locally obtained. Also, 100% of the

income would also be affected because Keda Ceramcis exports product to Kenya, Uganda, Rwanda, Burundi, Congo, Malawi, Mozambique and Zambia. In the period of one year alone, the company earns more than

“if we stop the production line for four months, we can sell off half of the stock…if we stop for eight months, then we can be fully sorted out energy is purchased locally. A factory worker, Mr Saidi Msangi, a resident of Chalinze in the Coast Region, said closure of the factory will affect him directly because he depends on it as a salaried employee.

US$10m. in foreign exchange. Recognising the situation, the deputy minister for Industry and Trade, Ms Stella Manyanya called upon Tanzanians to prioritise the use of local products over imported ones because the former are “high

“Manufacturing is a very technical job, and it is not always easy to find people with the requisite skills “I have been employed by Keda since November 2017, and depend mostly on my job as it enables me to pay rent and feed my family”. Explaining how other stakeholders will be affected, Mr Ni said that “per day, the factory consumes 900 tonnes of raw materials and 200 tonnes of coal, paying local levies, service levies, royalties and more to the likes of TRA, Tanesco, Tancoal, the Ministry of Minerals and local governments” he explained. In addition, the company’s contribution of foreign exchange

quality and affordable”. “Tanzania now produces tiles. We have two factories which can fill the local market demand, and also supply for export. I would like to advise those who are used to importing these products to stop doing so as we have enough of our own” she said during a visit to the factory. She further noted that “we need to have fair competition; but we also need to ensure that we protect our local industries so that they can grow and carry on….so I promise to do whatever it takes

to ensure that local industries are effectively protected”. Mr Wu said that in the next five years, Keda Ceramics would focus on starting to produce sanitaryware also, and other sanitation-related products to capitalitise on the raw material situation. “Our focus on industrialization will correspond with how quickly we are going to focus on building products like sanitary sets and toilet sets as the raw materials are the same to which we already employ. Also, we are planning to manufacture more large-sized tiles. We have the plant and space to expand our factory”, he added. Mr Wu also pointed out that “…we have written letters to the ministry (outlining the company plans), but as we want to expand, we must sort out all the production chain”. He further added that some challenges faced by the company included delays in obtaining work permits for more skilled workers outside the country. “Manufacturing is a very technical job, and it is not always easy to find people with the requisite skills – even holders of academic qualifications such as diplomas and university degrees may not have the required knowledge of skill-set. We simply can’t find the right level of ceramicist here in the country, since the tile industry is so new to Tanzania” he concluded. According to the factory’s report of 2019, in efforts to improve public relations, the company organised a programme for Chinese doctors to give free medical treatment to over 200 local staff. “A good health plan does not translate into a blank cheque. Continued investment in domestic resources is part of a mutuallyaccountable partnership” he said. In addition a local orphanage has been supported and security has been contributed to. To improve the living conditions of staff, Keda started the construction of a five-block staff dormitory at the Cost Region’s police station in Kibaha. However, this has yet to be completed as funds ran short.

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Machinery sector sees decline in 2019 Italy

019 marked a hiatus in ceramic technology investments, prompting a slowdown in sales on the part of the Italian ceramic machinery and equipment sector. According to preliminary figures published by the Research Department of Acimac (Italian Ceramic Machinery and Equipment Manufacturers’ Association), the industry is expected to close 2019 with a turnover of 1.78 billion euros. The biggest falls have been in the Italian domestic market, which following the boom fuelled by the Industry 4.0 tax incentives has

dropped by 27.7% to 414 million euros. Exports have fallen by 13.8% to 1.366 billion euros. “We were expecting a decline in the domestic market given the huge investments already made by Italian manufacturers, but in 2019 several of our export markets experienced a degree of difficulty and adopted a more cautious approach after a positive start to the year, resulting in an overall decline in investments,” said Acimac’s Chairman, Paolo Sassi. “Our export share remains above 76% and we are confident that some of the production districts we serve all over the world will continue

modernising their lines and resume the investments they had put off this year. This will enable them to make higher quality products with added aesthetic value while reconciling the needs of process efficiency and automation with the growing attention to green issues, especially in mature markets,” he added. “In these respects, the Italian ceramic machinery manufacturers have definitely retained their world leadership position.” The forecasts for 2020 are nonetheless very cautious. Areas of concern include the continued geopolitical turbulence in a number

of markets, tariffs and trade tensions at an international level, and the failure of the Italian government’s policies to adequately address companies’ growth needs. “According to macroeconomic projections, growth of world GDP will continue to slow,” continued Sassi. “We therefore expect to maintain our positions and consolidate our market shares with respect to our competitors. 2020 will also be the year of Tecnargilla, where the Italian industry will once again have the opportunity to showcase its levels of innovation and technological excellence.”

Ceramics industry “at heart” of talks on future trade United Kingdom

abinet minister Liz Truss has pledged to put the needs of the ceramics industry at the heart of Britain’s trade talks with the USA. The International Trade Secretary visited Stoke-on-Trent in January, to tour Middleportbased Steelite International and speak to pottery leaders. She revealed a key priority in negotiations will be to make it cheaper to export Stoke-on-Trentmade goods to the United States. At the moment, the average US tariff on ceramic imports is 6.7 per cent and the figure can rise as high as 28 per cent for tableware. Ms Truss said: “One of the things I’ll be keen to secure is to eliminate these tariffs. If it’s cheaper to export, it means more jobs here in

Stoke-on-Trent. “We’re also looking at customs paperwork and some of the testing. “Ceramics is a very important industry. The British have a reputation for quality and I don’t think there is a better example of that than ceramics in Stoke-on-Trent.” Other steps will include new anti-dumping measures, which aim to prevent overseas companies flooding the UK with goods sold at below fair market price. The European Union stepped in several years ago to stop China undercutting British pottery firms. During her visit, Ms Truss also got to decorate a plate and try her hand at making pottery. But while happy to talk up the US negotiations, she batted away

questions about what would happen if the Government failed to secure a free trade agreement with the EU by the end of 2020. Prime Minister Boris Johnson has already ruled out asking for an extension to the transition period, despite pleas from business leaders. The British Ceramic Confederation (BCC) has previously said thousands of jobs in the pottery industry could be at risk if there is no deal. Ms Truss said: “We will see a trade deal with the EU. It’s in the EU’s interests.” She had a private meeting with the BCC during her visit to Staffordshire. Steelite – which was bought by American private equity firm Arbor

Ceramic Group unveils investment plans Bulgaria

ulgarian sanitary ware retailer Ceramic Group intends to invest over 11 million levs ($6.3 million/5.6 million euro) this year in the opening of two new showrooms and the construction of a manufacturing plant for sanitary furniture, local media reported. Ceramic Group will invest 5 million levs in the production plant, which is expected to

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start operations in the first half of 2021 and employ around 80 people, business news outlet Capital.bg reported on Sunday. The plant will have an annual capacity of some 50,000 products. The two new showrooms expected to be opened this year will be located in Sofia and Ruse and will operate under the company's Alati brand of stores.

Ceramic Group estimates that its 2019 turnover will be around 10% higher year-onyear at 38 million levs. The company eyes turnover of some 41 million levs in 2020. In the medium term, Ceramic Group aims to expand the number of stores under its Alati brand and enter all large cities in the country, Capital.bg quoted the company's owner Ruslan Stefanov as saying.

Investments last month – is one of North Staffordshire’s big export successes, selling its products to more than 130 countries. ts president and CEO, John Miles, said: “As Steelite and the ceramics industry look at our next chapter of global expansion, we welcome the comments made by the secretary of state and the Government’s continued support for our industry.” Laura Cohen, chief executive of the BCC, said she appreciated the opportunity to raise key issues with Ms Truss. She added: “We and our members want to help Government achieve their ambitious timescales for a UK-EU trade agreement by the end of the year, as 57 per cent of our members’ exports are sent to the EU.”

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ETEKINA project continues to develop Europe

nergy efficiency in kilns and other process stages of ceramics production are quite low and pollutants are currently emitted at unsustainable levels. But as costs for fossil fuels rise and governments impose ever tighter carbon emission regulations, ceramics companies are increasingly turning to creative solutions to reduce their climate footprint. "Carbon dioxide emissions are a common issue for many intensive-energy industries, and any primary measure or secondary measures you implement that can reduce carbon dioxide emissions are good," said Dra Irina Celades Lopez, who is responsible of the Sustainability Area in the Ceramic Technological Institute located in Castellón, a city in Spain. Luca Manzini, in charge of energy management for the Ceramiche Atlas Concorde Spa, part of Gruppo Concorde in Italy and partner within the EU funded project ETEKINA, agrees: "All ceramic groups here in Italy are making huge investments in energy efficiency. You need a lot of thermal energy in order to make ceramics. We try to recover waste heatto cut down our main expense, which is natural gas." With kilns that can reach 1250 degrees Celsius, pollutants like carbon dioxide and sulphur dioxide being released, and liters of drinking water turned into waste water, the ceramic tile manufacturing industry does not have a reputation for being exactly environmentally friendly. Gabriele Frignani, who works for Gruppo SACMI, noted that no one should expect industrialists to suddenly become ecowarriors unless there is a financial incentive. "Industry, in general, is not interested at all in environmental issues unless they can transform this topic into higher turnover," he said. "The idea that a new renaissance in environmental terms can be generated from the industrial sector is not only romantic but completely detached from reality." For example, as part of ceramic tile production, water is added to

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raw clay and materials, resulting in a clay/water mixture called "slip," characterized by a water content of 32-38%. The slip is dried in a spray drier, the water evaporates and humidity is reduced to about 6-7%. Finally, the ceramic tiles are pressed. The ceramics industry sources drinking water for use in this process simply because it is

not like going to the moon. It's something that we already do to some extent. But up until now we didn't have the technology in order to recover the kiln exhaust energy," said Manzini. ETEKINA HPHEs are being tested on two kilns present within the new pilot plant at Ceramiche Atlas Concorde Spa. Luca Manzini expects that the initiative will

“Industry is not interested in green issues unless it transforms into higher turnover cheaper than purifying waste water, according to Frignani. Although water is also expelled by this process, no measures have yet been put in place to recover it, though some prospective studies have been carried out. However, in Spain water scarcity issues have driven the industry to use part recycled water and part drinking water, and this is an example other countries could follow. In reality, drinking water is only a requirement for the preparation of glazes and inks, due to high quality requirements. But there are savings to be made by implementing more energy efficient processes, and the European ceramics industry is experimenting with heat pipe heat exchangers (HPHEs) to recapture energy lost from piping hot kilns and transferring that energy to another point in the production chain. Rather than dispose of the heat, Ceramiche Atlas Concorde Spa wants to collect it and then use it within other processes inside the plant. The HPHEs being developed as part of ETEKINA project will help with this. "We will save some natural gas in this way. The idea is not a breakout in technology, it's

result in savings of between €120,000-180,000 for the plant. That corresponds to 400,000 cubic meters of natural gas, which represents 2% of the overall heat produced. "Actually, it will be slightly more, due to the fact that the plant has a lot of autoproduction, because of the presence of a generation plant inside the plant itself," he said. Within the Ceramics Technical Institute in Spain, Celades Lopez is also looking at heat pipes as a potential vehicle for heat transfer within ceramics plants. For her, a main advantage of heat pipes is that they are resistant to changing atmospheric conditions and are fast and effective no matter what the surrounding temperature or pressure may be. "Sometimes in industry you can find environments that are very corrosive, with a lot of pollutants, and [the heat pipes] are still working properly," she said. Her department is also involved in the DREAM project, which is developing a simulation model to catalog the thermal behavior of ceramic products during the firing stage. "[Our aim is to] try to install these heat pipes within the cooling area of the firing stage

in order to harmonize the temperature during the cooling state, which is [a] tricky stage in the manufacturing of ceramic tiles," she said. The cooling phase of the production of ceramic tiles is particularly delicate because stress within the ceramic pieces could cause breakages. Gabriele Frignani is also involved in the DREAM project. He's a big fan of how heat pipes can be used to transport heat away from heat emitters and towards heat consumers. "One of the advantages in using heat pipe technology is that we are always sure that the air that we move to other thermal machines of the process is clean. There is no mixing between the air that we heat and the air that could potentially be contaminated from the firing area of the kiln, for example," he said. The efficiency of heat pipes is also a little higher compared to standard heat exchangers that are used for similar applications. Another method that can be used to make ceramic tile production "greener" is to use the existing machinery in a more energy efficient way. Manzini is in the process of training and informing his co-workers about small tweaks and adjustments that can be made within the tile production process to increase efficiency. "If you find a better way to run your machinery, it's cheaper but you have to factor in people too. People are often not really willing to change their habits!" he laughed. "It's long work but it has to be done, in terms of awareness." But, such tweaks are sometimes incompatible with the results that a client may want for a particular tile. That's why innovations like ETEKINA's heat pipes can provide value. "If the market is asking you for tiles with certain specific characteristics, that are only obtained through high energy waste [methods], at least with ETEKINA you will be able to retrieve the heat that normally would be wasted, and take it back into the plant," Manzini said.

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Nnino looks at overseas tableware Zimbabwe

ulawayo-based company Nnino Ceramics plans to penetrate the international market like European Union to increase its exports, an official has said. The company, established in 2015 by Mary Filannino, manufactures hand painted and sculptured tableware. In an interview, Nnino Ceramics factory and production manager Zondani said that they were currently exporting in the region to countries such as South Africa,

Zambia and Angola. “We make tableware with each and every product being handmade and hand painted, thereby making it unique and original. We have got a market locally and regionally, the latter including South Africa, Zambia and Angola. We are trying to penetrate all over the world, so that we can get exporting. We are already exporting, but we need to push,” Phiri said. Phiri, however, would not be drawn into disclosing their export figures. “Our products have got high

potential. There are so many opportunities in the ceramics industry because the product sells itself. So the opportunities are very high.” Phiri said they buy their raw materials from South Africa, but foreign currency shortage was hampering them. “Our clay, our paints, our brushes and everything we buy them from South Africa. So we need foreign currency in order for us to produce. That’s why we are trying by all means to have more

exports than local,” he said. “We have to make sure that we produce 1 500 pieces a month. But now it depends on the orders. If we get an order which needs more than our stipulated target, then we have to hire artists in order to speed up, but our production line is 1 500 pieces a month.” “Sometimes you get orders which are less than the target. So it forces you to lay off some employees. Challenges that we are facing at the moment are to do with the country’s economic environment.”

Raw Material News Altech looks for high grade options AUSTRALIA // KAOLIN ASX-listed Altech Chemicals, has successfully completed a drilling program at its promising Kerrigan Kaolin Project near Hyden in the West Australian Wheatbelt and will now look to update its kaolin mineral resource in that area. The company said this week that the drilling program at Kerrigan , which is located just 20km south of Hyden, consisted of 27 aircore holes for a total of 765 metres. It said all holes were drilled vertically at an average hole depth of 28 metres and samples were collected at one-metre intervals. According to management, the completed drilling program at the Kerrigan project is expected to enable the company to update its mineral resource estimate and will assist in determining the next steps for the project. Altech plans to mine kaolin clays at its wholly-owned flagship Meckering kaolin deposit before shipping it to its soon to be built processing facility within the Tanjung Langsat industrial complex near Johor Bahru in southern Malaysia. It has previously said it is looking to produce up to 4,500 tonnes a year of high-purity alumina sourced from pure kaolin

clays mined from an open pit operation near Meckering which will provide a much needed shot in the arm for the Wheatbelt region where most jobs are farming based. Whilst the Meckering kaolin deposit will provide feedstock for the Johor HPA plant, Kerrigan also hosts a high-quality kaolin deposit comprised of kaolin and mottled clays with overburden thickness ranges of 1 to 12 metres. Interestingly, the Kerrigan project is proximal to the Hyden to Lake Grace railway line which connects to the port city of Albany. The project was initially identified as containing highquality material in 1992 by Graphite Holdings Pty Ltd which subsequently drilled the project area, as did CRA Exploration Pty Ltd later on. Since that time, the only significant exploration conducted at Kerrigan was the bulk sample and evaluation of around 6 tonnes of kaolin and the processing of samples from the pits In 2011, the company reported an initial JORC inferred kaolin mineral resource of 85 million tonnes at an ISO brightness of 85.1% at Kerrigan.

Khorasan plant is “country’s first” IRAN // ALUMINA Iran has reached its full capacity of 30,000 tonnes per year of alpha-alumina, to supply the country’s refractories, ceramics and chemicals industries. Iran had opened its first "alpha" alumina plant in the country’s north-eastern province of North Khorasan, designed to serve the Iranian refractories market, in the middle of 2019 but it has been reported that it has taken time to reach full output levels. The new plant, which was inaugurated in mid-July is owned and operated by Iran Alumina Co, is one of a number of industrial development projects collectively worth more than $1 billion, in which the Iranian government has invested to help boost the domestic economy.

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Alpha alumina (α-Al2O3) is an extremely hard, redcolored form of corundum capable of withstanding temperatures of 1,050-1,100°C. It is used in the production of industrial ceramics, engineering§ ceramics, refractories, glazes and catalysts, for the oil and gas and petrochemical industries. According to unit managing director Majid Ejlali, the plant has capacity for 30,000 tonnes per year of alpha-alumina. Iran’s economy continues to struggle under the weight of international trading sanctions, since United States President Donald Trump withdrew the US from the Joint Comprehensive Plan of Action (JCPOA) in May 2018.

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Raw Material News For your information…kaolin progresses AUSTRALIA // KAOLIN FYI Resources Ltd (ASX:FYI) mining proposal and mine closure plan for its 100% owned Cadoux Kaolin Project has been approved by the Western Australian Department of Mines, Industry Regulation and Safety (DMIRS). The approval covers the planned mining, processing, site infrastructure, waste facilities and haul roads for the project as well as outlining the mining schedule and project economics over the life of the mine. FYI Resources managing director Roland Hill said: “With this important milestone now achieved and only minor regulatory approvals required prior to commencing development and mining activities, FYI will continue progressing its high purity alumina (HPA) strategy in

anticipation of arranging full project funding and a formal decision to mine from the FYI Board.” This approval paves the way for the first step in the company’s HPA strategy, the foundation of which is the superior quality aluminous clay (kaolin) deposit at Cadoux. The project’s feedstock has responded positively to the company’s innovative and integrated processing flowsheet - utilising uncomplicated moderate temperature and atmospheric pressure technologies. FYI is positioning itself to be a significant producer of HPA in the rapidly developing LED, electric vehicle, smartphone and television screen as well as other associated high techproduct markets.

Trade-war calm boosts zircon hopes AUSTRALIA // ZIRCON The cooling US-China trade war is a positive for metals and bulk commodities, none more so than for zircon. The trade war was seen as a key factor in the price weakness for the key mineral sand in the back half of 2019. Tied as it is to building and housing activity along with some other sectors, zircon, like copper, is something of a bellwether of global economic activity. Now things are settling down on the trade war front, the expectation is that the demand and price weakness that worked its way into the zircon market in the second half of 2019 will be reversed as 2020 unfolds. Having said all that, the zircon price in its weakened form (the last reference price was $US1,540/t) is pretty good anyway. It might well be down on its 2011 peak of $US2800/t, but it is also well up on its 2015 low of $US900/t, with predicted supply shortages in the early 2020s yet to bite. It is against that backdrop that 2020 is shaping up as a big year for mineral sands developer, Strandline (STA). It’s trading at 11c for a market cap of $40 million. While it is working away at getting a “starter” mineral sands project up in Tanzania, it is the big-time potential of its zircon-rich Coburn project in WA’s Mid-West that is attracting investors’ attention. No wonder in that as the DFS on Coburn, which was released in April last year, suggested a pre-tax NPV of $551m, an IRR of 32%, life-of-mine revenue of $3.9b, average annual EBITDA of $86 million and a revenue-to-operating cost ratio of 2.2, based on price forecasts by the leading mineral sands consultancy, TZMI ($US1,480/t for premium zircon). The project is now in the offtake and financing stage, with the latter including the potential for debt financing from the Federal Government’s NAIF, announced in October. The financing task has just been made easier thanks to recent process enhancement work which essentially pointed

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to the potential to increase revenue from the DFS case for no increase in capital or operating costs over the projected 38-year mine life. As was outlined in the DFS, Coburn could end up producing a heavy mineral concentrate (HMC) at a capital cost of $207m, or go through to producing final products for an extra $50m, or $257m all up. Producing HMC for sale is nothing new for the WA industry. Industry leader Iluka (ILU) brings in HMC from its South Australian operation for processing at its separation plant near Geraldton in the Mid-West and Image Resources (IMA) ships HMC from its northern Perth Basin project to China. Iluka’s separation plant is one of the biggest in the world and given its proximity to Coburn, some pundits speculate there is a role for Iluka in Coburn’s development, if it wants one. There would seem to be scope for Iluka to provide debt or equity at either a project or company level, or simply help underpin Coburn by purchasing the concentrate for processing at its own plant. Equally, it may choose to let Coburn stand on its own two feet, in which case Strandline would presumably go down the route of making final mineral sands products for export to the world. Either way, it’s an interesting scenario, particularly given that Coburn will account for 5 per cent of the world’s annual zircon supply. Iluka has a lot on its plate at the moment. Next month it will let the market know what it will be doing with the MAC iron ore royalty with BHP, valued by the market at around $1.6 billion. There is also work to be done salvaging what value it can from its $US330m acquisition of Sierra Rutile in 2016, now with a written-down carrying value of $US50m. The troubles with the African excursion necessarily narrowed Iluka’s mineral sands growth options.

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Bangladesh to phase out clay bricks

he government move to make the use of blocks mandatory in public construction will boost manufacturing of environment-friendly construction materials and encourage private businesses to invest in the sector, said the chief of a top realtor. “It is very good starting point,” Shahriar Kamal, managing director of Concord Group of Companies, told local media in a recent interview. The reason being, before this people could not understand how serious the government was about the switch from the environmentally harmful fire-burnt clay bricks. In December, the ministry of environment, forest and climate change directed state-agencies to begin the use of blocks -- which are made up of sand, cement fly ash or materials other than clay -- in public construction from this fiscal year. Public agencies will have to use blocks to build and repair walls of buildings, surrounding walls, herringbone bond road and rural passages in place of bricks, which use valuable topsoil as raw material. To start off, the ratio of bricks to blocks would be 9:1. From next fiscal year, the ratio of use of blocks will increase to 20 percent and increase gradually to completely phase out fire burnt clay bricks by 2024-2025. “The government has given a clear indication of how much demand it will create. Now, business will come to this industry on their own.” With 10 concerns spanning from real estate, constriction, entertainment, hospitality and garments, Concord is one of the largest real estate, engineering & construction entities in Bangladesh. “Concord is a pioneer in environment friendly building materials manufacturing,” Kamal said. The company began making readymix concrete in mid 1980s and signed up for making hollow blocks, pavers and other blocks in 1998, when clay bricks burnt in traditional fixed chimney kilns was the only available product for construction. The actual number of brick kilns in Bangladesh and the bricks they spit out is hard to come by. The number of kilns will be between 7,000 and 10,000, manufacturing 2,100 crore to 4,300 crore units of bricks annually, said trade bodies representing brick

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makers in mid-December. “We could realise that there are serious negative factors to clay bricks,” said Kamal. He cited reports of Dhaka’s terrible air quality and said brick kilns are sources of 58 percent of all the fineparticulate air pollution in the capital and the situation becomes worse in dry season. The kilns emit huge green-house gas and affects farmland. Air pollution might cause 5,000 premature death annually in the Dhaka city, he said. In contrast, hollow blocks are environment friendly: no topsoil or coal is needed to make and burn them, so there is no CO2 emission. On the other hand, one clay brick consumes 3.2 kilograms of topsoil and eight kilograms of coal and one square foot of such brick causes emission of 17.6 kilogram of CO2, according to Concord. “Due to its ductile, lightweight properties, concrete hollow blocks make structures more earthquake resistant. It is also more heat and sound resistant than clay bricks because of existence of void in the block.” Finally, overall cost of construction is much cheaper. If hollow blocks are used, total construction cost falls almost 10 times, he said. “This is environmentally much superior and has a lot of advantage.” Despite the obvious advantages, it was not easy for Concord to popularise hollow blocks: one company is not sufficient to bring a complete shift in an industry without government’s support and direction. “We tried. But it was difficult to make people aware of the environmental issues, which will affect them later.” It was also difficult to educate people about the use of blocks. Plus, masons were not trained to use the materials. “Now, that awareness has grown and the government has taken some visionary steps we are hoping that there will be a positive result in the near future.” Today, 50-60 private firms make blocks, according to Kamal. Concord is one of the biggest makers of hollow blocks, and it has the capacity to make 45,000 units of hollow blocks, 60,000 uni-pavers and 2,000 parking tiles daily. The demand for block is growing slowly but it is still negligible.

The main reason behind this is the lack of awareness,” he said, adding that the government’s step to completely come out from clay bricks for construction would increase the demand for blocks. “Definitely, this will create a lot of demand but we should know the experiences of our neighbouring countries including India and Pakistan,” he said, adding that China began the process of shifting from bricks 30 years ago and India began with its last 15-year plan. They took short-term, medium term and long-term goals to come out from firebricks to alternative, environment friendly bricks and blocks. There are a number of environment friendly alternative materials for construction in those countries and they term the materials as resourceefficient bricks, he said. For Bangladesh, Kamal said the government should strictly enforce policies regarding brick kilns to control pollution and phase-out highly pollutant brick kilns. In addition, emphasis should be given on research and development to identify resource-efficient bricks and building materials for Bangladesh, awareness creation on the use of environment friendly blocks and bricks. A long-term policy or roadmap should be framed focusing on: research, strengthening the Housing & Building Research Institute, establishing mason training institute, reducing pollution and making brick kilns efficient, and giving incentives to brick field owners so that they themselves switch away from clay bricks and towards green bricks or blocks. Providing financial incentives will also encourage investment for making resource-efficient blocks or other green products, he said. More private entrepreneurs will come to this field if the government provides soft terms and tax benefit. And because of entry of big companies, there will be competition in the segment. “So the prices of blocks will drop and the quality will improve.” Huge investment would be needed to meet the demand for blocks in the coming years following the government decision, Kamal said.

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Analysis: Tiles

North Afric expansions abound as region prospers

omprising three of the most attractive African markets and war torn Libya, North African ceramic tile market has registered mixed growth rates in recent years. However, steady on-going construction activities and vibrant tourism sector in the region are expected to lead to higher growth rates of ceramic tile production and consumption in most of the countries in the region in the coming years. Barring Libya, all the other three countries have announced a slew of measures for the construction sector in their countries, which will enable the domestic ceramic tile producers to achieve higher growth rates in coming years. Currently, four countries of the North Africa consume more than 200 million square metres of ceramic tiles on per annum basis. The installed capacity in the region is about 220 million square metres, but lower capacity utilization, particularly in the largest market Morocco has necessitated significant imports of ceramic tiles in the region. These three North African countries can position themselves as a regional ceramic tile manufacturing hub, owing to their location at the tri-regional focal point of Sub-Saharan Africa, the Middle East, and Europe.

credit rating agency Fitch, Moroccan construction sector will grow at an average of 3.1% per year by 2028, â€œa path of growth modest by regional comparison, lower than that of more efficient markets such as Egypt and Qatar, where we expect average growth of more than 8% over the same period.â€? The agency also expects slower growth in construction in Morocco compared to recent years, as work on major projects such as Tangier-Casablanca TGV and Tanger Med 2 Terminal 2 have been completed. However, on the positive side, the second stage of a major infrastructure project was launched in June 2018. Known as, Wessal Bouregreg, it will extend along the river Bouregreg between the capital Rabat and the neighboring city of Sale and will cover a total built area of around 875,000 square metres. The development will include residential buildings (4,200 housing units), commercial areas, offices, sociocultural and leisure centres, healthcare facilities, car parks and hotels. It is due to be completed in 2024 at a total estimated cost of 786 million euros. In comparison to three main countries, Libyan construction industry is expected to register steadiest growth in the next few years. Ceramic tile demand in Libya is expected to register steadiest growth ( though from a lower base) in next few years.

Construction trends in North Africa

Morocco

North African construction markets have exhibited a mixed trend of construction in last two years. All three key markets have registered a growth in the range of 3- 4.5 % in the construction sector in these two years. Construction trends indicate a mixed bag of fortunes for Moroccan ceramic tile producers in coming years. According to the global

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Largest producer and consumer of ceramic tiles in the North African region, Moroccan tile industry has had mix fortunes in last two years. Production and consumption have increased by low single digits in last two years. Ceramic tile production, consumption and exports, imports in Morocco

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Analysis: Tiles

ican tiles Catered by ten large and mid-scale ceramic tile producers, Moroccan ceramic tile manufacturing industry has been struggling for past few years, on account of high production cost due to high prices of natural gas in the country. Domestic ceramic tile producers have been unable to meet the domestic demand (despite the sufficient installed capacity) on account of higher production costs. Economic growth has also impacted the ceramic tile growth in Morocco in 2018 and 2019. Though, exact GDP numbers are not out, but according to the World Bank predictions Moroccoâ€™s economy is expected to have grown by 2.9 % in 2019. Moroccoâ€™s GDP has not grown as fast as it did last year (3%) or in 2017 (4.1%). However, the International Monetary Fund expects the growth rate to increase to 4.5 % by 2024. Morocco enjoysÂ political stability, robust infrastructure, and a strategic location, which have contributed to its emergence as a regional ceramic tile manufacturing and export base for domestic tile producers. Ceramic tile industry in the country is expected to be benefited in coming years as the Government of Morocco has implemented a series of strategies aimed at boosting employment, attracting foreign investment, and raising performance and output in key revenueearning sectors, such as the automotive and aerospace industries. However, high natural gas prices has been the most pressing issue for Moroccan ceramic tile producers. In fact, this is the sole reason behind low capacity utilisation in ceramic tile sector of the country. Morocco relies on imports for almost 95% of its energy requirements, and is heavily reliant upon imported oil, natural gas and coal to generate electricity. The vast majority of its natural gas is imported from Algeria (a mere 7% sourced from domestic production), and large quantities of electricity are imported from Spain (~15%).

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Morocco has an installed capacity of 96 million square metres of ceramic tiles on per annum basis, but most of the producers operate at low capacity utilisation rates. In 2018, the domestic consumption at 94 million square metres registered a growth rate of 2.6 % as compared to the previous year. A significant part of total demand was met through imports. The country imported a total of 26 million square metres of ceramic tiles in the year 2018. Egypt, Spain and China are three of the largest importing sources for ceramic tiles in Morocco. It would be worthwhile to mention Zellige ( also zelige or zellij) tiles in the context of Morocco, as these tiles are very popular in the country. Zellige is mosaic tile work made from individually chiseled geometric tiles set into a plaster base. This form of Islamic art is one of the main characteristics of Moroccan architecture. It consists of geometrically patterned mosaics, used to ornament walls, ceilings, fountains, floors, pools and tables. The Moroccan traditional patterns and styles are found inside famous buildings such as AlQarawiyyin Mosque in Fez, and the Alhambra in Granada. Fez and Meknes in Morocco are the main production centers for zellige tiles due to the Miocene grey clay of Fez. The clay from this region is primarily composed of Kaolinite. For Fez and Meknes, the clay composition is 2-56% clay minerals, calcite 3-29%. As the colour palette of the zellige tiles increased over the centuries, it became possible to multiply the compositions ad infinitum. The most popular current form of the zellige is a square. Other forms are possible: the octagon combined with a cabochon, a star, a cross, etc. It is then moulded with a thickness of approximately 2 centimetres. There are simple squares of 10 by 10 centimetres or with the corners cut to be combined with a coloured cabochon.

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asian ceramics

Analysis: Tiles

Algeria

With a population of more than 42 million ( 2018), Algeria is the largest populated country in the North Africa region. Algeria is also the largest country in Africa by land area. Among the four North African countries, Algeria registered the steadiest growth in terms of production and consumption of ceramic tiles in last two years. In 2018, country’s ceramic tile consumption registered double digit growth rates. Catered by ten large and mid- scale producers, Algeria produced a total of 47.1 million square metres of ceramic tiles. Consumption increased by nearly 11 % in comparison to the year 2017 to reach at 62.4 million square metres. Imports meet nearly one third of the total ceramic tile consumption in Algeria. Spanish companies continue to dominate exports of ceramic tiles in Algerian market. In fact, Spain is the largest exporter of ceramic tiles in the country. According to data from ASCER, Spanish tile producers exported more than 13 million square metres of ceramic tiles to Algeria in the year 2018. Turkey, Egypt, Morocco, Tunisia and China account for the rest of imports in the country. Though, on economic front, Algeria could not register healthy growth rate. Algeria’s economy is highly dependent on hydrocarbons, and on global oil and gas prices. GDP growth reached 1.5 percent in 2018, compared to 1.4 percent in the previous year, and was sustained at 1.5 percent the first quarter of 2019. Growth in the hydrocarbon sector was slow, with economic activity contracting by 6.5 percent in 2018 and 7.7 percent in Q1 2019, partially offsetting the slight increase in non-hydrocarbon growth at 3.4 percent and 3.9 percent respectively. Despite, the muted economic growth, ceramic tile industry was able to register one of the most successful year in the last decade. In 2019, Ideal Ceramique, one of Algeria’s largest ceramic companies owned by Tunisian industrial group Poulina, ordered a new production line from a leading Italian technology supplier. The new line will be used to produce red body single fired tiles in 30x30 cm, 40x40 cm and 30x60 cm sizes and will be installed at the facility in Hammam Essokha El Eul ma (Setif) during the first quarter of 2020.

Tunisia

Tunisian ceramic tile manufacturing industry has undergone significant changes during the in the last decade. Major producers have added capacities and streamlined their operations resulting in increase of capacity. However rising imports and lack of demand in some of the key export markets ( most notably Libya) has led to low capacity utilisation in the domestic industry. Tunisian ceramic tile sector has also been impacted by the devaluation of the dinar during the 2016-2018 period, with nearly 58% against the euro, and 54% against the dollar and the surge energy prices, which has gone up up 48% from 2016. Catered by eight mid-sized companies and a number of small units in Nabeul, Tunisan ceramic tile industry has an installed capacity of about 42 million square metres of ceramic tiles. Polina Group’s subsidiary company, Carthago Ceramic is the market leader in Tunisia with an installed capacity of nearly 13 million square metres per annum. Sisiter companies, Somocer and Sotemail, with a cumulative installed capacity of nearly 12 million square metres per annum of ceramic tiles occupies the second position with a a share of 26.75% of ceramic tile installed capacity in Tunisia.

Libya

War torn Libya is expected to consume significant volumes of ceramic tiles in coming years. The country is preparing to launch a comprehensive reconstruction program with the support of several international organizations including the World Bank.

asian ceramics

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

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

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Analysis: Tiles

Speaking at the first Libyan investment economic forum held in Morocco's capital Rabat, Libyan Minister of Planning Taher Al-Juhaimi said, “Libyan government is reviewing its five-year development plan by redefining the priorities of some 4,000 projects worth around 100 billion U.S. dollars. Priority will be given to projects for reconstruction and modernization, including projects in sectors of education, health, housing, basic services and infrastructure. Libya aspires to attract both Libyan and foreign private investors to implement the development plan. The Libyan government intends to show foreign investors the economic opportunities in Libya so that they can contribute to the development and reconstruction of the country.”

Super Cerame

Super Cerame, a subsidiary of the Ynna Holding group, is the largest ceramic tile producer in Morocco. The company started its activities in Kenitra in 1968 with modest scale. Today, the company has an installed capacity of 120,000 square metres per day. Ranked in the top 20 worldwide for ceramic producers and in the top 10 for construction companies in Morocco, Super Cerame employs more than 2000 people spread over 4 manufacturing sites. Since 1999, the company has injected 2 billion DH into the modernization of its production processes, development of infrastructure and the opening of industrial units and other showrooms. Over the past 4 years, the company has achieved a combined turnover of more than 5 billion DH. Since its creation, Super Cerame has developed more than 20,000 models. In 2019, the company announced an investment of 300 million DH for the construction of the 5th factory.

Faienceries Algeria

Founded in 1969, Faienceries Algerian group is the largest ceramic tile producer in Algeria with an installed capacity of about 34,000 square metres per day from its five production units. The company has leading position in several provinces, including Algiers, Bejaia, Blida Bordj Bou Arreridj, Chlef, Constantine, Oran, Ouargla, Sidi Bel Abbas, Tiaret Tizi Ouzou and Ghardaia. To support the ceramic tile manufacturing, the company also mines needed raw materials. It operates two clay mines at M’sila and Bechar and a Kaolin mine at Jijel. The company also produces frits and glazes for in-house consumption.

Carthago Ceramics

With an installed capacity to produce about 13 million square metres of ceramic tiles per annum, Carthago Ceramics is largest tile producer in Tunisia. Founded in 1988, Carthago Ceramics is a subsidiary of one of the largest industrial group in Tunisia, Poulina Group Holding. Carthago produces floor and wall tiles from its two plants in Sfax. Carthago also operates a ceramic tile production facility in Algeria. With an installed capacity of 8000 square metres of floor and wall tiles, this plant is one of the most advanced ceramic plants in Algeria. The company has a holding of 60 % in Algerian plant with balance 40 % held by Algerian group, Boulanaouar. Located at Setif, this plant is catering Algerian tile market since 2010. In addition to ceramic tiles, Carthago Ceramics produces bricks, sanitary ware and building adhesives. In early 2019, the company announced that it wil build new factories for all four business areas with a total value of 180 million euros between 2019 and 2021. Carthago’s parent company, Poulina Group Holding is a Tunisianowned private industrial group listed on the Tunis stock exchange. The company was founded in 1967 and operates more than 100 subsidiaries . Poulina Group Holding’s operate a number of businesses, including building materials, poultry integration, consumer

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Faienceries Algeria Location: Industrial Zone of Rouiba, Algeris Country: Algeria Installed Capacity: 12 million sqm per annum Markets: Domestic and export markets. Other: Faienceries Algeria is the largest producer of ceramic tile industry in Algeria with an installed capacity of about 34,000 square meters per day from its five production units. Since its creation as a small company producing ceramics by the founder Zetchi Said, the company has grown to become one of the leading Algerian producer of wall tiles and floor tiles. Today, its innovative products and processes of superior quality are recognized throughout the Algerian territory.

Saf Cer Group Location: Setif Country: Algeria Installed Capacity: 8 million sqm/ year Markets: Domestic and export markets. Other: Set up in 1987 as a ceramic floor and wall tile producer, the SARL S.A.F.CER group (Societe Algerienne de Fabrication des carreaux Ceramiques et produits rouges) is one of the leading ceramic tile producers in Algeria. The company ventured into brick production in 2005. With two facilities located in the Algerian cities of Sétif and Constantine, the group is now one of the leading players in the Algerian building materials industry, renowned for its high:quality products sold in both the domestic and international markets.

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

Leading tile producers in Tunisia and their installed capacity Company

Installed Capacity

Cathargo Ceramics

13 million square metres per annum

Somocer and Sotemail 11.7 million square metres per annum MPC Essid

3.50 million square metres per annum

GCCB

3.20 million square metres per annum

FTT La Ceramic

1.90 million square metres per annum

Socer

1.85 million square metres per annum

Nofasud

900,000 square metres per annum

Others ( Mostly based at Nabeul)

4.1 million square metres per annum

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Analysis: Tiles

products, steel processing, packaging, real estate, wood products and equipment, trade and services. The group is international in scale with some 20 foreign subsidiaries, mainly in Morocco, Algeria, Libya, France, Senegal and China.

Somocer ( and Sotemail)

Somcer, The Modern Society of Ceramics is a limited company created in 1985 and bought by the Abdennadher Group in 1989. At the time of acquistion, it had an installed capacity of 360,000 square metres of ceramic tiles. Currently, with an installed capacity of 6 million square metres of floor and wall tiles from its five production lines, Somocer is the second largest producer of ceramic tiles in Tunisia. The company has a technical tie up with Italian group La Faenza. Somocer’s subsidiary, Sotemail ( Somocer owns more than 70 % of the company’s share capital) ventured into ceramic tile manufacturing in 2011. Established in 2011 in technical collaboration with Italian company, Industry Ceramiche Di Faenza SPA, Sotemail produces porcelain tiles for the domestic and exports market. Initially Sotemail had an installed capacity of 1.5 million square metres of tile. But, as the local demand started to outstrip supply, the company carried out a major expansion within three years of its establishment. The expansion added 3 million square metres per annum of the installed capacity. Ceramic tile production, consumption and exports, imports in Morocco Year Production Consumption Exports Imports

Carthago Ceramics Location: Sfax Country: Tunisia Installed Capacity: 13 million square meters per annum Markets: Domestic and exports ( primarily Libya) Other: Largest ceramic tile producer in Tunisia, Carthago Ceramics operates two state of the art plants in close vicinity at Sfax. Carthargo Ceramics is a subsidiary of leading business entity, Poulina Group Holding. A large proportion of Carthago’s tile output is consumed by parent company. Carthago’s parent company, Poulina Group Holding S.A. operates in the real estate, public works and infrastructure, wood and household appliances, mass consumption goods, packaging, steel works, trade and services, building materials, and poultry sectors primarily in Tunisia, Libya, Algeria, France, Morocco, Senegal, and China. The company engages in the real estate activities; and construction of buildings. It also manufactures and distributes household appliances, including refrigerators, stoves, and washing machines; and industrial equipment, such as freezers and mini bars.

Somocer (The Modern Society of Ceramics) Location: Monastir Country: Tunisia Installed Capacity: 6 million square meters per annum Markets: Domestic and exports Other: Starting with a very small output in 1989, Somocer has gone on to become the second largest ceramic tile producer in Tunisia. Currently, with an installed capacity of 5.70 million square meters of floor and wall tiles from its five production lines, Somocer is the second largest producer of ceramic tiles in Tunisia. The company has a technical tie up with Italian group La Faenza.

2018

69.7

90.8

6.3

27.4

2017

68.6

88.2

6.3

25.9

2016

68.1

86.4

6.2

24.5

2015

66.3

82.4

7.5

23.6

Sotemail (Subsidiary of Somocer)

2014

66.2

79.1

8.9

21.8

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

2013

64.6

76.8

9.1

21.3

2012

61.6

76.5

5.7

20.6

2011

57.9

70.6

4.6

17.3

2010

59.0

66.8

3.4

11.2

2009

56.0

64.1

5.1

14.0

2008

51.7

60.6

4.2

13.1

Ceramic tile production, consumption, imports and exports in Algeria Year Production Consumption Exports Imports 47.1

62.4

7.2

22.5

2017

43.4

56.3

5.3

20.0

2016

40.5

53.4

5.2

18.1

2015

38.1

52.0

4.8

18.7

2014

36.2

50.5

4.4

18.7

2013

36.1

49.1

3.9

18.2

2012

33.7

47.8

4.2

18.3

2011

30.3

45.6

3.6

18.9

2010

32.8

42.0

3.4

12.6

All units in million square metres

asian ceramics

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CMY

All units in million square metres

2018

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Analysis: Tiles According to Riadh Jaidane, General manager of Somocer, “Our ceramic tile manufacturing units are the first two companies in Africa to obtain QB UPEC certification, a quality certification for building recognized internationally, which is likely to facilitate us the access to the European market and conquest other markets. The two companies posted respective sales growth of 3% to 88 MTnd and 9% to 52 MTnd in the year 2018. It is mainly the local market (+ 4% to 76MTnd for Somocer and + 11% to 50MTnd for Sotemail) which boosted sales and which helped offset the relative decline in exports (-5% to 10MTnd for Somocer and - 23% at 2.3MTnd for Sotemail).

Egypt: in context

NOTE: AC carried an extensive review of Egypt in the middle of 2019, and so only a precis is supplied here. Egyptian ceramic tile producers are expected to be benefited in the current year and next few years on account of the improvement in economic situation in the country. The Egyptian economy is expected to continue its strong growth performance of about 5%, driven by recovery in the tourism sector, higher gas production and continued public investment. Inflation however, is likely to remain elevated at around the 13%-mark as the government moves to liberalize fuel prices in mid-2019. The World Bank issued earlier in April a report about the economic outlook for the Middle East and North Africa region including Egypt. The bank expected Egypt to achieve a growth rate of 5.5 percent during 2019, marking the second highest growth rate in the Middle East and North Africa region behind Djibouti, which tops the forecasts by 7 percent. It foresaw Egypt’s growth rate to hit 5.8 percent in 2020 and increase to 6 percent in 2021. The World Bank’s report also expected real GDP per capita growth to record 3.7 percent in 2019, 4 percent in 2020, and 4.3 percent. However, just three years ago, the country lacked the hard currency to import cooking oil. A revolution in 2011 (and a coup two years later) tipped Egypt into economic crisis. Investors and tourists fled. Economic growth was anemic. Unemployment peaked at 13.2%. President AbdelFattah al-Sisi had to seek a $12bn loan from the International Monetary Fund ( IMF) in 2016.

Gas woes?

It came as a shock to global gas market, when Egypt became a net gas importer in 2015 after being a key gas exporter for a period of ten years. This unfortunate, but not unexpected, situation was the result of a decline in Egypt’s indigenous natural gas production combined with a rapidly rising domestic gas demand driven mainly by large energy price subsidies. For a long period of time, the domestic price of gas to the ceramic industry was heavily subsidized and resulted in a series of ceramic projects being planned and developed. But the sharp drop in gas supply availability, and the decision to import more expensive gas, pushed the Egyptian government to increase domestic gas prices. However, a couple of years back the government increased the price for gas supplies to ceramic industry to USD 7 per (MMBtu) . A price level that has a significantly adverse impact on ceramic production costs and that has led the majority of ceramic producers to switch to coal use or cheaper fuel alternatives. This is even more critical with the present, fierce international competition and capacity surpluses in international ceramic markets. Currently major changes are taking place on the gas supply side which are significantly impacting on the country’s natural gas balance, country’s economy and ceramic tile manufacturing. Given the dominant position of natural gas in Egypt’s energy scene, the government has focussed on the pricing of natural gas prices for home and industries in recent years. However, a further hike in natural gas prices for ceramic industry would prove to be counterproductive.

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Cleopatra Ceramics Location: Cairo Products: Wall and floor Tiles Markets: Domestic and export markets. Other: Based on the outskirts of Cairo, Ceramica Cleopatra is the largest Egyptian manufacturer of ceramic tiles. Established in 1983, it has become one of the largest private corporations in Eygpt and one of the world’s largest ceramic, porcelain and sanitary ware producers. Its integrated industrial complex of 17 plants employs 25,000 people and the business now exports to 108 countries worldwide.

Lecico Egypt Location: Alexandria Products: Wall and floor tiles Markets: Domestic and export markets Other: Known more for its sanitary ware producing prowess , Lecico is also a significant producer of ceramic tiles. Company’s three state of the art plants have a cumulative installed capacity of 36 million square meters, which was scaled down to 25 million square meters in order to retain the competitive position in the domestic and regional ceramic tile production industry.

Al Omarra Location: 10th of Ramadan City Products: Wall and Floor Tiles Markets: Domestic and Export Markets Other: Established in 2005 in the 10th of Ramadan city, Al Omarra has a state of the art production facility spread over an area of 88000 square . meters. With its last investment in early 2014, the company has an installed capacity to produce 6 million square meters of ceramic tiles. Company: Al Masia Location: 10th of Ramadan City Products: Wall and Floor Tiles Markets: Domestic and Export Markets Other: Established in 2004, Al Masia Group is a rapidly developing ceramic tile producer. In 2012, the company installed a new single:firing line dedicated to the production of red body single:firing with a production capacity of over 20.000 sqm/day. The plant located in the area 10th of Ramadan city has a daily installed capacity of 40,000 sqm, making it one of the top tile producers in the country. Company: Art Ceramics Location: 6th of October City Products: Wall and Floor Tiles Markets: Domestic and Export markets Other: Art Ceramics was established in 2010 at 6th of October with with two production lines and an installed capacity of 8 million sqm of ceramic and porcelain tiles. The company invested in state of the art technology and acquired the production lines from reputed Italian technology providers. Company: Alfa Ceramic Location: 6th of October City Products: Wall and Floor Tiles Markets: Domestic and Export markets Other: Established in 1996, Alfa Ceramics is among the second generation of ceramic tile producers. With a manufacturing capacity of 12 million sqm of ceramic tiles, the company is one of the leading exporters of the tiles from Egypt. In its latest expansion in 2014, the company installed 4 new production lines with a total investment of EGP200 million.

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Analysis: Tiles Leading manufacturers in Egypt Company

Location

Installed Capacity

Ceramica Cleopatra

10th of Ramadan city

100 million sqm

Lecico

Alexandria

36 million sqm

Ceramica Prima

Fifth Industrial Zone, Sadat City

35,000 sqm/ day

Ceramica Innova ( Pharaohs Group) Al Omaraa

Alexandria and Fayoum city

40 million sqm

10th of Ramadan City

6 million sqm

Al Masia (Varsina)

10th of Ramadan City

14 million sqm

Art Ceramic

6 of October City

8 million sqm

Ceramica Gloria/ Al Shark

Nasr City

8 million sqm

Omega Ceramics

10 of Ramadan City

12 million sqm

Ceramica Venezia

6th of October City

20 million sqm

Ceramic Al Amir

10 of Ramadan City

MICC ( Misr International Ceramic Company)

Quesna Region Industrial Ceramic

20 million sqm

Ceramica Prima

Sadt City

7 million sqm

Ceramica Verdi

Suez Industrial Zone

4 million sqm

Ceramic Alfa

6th of October City

12 million sqm

Ceramica Glamour

Soukna

23,000 sqm/ day

Ceramic tile production, consumption, imports and exports in Tunisia Year

Production

Consumption

Exports

Imports

2018

34.6

43.1

3.0

11.5

2017

32.2

39.9

2.8

11.5

2016

30.8

37.2

2.7

9.1

2015

31.2

37.3

2.5

8.6

2014

30.9

37.5

2.2

8.8

2013

27.4

33.3

2.4

8.3

2012

26.2

32.0

2.1

7.9

2011

25.4

29.5

2.6

6.7

2010

23.2

27.4

2.9

7.1

2009

23.0

26.7

2.7

6.4

2008

21.2

24.7

2.5

6.0

Ceramic tile producers in Algeria Company

Location

Installed Capacity/ annum

Faienceries Algeria

Various locations

12 million sqm

SAF CER Group

Setif

8 million sqm

Modern Ceramics

Alger

4 million sqm

Bati Ceram Sarl

Setif

3 million sqm

Ceramique Hippocampe Tipaza Sarl Zet Ceram El Harrach Alger

3.2 million sqm

Societe Milevienne De Ceramique SAFCF

Costantine

4.5 million sqm

Boumerdes

2.8 million sqm

Corso Ceram Sarl

Boumerdes

3.6 million sqm

C Gres Compacto

Hassi Ameur Industrial Area, Oran

3 million sqm

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3 million sqm

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Analysis: Tableware

First-class

Sri Lanka seeks a tableware advantage Rohan Gunasekera looks at how the countryâ€™s ceramic tableware sector is emerging into a new period of optimism following a lengthy time of procrastination and indecision.

ri Lanka's tableware industry has gone through a period of consolidation and is now in a new growth phase, having recovered from the sharp slump in orders after the global financial crisis and subsequent labour unrest. Although there has been a downturn in sales this year owing to the global trade slowdown and terrorist bombings in April 2019, manufacturers have been investing in new machinery to make their processes more efficient and reduce costs and looking at new markets. Most inputs like energy - liquid petroleum gas (LPG) - and raw materials like clays and pigments are imported. Sri Lanka is known for having good deposits of minerals like clays used in the manufacture of fired ceramic products. But some existing deposits are no longer accessible while delays in getting regulatory and environmental approvals for mining mean the industry is forced to import. This has its own implications as manufacturers are dependent on the timing of clay shipments. The industry hopes the government will act to make local clay deposits more accessible helping to reduce the cost of imports and improve timing in the production process. The single largest expense faced by Royal Fernwood Porcelain is the cost of LPG, essential for firing kilns. Last year, there was a 30% increase in LPG costs, which in turn drove up cost of production, although this was mitigated to a certain extent through process improvements, according to the company. And labour cost is now the highest cost for most Sri Lankan tableware firms, followed by energy. It used to be the other way around just a year ago.

of white body a month, to improve efficiencies and reduce costs, according to T. C. Thennakoon, Senior Director at Noritake Lanka Porcelain. The plant makes porcelain, bone china, fine casual china and super white fine china.

Noritake: heavy investment

Noritake Co. Ltd. opened a tableware plant in Sri Lanka in 1972, drawn by cheap labour and good deposits of minerals like kaolin. The Noritake Lanka Porcelain (Pvt) Ltd. manufacturing plant in Matale, in the central hills, close to feldspar and quartz deposits, is now the Japanese tableware brand's biggest production facility, operating under its tableware top business segment. Sri Lanka is now a convenient location and a hub to serve growing markets in Asia, especially India. Noritake has been investing in new machinery at the Sri Lankan plant, which now has a total capacity of 650,000 pieces

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Analysis: Tableware

service? There are no plans to expand capacity but Noritake is investing in technology to improve production efficiency and labour productivity, Thennakoon told Asian Ceramics. "Recently we installed new automatic forming machines - plate making machines - which doubled productivity. Improved productivity does not necessarily mean increased output but labour use was halved." The plant, which is operating below full capacity, used to have a capacity of about a million pieces a month years ago when it was supplying smaller tableware especially to airlines, a market it is trying to win back. Most of the production is exported with orders routed through the head office in Japan and mainly back to the Japanese market, its main market.

3-black tea set under Midaya brand

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Noritake Lanka Porcelain's exports have fallen slightly this year from last year, largely owing to demographic and lifestyle changes, such as the trend towards smaller families and dining out which reduces the need for dinner sets with many pieces. "Lifestyles changes mean people donâ€™t spend much money for that type of slow moving product," explained Thennakoon. The requirement is now more for fashionable products or those that are used daily. In recent years Noritake has been trying to increase sales in other markets like India. Last year it introduced a collection of dinner sets geared toward average households in India and aligned with their needs. In India and other Asian markets where growth is expected, Noritake Co. Ltd. is strengthening its sales structure and working to expand sales. The Indian subcontinent is one region that maintains the tradition of living in large families, in contrast with other markets like Japan where small families buy products to fit small living spaces. Sri Lanka's domestic market is also strong and offers high potential. Being an export-oriented firm under the Board of Investment, which provides tax incentives and other benefits like duty free raw material imports, Noritake Lanka Porcelain is committed to exporting the bulk of its production with domestic sales confined to a proportion of exports, a factor that limits its ability to increase local sales. It can do more local sales if export orders increase proportionately. Local sales dropped sharply after the Easter Sunday suicide bombings of hotels and churches by Islamist extremists in April but are now picking up again. "We have been strong in formal dinner ware with gold and platinum decoration but not so strong in casual dining and in the hotel, restaurant and airline market," says Thennakoon. "Now we are trying to get those markets. Our development strategy is to penetrate the casual market and hotels and restaurants and also airlines. Products are available â€“ we have an airline range and a hotel and high end causal range - but shapes and designs must be create to match demand in those segments. But our formal line is still strong. We have a very good position there." For instance, Noritake Lanka Porcelain is focusing on the hotel sector with better chip resistance fine casual china for daily hotel usage. According to Noritake Co. Ltd., in Japan, it aims to expand sales of business-use tableware, targeting the hotel and restaurant market in anticipation of higher demand being brought about by increasing numbers of foreign visitors to the 2020 Tokyo Olympics. Noritake Lanka Porcelain has been coping with raw material issues in recent years, especially in getting kaolin, which it is now forced to import. In 1972 when the company was established it had access to very good kaolin mines in Meetiyagoda. But now, although 60% of raw material is sourced locally in terms of quantity, cost wise over 90% is imported, which means product material costs are a big component of total costs.

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asian ceramics

Analysis: Tableware

Clays are imported because of practical issues that restrict mining such as buildings and settlements on top of good clay deposits. Noritake Lanka Porcelain stopped buying local kaolin 10 years ago as the quality was not up to its standard, although it still buys local quartz and feldspar. "Since we have to maintain superior whiteness of product we import world class raw material like kaolin from the U.K., Germany, Japan, New Zealand, China and Vietnam, which is more expensive," explained Thennakoon. "Kaolin is available locally but we cannot mine because of nearby villages. There has been some discussion on restarting the Meetiyagoda mine but so far no firm plans." Gold and platinum pigments are imported from Germany and Japan. Noritake Lanka also depends on imported LPG for energy, and finds itself at a competitive disadvantage against other South Asian origins which have access to cheaper liquefied natural gas which is not available in Sri Lanka. "Because of this their firing fuel costs are about 50% cheaper than ours, making it very difficult to compete with them," says Thennakoon. "We're now trying to introduce energy efficient burners and energy efficient kilns. Very recently we introduced electric kilns. Now we're looking for different types of kilns to install in future and energy efficient burners which consume less energy."

Midaya: the oldest brand

Midaya Ceramic Company Pvt. Ltd., the oldest surviving ceramic firm in the island, has long been a contract manufacturer for foreign brands but is now developing its own brand. The company, which started in 1968 mainly with ornamentalware, employs 240 people, down from 600 about 25 years ago. Annual sales are around US$1.8 million and have been growing at about 6-7% in the past two years although in 2019 is probably stagnant, according to Anura Warnakulasooriya, Managing Director of Midaya Ceramic Company Pvt. Ltd. Midaya deals with over 60 customers worldwide, mainly in Europe, USA, Japan, South Africa and Australia. About 90% of production goes under OEM orders of foreign brands but Midaya has started its own house brand, depicted with a stylised 'M' and is developing its own designs and own products. It recently opened a showroom in the upmarket shopping complex of One Galle Face in the Shangri-La Hotel complex in Colombo. "Everything you see here is handcrafted," says Warnakulasooriya, pointing at products displayed on shelves when Asian Ceramics visited the factory on the outskirts of the capital Colombo. The family-owned factory focuses on being flexible and doing small orders and adapting to meet customised requirements of clients, instead of mass production where it would find it difficult to compete with the likes of China. "We can handle low MOQs – minimum order quantities – of about 500 – 1,000 pieces," explains Anura Warnakulasooriya, who has taken over the running of the business from his father, Dayasiri Warnakulasooriya, the firm's founder who remains company chairman. "With the trend of lower MOQs from all over the world we prefer to stick with the more flexible method. Our selling prices are higher than for mass produced items. Even our tableware is unique – hand painted and the holes hand done. We give customers flexibility, guaranteed quality, unique shapes, low MOQs and the hand-made feel." It does not cater to big customers like supermarkets or large retailers but prefers working for high-end ceramic tableware brands and smaller studios and designers who want low MOQs and their own plate designs with very different shapes. "A lot of our customers are small design houses who have beautiful designs and they use us to get that design made. We get orders mostly by word-of-mouth," says Warnakulasooriya. "Our price is higher but for a lot of customers, especially in the high end, they don't mind

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WE CAN'T COMPETE WITH THE MASS-SCALE MODEL OF CHINA, BANGLADESH AND VIETNAM Manual dip glazing at Noritake Lanka Porcelain

Banking on a kaolin revival Sri Lankan ceramic tableware manufacturers are trying to revive kaolin or china clay mining to reduce reliance on imports, according to the head of a top Japanese tableware exporter with a factory in the island. Hidenori Tanaka, chairman and managing director of Noritake Lanka Porcelain (Pvt) Ltd., said that access to kaolin was one of the difficulties faced by tableware firms in the country which was known for having good quality raw materials. “One of the strengths of Sri Lanka is availability of good quality raw materials,” he said in a speech at the annual meeting of the Sri Lanka Ceramics and Glass Council which groups manufacturers of ceramic tableware, tiles and sanitaryware, clay roof tiles and glass bottles. The island had good deposits of kaolin, feldspar, silica and quarts which were used by manufacturers. “But unfortunately mining and processing of kaolin has been stopped and all ceramic manufacturers are forced to import kaolin from overseas,” Tanaka said. The ceramics and glass council was working with Lanka Ceramic, the main supplier of clay raw material to the industry, to resume kaolin processing so imports can be stopped. The main kaolin mines are in Meetiyagoda, in the southwestern coastal region.

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Analysis: Tableware

because they are charging high prices anyway. It's the only way we go above and beyond what the government recommends as we're could survive since even in Sri Lanka labour and energy costs are depending on skilled labour – skills we have taught them." going up." Dankotuwa: long-time OEM Warnakulasooriya has an amusing way to describe the Dankotuwa Porcelain PLC, long an OEM supplier for some of the top impact of China on the ceramic tableware and ornamentalware international tableware brands, is looking to develop new markets industry, recalling how Midaya lost orders when large numbers and products as well as its own brand. The group includes another of Chinese manufacturers emerged with cheaper, faster masstableware manufacturer, Royal Fernwood, as a subsidiary. production methods. “Dankotuwa Porcelain is reputed for its whiteness and premium "To survive in the world market we had to find a niche as we can't range of products while Royal Fernwood Porelain focuses on the compete with the mass-scale model of China, Bangladesh and colored ranges aiming at the millennials,” Channa Gunawardana, Vietnam," Warnakulasooriya says. "In the 1980s and 1990s we were Dankotuwa Porcelain's new Chief Executive Officer, told Asian mostly doing ceramic ornamental ware. I call it the BC period, not Ceramics in an interview. 'Before Christ' but 'Before China'. Dankotuwa’s future plans include We had 600 people, doing highly expanding its global market presence ornamental earthernware for the U.S. as an OEM manufacturer as well market. But in the late 1990s when under its own brand 'Dankotuwa China happened, all those orders for Porcelain'. Last year, the company moulded and hand-painted products reaffirmed its partnership with cowent to China for half the price. They branded Middle Eastern partner could do it cheaper and faster." Jashenmals, for 'Dankotuwa Warnakulasooriya, who had Jashenmal', a co-branded product. been made to gain experience in all According to the firm, this is an aspects of the production process essential first step in establishing the by his father when he was growing Dankotuwa brand in an overseas up – "ceramics is more or less in market. my blood" – says he visited China As demand increases the to find out what he was up against. company has invested much into Realising Midaya Ceramic could improving production capacity and not compete in the cheap, massCase mould making at Midaya Ceramic efficiency and productivity of its produced product range, he focused existing plant through innovative mechanization and automation with on what China cannot do – high flexibility, low order quantity, good and adopted technology and even in-house developed machinery to make consistent quality, English communications and transparency. "Luckily, production processes faster and smarter. "We have partnered with we had all those features already," he recalls. "That's what some some of the universities to study our processes and are working on buyers were looking for in Europe and USA. I just had to concentrate process improvements," Gunawardana explained. and be different from China. More than marketing, we are selling our The local market experienced a drop in domestic sales after skills – we're not selling a product here. To sell the skills, they have to Table 1 the Easter Sunday suicide bombings which led to a sharp fall in trust your ability." tourist arrivals. "However, local sales have now picked up," says Midaya Ceramic is now well-placed to take advantage of the trend 2014/2015 14,208,950 Gunawardana. "Tourists play a significant role in our local turnover, towards hand-made looking pottery. "We2015 are/ 2016 seeing 14,380,845 a big move 2016 / 2017 13,895,952 2017Warnakulasooriya. / 2018 11,423,911 particularly the Indian, Arabian and Chinese tourists." towards hand-made looking pottery," says "People 2018 / 2019 11,740,720 To serve increasing tourist arrivals, Dankotuwa opened its latest want to have durable pottery but unique designs. Ten years ago bone showroom at the upmarket shopping complex, One Galle Face china and white porcelain were very popular – it still is - but now the mall – Shangri-La, Colombo, in preference is for different colours Total tableware production (no. pieces) November 2019 where its own and textures. Most designers collection of giftware and nonthese days are asking for coloured traditional sets are on display bodies, such as black, and handalong with coloured porcelain made appearance. from subsidiary brand Royal Midaya Ceramic has recently Fernwood Porcelain. installed new kilns bought from The management is also Italy and China in efforts to paying close attention to better improve efficiency and reduce labour relations, with initiatives energy costs. "The cost of energy to appreciate the educational – LPG - is constantly rising but achievements of the children of with new technology the efficiency factory workers, having them of using gas has also increased visit the plant where their parents which has helped us to control work after the Ordinary and costs," says Warnakulasooriya. Advanced Level examinations. "Labour cost is what has changed "We're trying to build relationships the most, however, since we raise between Dankotuwa and our salaries every year to keep up Total pcs produced employees and their children," with the rising cost of living. We

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Analysis: Tableware

explains Gunawardana. "We want to support their education and help them to reach their true potential." He mentions the example of one long-standing female factory employee whose daughter is in medical school and aiming to be a doctor. Next year the company plans arrange revision programs for children of employees facing exams. "Labour costs are increasing and better employee engagement will help us retain employees," says Gunawardana. "We're also looking at educating our factory employees with essential life and family skills to improve one’s overall wellbeing." These efforts are aimed at retaining skilled labor which is becoming more expensive and scarce in the market, across manufacturing industries. The two group factories in Dankotuwa and Kosgama for Royal Fernwood Porcelain are strategically located in attracting labor, being surrounded by villages from where people are hired and with whom the company and its employees have mutually beneficial transactions. According to the company, labour and energy costs are the main cost components at 40% and 30% respectively of total costs, because of low automation and high labour intensity. Efficiency improvements made last year to support future growth contributed towards significant savings on energy use, accompanied by per person productivity improvements despite a reduction in workforce. The recent transformation process to improve productivity included redesigning the layout of the factory floor, adjusting capacity, redesigning the production processes, and revamping the delivery

mechanism to cater to current and emerging customer requirements, according to the company. The porcelain manufacturing factory in Dankotuwa has a production capacity of roughly over 450,000 pieces a month. The company has also invested in new machinery with new technology to get capabilities to manufacture extremely thin porcelain. E-commerce is another important initiative, given the growth of online sales globally. Dankotuwa Porcelain's online site offers augmented reality (AR) and 3D viewing capability of products enabling a better customer experience. Dankotuwa now exports to over 50 countries and is eyeing new geographies. "The next phase of growth will come from international markets," says Gunawardana. "We're looking at the United States in a serious way. We're already in Australia and are looking at New Zealand as well as Africa. Secondly, we're looking at having strategic partnerships and franchising partnerships with retailers globally.” Dankotuwa also has a significant presence in south India, with one showroom in Chennai and a network of dealers which it aims to grow. Last year, new clientele from Scandinavian countries such as Sweden and Norway placed orders for Dankotuwa products. The company is moving away from traditional tableware to more modern lifestyle products. “The market will witness new product ranges from us, for instance ceramic candle holders and porcelain water bottles, as we move to new segments including hand painted gift ware,” explains Gunawardana.

Dankotuwa Porcelain PLC., Sri Lanka’s premier manufacturer of porcelain tableware recently announced that the company was adjudged winner of the Gold award in the large-scale industrial sector for Ceramics and Porcelain products category at the recently concluded NCE Export Awards 2019. Awarded by the National Chamber of Exporters of Sri Lanka (NCE), this accolade is the second the company has won within a period of one week as it bagged the award for the Best Exporter in the Ceramic and Porcelain Based Product Category at Presidential Export Awards 2018/19; two of many that the company has won over its 36 years of rich heritage and plating of gastronomy in Sri Lanka and over the world. Commenting on this illustrious win, Dr. Sajeeva Narangoda, Director/Chief Operating Officer Millennium IT ESP and Chief Investments and Process Officer Ambeon Holdings PLC, the holding company of Dankotuwa Porcelain PLC, said, “We are proud to accept this Gold award in the large-scale industrial sector as a testament to our trailblazing products, epitomizing Dankotuwa Porcelain’s manufacturing excellence and evidence of our stature among the nation’s topmost corporate leadership. As recipient of prestigious multiple awards, we firmly believe that despite the challenging macro-economic conditions that prevailed throughout the year, the concerted efforts by the Dankotuwa team to transform has borne impressive yields.” The National Chamber of Exporters of Sri Lanka (NCE) has been conducting the NCE Export Awards for the past 27 years with the objective of recognizing and rewarding the excellence of Sri Lankan Exporters who have marked Sri Lanka’s presence in the international market arena through the manufacturing and marketing of local products to global standards. Evaluation of applicants and selection of award winners are usually conducted by a technical panel of professionals who bring in expertise and experiences from various industries related to exports. This year’s ceremony was conducted with great pomp and flair, with His Excellency Ambassador of the EU to the Maldives, H.E Tung-Lai Margue was the chief guest at the award ceremony, Mr Mangala Yapa – Chairman of Board of Investment, Sri Lanka was the guest of honour at this prestigious event

Commenting on their achievement, Dankotuwa Porcelain PLC Chief Executive Officer Channa Gunawardena stated “It is with great pride that we acknowledge this accolade. Over the years, Dankotuwa Porcelain has designed, developed and mastered the art of producing innovative world-class tableware. It is our sense of creativity, the design techniques used and developing a quality product with exquisite designs that has given us the opportunity to enjoy a diverse customer base from various parts of the world. This feat is testament to our dedication, passion and attention to detail and the reason as to why Dankotuwa Porcelain is a leading exporter of tableware in Sri Lanka.” Dankotuwa Porcelain has earned for the company a reputation for being the best in Asia, Europe and the US. As such, the company continues to maintain a broad global client base for brands such as Macy’s Department Stores, Debenhams, Portmerion, Oneida, House of Fraser, John Lewis, Jashanmal, Jumbo Retail, Joules, Crate & Barrel, Country Road, Laduree, Tchibo, Notneutral, XXX Lutz, Lenox, Porsgrund, Fischer, Ritzenhoff, Migross, Ripley, Thun, Narumi, El Corte Ingles, Berghoff, Yalco, Weissesstal and Galeria Kaufhof. Dankotuwa Porcelain PLC., a subsidiary of Ambeon Holdings PLC commenced its commercial operations in 1984. From superior glazing technologies, personalized designs and endless options, Dankotuwa Porcelain continues to create timeless and modern collection of porcelainware that expresses exclusive dining experience for every occasion. “As one of Sri Lanka’s top suppliers of Porcelainware for exports, Dankotuwa Porcelain is a vital and valuable part of the Ambeon Group,” stated Mr. Murali Prakash, Group Managing Director and Chief Executive Officer of Ambeon Capital PLC and Ambeon Holdings PLC. As an organization, Dankotuwa Porcelain continues its quest for innovation by launching products consisting of timeless designs across countries and markets, giving customers value for money in every purchase they make. This award proudly acknowledges the Company’s’ export successes on a national scale. As we aim to continue to forge ahead, this award provides further impetus for us to look forward and plan for the future”.

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The brand you can trust

Takahama Industry Co.,Ltd. Head Office 2-2-1 Hashiman-cho, Takahama-city,Aichi-Pref,444-1302,Japan TEL +81-566-52-5181 FAX +81-566-52-5960 E-mail info@takahama-ind.co.jp URL http://www.takahama-ind.co.jp

Analysis: Sanitaryware

Vive la differ

a sub continent comparison

angladesh was in a worst situation with a sanitaryware deficit market till last decade. There was a serious dearth of domestic investors for absence of proper sanitation. It was a huge and monopoly market for the Indian products since its emergence in 1971. The lower-end and middleclass market was almost entirely grabbed by the Indian sanitarywares shipped from Gujarat. The country with its present large population of about 170 million is no longer in that condition. “The local sanitarywares have occupied about 90 percent of the domestic market,” said Shirajul Islam Mollah, President of Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA). Industry sources said Bangladesh is now a conundrum to India as the Bangladeshi sanitaryware manufacturers, strongly active with a huge investment for manufacturing products of all segments for domestic consumption and exports, are eyeing northeastern Indian states stretching from West Bengal to the farthest eastern state of Arunachal Pradesh bordering China. “The biggest challenge faced by the Bangladeshi ceramic manufacturers are dependence on imported rawmaterials, but Bangladesh is able to minimize this in production cost with the advantages it enjoys from the domestically available cheaper and high-quality natural gas and lower wages of workers available locally,” said Mollah. “Because of cheaper gas and labour, the cost advantage is greatly in favour of Bangladesh compered to India and China,” he added. Currently Bangladesh’s organised and non-organised ceramic sanitaryware production capacity of over 10 million pieces a year meets almost entire consumption of non-affluent segments and have some products exportable to those neighbouring northeastern Indian states from Bangladesh’s manufacturing bases located in Nilphamari, Rangpur, Mymensingh, Sylhet, Habiganj and Gazipur districts through present cross border trading, according to the industry sources. The

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sources said the export price of a 2-piece unit of average size/standard squat pan and washbasin could be less than US$10, quite competitive to the Indian domestic products. India’s entire northeastern region with over 10 percent of the country’s total (2018) estimated population of 1.352 billion is reachable by Bangladesh’s lower-end and lower middleclass segment sanitarywares in competition with Indian long-distance domestic supplies transported from western and southern Indian states, two main production locations. While Bangladesh is trying to export sanitarywares to India, its imports of the products from India has plummeted this decade. In 2018, Bangladesh imported about US$14 million worth of sanitarywares, mainly from China, Thailand and Indonesia, according to Geneva based International Trade Centre. During the year, India’s shipment of sanitarywares to Bangladesh was of worth only some US$240,000, which was about 2 percent of Bangladesh’s total imports of sanitarywares in terms of value.

Contrasting fortunes

The sanitaryware manufacturing and consumption in Bangladesh and India has both large numbers of similarities and contrasts. Both the countries have a majority consumers with lower income that does not provide access to modern living with toilet facilities, and, on the other hand, the organised manufactures of sanitarywares in the two countries target mostly the houses having bedroom-attached bathrooms or adjacent/separate bath and toilet facilities. At the moment, India is going through a massive campaign of government sponsored sanitation and urban developments that raised the consumption of sanitarywares in mass scale. Bangladesh is just preparing for such urbanization and public spending for modern living. However, in contrast to India, many of its small unorganized ceramic sanitaryware manufacturers are providing ceramic squat pans and washbasins under financing programmes offered by the

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Analysis: Sanitaryware

rence thousands of non-governmental organizations (NGO). The NGOs also provide loans for buying construction materials for setting up toilets, while the government Department of Public Health Engineering (DPHE) is supplying sanitary toilet pit equipments and tubewells under government subsidy to provide access to safe water and sanitation as well as proper hygiene that has ensured better life expectancy compared to India. Currently, a large majority of rural Indians prefer to avoid using toilet at home, in contrast to most of the rural Bangladeshis who use toilet at home, attached to washroom or a separate homewashroom in an adjacent place, which is less acceptable to most of the rural Indians who consider this unclean according to their traditional faith. The Bangladeshi villagersâ€™ and semi-urban dwellersâ€™ washroom facilities are equipped with a tubewell, water tank/bucket, or improved sanitary pit toilet with water storage constructed separately near the dwelling houses. Water supply or running safe water is available only in the urban or municipal areas where the residents, who are mostly affluent and middle class, have their bedroom attached toilets equipped with ceramic sanitarywares. Elimination of open defecation and access to sanitation and permanent home-toilet is now cent percent in Bangladesh, according to the health and sanitation related monitoring organisations, including WHO (World Health Organisation). Many of the rural Bangladeshis are now going to remodel their toilets with better sanitary construction. They are also replacing squat pans made of plastics and other building materials and installing ceramic squat pans and water closets, also with financial supports provided by the NGOs and SME financial organisations.

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A new hub

Bangladesh has emerged as a new manufacturing centre for standard grade sanitarywares for affluent segments as well as mass production of lower segment squat toilets and washbasins. In addition to around a dozen ceramic sanitaryware manufacturers under organized sectors, several dozen unorganized ceramic sanitaryware manufacturers are operating all over the country. The 18 operating plants under organsed and unorganised sectors of large and medium manufacturers, who are members of BCMEA and associated or listed with it, have a production capacity of some 9.0 million pieces ceramic sanitarywares per year, according to the BCMEA. Despite increasing cost of raw materials, energy, logistics and labour, Bangladesh offer attractive production cost for cost-efficient manufacturers, said BCMEA. The current lower price of natural gas supplied from the domestic gas fields and imported LNG is about US$4 per mmBtu, one of the lowest in Asia. The skilled workersâ€™ minimum wages is something US$200-US$250 per month. Industry sources estimate that the current cost increase would be minimal as there exists scope for increasing the efficiency in minimizing production cost and reducing wastage of gas and labour-hours. In production cost of normal ceramic or vitreous china/ porcelain sanitarywares, on average, energy accounts for 25-30 percent of the production cost and wages and salaries account for about 20 percent, according to the industry sources.

Consumption rises

On the domestic front, a booming consumption of sanitarywares in Bangladesh has been raising the production capacity almost every year since last 15 years. Some of the major operators, such as, RAK

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asian ceramics

Analysis: Sanitaryware

Ceramics Ltd, Charu Ceramic Ind Ltd, Abul Khair Ceramic Ind Ltd, Akij Ceramics Ltd, Excellent Ceramic Industries Ltd, Star Ceramics Ltd, Bangladesh Insulator & Sanitaryware Factory Ltd (BISF) and Sanita Ceramics Pvt Ltd have developed capability to export to the regional countries. BCMEA data shows some exports, though negligible at the moment, have emerged. However, the increasing domestic demand has been providing premium compared to export prices. Improved water and sanitation situation have greatly attributed to the domestic demand. Bangladesh has officially eliminated open defecation and got access to improved toilets both in urban and rural areas in last fiscal year ended on June 30, 2019, well before the official target fixed following the 7th Five Year Plan to achieve Vision 2021, ending next year. Access to safe water and sanitation is improving rapidly providing faster elevation to eliminate absence of proper hygiene. The government allocates huge development fund every year for safe water and sanitation leading to a boom in consumption of ceramic sanitarywares in the villages. The country’s rapid GDP growth of 7-8 percent a year since past several years has driven the country’s economic development and improvement of the living condition with proper sanitation. Backed by rural economic activities, remittances of about US$20 billion a year by the expatriate Bangladeshis, huge employment of expanding export industries and empowerment of rural and semi-urban women with enhancement of household income have created the demand for housing and sanitarywares and prompted the efforts to construct improved sanitary toilets in the villages. Bangladesh’s expanding urbanization, rapidly growing middle class and construction of sanitary toilets in the villages are the main driving force for a double-digit annual growth of the ceramic sanitaryware consumption. The domestic consumption led higher expansion of the sanitaryware industry has also developed to become an export industry, according to Shamsul Huda, Managing Director of Charu Ceramic ind Ltd. Charu is currently exploring markets for exports, while other major sanitaryware manufacturers are also in pipeline as they have recently set up latest production plants capable to export to the world markets including neighbouring India.

Comparative advantage

Bangladesh’s efforts to export to India is promising, according to the industry sources. Although, Indian exports to Bangladesh has nearly zeroed in recent years, its export to the world market is rapidly expanding. India’s export of ceramic sanitarywares has boomed to US$130 million in 2018, from over US$109 million of the previous year and more than US$74 million in 2014, according to ITC. Since past five years, India’s import is also rising and has reached to about US$110 million in 2018, from nearly US$93 million of the previous year. India has many production advantages over Bangladesh because of domestically available raw materials and machineries, while Bangladesh provides cheaper domestic natural gas at lower prices than India giving better edge in firing cost and quality burning. Latest kilns and advanced pressure casting as well as traditional and manual casting bench processes are used in both the countries. Machinery used in Bangladesh are imported mainly from Italy, China, Spain, Germany, Japan and India. Rawmaterials are mostly imported from China, India, Thailand and other sources, while local insignificantly available and mined clays are used at optimum level.

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

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THE FUTURE OF CERAMICS

28.9.2020 - 2.10.2020 Rimini Exhibition Centre â€“ Italy

tecnargilla.it ORGANIZED BY

IN COLLABORATION WITH

WITH THE SUPPORT OF

Analysis: Sanitaryware

Despite increasing exports of sanitarywares from India, the domestic market is expanding with higher spending for expansion of housing and improved toilet facilities. Many foreign manufacturers are arriving in India to exploit the domestic markets. Roca India has already grabbed a substantial market share in India with more investment on technology, and Kohler India also has high expectation with their new generation plant equipped with faster firing process. Indian owned and leading modern manufacturers, Hindware brand owner HSIL (Hindustan Sanitaryware Limited) and Cera Sanitaryware Ltd, are instances; they consider that the sanitaryware manufacturers need to shift their firing to highly efficient kilns to tap the market potentially. Bangladeshi manufacturers have imported competitive technology to stay in the market, both at home and abroad. Indigenous natural gas supported cheaper firing advantage has prompted Bangladesh to become a new sanitaryware production base in Asia. The high quality and lower priced natural gas and the booming domestic consumption have provided a great incentive to the manufacturers of sanitarywares who are investing heavily in this rapidly growing sector for quick return, ensured by the country’s import restrictions and non-tariff barriers. The major and organised Bangladeshi manufacturers are firing largely with SACMI installed shuttle and tunnel kilns and firing systems. Newly installed Charu Ceramic is applying a few couples of firing considerations aiming at grabbing domestic market shares and to compete in the export markets with middle to upper segment products. Charu’s products are developed and fired most cost effectively and have already attracted the buyers from abroad for its quality, said Huda. “With SACMI supplied well advanced Riedhammer shuttle kilns Charu has attained the ability to apply different firing options to manufacture high quality products cost-efficiently and we are adding more tunnel and shuttle kilns soon to build up capacity,” said Huda, who is also the Managing Director of Great Wall Ceramic Industries Limited, one of the top manufacturers of ceramic and porcelain floor and wall tiles in Bangladesh. The sanitaryware factories in Bangladesh have few variations

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CMY

Analysis: Sanitaryware

RAK Ceramics (Bangladesh) Ltd Location: Dhanua, Sreepur, Gazipur, Bangladesh Products:Ceramic sanitarywares Markets: Domestic and export markets

Charu Ceramic Industries Ltd (A unit of Great Wall Ceramic Industries Ltd) Location: Manikpur, Baghasura, Madhabpur, Habiganj, Bangladesh Products: Ceramic sanitarywares Markets: Domestic and export markets

Abul Khair Ceramic Ind Ltd Location: Baligaon, Kaligonj, Gazipur, Bangladesh Products: Ceramic sanitarywares Markets: Domestic and export markets

Star Ceramics Ltd Location: Riaznagar, Baghasura, Madhabpur, Habiganj, Bangladesh Products: Ceramic sanitarywares Markets: Domestic and export markets

Akij Ceramics Ltd Location: Mymensingh, Bangladesh Products: Ceramic sanitarywares Markets: Domestic and export markets

Bangladesh Insulator & Sanitaryware Factory Ltd Location: Mirpur, Dhaka, Bangladesh Products: Ceramic sanitarywares Markets: Domestic and export markets

in firing their products in the kilns installed by SACMI. They mostly follow the technologies offered by their plant suppliers to exploit the fast growing and lucrative domestic markets. Charu is manufacturing some foreign OEM products for exports as well as for the domestic markets by escaping high import duties and nontariff barriers applied to imported products. Besides Charu, some other companies, including Akij Ceramics, are also manufacturing such products to market domestically and also expecting to go for exports to other regional countries in the near future. Most ambitious manufacturer, Charu Ceramic, believes that they have the opportunity to explore export markets in collaboration with the Thailand based ceramic giant SCG owned Siam Sanitary Ware Industry Co Ltd (SSI), the producer of Thailand’s premier high-end COTTO brand sanitarywares, which are marketed in Asia and other regions. Charu is manufacturing COTTO brand in Bangladesh along with their own brand Charu. Fully designed and built at Riedhammer's European plants, the construction of the new tunnel kiln makes extensive use of stainless steel and high-quality refractory materials to ensure maximum reliability and durability. Charu’s initial production capacity is about 0.75 million pieces a year, while the company has planned to double the capacity to 1.5 million pieces a year. Bangladesh’s other major new sanitaryware manufacturer Akij Ceramics’ current phase one plant has a production capacity of 0.25 million sanitaryware articles per year. The phase two will raise the production capacity to 1.2 million sanitaryware pieces. SACMI designed the plant and supplied the main production line machineries, for almost entire operation, from body preparation to firing.

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Dacca Ceramic & Sanitaryware Ltd Location: Tongi, Gazipur, Bangladesh Products: Ceramic sanitarywares Markets: Domestic markets

Apple Ceramics Ltd Location: Rangpur, Bangladesh Products: Ceramic sanitarywares Markets: Domestic markets

Euro Bangla Ceramic Company Ltd Location: Sylhet, Bangladesh Products: Ceramic sanitarywares Markets: Domestic markets

Excellent Ceramic Industry Ltd Location: Mymensingh, Bangladesh Products: Ceramic sanitarywares Markets: Domestic markets

Glory Ceramic Pvt Ltd Location: Nilphamari, Bangladesh Products: Ceramic sanitarywares Markets: Domestic markets

Sanita Ceramics (Pvt) Ltd Location: Nilphamari, Bangladesh Products: Ceramic sanitarywares Markets: Domestic markets

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asian ceramics

Analysis: Sanitaryware

Bangladesh sanitaryware sector Product

Number of Investment/ Yearly Direct Industries Project Production Employee Value in Capacity Million BD Taka

Import Million BD Taka

Export Million BD Taka

Sanitary wares

18 (BCMEA members/ listed)

14,410 (US$180.125 million)

8.35 Million Pcs

8,353

947.2 (US$11.8 million

00.20 7,163.5 (US$0.0025 (US$89.54 mn) million)

8,110.7 (US$101.4 million)

88.32

11.68

Total

86,160

47,098

11,141.8

3,801.4

54,519.1.

The machinery and equipment include all the traditional casting benches produced by SACMI Istanbul Turkey, the mould and piece dryers, a Gaiotto Automation-supplied robotized glazing carousel and a Riedhammer HWS 12/500/190 PF shuttle kiln with an effective volume of 114 m3. Bangladesh’s other established ceramic sanitaryware manufacturers include, RAK, Abul Khair, Excellent, Star, BISF, etc.

Indian expansion

India’s huge domestic market is the main key to its success in ceramic sanitaryware industry. Many foreign and domestic companies are entering sanitaryware markets for sure success as the Indian government has sponsored many promotional campaigns that expanded the domestic market demands for sanitaryware products. The organised manufacturers, such as, HSIL, Cera and Parryware/Roca, have their own world in sanitaryware business in a large consumer economy like India which has one third of the population with middle and upper-class segments and buying power for products manufactured by the organised sector. In recent years with continuous annual economic growth of over six percent on average India attracted many foreign and multinational manufacturers for a prospect in sanitarywares. Kohler India and TOTO India are able to grab their market share without much efforts because of their product ranges with competitive edges in quality, design, prices, distribution systems and after sale services. Although India has a potential export markets worldwide, its domestic market is more lucrative to the foreign manufacturers and those who export to the Indian domestic markets that offer plenty of opportunities to the investors in sanitarywares. Existing operators are growing every year with big jumps. Major manufacturers are utilizing capacities profitably. Fast growing Cera utilized capacity at full-scale, according to the industry sources. HSIL Chairman and Managing Director Rajendra K. Somany said India currently witnesses a new housing boom, rapid urbanization and lifestyle changes and the government has planned to spend massively to provide toilets to every Indian household. Japanese sanitaryware major LIXIL Group owned LIXIL India is investing US$65 million in Indian sanitaryware projects. As part its investment project it has recently opened its first sanitaryware manufacturing facility in India in Bhimadole in Andhra Pradesh with a production capacity of one million units per year, with an ability to double the output with expansion of its markets. Leading tile manufacturer, Kajaria Ceramics Ltd, comparatively

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Local Sale of domestic ceramics Million BD Taka

43,377.3

Local Market Market Share Consumption % in Million BD Local Foreign Taka

Solar Ceramics Ltd Location: Gazipur, Bangladesh Products: Ceramic sanitarywares Markets: Domestic markets

Sarmano Ceramics Ltd Location: Rajbari, Bangladesh Products: Ceramic sanitarywares Markets: Domestic markets

new among the major operators in ceramic sanitarywares, has completed its capacity expansion in sanitaryware segments in the financial year 2019-20. It has expanded sanitaryware capacity to 0.75 million pieces, from 0.6 million pieces and expecting to double its sales in coming 2-3 years. Indian sanitaryware manufacturers suggest that the current recession in the sanitaryware markets is short lived. “It is a short-term disruption and this phase shall pass soon,” said." KE Ranganathan, Managing Director of Roca. "With the government’s recent move to finance and complete stalled projects, the real estate sector will regain its strength," he said. In the current year financial year, 2020, Roca, which in addition to its Roca brands also owns one of the leading national brands, “Parryware” expects to do better like the past years. The company is expecting a continuing upward growth in India by launching many display studios and investing in manufacturing facilities to increase the exports in terms of volume. Sanjay Kalra, President and Chief, Bath Products & Tiles, Brilloca Limited told “exchange4media” that the current market for Indian sanitaryware is growing at a steady pace of CAGR 8-10

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Analysis: Sanitaryware

percent over financial year 2018-21. Indian Prime Minister Narendra Modi’s five-year Swachh Bharat Abhiyan (SBA) or clean India campaign, ended last October, has showed a spectacular rise in expansion of sanitarywares production and it is now in its height for the unorganized sector. SBA, which has increased India’s sanitaryware production capacity significantly, has emphasised on hygiene and the need to construct toilets for which the government has offered funds for the those who have no sanitary toilets of their own at home. Under the SBA, 800 million toilets were supposed to be constructed the five years or 160 million toilets per year, according to an Indian research firm, Reliance Securities Ltd. After launch of SBA, the sanitaryware industry in India achieved one of the highest growths in the world. "The key reason for this growth of the sanitaryware industry in India is the rising awareness surrounding sanitation and proactive government missions of SBA, Housing for All (60-million new houses by 2022) and Smart City Mission (development of 100 smart cities) projects, a combined development efforts of three major sectors," highlighted Kalra. SBA campaign mission was a movement for behaviour change. One of the key goals for the initiative is aimed at making the country, open defecation-free with lower pollution levels in rivers and other water bodies. Sanitaryware or hygiene industry were the key beneficiaries of SBA. "Around 69 percent households in rural areas and about 19 percent households in urban areas in India don’t have access to safe sanitation,” said Kalra. Foreign companies have taken the advantage of the mass housing and smart city campaigns. For Kohler, India is among one of the most interesting and creative markets it serves anywhere in the world, and the company has focused a long-term potential in India. It launched its second Kohler Experience Centre (KEC) in the country in Mumbai recently, with plans to open one more in Bengaluru soon. The first KEC is in Delhi. With only around ten KECs globally, India will be the first to have three KECs, said David Kohler, President and CEO, Kohler Co, while emphasising the importance of the Indian market. Since launching its operation in India over a decade ago, Kohler already has 500 showrooms in India for its products made in India and abroad. The company has invested significantly in India with setting up of a modern manufacturing plant in Gujarat state for ceramic sanitarywares. It has built up full-fledged manufacturing and supply chain capability across India and it uses those manufacturing locations for export to the US and Europe too. Kohler’s famed KECs, unlike regular outlets, are not designed like display centres or showrooms, but are “inspiration zones” sprawled over a huge space of some 16,000 sq feet, meant more for customer engagement than sales. Kohler has also launched several new product categories in India like grooming solutions inside bathrooms, water filtration and bathroom furniture and mirrors. LIXIL India said its Indian production operation will be a zerowater discharge plant which is a first in the sanitaryware industry in India. The Indian production team is also building capabilities for zero discharge of solid waste inside the plant. “We aim to capture 15-20 percent market share and lead the local ceramics market in the next three years,” said Bijoy Mohan, CEO, LIXIL Asia Pacific. LIXIL India said it will serve as the central production base for the Indian market. The main products will be a select range of American standard. While 80 per cent of the production will cater to the Indian market, LIXIL plans to export 20 per cent to its global markets.

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10 Major local and foreign sanitaryware manufacturers in India Companies

Main brand

HSIL (Hindustan Hindware Sanitaryware Limited) Parryware/Roca Roca/ Parryware India (Roca Bathrooms Products Pvt. Ltd) Cera Sanitaryware CERA Limited Kohler India KOHLER TOTO India TOTO RAK Ceramics India RAK Duravit India Duravit Golf Ceramics Ltd Golf Kajaria Ceramics Ltd LIXIL India

Location Bahadurgarh, Bibi Nagar and Dahej Dewas, Ranipet, Alwar, others

Kadi Jhagadia Halol Kakinada Tarapur Mehsana,

Kajaria

Andhra Pradesh

American Standard

Bhimadole, Andhra Pradesh

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asian ceramics

Analysis: Pakistan

A clear visi

brick-by-brick into the future…

“

No government has focused more on manufacturing and exports since the 1960s than ours;” Prime Minister Imran Khan remarked during a recent interaction with business leaders. For sure, he must be having some solid reasons to claim so. However, irrespective of the claim which government of the past has focused more, the ground realities indicate that manufacturing and export sectors need more focus now than ever since the 1960s. Starting with the latest; large scale industry registered a negative growth of 6.45% during the first four months of the fiscal year. Exports being largely an extension of industrial production have registered a meager 3.2% growth during the first half of the year. Pakistan exports are stuck in early 20s billion range since last six years. Governor SBP Dr Reza Baqir has pointed out during a recent seminar “Firms and Growth' that one fourth of the emerging economies have growth at an average of seven per cent since 2001. “To reach this average growth rate it was critical for Pakistan to achieve significantly higher export growth," according to him. What Pakistan, however, could achieve during the period is a dismal reminder that Pakistan economy has some fundamental and structural anomalies stretched persistently during various governments during this period i.e. 2001 onwards. Exports in FY 2003 stood at USD 11.16 billion whereas a negative balance of trade in goods was registered at USD 1.06 billion. Negative trade balance crossed a mammoth figure of USD 20 billion by FY 2008; exports stood at USD19.05 while imports at USD 39.97 billion. The same trend continued with varying speed to peak during FY 2018 when balance in trade in goods stood at USD 37.58 billion; exports at USD 23.21 and imports at USD 60.80 billion.

Industrial pressures

The growth story of industrial sector during the same period is also marred by fluctuating fortunes. The share of industrial sector in GDP was registered as 22.36% in FY 2003 which gradually

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declined to 18.17% by FY 2018. On a longer horizon, annual average growth rate (at constant price – 1999-2000) for largescale manufacturing during 1990-2015 was 5%. However, long term growth trend turned out to be a meager 3.5%. Many leading economists have been pointing out for many years that Pakistan's economy is in effect going through a premature de-industrialization process. A recent research report of the Pakistan Business Council while analyzing this disturbing trend of de-industrialization noted that this phenomenon is experienced by developing countries at an advanced stage of development. Premature de-industrialization is when economies at a nascent stage of development move away from the manufacturing sector. The importance of industries is immense in sustainable development of any economy as it acts as a cogwheel to generate economic growth. What lead the economy to this low growth manufacturing trajectory? A plenty has been written, deliberated and debated. Most common obstacles pointed out include low value economic structure, erosion of competitiveness, inconsistent economic and fiscal policies, entrepreneurship deficit, cumbersome taxation regimes, bias towards exports and liberal import regimes, low labor productivity, etc., in addition to the fallouts of war of terror. Competitiveness is a primary defining agent for industrial and export growth. Various studies have pointed out time and again that industrial and export sectors are consistently losing to the rival economies of the region. If only two most vital enablers of competitiveness are taken into account – electricity and gas – it reveals the odds the country's manufacturing and exports are facing. The cost of electricity as an input was USD 0.13/KWh in Pakistan whereas it was 0.11 in Bangladesh and India, 0.09 in Sri Lanka and 0.05 in Vietnam as recorded during 2018. Comparison of gas rates revealed the same episode; Pakistan offered at USD 0.23/m3, Bangladesh at 0.09, India at 0.13 and Sri Lanka at 0.10. Economic policies of successive past governments have

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Analysis: Pakistan

ion not varied much to provide an enabling environment for the manufacturing sector. With this worrisome manufacturing and exports handicap, PTI Government has to focus more and with immense sense of urgency on manufacturing and export sectors than any government since the 1960s. The country has never experienced such grave economic challenges as it is facing now. Rising debt payments and overzealous revenue targets are hurting the manufacturing and export sector. Revenue drive is bringing all the tricks in the bag to practise; excessive taxation, repressive tactics, holding sales tax refunds on one pretext or other, passing on the losses and non recovery of power and gas utilities to the consumers and so on. This is burdening the already over-taxed manufacturing sector; a sector that has an over 58% share in tax revenue with a share of about 12% in GDP. Sure, it's a defining time to deliver on the claim made by PM that ‘no government has focused more on manufacturing and Table 1 the 1960s than ours!' exports since 2014 2696000 Crisis crisis? 2015upon 2727600

2016 3010400 Pakistan’s is constantly facing crises throughout its life. In 2017 economy 3337100 2018 Pakistan’s 2855300economy is facing the worst conditions. Foreign these days 2019 3034022

Total tableware production (no. pieces)

countries are not interested in investing in Pakistan. There is lack of stability in government; hence there is a problem in implementing the rules & regulations. In these days there is a no. of factors influencing the Pakistan’s economy very badly. Electricity shortages and other energy crises decrease the production of the country’s industries. With this backdrop, it is hard to make significant progress in the manufacturing industries, let alone in the concept of cleaning them up and modernising them. That, however, is not stopping the brick sector from trying. The FBR Faisalabad region has started the new decade with a ‘compulsory registration’ of kilns operating in the region and some 50 kilns have been registered in the first phase to assess their income from bricks sale and levy of sales tax and income tax in the light of their income, It has been learnt that over 700 kilns are operating in Faisalabad division for a long time, and yet the owners of the kilns have not paid even a single penny as Tax and Sales Tax for the last 10 years despite issuance of notices. The sales tax was assessed by the local FBR authorities and notices were sent to the kiln owners besides issuance of reminders but they did not pay the taxes. The FBR local authorities have further pointedout that the kiln owners were themselves fixing the price of bricks without any prior permission from the authorities concerned and were hesitating to pay sales tax and income tax. Meanwhile, President of Kiln Owners Association, Faisalabad region, Abdur Razzaq Bajwa, said the kiln owners were ready to pay sales tax and income tax to the government. He said President of the Pakistan Kiln Owners Association was holding meetings with the government and the FBR Chairman and urged the FBR authorities to wait for the outcome of the negotiations. He was confident that a ’reasonable formula’ would be evolved in the meeting and urged the FBR authorities not to issue notices to kiln owners.

Lahore: a compulsory change

In a bid to control the environmental pollution caused by brick kilns because of the burning of coal, the government of Punjab has long been pushing the strategy to promote Zig-Zag Firing Brick Kiln (ZFBK) technology. However, the government’s goal to completely replace the old technology is still a far-fetched dream

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Analysis: Pakistan

as, so far, only 500 traditional style kilns in the province could adopt the zig-zag technology. According to the All Pakistan Brick Kiln Association (APBKA), at least three to four years are required for more than 11,000 brick kilns in Punjab to abandon the old, Fixed Chimney Bull’s Trench Kiln (FCBTK) method and transition to the zig-zag technology. According to the association, negligence on part of the government and shortage of manpower are the major reasons why it has become so difficult to adopt the zig-zag technology. Rana Abdul Jabbar, who runs a traditional-style kiln for the past several years near Phul Nagar said that he has recently shifted his kiln to the zig-zag technology. “The transition to zig-zag technology cost me a total expenditure of Rs1.5 to Rs2 million. Since I already had an electricity connection and a kiln, I only had to purchase a fan and blower,” he said. The smoke emitted by the kiln using the zig-zag technology is white and lacks carbon while the quality and production of the bricks are also considerably improved. “Earlier, we would produce 20,000 to 25,000 bricks daily through the FCBTK method, but after using the zig-zag technology, the production has increased to 45,000 to 50,000 bricks per day,” Abdul Jabbar informed The Express Tribune. He said that the production of first-quality bricks has also increased from 60 % to 90%. The new technology has also reduced the expenditure of fuel and coal by 30%. Secretary-General APBKA Mehr Abdul Haq said that kiln owners are generally willing to adopt the zig-zag technology, however, the transition cannot happen overnight. He said that Pakistan is the third biggest brick-manufacturing country in South Asia and there are a total of 19,000 brick kilns in Pakistan, out of which 11,000 are set up in Punjab. It takes nearly two to three months to shift a traditional-style kiln to the zig-zag technology. “Shifting the traditional-style brick kilns to the zig-zag technology is not difficult,” Abdul Haq said. “We have examined the technology in Nepal which is quite similar to our traditional method. It requires nearly Rs10 million to adopt the new technology. Not every kiln owner has the means to make the transition.” He added that the association has recommended the provincial government to offer subsidy and loans, based on easy instalments, to kiln owners and also control the coal mafia. Rana Sajjad, who is associated with the brick kiln business for the past several years, said that the adoption of the zig-zag technology will help increase brick production in lesser time. “The new technology will help produce more bricks in lesser time without reducing the number of labourers involved in the production of raw bricks,” he said. “In fact, more labourers will be needed.” Rana Sajjad said that the shortage of labourers to prepare bricks is also one of the reasons for the non-adoption of zig-zag technology. In the zig-zag process, the process of igniting coal inside the kiln is expedited and a blower is used for the purpose. Instead of being put in a straight line, the raw bricks are kept in the kiln in a zig-zag manner which emits smoke in the same manner. The carbon content of the smoke remains inside the kiln while the white smoke is pushed out of the kiln through the strong wind pressure from the blower which greatly reduces environmental pollution. While APBKA owners have wholeheartedly accepted the new technology, they have rejected the government’s recommendation to shut down the all traditional kilns in October. According to Mehr Abdul Haq, the sudden closure of the kilns will not only affect one industry but several fields. “Several brick kilns can be shifted to zig-zag technology during

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SOME KILN OWNERS HAVE NOT PAID ANY TAX FOR MAYBE 10 YEARS the smog season, given that the government provides subsidy and technical assistance to us,” he said. On the other hand, some kiln owners have several reservations over the new technology. A kiln owner shared that his blower, which cost him Rs500,000 to 600,000, runs out of order every two months, while several bricks remain raw during the process. According to experts, this happens due to the use of wrong techniques. They opine that the installation of the blower by a technical expert and the arrangement of the bricks accordingly will deter the loss.

Punjab: issues on conversion

During a preparatory meeting to tackle the issue of smog in coming winter, the Environment Department Punjab (EPD) had decided to serve notices on brick kilns to convert their kilns on zigzag technology or be ready to face closure as was done last year. The Punjab Agriculture Department also launched a campaign from September 01 last year to create awareness amongst the growers about disadvantage of stubble burning which heavily contribute in smog. The special meeting of smog commission held in Punjab Environment Protection Department under the chairmanship of Dr Pervaiz Hassan was attended by officials of different government departments, representatives of steel mills and brick kilns. The meeting was informed that Punjab experienced period of low visibility due to fog, mist and smog between November and February each year for almost 10 to 25 days. The participants were told that industrial units both large and small, many of which use furnace oil with high sulphur contents, burning of agricultural residue and municipal waste and vehicular emissions were the main source of these pollutants. A wide range of small to medium scale industries including brick kilns and steel mills, furnace and others make a much larger contribution as compared to the size of their economic activity due to use of waste fuel such as used tyres, paper, wood and textile waste result in smog in winter season. All Pakistan Brick Kiln Association President Soeib Niazi informed that over 330 kilns had been converted to zig-zag technology while many others would be converted soon. He said many owners were unable to convert their kilns to the zig-zag due to high cost and this issue can be resolved by bank financing. Niazi assured that his association will support government's effort to deal with the issue of air pollution in the province. The issue of stubble burning was also discussed in the meeting. The EPD Secretary informed that a letter has

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Analysis: Pakistan

been written to agriculture department, requesting to ban burning of rice stubbles during winter season. Stakeholders also discussed other major cause of air pollution and vehicular emission. They suggested that the government should formulate the policy to introduce low sulphur content fuel in country. They also highlighted the needs of better traffic control by restricting the number of vehicles playing on the roads during high pollution episodes. A systematic public awareness campaign focusing the advantages of use alternates to motor was also suggested in meeting. EPA spokesman Naseemur Rehman Shah said it was conveyed to the stakeholders in the first preparatory meeting of this year's smog season that zero tolerance will be observed against the polluters. "Industrialists were also requested to update their system of controlling air pollution otherwise they would be penalized," he said. Smog Commission Chairman Dr Pervaiz Hassan concluded that every step would be taken as per the Supreme Court orders to avoid smog-like conditions in Punjab province.

Economic pressures

Of course, the move is meant to combat smog and the rising AQI (air quality index), but it has some serious financial implications, especially for the labour associated with brick kilns and the coal and steel industries. What’s more, owners of these mills are also to suffer. According to the government notification, the districts in which kilns are going to remain closed for a month include Lahore, Sheikhupura, Kasur, Faisalabad, Chiniot, Okara, Sahiwal, Khanewal, Multan, Nankana Sahib, Narowal, Sargodha, Jhang, Vehari, Hafizabad, Pakpattan, Gujranwala and Sialkot. Consequently, 8,000 out of 11,000 kilns situated in 18 districts shall remain shut for the said period. The Pakistan Bhatta Mazdoor Union (PBMU) has stated that almost half a million workforce is associated with these 11,000 kilns. This means that more than two-thirds of the labour is going to face crises in the days to come. “The conditions are only going to get worse for the kiln workers who are already ranked among the poorest and weakest sections of labour,” says general secretary of PBMU, Muhammad Shabbir, while talking to TNS. The closure of kilns is for a month only, but its impact is expected to last till the end of March. It is because the business of brick kilns is a seasonal affair, and the first quarter of the year is not good for the production of bricks because of cold weather and the small number of sunny days available. Labour Education Foundation Director Khalid Mahmood says, “This quarter provides an opportunity to the kilns’ owners to exploit workers’ financial position and lay a debt trap for them. “Because of the nature and condition of their work, brick kiln labourers are routinely called ‘modern-day slaves’.” The kiln owners have an entirely different take on the issue. Secretary General, All Pakistan Kiln Owners’ Association, Mehar Abdul Haq is unhappy with the “hasty shut-down announcement” by the government. “Till November 16 last year, we were told by the Punjab government that the kilns would not be closed this year, in order to avoid unemployment. So, we bought coal and other essential materials required for production. Now, in a surprising

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move, the notification has been issued. This will cost us material losses as well as extra administrative expenditure.” Administrative expenditure, Abdul Haq adds, is “the monthly baithky (minimum amount per month allocated for workers).” Additionally, the prices of clay and coal are expected to go up when the kilns reopen.” Baitkhy, says Muhammad Shabbir, is “nothing but deception and another way of exploitation. Firstly, the amount offered to workers [as baithky] is ridiculous. Secondly, merely two percent of kiln owners offer it. As a result, the workers are pushed to the extent where they have no option but to fall into the debt trap for their survival. “The owners call it peshgi (advance payment), but it is actually debt bondage.” There is another class of workers that is tipped to share the financial crunch in the months to come — the coalmine workers. Since kilns with old technologies use 70 percent of the coal as fuel to produce bricks, the demand of coal for kilns would touch a new low during the kilns’ official closure period. Actually, this situation would remain so till the end of March. Engineer and administrator at Wah Stones, Syed Shahid Hussain is of the view that closing the kilns will reduce coal production by 40 percent. “It’s a financial loss for investors, and a reason for possible unemployment. We have no option except to stop production and lay off employees. “Usually, the last quarter of the year is considered peak season, and the first quarter is business-wise dead [for coal mining]. Therefore, the shutdown policy has become the main cause of unemployment.” Hussain also speaks of the operational cost of mines “going up at the time of restarting operations, as we require more workforce and heavy machinery to reopen business.” More than 130 steel mills situated in Lahore are also facing an official closure along with the brick kilns. These mills are closed because of not installing scrubber technology (equipment to control pollution). “Though 46 mills are operational, thousands of daily wagers have to bear the financial brunt of it, being unemployed for more than a month now,” says Iqbal Ahmed, owner of a steel mill. Khalid Mahmood considers the shutdown policy as “anti labour rather than anti smog. Unfortunately, the government does not seem to have taken all stakeholders on board before formulating any policy. This could affect millions of workers.” The implementation of the Social Security Policy can be a good way to provide financial assistance to labourers who are facing financial crunch. Though, it is the duty of the Punjab Labour Department, nothing is being done in this respect. “It is obvious that the anti smog policy shall have a reaction from the daily wagers and brick kilns workers,” he adds. Presumably, the government is forced to take action against brick kilns not using the expensive ZigZag technology, and the steel mills that have yet to adopt the scrubber technology. But the business community associated with both industries is of the view that unorganised and hasty decisions taken by the government shall only create panic and frustration. “The stakeholders must be taken on board. Secondly, the government must come up with a proper solution,” says Mehar Abdul Haq. “A new law in this regard is the need of the hour!”

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The

State of Gujarat has single-handedly driven the development of ceramic industry in India for the past two decades. Accounting for more than 70 % of the total ceramic tiles produced in the country and more than 77 % of the sanitary ware products, the state has put the country firmly on the global map as second largest ceramic producing country.

Ceramic tiles

The Indian tile industry saw 7.6 % revenue CAGR over five year period (FY2013-14-FY2018-19), with total market size reaching INR 296 billion as in March 2019. Rapid growth in Indian tile industry has been possible due to huge contribution from Gujarat. Along with the huge number of ceramic tile producers from Morbi and Himmatnagar, a number of tier II ceramic tile producers from the state are consolidating their position in Indian ceramic tile industry. The players with sizable production capacities (including their group companies) in Morbi are Varmora (33msm), Simpolo (25msm), Sunhearrt (23msm), Oasis (24msm), ICON Group (18msm), Metro Tiles (14msm) and Qutone (15msm). Himmatnagar based Asian Granito has an installed capacity of 35 million square meters per annum. Emerging tier-II players ( all based in Gujarat) have seen strong consolidated sales CAGR over FY 2014-2019 (Simpolo 24%, Varmora 15%, Sunheart 19%, Qutone 28%, Exxaro 37% and Lexus 33%), which was led by wide product offerings, higher export contribution, distribution network strengthening, dealer addition in new geographies, higher brand awareness and competitive pricing. Currently, there are there are 798 ceramic tile producing units operational in Gujarat with a total installed capacity of about 1, 670 million square meters of ceramic tiles. For the last 3-4 years, most emerging players are preferring European technology (vs. Chinese technology) for critical processes (tile biscuit pressing, tile heating, digital printing) in vitrified tiles; this has significantly improved product quality coming out of the state. A delegation from India, comprising Union Commerce Ministry, Morbi Ceramic Association and Indian Embassy officials in Riyadh met officials of GCC on November 27th in Riyadh to convince the GCC officials about revoking the imposition of anti-dumping duties on Indian ceramic tile exports. According to Mukesh Ughareja, President of vitrified tiles division

of Morbi Ceramic Association who was also part of the meeting: “The meeting lasted for more than four hours. However, we could not secure any commitment this time. We are hopeful that they will consider our representation.”

Sanitary ware

Barring a few handful manufacturing facilities (Hindustan Sanitary ware Industry Limited, Roca Parryware and RAK Ceramics), almost close to 80 % of the India’s sanitary ware production takes place in Gujarat. Ceramic sanitary ware production in Gujarat (m pieces/annum)

Thangadh

With more than 200 sanitary ware producing units, Thangadh is the epicentre of sanitary ware production in the state. However, most of the units produce basic sanitary ware products meant for mass market. Often the products from this cluster sell in the range of INR 500- INR 2000 in domestic market. About two dozen units based in Thangadh are engaged in exporting to countries in the Middle East, Africa and Central Asian countries. Though, bulk of their products are also meant for mass market segments in these countries. Nearly 10 companies produce global standard products and compete with leading organised sector sanitary ware producers. In last eight years, Morbi has also become an important centre for sanitary ware production in Gujarat. Currently, there are 76 sanitary ware production units are in operation. In comparison to Thangadh, most of the Morbi based sanitary ware producers have targeted mid and higher –end of the domestic and export market. Production scale of Morbi based sanitary ware units is also far higher than those of Thangadh. Management of most of these units are from ceramic tile producing units of the town.

Rest of Gujarat

In addition to Thangadh and Morbi, leading organised sector sanitary ware producers such as Cera sanitary Ware, Jaquar and multinational sanitary ware producers – Kohler, Duravit and Toto also operate from their Gujarat based production plants.

.... .... .... March 2019- Ban on use of coal gasifires on account of an order of Gujarat High court....... Nov 2019- Pro 62

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Gujarat tile production 2014

2015

2016

2017

2018

Ceramic tile installed capacity

1,130

1,294

1,389

1,510

1,670

Actual production

586

638

689

756

808

Overall Capacity utilisation

51.855

49.30%

49.60%

50.06%

48.38%

Number of producing units

570

641

695

751

798

Product Type

Number of units

% of total units

Wall Tiles

364

42%

Wall and floor tiles ( under one roof)

10%

Floor Tiles

156

18%

Vitrified Tiles

120

14%

Industrial tiles & others

Sanitary ware

11%

Total

866

100%

Ceramic sanitary ware production in Gujarat (m pieces/annum) Year

2014

2015

2016

2017

2018

Capacity

23.8

25.1

26.4

28.1

29.4

Production

19.2

20.7

21.9

24.1

24.6

No of companies

251

267

289

301

318

Thangadh

210

212

216

223

Morbi

Elsewhere

Company

Cera Sanitary Ware

Location

Installed Capacity ( in million pieces per year)

Mehsana

3.3

Jaquar India

Kadi

1.8

Kohler India

Jhagadia

1.3

Duravit India

Tarapur

0.5

Halol

0.5

Toto India

Guja rat

"Drop in domestic demand of ceramic tiles has prompted Morbi based ceramic tile makers to cut production by 25 â€“ 30 % in last few months. A number of factors- ban on coal gasifiers, GST and most recently imposition of anti-dumping duty on ceramic tile imports in GCC region s behind the cut in production. Natural gas consumption in Morbi has dropped by 27 % in last two monthsâ€œ Nilesh Jetpariya, Preseident of Wall Tiles Division of Morbi Ceramic Association.

ovisional anti-dumping duty imposed by GCC countries in the range of 40- 106 %. www.asianceramics.com

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asian ceramics

Talking Shop

A pan-Asian pivot

Kohler sees India as central to strategy For the US-based premium sanitaryware brand Kohler Co, India remains one of its three most strategic markets, despite the prevailing economic slowdown. In an interview to regional media, David Kohler, President and CEO, Kohler Co, explains why he thinks India is one of the most interesting and creative markets in the world. Kohler started operations in India in 2006. What are some of the changes and trends you have been witnessing since then? I think the brand’s journey has been excellent. Everything we believed about India, in terms of the opportunity, the fast growth and the dynamic economy, has been true. I think it has been exciting to see the design dynamic and the continued evolution of the luxury market, and the interest that people have in designing beautiful spaces in their home. To us, it is one of the most interesting and creative markets that we serve anywhere in the world... We think that it has been a great market and we have evolved over that period of time to be the leading international brand in the market. How would you describe the importance of the Indian market to the company? We think it’s hugely important. When we think of our top three most strategic markets, India comes right after the US, our original market, and China, where we are the number one brand. These are the three most strategic markets for us because of their long-term economic potential. In India, we have been growing at around 2x the market growth in the last five years. Is there any India-specific strategy that you follow? Our strategy is similar around the world, but we also have to tailor it to be appropriate for the market and that starts with building a strong organisation. Our team in India is one of the strongest teams we have anywhere in the world. From the beginning, we started designing and developing products for the Indian market. We also believe in building a network of strong business partners, distribution partners. So, we have invested significantly in the country. We build manufacturing and supply chain capability across India. We have two modern manufacturing facilities in Gujarat. We also use those manufacturing locations for export to the US and Europe. We’re trying to build our brand in India in a very creative way. Are there plans to expand the capacity at your manufacturing plants? Yes, both of them continue to expand. One is for faucets or taps and the other is for ceramics. They are two of our larger and most capable plants in the world. It’s a very significant facility… They are significant investments.

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Does the slowing consumption in India concern you? We think there will be ups and downs in every major market. In a high growth market like this, you are going to have some volatility here and there and you will go through shorter term cycles, but that really doesn’t make a difference to us, because we are focused on the long term. And we invest through cycles and continue to do the right things to build the brand. We don’t really change our strategy dramatically based on short-term cycles. So, the short answer is: we are not concerned about the slowdown. Has the slowdown had any impact on the company and the larger premium sanitaryware market? No. On the project side, you may see some projects getting delayed, depending on what market they are in. What do you have to say about the ease of doing business in India? I think it’s like in any other country or culture. You have to learn how to do business in India and one of the keys to our business is building a strong local team that understands the market. We have not built this organisation with lots of expats. It’s a local team that understands the laws, understands how the economy runs, understands how to navigate the complexities of this market. Certainly, whether it is the tax structure in the country or the legal environment, there are a set of complexities to operating in India, but that’s the same for all companies. Just because we are a foreign company, we are not at any major disadvantage. So it’s just the reality of how the economy and the country works. We have not felt disadvantaged, because we have built a strong team that understands how to do business in India. But, is there bureaucracy and complexity in India? Yes, and it’s there in most countries. It’s just that every country is a little different. Is there any change that you would like to see? I think it’s always about the infrastructure. The better the infrastructure and logistics network – the highways, mass transportation, airport etc – the easier it will be to do business across the country. But, since my arrival in India 16-17 years ago, the quality of the infrastructure – the airports and road systems etc – has improved dramatically. I think India is making a lot of progress. But the reality is, India has to make a lot of progress because of the size of the country and how much

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Talking Shop

opportunity there is. And other countries such as China are progressing rapidly. So, in this competitive landscape where businesses and companies can decide where to invest in, it is important for India to stay competitive in the global business world and continue to improve the attractiveness of its economy. So, I think it’s imperative that the government realises that and continue to drive that type of investment. That also impacts the quality of life for all. Talking about investments, what do you have to say about India as a potential investment destination? For us, it has been a great investment destination because of the long-term potential of the market for us, but then also as an export base for manufacturing. So, we very much have bought into this Make in India idea, not just because of the philosophy of making in India, but also because we build manufacturing facilities that are high quality and very cost-competitive with any market in the world. So they are great export facilities. If we were just interested in short-term returns, we would not invest in building a brand like we have over the last 14 years. I mean, to really build a brand in the country, you can’t be looking at just short-term results. You have to be looking at long-term results because, with the exception of a few categories, you can’t harvest a return that quickly and really build the brand. Are there plans to have more manufacturing plants in India? Absolutely. As we mature in some of these other categories that we have talked about, we definitely want to develop domestic manufacturing capabilities. Ever since 2006, what are some of the positive and dampening factors that you noticed in the market when it comes to the premium decor space? I think one of the biggest things that I've talked a little bit about is the appetite and interest in design in the country. And we've been really pleased to see the Indian consumer and the architects and designers

TO REALLY BUILD A BRAND IN THE COUNTRY, YOU CAN’T BE LOOKING AT JUST SHORT-TERM RESULTS really being interested in colours, materials, finishes... There’s almost more of a vibrant interest in colour and texture and finish in this country. I mean, there’s this whole kind of personality and emotion around design and the use of colour in a rich kind of way that we don’t necessarily see in other markets as strong as we see here. And that has played right into our strength as a company because we are a leader in colour and finish. Despite all the numbers and figures saying otherwise, what makes you bullish about the Indian market? Well, I would just keep coming back to, why not? Look at the numbers around population growth, look at the numbers around per capita GDP, per capita income, look at the numbers around education and how the country continues to invest in education. You know, I think this market does have very strong, long-term potential and it’s demonstrating that year by year with one of the highest GDP growth rates in the world. And the country is making progress. So, to me, this is a very different market than other markets in the world.

ASIA...

is one click away

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IN ADVANCE: PHILIPPINES

In Advance: the electronic exports prove a key driver

In the first of our new sections dedicated to the advanced ceramics sector across Asia, Jahir Ahmed focuses on developments in the archipelago…

hilippines advanced ceramic industry is growing steadily with expansion of the export oriented electronic industry. Many foreign companies, both advanced ceramics and electronic component manufacturers (consuming fine ceramics), are continuously developing Philippines as one of the largest markets for the industrial and technical ceramics, despite expanding cost burden and reducing profit margin following emerging regulating reforms. The Philippines made advanced ceramics and products include electronic components (capacitors and resistors), semiconductors (wafers, integrated circuits), printed circuit boards, and transmission and distribution devices (transformers, switchgear, storage component). The electronic industry sector of the country, receives raw materials or more upstream electronic components and inputs, and produces components that serve large electronics players downstream, such as, Apple, Samsung, Sony, and many other global and regional majors worldwide, including Philippines. Electronic industry has already become the premier export sector of the Philippines. According to the Philippines Statistics Authority PSA) and the electronic industry association SEIPI (The Semiconductor and Electronics Industries in the Philippines Inc), the sector’s exports expanded to US$37.569 billion in 2018, and accounted 55.67 percent of total merchandise exports, while the semiconductor shipments, that occupied 73.75 percent of the exports of electronics products, accounted for 41.06 percent of the county’s total exports. At the moment, foreign investment in the Philippines’ electronic components industry account for about 80 percent of the sector, according to the industry sources. Industry coordination group SEIPI (The Semiconductor and Electronics Industries in the Philippines Inc) said several hundred companies are now operating in the

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country, mostly in the northern Philippines, and mainly in and around Metro Manila and Calabrazon. Many integrated circuit (IC) design companies are active in the country. They include, Intel, Sanyo Semiconductor, Eazix, Symphony, BItmicro, TI Phils, Fairchild Semiconductor, Lexmark, Blue Chip, etc. Also, active are faimware embedded system operators, such as, Canon IT, Tsukiden, etc. SEIPI President Dr. Dan Lachica said many domestically owned Philippines companies have entered in the production and exports of electronics using advanced ceramics manufactured locally and imported. Their products include automotive and consumer electronics. He said Integrated Micro-Electronics Inc (IMI) has automotive cameras being designed and made here. Ionics EMS has contracts with global brands in smart 1 homeTable devices. For other subsectors, there are plenty of opportunities for 2015 28.9 homegrown electronics manufacturers 2016 29.42 2017 36.54 to compete locally and for exports. 2018 2019*

37.57 32.22

However, the manufacturers, both local and foreign, are Philippines electronic and semiconductor exports (US$'000m.)

*Jan-Sept Source: SEIPI, Phiippines and PSA

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IN ADVANCE: PHILIPPINES

e Philippines facing various difficulties in their continued efforts to give a big push to the industry’s steady growth of expanding and consolidating positions in the world markets where Philippines have lots of opportunities to tap following its experience in the industry and backing of the locally emerged highly skilled workforce, including, engineers, researchers, developers, production managers and export markets. “Domestic industry faces many challenges, mainly the issues, spanning from tax reforms to incentives rationalization act to regulatory issues such as inefficiencies in permit issuance, and inconsistent surety bond computations for interzone transport, among others,” said Lachica. Higher cost of power, which is 40 percent higher than in Vietnam, expensive logistics services and labor costs, which are 10 percent and and 28 percent higher, respectively, than the ASEAN average have already badly reduced the manufacturers’ profit margin, Lachica lamented. The razor-thin the margins in the electronic industry are now hurting the industry, according to Earl Qua, President of Electronics Industry Association of the Philippines Inc (EIAPI). The present situation is potentially an existential threat, because, the manufacturers are losing money at every transaction, that is not a sustainable situation for any company large or small, said Qua. EIAPI is working hard to extend the incentives the government offered to the development of the industry and to get supports from the government policymakers in respect of removing all hurdles at home for manufacturing and exporting electronic products. The stagnating situation in removing the hurdles affects our ability to compete in the world market,” Qua said. “The industry in dire need of escaping the negative impacts of material flow as well as on cash flow on top of any potential changes to taxation,” he added. EIAPI said the electronic industry is continuously facing new challenges. It said the challenge facing the Philippine semiconductor and electronics manufacturers in respect of regulator-forced increasing the amount of local content in materials used for manufacturing, directly or indirectly, in order to reduce dependence on imports is not favouring the industry’s growth. It argues little local components cannot help immediately as the industry has to source components from reliable and global sources for profit and export competitively. Many companies have to import 80-85 percent of

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their components from abroad to ensure their profitmaking existence, said EIAPI. According to EIAPI, ICs and wafers make up 80 percent of total import cost of many manufacturers. However, to reduce the dependence of the industry on importation of electronics components, parts and materials, and to integrate the local small and medium enterprises into the supply chain, SEIPI is promoting parts localization. The association is carrying out its advocacies and special projects through its networking committees, which serve to advance the various professions in major functional areas of the industry, including, finance, HR, engineering, logistics, health and safety, and others the industry needs to exist and grow. SEIPI has engaged more of its affiliate members to address industry-supportive academic linkage needs in the higher institutions like universities.

Expanding capacitors

Following a recent letter of intent initiated between the Philippines and Japanese governments, Japan’s globally leading ceramic component manufacturer, Murata Manufacturing Co Ltd, is expanding the manufacturing capacity of its Philippines based production plant, the Philippine Manufacturing Company of Murata Inc (PMM) to serve the demands of the existing customers, accommodate new customers, and increase the sales of multilayer ceramic capacitors (MLCC). Murata is investing about US$800 million, even more, in its expansion project at PMM. According to Murata Manufacturing Co’s Japan headquarter-based Executive Vice President (Capacitor Division, Components Business Unit) Masahiro Ishitani, who signed the agreement, Murata intends to more than double its Philippines based production unit to supplement global supplies of much demanded MLCC. Since it started manufacturing operations in 2012 in the First Philippine Industrial Park in Tanauan, Batangas, where it makes MLCC, among other electronic components, including advanced electronic materials, leading edge electronic components, and multifunctional, high-density modules. It earns over US$110 million in sales per year, according to the Philippine Economic Zone Authority (PEZA). Murata operates both a sales branch and a large production site in the Philippines. After opening a successful sales branch in 1998 Murata set up its factory,

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IN ADVANCE: PHILIPPINES

PMM. It is Murata's largest production site in Asia, capable of producing a variety of components. It is anticipated that many other Murata products will also be manufactured there in the future, for consumption in the Philippines and export to world markets. Murata, in Japan, has developed the world’s first MLCC, GRM011R60J104M, to feature a maximum capacitance of 0.1µF in 008004-inch size (0.25×0.125mm). Mass production of this new product is scheduled to begin in 2020 and PMM is expected to produce it in largescale in the Philippines for local and export markets. The MLCC is an electronic component that stores and releases electrical energy that stabilizes voltage by going through a charge-discharge cycle, and is widely used to absorb noise and detect signals of certain frequencies. Chip type multilayer capacitors are essential components for electronic equipment. It has several uses in electronics products particularly mobile phones, PC and computers. More than 500 monolithic ceramic capacitors are assembled into one latest smart phone. The Japanese firm is a key electronic component supplier in the industry, leading in both the market and technology. Its chip components are also used in other devices such as computers, flat screen TV sets, digital cameras, automotive electronic systems and home appliances. Murata said as smartphones supporting 5G become more widespread and devices such as wearable devices become increasingly multifunctional and more compact, the demand for smaller and higher density electronic circuitry is growing. Among the components employed in this circuitry, multilayer ceramic capacitors are essential for electronic devices and are used for a wide range of applications such as in smartphones and wearable devices. Based on an internal study, as of January 20, 2020, Murata Manufacturing Co said it has succeeded in commercializing the world's smallest PTC thermistor (commonly known as a resettable fuse) in the 0201 inch size (0.6×0.3×0.3mm) for mobile devices, and has recently begun mass production of this device under the part number PRG03BC181QB6RL, which has achieved an approx. 80 percent smaller volume and an approx. 70 percent smaller footprint than the company’s previous PTC thermistor (the 0402 inch size, 1.0×0.5×0.5mm). Built using Murata's unique ceramic materials, the new product maintains its stable properties for a long time, thereby contributing to improving the safety of electronic devices. The Japanese company said its produced world's smallest size (0201 inch, 0.6×0.3×0.3mm), is ideal for multifunctional smartphones and small wearables. Its operating temperature

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range -20°C to +60°C. Murata's own ceramic technology enables small resistance change and excellent longterm stability in high-temperature environments. Murata expects that the ceramic capacitors manufactured in the Philippines will meet a substantial part of demands in the Asian markets. In 2020, the Asian economy will be marked by 5G networks, especially in the ASEAN region, lifting the earnings of top telecommunications suppliers, according to various outlooks and analysis. The demand for 5G compatible smartphones will boost the worldwide sales for ceramic capacitors. Global smartphone shipments will grow 5 percent in 2020 to 1.44 billion units, said Seung-woo, chief analyst at Seoul-based Eugene Investment & Securities Lee said. Nomura Singapore’s chief ASEAN economist Euben Paracuelles suggests that the expected higher GDP growth in 2020 for the ASEAN economies in 2019 will ease monetary expansion to spending supports across the region. The Philippines based Murata factory is already capable of producing a variety of models of capacitors, especially with the growing demand of mobile phones. Currently, three more Murata plants are operating in the ASEAN countries, located in Singapore, Thailand and Malaysia.

COMPANIES AND ORGANISATIONS • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

Philippine Manufacturing Co. of Murata, Inc SEIPI Alexan Commercial Arkus Electronics Philippines, Inc. Centertronics Power Corporation Camp Competitive Electronics Zone Corp. Digital Marketing Eastern Integrated System & Automation Futuristic Aviation And Maritime Enterprise, Inc. Himmax Electronics Corporation Infineon Technologies Innovatronix Incorporated Ionics, Incorporated Johnstech Int'l. Phils. Inc. Microcontrol Design Technology, Inc. Micrologic Systems Inc. Power Quality Engineering Limited Quantum Sharp Phils. Corp. Smartfox Data Solutions, Inc. Socotec Certification Philippines, Inc. Star Communications Holdings Corporation Symphony I.T. Consulting Trident Electronics Corporation Vishay Phils. Inc. Würth Elektronics Wave Computing Xinyx Design Consultancy And Services Inc. Yongden Technology Corporation

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CHINA

IACE CHINA 2020

The 13th Shanghai International Advanced Ceramics Exhibition & Conference

March 24th~26th, 2020 Shanghai World Expo Exhibition Center

The Leading Trade Fair for Advanced Ceramics Industry

Organizer Tel: +86 20 8327 6369/6389 Email: iacechina@unifair.com

+86 4000 778 909 iacechina@unirischina.com

THE

TRADE M USA: SANITARYWARE IMPORTS

Overseas expansions by US-based sanitaryware companies may provide an increasing route back to the homeland for products. As the government looks to warmer relations with China again, will this be the green light the sector is looking for? President Trump signed an initial trade deal with China in January, bringing the first chapter of a protracted and economically damaging fight with one of the world’s largest economies to a close. The pact is intended to open Chinese markets to more American companies, increase farm and energy exports and provide greater protection for American technology and trade secrets. China has committed to buying an additional $200 billion worth of American goods and services by 2021 and is expected to ease some of the tariffs it has placed on American products. But the agreement preserves the bulk of the tariffs that Mr. Trump has placed on $360 billion worth of Chinese goods, and it maintains the threat of additional punishment if Beijing does not live up to the terms of the deal. The deal caps more than two years of tense negotiations and escalating threats that at times seemed destined to plunge the United States and China into a permanent economic war. Mr. Trump, who campaigned for president in 2016 on a promise to get tough on China, pushed his negotiators to rewrite trade terms that he said had destroyed American industry and jobs, and he imposed record tariffs on Chinese goods in a gamble to get Beijing to accede to his demands. In regards to ceramics, it remains to be seen how much pressure is brought to bear however. As AC’s research shows in the graphs opposite, through the Trump presidency there has been little – if any – change in the quantity of sanitaryware being imported from China. Perhaps this is a direct result of American companies having invested heavily in the Peoples’ Republic and the revenues they generate as a result. Indeed, in the last two years it would seem that China has actually grown in proportional imports to the country, rather than

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diminished. In fact in the last two years (2019 figures are expected to show an even greater gulf in the numbers), China has now overtaken Mexico as the key supplier of sanitaryware goods to the country. This, of course, is far from a policy of exclusion, and instead still indicates that China is a critical component of the sanitaryware sector there. AC expects Mexico’s influence to continue to fall in the next few years, particularly if Trump is re-elected. The economic pressure being brought to bear on Mexico will doubtless increase, creating an even greater opening for companies wanting to sell to the US sanitaryware sector. It is interesting that the third most dominant country exporting to the USA is Thailand…again, an area with US involvement. Although the numbers are much smaller (around 1.3m. pieces), they are significant. Europe, for example, is hardly featuring. The average price for Chinese imports also remains consistently low, and perhaps this is an indication that US companies simply do not want to produce the types of lower grade sanitaryware that China can provide? Again, such a move would surely mean that the quantity of Chinese goods will remain the same. The pressure will come if China simply does not wish to produce such goods in future, and as such Vietnam and Thailand may become more relevant as areas to source from. Sanitaryware consumption remains strong in the USA, and one dominated by local brands. However, the growth of those brands overseas in areas such as India, ASEAN and China, and the potential for the production of excess capacity in those areas may result in a slight increase in imports going forward. With politics continually putting pressure on the US manufacturing sector to make everything domestically, it will remain to be seen if sanitaryware is forced to go the same route as other industries and reduce this overall overseas dependence.

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News

MATRIX Table 1

Table 1

2015 2016 2017 2018

44.64 40.35 37.13 42.67

Total sanitaryware imports (m. items)

18.43 17.23 18.48 20.8

Import trend from China (m. items)

Table 1 2015 2016 2017 2018

Table 1

188 206 229 238

2015 2016 2017 2018

Import trend from China (US$m.)

from China

10.2 11.95 12.39 11.44

Overall

25.72 27.54 31.88 31.66

Average price per imported piece (US$) from China

Table 1 2015 2016 2017 2018

Table 1

41.2 42.7 49.8 48.7

Imports from China as % of total

2015 2016 2017 2018

China

18.43 17.23 18.48 20.8

Mexico

Overall

1 22.65 19.15 13.9 16.6

China v Mexico as imports to USA (m. items) China

Mexico

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AC 20-1

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Insight

VIETNAM Table 1

Table 1

Capacity 2015 2016 2017 2018

Produc-on 452 463 537 553

Capacity 309 360 456 442.4

Ceramic tile capacity v production (m. sq metres) Capacity

2015 2016 2017 2018

94 100 127 135.3

Granito tile capacity v production (m. sq metres)

Production

Capacity

Production

Table 1

Table 1 Capacity 2015 2016 2017 2018

Produc-on 73.5 166.5 169.5 169.5

Capacity

Produc-on 22 31 31 31

18.7 24 27 24.8

Roof tile capacity v production (m. sq metres) Capacity

Production

2015 2016 2017 2018

Produc-on 19.55 20.6 23.25 24.75

15.8 16.4 18.5 19.8

Sanitaryware capacity v production (m. pieces) Capacity

Production

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AC 20-1

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Table 1

Table 1 2015 2016 2017 2018

2015 2016 2017 2018

262.6 306 365 398

Ceramic tile - domestic consumption (m. sq metres)

Granito tile - domestic consumption (m. sq metres)

Table 1 2015 2016 2017 2018

Table 1 15.8 20.4 23 22

2015 2016 2017 2018

Roof tile - domestic consumption (m. sq metres)

Table 1 Total -les Sanitaryware Raw materials Tableware

133,596,229 117,218,352 89,025,043 11,714,475

Export values: (first 9 months of 2019 - US$)

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13.4 14 15.87 17.8

Sanitaryware - domestic consumption (m. pieces)

Table 1 Total -les Sanitaryware Raw materials Tableware

79.9 85 108 122

70,913,757 36,134,186 207,567,429 26,386,992

Import values: (first 9 months of 2019 - US$)

AC 20-1

asian ceramics

Hunter and the hunted

Well…THAT went well…! Dear Diary,

of the year it is time to take stock of the William Hunter December 2018: ‘As we approach the end lly will be better and smoother than hopefu situation and look with hope or trepidation to 2019 which world powers with the risk of major the en betwe friction and wars trade 2018. A year of increasing it at face value. Certainly, it summ APEC recent the from more to come if we are to take the messages US and China are going to the down backs seems that unless a compromise is reached or somebody contest likely centred staring risky singly increa an in part taking also continue tit for tat sanctions whilst sive approach aggres more far a taking ment around the South China Sea. The current US govern ns.’ istratio than other recent admin were very much displaced. 2019 proved to It sucks to be right and last year’s shreds of optimism, g trade war between the USA and ongoin the er wheth sibling be more dysfunctional than its elder ened tensions in the South height Asia, China, the turmoil in the Middle East, terrorism in South the United Kingdom, never in nut Chest Old that and Oh, e. Europ in China Sea or political unrest mind the disquiet in South America. full 2019 and the rate for 2020 was The global economy is expected to grow by 3% for the to 3%. You have to question if even this down d revise being also projected to be 3.4% - but that is m – but ageing demographics in the proble isn’t optimistic or realistic? The trade tensions are one ainties mean less investment uncert the world ping develo the for and developed world don’t help ble as with the global standa Under e. declin goods l and less manufacturing as orders for capita debt and everyone wants to be ed extend to elves thems e expos to rush a in is one uncertainty no to think the economies will grow? cash-rich rather than risk poverty. Is there any reason recession or suffer another huge enter On the contrary, if anything we seem more likely to ime mortgage sell-off, because sub-pr the by d cause chaos the equal financial crisis that could fundamentally – nothing has changed. what indictors could suggest that 2020 Firstly if 2019 was the weakest expansion in a decade ly as October 15th: recent as stated IMF The could be anything but a contraction? the pace of global economic activity 2018, of rs quarte three last the in y sharpl g slowin ‘After particular, has weakened substantially, remains weak. Momentum in manufacturing activity, in trade and geopolitical tensions have Rising crisis. to levels not seen since the global financial system and international cooperation trading global the of future the about ainty increased uncert decisions, and global trade. ment invest ence, confid ss more generally, taking a toll on busine hrough both action and ion—t modat A notable shift toward increased monetary policy accom ial market sentiment and financ on ns tensio these of t impac the ned communication—has cushio growth. That said, the yment emplo rted suppo has activity, while a generally resilient service sector outlook remains precarious.’ (delete as you feel appropriate) and the Notwithstanding the trade conflict/battles/tensions/wars still Brexit affecting Europe and the UK. is effect they are having on the global supply chain, there Kong, problems in Turkey and Syria, Hong in ts protes g ongoin with d Geopolitical issues aboun ty in South Asia. It is hard to find volatili and ca Ameri various countries in restlessness in South no coordinated way out of the be to an economy not in some way in distress and there seems to purchasing with subsequent comes it when soft larly particu mess. Emerging Asian markets are ns that new environmental bemoa IMF the r, downturns on manufacturing and investment. Furthe thing? bad a is that If ry. indust otive autom the in standards can reduce growth have had only some credit easing or rates t interes Prospective solutions including lowering economy had been so tipped world the se becau is This sses. succe term shortperipheral and the last financial collapse – we simply into absurdity by the huge and false demand prior to to replace that lost demand with tried haven’t adjusted the model since then; we’ve only that was an abhorrent error at best with hing somet e replac to trying are demand elsewhere, we

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

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acturing and services that supported and something else that would continue to use the manuf ral problem – rather it continues to structu the fix ’t doesn this fed off that abhorrent error. But harm the structure itself. are to stand a chance of getting better. There are four major issues to be addressed if things ing economies; we simply need more emerg and Firstly, more money needs to go into labour and manufacturing. We are an industry uction constr fuel can they so money more g people earnin need improvements in sanitary works. We them. te decora and gs that needs people to build buildin . Public spending needs to increase homes We need more middle classes eager to decorate their tion and health. We are ageing, we educa , ructure infrast useful and real but – not on vanity projects for the future and we need them ted educa people young need services to provide for that we need area. And of course, climate this ment in to have ambition and desire. So, we need more invest the planet (which I think is a save to just not is, it unity opport protection needs to be seen as the and represents a whole action global need good idea given the lack of options) but because it will the success of the New echo could Deal New Green a is stion sugge A my. new industry and econo that we have demand is ent argum The ssion. Depre Deal that helped the recovery from the 1930’s is no innovation, there and ed chang g has stagnation – apart from some cosmetic changes nothin s another toward alking sleepw are we y quentl conse – no ideas to drastically change things financial catastrophe. Is there another way? New Zealand’s Prime Minister, Jacinda Recently there was consternation in the media when based on continuing to try to increase GDP not t budge and policy Ardern, announced an economic sing it). increa (for some reason the measure of success is to keep the disadvantaged improve their help to t budge a g buildin by , simple New Zealand’s plan is tic violence and transition to a domes reduce , lot, reduce child poverty, improve mental health Zealand a better place to build a life as sustainable low emissions economy would make a New something that may face tests as and daring very this find well as earn a living. Some people to refine.’ But other countries are years ‘new metrics may be difficult to quantify and could take ans in the prosaic UK. Thinking politici some even and n Bhuta UAE, the taking this approach too, nt GDP growth and short-term consta g chasin not in be about it – may be the key to success could birthday. If there can be next our not just targets – let us be honest we are in this for the long run and wealth is divided lives ngful meani more to helped be can less wage stagnation, if more people measure of better a be may t ntmen Conte a little more equally then maybe they will be happier. nable recovery. sustai term long for needs my econo the energy the success it might even be k remains precarious with a I will allow the IMF some final words. ‘The global outloo cent growth, there is no room for policy per 3 At ry. recove ain uncert and own slowd synchronized growth. The global trading system rt suppo to s maker policy mistakes and an urgent need for work together because multilateralism to needs to be improved, not abandoned. Countries need risks from climate change, as such , issues major g tacklin to n remains the only solutio opportunities and challenges of the and n, evasio cybersecurity risks, tax avoidance and tax emerging financial technologies.’ e in purchases of iron oxides & barium Oh, before the last crash we noticed a sudden declin want to keep in eye on that. might carbonate both used in making bricks and tiles – you forbid… Still….we’re in a new decade now aren’t we? Heaven Until next time Your humble servant William Hunter

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

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