Asian Ceramics - Dec-Jan 2016 Edition

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December/January 2016

A GIANT AWAKENS‌

INSIDE:

Fre e 2016

YEAR PL AN N

W ITH TH I S I

Iranian porcelain Asian tile trade Heavy clay spotlight ASEAN sanitaryware strategies

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SSU E

PLUS NEWS, VIEWS, ANALYSIS AND MUCH MORE!

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Contents: December/January 2016

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AC16-1

SEE US AT:

AMA CEVBIS RUARY 1-5 FE VALENCIA

See us at AMBIENTE

ON-PAGE: full and half display advertis ing DIGITAL: full and half display advertising…and DUMMY COVERS: the more! ultimate, high impact creative… take ownersh BELLY-WRAPS: high profile, hard-hitting ip of the issue message conveya nce

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November 2015

GERMANY

IDE: IN Song tiles

As the industry readies itself for the end of the year, thoughts are already turning to 2016 and the exciting opportunities that await the industry.

Of course, everyone at AC is looking towards our 20th year serving the industry with great anticipation, and we will be introducing a range of new ideas through the next 12 months.

One of the most obvious, starting with the next issue, will also be one of the most simple: we are changing the numbering system on the magazine.

Since we started back in 1997, we have always entitled our issues by “month”. However, from the Asian Ceramics Edit orial & Distribution first issue of 2016 onwards (which will be Sch edu le A wealth of exciting oppor tunities… published in late January), we are moving towards a more harmonised system of year and number. For example, the first of 2016, will be called “AC16-1” through to “AC1610” at the end of next year. It will then move each year to be “AC17-1” etc. There is of course no difference in the quantity of issues of course, but we believe that the new system will make it easier to track down articles compared to the old-fashioned “monthly” system.

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■ Heavy clay in Maghreb ■ Fuel evolution in Asian heavy clay ■ Capacity builders: the future for Asian ■ Province profile: ●●●●●●●●

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Guangd Turkey’s tableware tegies Pakistan: survival stra debate The ASEAN leader’s

LYSIS AND MUCH MORE! PLUS NEWS, VIEWS, ANA

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■ Shared freight: cost savings for Asia ■ Iranian porcelain spreads regional influence ■ Tile trade: winners and losers ■ Heavy clay industries ●●●●●●●●

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■ Province Profile: Guangdong ■ Turkey: a tablewar e hotspot ■ Pakistan: an industry in turmoil?

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■ Rajasthan: a rival for Gujarat?

■ Chinese sanitaryw are markets and ■ South Korea: setting a future stage makers ■ Egyptian tile markets ■ SPECIAL FOCUS:

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■ The Casting Couch: Asia decides ■ Vietnam sanitaryw are markets and ■ Tile decoratio n: choosing the right makers option ■ Brick opportun ities in North Africa ■ SPECIAL FOCUS:

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Printing technolog y SEE US AT: The Big 5, Dubai

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■ Roof tile markets in southern Asia ■ Export patterns for Asian tiles ■ Thailand: the Lampang factor ■ Southern India: a tile and sanitaryw are ■ FREE INSIDE:

Chinese machinery exports SEE US AT: Official Magazine: Ceramics China; Middle East Stone & Ceramic, Dubai

Paul Russell, Tel: +44 (0) 208 638 0619 Email: prussell@asiancera mics.com

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Raising investment funds SEE US AT: Tecnargill a, Italy

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■ Province Profile: Xinjiang ■ Iran in focus: tableware and sanitaryw ■ J-V or OEM: decisions are for tile makers ■ Technical ceramics demand in South Asia ■ SPECIAL FOCUS:

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revolution? tableware decoratio n techniques SEE US AT: Ceramic Industry Club of ASEAN, Thailand

AC16-8

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Tile inspection and certification SEE US AT: Keramika , Indonesia; Mosbuild , Russia; 27th Cerambath, China

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Asian tile makers SEE US AT: Cersaie, Italy

clay land of opportunity?

SEE US AT: Official Magazine: Indian Ceramics; Tile & Sanitaryware China

■ Province Profile: Qinghai & Tibet ■ Kiln design tech: conflicts of interest?

■ Gujarat p1: changing tiles, changing times ■ Building blocks: heavy clay markets in ASEAN ■ SPECIAL FOCUS:

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■ Iran in focus: the heavy clay options ■ Cost control in Asian tiles ■ Middle East sanitaryw are: evolution or ■ Asian Tablewar e: a change in focus ■ SPECIAL FOCUS:

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■ ASEAN tile manufact uring trends ■ Fuel choice: powering the factories of tomorrow ■ China tile demand analysis ■Asian trading blocs: winners and losers ■ SPECIAL FOCUS:

Asian porcelain tiles SEE US AT: Ambiente , Germany; Unicera, Turkey; Cevisama, Spain

■ Province Profile: Fujian ■ Sri Lanka: a new day dawns ■ Cost saving strategies for heavy ■ Bangladesh:

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or consolidation?

Freight options for difficult markets SEE US AT: Cerafair, Iran; ISH, China

OPPORTUNITIES SUPPLEM ENT

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■ China: the mid-year review ■ Kiln furniture demand cycles ■ Gujarat p2: sanitaryw are - growth ■ Bangladesh: a new tile centre ■ SPECIAL FOCUS:

saniware?

BONUS DISTRIBUTION: g SPECIAL FOCUS: AFRICANBricks Expo Ahmedabad

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YOUR 2017 YEAR

maxim ise you r budget…

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centre PLANNER

FRE E WIT H THI S ISSU E The 2017 Year plan ner!

Valerie Adamson, Tel: +44 (0) 208 133 5273 Email: vadamson@asianc eramics.com

www.asianceram

ics.com

Have a great New Year!

News 10 Inside Asia

Preview of the 27th Cerambath.

12 Welcome

Made in Thailand…officially.

14 Across The Continent

Openings, closures and industry moves from across Asia.

18 International News Our eye on the international arena.

20 Material Matters Raw materials news and views.

22 Comment & Analysis In China…hope springs eternal.

8

asian ceramics

december/january 2016

42 www.asianceramics.com

News

www.asianceramics.com Features 26 China’s heavy clay industries

In the first of two part in-depth analysis of China’s brick and roof tile industries, AC talks to Xu Mingi, Wang Yajuan and Zou Jiyu about how technological developments are proving the driving force behind the country’s evolving heavy clay industries. With 70,000 companies having “substantial” capacity, this can only be a good thing for the environment.

42 Iranian porcelain

Yogender Malik presents an overview of the Iranian ceramic tableware industry with an emphasis on the country’s progress in the production of the porcelain form.

50 Sanitaryware evolutions

Jahir Ahmed discusses how the continued rise in sanitaryware capacity across Asia is creating two distinct groups: the multinationals, and the smaller, independents.

How will this thinking evolve in the next few years?

62 Chinese tiles & the American dream With the resurgence of the US economy, Chinese tile companies are looking across the Pacific as a potential outlet for their under-utilised capacity…

Looking forward Cevisama

Spain 01-05-Feb

Ambiente

Germany 12-16-Feb

Unicera 2016

Turkey

23-27-Feb

Indian Ceramics

India

02-04-Mar

Keramika

Indonesia 17-20-Mar

Ecobuild China

China

29-Mar-01-Apr

Mosbuild

Moscow

05-08-Apr

The 27th China International Ceramic & Bathroom Fair Foshan 18-21-Apr ISH China & CIHE China

30-May-01-Jun

Middle East Stone

UAE

23-26-May

Ceramics China

China

27-30-May

Unitecr

Austria TBC

Tecnargilla Italy 26-30-Sep Cersaie

Italy 26-30-Sep

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

www.asianceramics.com 62 66 Talking Shop

Your favourite magazine is now available at the App Store…

70 Insight

download today to see your first sample issue!

Anaylsis Mr. Abdallah Massaad, CEO, RAK Ceramics, speaks openly with regional media organization, Zawya, about his hopes and plans for the coming year.

Analysis and insight into China.

74 The Hunter And The Hunted

William upgrades to an ipad, but still casts his unsympathetic eye over industry issues: this month he asks if the miracle of China has derailed in spectacular fashion.

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Asian Ceramics: now for mobiles, ipads and androids

december/january 2016

asian ceramics

9

The 26th CeramBath, Foshan International Ceramic & Bathroom Fair, held in Foshan from Oct. 18-21, 2015, was attended by over 46,632 visitors, 1.37% more than last session. These include international attendees, who accounted for 9.8% of the total (a decrease of 1%); of which, Asia accounted for 64.3%, Europe accounted for 10.3%, Africa accounted for 8.9%, North America accounted for 5.8%, South America accounted for 3.5%, and Oceania accounted for 2.5%. visitors’ decrease reflects the continued weakness of the global market. On the other hand, the numbers of Chinese visitors remained stable, 43.4% of which applied the gate pass via Wechat self-help registration.

China International Ceramics & Bathroom Fair, Foshan (CeramBath) will enter its 27th session in April, 2016.

The biannual CeramBath is regarded as the most prestigious and influential ceramic and bathroom exhibition in China. Having 700 leading manufacturers of ceramic tiles and bathrooms, CeramBath is the most professional exhibition of the sector in China, with most famous brands, largest scale and strongest aggregation effect. It has been seen as the market vane of the section in China.

For 13 years, CeramBath has retained its position as the first ceramic exhibition in Asia and the second ceramic exhibition in the world. Its domestic exhibitors covered districts of Foshan, Guangzhou, Qingyuan, Zhongshan, Jiangmen, Zhaoqing, Heyuan, Zibo, Linyi, Fujian, Zhejiang, Anhui, Anyang, Hebi, Gaoan, Jingdezhen, Guangxi, etc. International exhibitors mainly came from America, Germany, Italy, Spain, Japan, Mexico, Malaysia, Brazil, etc.

For 13 years, CeramBath has attracted visitors of over 2 million person-times, constructing an important platform for distributors from over 50 countries to know about China ceramics and helping establishing over 2500 ceramic and sanitary ware trading companies.

By far, it has become the bridgehead of China ceramic industry connecting China and the world.

CeramBath covers three venues. China Ceramics City serves as the top trade window for import and

export; China Ceramics Industry Headquarters focuses on domestic market, gathering famous brands from home and abroad; Foshan International Conference & Exhibition Center is orientated to boost the development of new brands. With various orientations, three venues rely on and coexist with each other, constructing an important platform for ceramic & bathroom enterprises to exploit the market and upgrade brand value.

Organizer: Foshan China Ceramics City Group Co., Ltd Exhibits: 1. Building Ceramic (wall & floor tile, mosaic, plaza tile, roof tile etc.)

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

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

Venues: China Ceramics City Add: China Ceramics City, No.2, 3rd Jiangwan Road, Chancheng District, Foshan, Guangdong, China China Ceramics Industry Headquarters Add: No.68, West Jihua Road, Foshan, Guangdong, China Foshan International Conference & Exhibition Center Add: Taobo Avenue, Nanzhuang Town, Chancheng District, Foshan, Guangdong, China Visitor Registration Please apply the E-ticket at: http://en.cerambath.org/ Contact Us: Mandy Liu International Market Department Tel: 86-757-82525961 Fax: 86-757-82525996 E-mail: fair@eccc.com.cn Web: en.cerambath.org

Inside Asia

THE 27TH CHINA INTERNATIONAL CERAMIC & BATHROOM FAIR, FOSHAN (CERAMBATH) APRIL 18-21, 2016

Welcome

News that The Department of International Trade Promotion (DITP), under the policies of the Thai Ministry of Commerce, aims to bolster confidence in Thai products and services with the Thailand Trust Mark (TTM) – a mark of quality that will hopefully inspire trust among consumers worldwide in the quality of Thailand’s exports – has been well received by the country’s ceramic industry.

Thailand is already internationally recognized as a source of high-quality products and services, and the quality assurance mark issued by the government aims to further communicate this quality to consumers.

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December/January 2016

CONTACT DETAILS EDITORIAL

A GIANT AWAKENS…

IN SI DE:

Fre e 2016

YEAR PL

AN NER

WITH TH Iranian porcelain IS ISSU E Asian tile trade Heavy clay spotlight ASEAN sanit aryware strategies

PLUS NEWS, VIEWS, ANAL YSIS AND MUCH MORE!

TTM was conceived by the Department of International Trade Promotion in 2012. The Mark covers 6 key industrial sectors – including food industry, heavy industries, lifestyle industries, fashion industry, and miscellaneous / service industries, which are broken down into health promotion services, academic services, and nursing services. Additionally, the DITP has been raising awareness of the Mark on a global level.

The DITP has put in place a stringent selection process for potential TTM recipients. Every applicant must possess a manufacturing process of international standards, strong environmental management procedures, socially responsible conduct, and fair labour practices. The Mark represents the most stringent test of quality for Thai products and services onto the international stage.

As of May 2015, 644 companies have become TTM bearers out of 920 applicants. Applicants that do not meet TTM requirements are given support from the DITP to improve themselves for re-application.

Companies with TTM certification have benefits such as being able to promote their products and services in relevant trade shows free of charge. Additionally, they can also take part in trade delegation visits with the DITP over a one-year duration after receiving the mark.

In 2015, the DITP has defined additional criteria for Thailand Trust Mark applicants, focusing on environmental, social, and workforce treatment standards among Thai exporters: 1. The company must have received certification from internationally-accepted standards – such as ISO 9001 or, for the food industry, GMP/HACCP. 2. The company must have an environmental management plan that meets level-2 Green Industry certification from the Ministry of Industry.

3. The company must treat its workforce fairly in accordance with TLS (Thailand Labour Standard 8001-2010) certification under the supervision of the Labour Ministry. The DITP will conduct an on-site inspection to verify this particular requirement.

4. The company must meet ISO 26000 standard for socially-responsible operations or have conducted in- and after-process CSR activities – including good governance, ethical operations, responsibility towards consumers, contributions to community development and more.

Have a great new year, and a successful 2016!

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

ADVERTISING AND DESIGN Advertising Sales Paul Russell Email: prussell@asianceramics.com Direct line: + 44 (0) 208 638 0619 Valerie Adamson Email: vadamson@asianceramics.com Direct line: + 44 (0) 208 133 5273 Production and design Tim Mitchell Email: tim@bowheadmedia.com Direct line: + 44 (0) 208 123 0839

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

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

Bowhead events OVERSEAS OFFICES China Professor Wen Lu and Wen Xin Email: 18980921123@163.com Tel: +86 28 8701 9077 Fax: +86 28 8701 9077 Bangladesh Jahir Ahmed jahir@asianceramics.com India Yogender Singh Malik yogender@asianceramics.com Sri Lanka Rohan Gunasekera rohan@asianceramics.com

Andy Skillen Publishing Director

HEAD OFFICE Bowhead Media Ltd, Communications House 26 York Street, London W1U 6PZ United Kingdom

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asian ceramics

december/january 2016

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

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Al Fanar Ceramics expands production • B&T White delivers boost to OOO Dreja • Anti-dumping crackdown sou Al Forsan Ceramics sees steady growth • Roof tile industry gets “shot in the arm” • RAK Ceramics installs new tun SAUDI ARABIA

Al Fanar Ceramics expands production Saudi Arabia's rapidly-growing and urbanising population is creating a near-insatiable demand for ceramic tiles in the kingdom, with Al Fanar Ceramics being one of the many beneficiaries in business terms.

Al Fanar, which commenced production in early 2009 with an initial capacity of just 15,000 sq m per day of wall and floor tiles, will achieve an installed production capacity of 50,000 sq m per day by the early next year. Al Fanar Ceramics’ production facilities are spread

over an area of 177,500 sq m at Al Fanar Industrial City in Riyadh’s Third Industrial Zone and are equipped with stateof-the-art machinery and a special tile designing system, all imported from Europe.

The Riyadh-based firm, which manufactures a wide range of designer ceramic and porcelain wall and floor tiles under its premium Exa Ceramic brand has emerged a sizable ceramic tile producer in the import dominated Saudi Arabian market. Apart from ceramic

RUSSIA

B&T White, the division of the group that operates in the sanitaryware sector, in which the experience and resources of SITI B&T Group are brought together and organized, strengthens its industrial partnership with OOO DREJA, a young and motivated group that has chosen SITI B&T technology for its first ASTRA shuttle kiln for firing sanitaryware.

The development of strong technical and technological partnership with the customer, combined with the particularly flexible nature of the SITI B&T firing systems, have led to very high qualitative and quantitative standards being attained.

asian ceramics

Islamic University; Umm Al Qura University in Makkah; Maraj Al Bahr Contractors; Danube Hypermarket; Saudi Basic Industries Company (Sabic); Princess Nora University (PNU); Tamimi Group; Saudi Aramco; and the General Housing Authority.

In a major revamping of its product offerings, the company had installed four digital printing systems supplied by System Ceradigit earlier, this year ( between January 2015 and February 2015).

SRI LANKA

B&T White delivers boost to OOO Dreja

14

wall and floor tiles, it also offers border tiles, special pieces, mosaic tiles, and accessories.

The factory has three production lines that are equipped with Italian machinery including a Siti, TSC and Sacmi line. Despite being relatively young in the market, the company enjoys a long list of clients and approvals, including the ministries of health, education, and justice; King Faisal University in Al Ahsa; King Saud University; Al Imam Mohammed Ibn Saud

Special attention has been focused on reducing energy consumption by optimizing heat distribution inside the kiln with a consequent increase in product quality and fewer rejects.

The new line consists of an intermittent ASTRA kiln with a capacity of six 4000 mm wide double-deck kiln cars with a load height of 1420 mm. It can reach an output of 390 pcs/day of large designer washbasins.

By purchasing SITI B&T technology, OOO DREJA will be able to address domestic demand with determination, competitively and with quality products.

december/january 2016

Anti-dumping crackdown sought Sri Lanka’s ceramics industry has urged the government to introduced long-delayed antidumping duty legislation before any planned reduction in import tariffs on ceramic products.

“We expect the government will enact anti-dumping laws before reducing import tariffs,” Mahendra Jayasekera, president of the Sri Lanka Ceramics and Glass Council told its annual general meeting.

The industry was concerned about changes in import tariffs on tiles and other finished goods imports which compete with locally manufactured products, he said.

“Any downward revision of tariffs should go hand-in-hand with anti dumping legislation,” Jayasekera said.

Anti-dumping duty laws have been drafted but not implemented for a long time, he said.

The ceramics industry is now controlled by the Royal Ceramics group which

has bought over rival tile manufacturers and is also the sole sanitaryware maker.

The industry has lobbied for high import tariffs saying local manufacturers find it difficult to compete against cheap imports from east Asian manufacturers.

25th - 27th April, 2016

NEW DELHI, INDIA

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ught • Morbi makers feel the heat • KwanJuYo leads tableware change • nnel kiln • Flour operation to move ahead?

INDIA

Morbi makers feel the heat Struggling t0 compete with Chinese exports, 300 ceramic kilns in the tile town Morbi shut down from late November for a month to cut “excess production which domestic market is not capable of absorbing,” industry association said. This is for the first time in the history of ceramic industry of Morbi that units will remain shut as their product is proving costly due to pricey gas. “Chinese tiles are giving a tough fight to our product in the overseas market. Our exports have tanked almost 80 per cent over the last three months and at the same time domestic market is also weak due to deficient monsoon. This has rendered our production capacity excessive.

Therefore, we have decided to declare a month-long vacation in 300 units starting from Tuesday midnight,” Nilesh Jetpariya, president of Morbi-Dhuva Glaze Tiles Association (MDGTA), said.

Ceramic industry is controlled

by Patels or Patidars who are believed to be strong supporters of the ruling BJP. However, the closure comes at a time when Patidars are agitating against the state government and municipal and panchayat elections in the state are round the corner. But Jetpariya said the shutdown has nothing to do with either election or agitation. “This is the reason we are calling this a vacation and not a shutdown or a strike,” he said.

Jetpariya said the decision was taken to clear stockpile of tiles which had been mounting for the last few months. “We produce approximately four crore square metre (sqm) of tile every month.

Around 1 crore sqm of it is exported to the Gulf countries, Europe, America and Africa.

But the exports have reduced to around 70 containers a day of late from around 300 containers

three months ago. Therefore, there is a huge stock of tile in our godown. The closure is aimed at clearing this pile,” he said.

MDGTA is an association of around 350 glaze tile manufacturers in Morbi. The closure will affect around 30,000 people, including labourers in kilns, raw-material suppliers, traders and transporters, industry sources said. Jetpariya blamed costly Piped Natural Gas (PNG) for forcing the vacation in the industry. “We are getting PNG at around Rs 33 per standard cubic metre (SCM). This is the only fuel available to us as the issue of using coal-gas is pending with the Gujarat HC. On the other hand, Chinese manufacturers are using coal-gas as fuel which is much cheaper compared to PNG. Thanks to this advantage and recent devaluation in yuan, Chinese manufacturers are exporting tile s at around Rs 120

per sqm whereas we can’t afford to export below Rs 140,” he said.

However, Jetpariya clarified that 50 big units which have signed Minimum Guaranteed Offtake (MGO) contracts with Gujarat Gas will not join the shutdown as they pay around Rs 2.5 lakh to the gas company every day irrespective of actual usage. The 300 kilns which will discontinue production have signed NonMGO with Gujarat Gas which allows them to pay the bill against the actual offtake of gas.

“We shall hold a review meeting on November 25 to assess the impact of the vacation on the market. If the orders start coming in, we may decide to shorten the vacation and start the production before December 10. However, if the market does not improve as per our expectations, we may think of extending the vacation,” Jetpariya said.

SOUTH KOREA

KwanJuYo leads tableware change As AC goes to press, renowned ceramic ware brand KwangJuYo is hosting ‘A Better Restaurant Project,’ an international restaurant ware promotion, at the company’s online shopping mall created for overseas customers, from which started on November 20 and expires on December 30.

KwangJuYo has developed a line of ceramic ware in collaboration with worldrenowned Chefs Thomas Keller, Corey Lee and Judy Joo and supplied its kitchenware to The French Laundry, Per Se, Benu and other Michelin 3-star restaurants. PIORA, the popular New York fusion restaurant that has recently

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earned a Michelin star, also uses KwangJuYo products.

Having satisfied the discerning tastes and standards of some of worldfamous chefs, KwangJuYo plans to be more aggressive in marketing and thus help expand the overseas market share of traditional Korean ceramic ware.

The name, ‘A Better Restaurant Project,’ signifies the message that use of KwangJuYo products, made of all natural materials and with a traditional handcraft method, as restaurant ware enhances the value as well as improves the image of restaurants.

Targeting the hotel and restaurant

industries, the sales event is the first of its kind promoting a traditional ceramic ware brand as restaurant ware.

Supplying kitchenware to Korea’s top-class hotels and restaurants, KwangJuYo enjoys such a high reputation for the quality and value of its product that the Blue House uses KwangJuYo products in its state dinners.

CEO Cho Tae-kwan of KwangJuYo said, “Customers who enjoy gourmet dishes value not only the quality of the food but also the overall ambiance, and the dishware is what holds the first impression of food and leaves behind a lasting impression,” adding “The sales promotion

is our response to overseas restaurant industries’ growing recognition of KwangJuYo’s quality and mounting interest in using our products as restaurant ware."

Through its online shopping mall created exclusively for overseas customers, the first and only one in the domestic ceramic ware industry, KwangJuYo makes it easy and convenient for global customers to purchase and enjoy the superior quality of its products.

KwangJuYo also plans to recruit international tableware consultants and develop diverse lines of products targeting overseas customers.

december/january 2016

asian ceramics

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News

SAUDI ARABIA

Al Forsan Ceramics sees steady growth Saudi Arabia-based, Forsan Ceramics, which is emerging as a global ceramics manufacturing company in the kingdom is in the process of streamlining its sanitary ware operations.

Established in 2011, Al Forsan Global Industrial Complex at King Abdullah Economic City in the kingdom produces ceramic tiles and sanitary ware and is latest entrant in the Saudi Arabian ceramic manufacturing industry ( The production of ceramic tiles commenced in January this year).

With its manufacturing facilities spread over an extensive area of 1.5 sq Km ( The Company has acquired a 1.5-million-sq-m of plot of land on a long-term lease with an option to purchase.

The complex allows for a tenfold increase in production to meet future demand according to Forsan Ceramics) , the company has an installed capacity to produce 20 million sqm of ceramic tiles ( 8 million sqm of porcelain and 12 million sqm of ceramic tiles ) and 1.45 million pieces of sanitary wares,

Al Forsan is an investment by KMG (Khater Massaad Group).

The company claims that an investment of SR500 million ($133 million) has gone into the facility, which is well equipped with the most sophisticated machinery, all imported from Italy.

The company claims that it has installed some of the most modern technology available for sanitary ware production at its plant , which includes innovative solutions for the pressure casting of

sanitary articles using porous resin moulds. The company also has a multi-mould high pressure casting bench for the manufacture of open-rim water closets that has a highly efficient work cycle and is fully automated.

By offering modern design and simple yet exclusive lines from its new manufacturing site, the KMG Group aims to improve its positioning in Saudi Arabia and, from there, branch out into new high-end ceramic sanitary ware markets of the region.

SRI LANKA

Roof tile industry gets “shot in the arm” Sri Lanka Ceramics and Glass Council plans to take immediate measures to resurrect the local red clay ceramic products (building bricks and roof tile) industry.

Speaking at the 12th Annual General Meeting of Sri Lanka Ceramics and Glass Council President Mahendra Jayasekera said the council has already taken measures to re-open all the closed down factories across the island.

There were over 500 brick and roof tile manufacturing factories in the country using red clay for manufacturing in Sri Lanka.

Unfortunately, due to lack of

incentives given by the relevant authorities to develop the industry, around 300 factories closed down their operations over the last 20 years.

Jayasekera also expressed his satisfaction over the government’s move to ban the use of asbestos roofing sheets in the country by 2018. He said the ban will help revive the red clay roof tile manufacturing industry to a greater level.

Jayasekera said the council has been lobbying government policymakers with regard to the issues faced by the ceramic industry.The Centre for Technical Excellence in

UAE

RAK Ceramics, one of the world’s largest sanitary ware producers, which produces 5 million pieces a year in its sanitary ware business has invested in a state of the art tunnel kiln at its RAK based plant in UAE. The company has installed a new tunnel kiln designed to handle up to 2,320 pieces in a day. Equipped with latest-generation burners and designed to optimise heat flows inside the firing chamber, this investment will

asian ceramics

bringing down the cost of production and making the local companies more competitive in the market place.

The council is also closely working with Industry and Commerce Ministry and the Agrarian Services Department to solve issues with regard to the mining of raw materials.

He said the government support must be given to resolve outstanding issues with regard to the mining of raw materials to take the industry forward as an environmentally friendly and sustainable industry.

SRI LANKA

RAK Ceramics installs new tunnel kiln

16

Ceramics (CENTEC) jointly with the Sri Lanka Ceramics and Glass Council is working closely with the Sri Lanka Standards Institution (SLSI) to introduce the SLS mark to the red clay ceramic products such as building bricks and roof tiles.

CENTEC has currently singed up with over 20 red clay roof tile and building bricks manufacturing companies to implement Sri Lanka standards with regard to system certifications in their factory.

With the implementation of SL standards, the council is intending to improve the productivity, yields while

allow RAK to boost energy efficiency considerably.

Supplied by Sacmi, the kiln ensures optimal firing and glazing quality, due to the high number of burners and advanced control systems that ensure progressive, uniform, flexible heating in all kiln sections.

A few months back, RAK Sanitary ware had invested in a new robotised glazing station equipped with cuttingedge glaze delivery control systems.

december/january 2016

Flour operation to move ahead?

Sri Lanka’s state-owned minerals sands producer wishes to bring a zircon flour operation in a joint venture with a foreign investor, the Ministry of Industry and Commerce said in a statement.

Lanka Mineral Sands Ltd (LMSL) made a net profit of 2.4 million US dollars in 2014, with sales up 80 percent to nine million dollars.

LMSL now exports in mineral sand products used globally like zircon, rutile

and high-titanium ilmenite, each of which are extracted separately from mineral sand.

Minister of Industry and Commerce Rishad Bathiudeen has asked LMSL to go for higher grade zircon flour production and other value additions to double mineral export revenues.

LMSL chairman Mahinda Moragolle said zircon is considered to be a ‘valuable’ mineral sand and one third of present zircon production is used in ceramics.

www.asianceramics.com

News

International News

Sacmi EKO kiln sales reach 50 milestone World

U

nbeatable reductions in fuel consumption, together with design features that ensure maximum line flexibility and efficiency to cope with ever-more frequent size changeovers and pauses in production: Sacmi brand firing excellence continues to gain market shares worldwide.

Fume volumes reduced by 20% compared to traditional kilns, 25% less consumption during pauses in production and recordbreaking operational consumption rates. These, then, are the latest advantages to be provided by the Sacmi Group that, with the

new line of EKO kilns, is gaining ever-larger market shares all over the world; over 50 machines have already been sold, 70% of which have already been started up successfully at plants belonging to the global ceramic industry’s major players.

Primacy in terms of consumption is certainly not the only EKO strong point: advantages extend to design features that boost market competitiveness and full compliance with all the most modern production requirements.

First of all, Sacmi has responded to the need for frequent size changeovers and accurate

American Standard shelves distribution unit United States

A

$22 million, 600-job manufacturing and distribution operation is no longer planned for the Davidson County portion of La Vergne.

New Jersey-based kitchen and bath products maker American Standard Brands said in November it had withdrawn its plans and related request for economic incentives from Metro and the state.

"The action is in response to business consolidation plans that have made a new manufacturing and distribution plant uneconomical now and for the foreseeable future," the company said in a statement.

American Standard will continue to operate out of an existing facility in Nashville, said Steven Delarge, CEO of LIXIL Water Technology Americas.

American Standard operates under LIXIL Water Technology, a business unit of Tokyo-based LIXIL Corp., and global leader in sanitary ware.

Delarge also said that the company will consider the Metro Nashville area for future expansion plans.

Most recently, American Standard

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was known to have a 10-employee shared services operation in Nashville with staff including in vendor relations.

Before officially announcing the planned expansion over the summer, Piscataway, N.J.-based American Standard had already leased a portion of the former Whirlpool plant building at 1714 Heil Quaker Blvd. in La Vergne.

The company had planned major renovations to that building to accommodate its planned expansion.

The La Vergne location was expected to be American Standard's first new U.S.-based manufacturing facility in more than 25 years.

As American Standard worked toward the expansion, officials said it became clear over the last month that the company needed to focus on improving capabilities and cost position of its existing U.S. operations. As a result, operations will no longer be moving to Tennessee at this time, officials said.

American Standard said it has received no incentives to date in connection with the planned expansion.

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management of increasingly smaller production batches by cutting kiln consumption during pauses in production (by 25%) and by implementing firing curve monitoring and control systems to minimize temperature variation inside the firing chamber (within 2 °C); this allows for high-precision material yields regardless of size or thickness, thus minimizing waste.

The decision to place kiln consumption data at the disposal of customers ensures they can monitor kiln performance in real time via an advanced, user-friendly interface. On Sacmi machines, the supervision system provides,

in fact, all essential system information and can be interfaced with external control tools, a factor vital to the proper management of modern manufacturing facilities.

With numerous references from key players in European and international ceramics over 50 EKO ovens have been sold in 10 countries around the world - Sacmi is a complete plant engineering partner-provider, capable of offering all-round consultancy services thanks to an in-depth understanding of consumption and resource optimisation procedures at every stage of the production sequence.

Golden Ceramic to boost employment Nigeria

T

he Ondo State Government has said that the Golden Ceramic Products Company, located in Ifon, Ose Local Government Areas of the state, which is being resuscitated, would provide about 1,500 jobs for the unemployed.

The Secretary to the State Government, Mr. Rotimi Adelola, said this, at the weekend, in Akure, while signing the Memorandum of Understanding (MoU), on behalf of the government in collaboration with the Jac-Estee Nigeria Limited.

Adelola disclosed that the 24- year-old, moribund Golden Ceramic Products Limited, would boost income generation for the people and the state as a whole.

He explained that development was part of efforts by the state government to prioritise industrialization, which was included in the “Caring Heart” mantra of the Mimiko government.

“It will aid genuine development of the state economy, and so a need to rejuvenate the industry, which has proved a hard nut to crack for previous administrations”, Adelola said.

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Raw Materials News

Raw Material News

IBERIAN MINERALS SEALS AROCHE AGREEMENT Spain // Wollastonite Iberian Minerals Ltd has announced that its 100% wholly owned Spanish subsidiary Solid Mines Espana, S.A. ("SME") has entered into a binding option agreement with Explotaciones Aroche, S.L. pursuant to which it acquired the option to purchase the mining rights of the Aroche Wollastonite Concession ("Aroche") consisting of five (5) mining grids totaling approximately 150 hectares or 370 acres, located 2 kms south of the town of Aroche in the province of Huelva, south western Spain.

Under the terms of the three-year option agreement, ending November 6, 2018, Iberian Minerals will be responsible to pay all exploration, G&A plus capital expenditures and governmental fees on Aroche. The Company will make a onetime cash payment of EUR100,000 to the Optionor once the exploitation permit for Aroche has been obtained.

Iberian Minerals has the right to terminate the agreement at its discretion at any time with no penalties. The Optionor will maintain a 10% interest in Aroche. The option agreement allows for an extension of the three-year term in the event of unintentional causes of delay relating to Iberian completing its due diligence, investigation of mineral extensions, confirmation of historical estimates and exploitation permitting of the

wollastonite.

Aroche was previously investigated by the National Mining Investigations Company Adaro, S.A. ("ENADIMSA") between 1983 - 1988, which included mechanical drillings, trenching, blasting and mineralogical studies determining the existence of an important marble quarry and wollastonite. At the time wollastonite was not a target mineral.

An Exploitation Permit for the marble resource was granted for Aroche on January 23, 1991 for a period of thirty (30) years that can be extended ninety (90) years until 2081. Marble was exploited on the property by the Optionor from 1991 to 2003. Recognizing the importance of the wollastonite deposit during this period, the Optionor designed and planned a conceptual concentration system and mineralogical plant for the processing of the wollastonite which included crushing, grinding, flotation, dense media and High Intensity Magnetic Separation ("HIMS").

Upon application to the local mining authorities, the current Aroche Exploitation Permit could be authorized to include wollastonite due to the previous extensive investigation, with an estimated cost of over EUR3 Million in relative value today, to prove the deposit.

FERRO COMPLETES TILE COATINGS PURCHASE Egypt // Frits/Glazes Ferro Corporation has announced that it has completed the acquisition of Egypt-based tile coatings manufacturer Al Salomi for Frit and Glazes (“Al Salomi”) for approximately $36 million, including the assumption of debt, and subject to customary working capital and other purchase price adjustments.

Al Salomi is one of the leading manufacturers of frits and glazes in the Middle East and North Africa (“MENA”). Al Salomi’s 5,600-square meter plant, located in Suez, Egypt, is state-of-the-art, including continuous furnaces and computerized production lines. It is expected to be one of Ferro’s lowest cost frit production sites. Current production capacity is 55,000 metric tons per year. An additional two lines, or 12,000 metric tons per year, of new tile coatings capacity is under construction and due to be operational in early 2016. The plant, which will be Ferro’s second frit production facility in Egypt, includes additional land and certain infrastructure assets to support expected growth.

The transaction was funded with excess cash and borrowings under the Company’s existing revolving credit facility. Based on 2014 EBITDA, excluding expected synergies, the acquisition purchase price represents a transaction multiple of approximately 8.0. Including synergies and the commercial benefits associated with the two additional frit production lines now under construction, the transaction multiple would be approximately 5.7. The transaction is not expected to significantly impact Ferro’s 2015 earnings but is expected to be accretive to adjusted diluted earnings per

share by $0.03 to $0.06 in 2016.

“We are excited to complete the acquisition of Al Salomi and welcome the Al Salomi team to Ferro,” said Peter Thomas, Chairman, President and CEO of Ferro Corporation. “The acquisition will provide much-needed production capacity, as we have been running at or near capacity levels at our existing plants in Spain and Egypt for some time.”

He continued, “Despite current weakness, the MENA region remains a very attractive, growing market for tile and porcelain enamel products.

This acquisition, combined with our investments in Turkey, strengthens our position as a market leader. These investments are consistent with our growth strategy, which is to expand sales in emerging markets, accelerate product development efforts, and build upon our leading market positions in glass-based coatings and color solutions. We continue to actively pursue a number of other transactions to build out all three of our business segments.”

Al Salomi for Frit and Glazes, headquartered in Cairo, Egypt, is a leading manufacturer of frits and glazes for the ceramic industry, primarily serving the Middle East region. The company’s production facility is located in the Suez industrial zone, north of the Gulf of Suez, and has capacity of 55,000 metric tons. Al Salomi has approximately 150 employees and recorded 2014 sales of EGP 169 million (approximately $22 million, at current exchange rates).

EU DEAL COULD “OPEN UP” NEW MARKETS New Zealand // Kaolin/General According to industry reports, New Zealand’s industrial minerals sector could benefit from a new planned trade agreement with the European Union.

EU Trade Commissioner, Cecilia Malmstrom, and New Zealand’s Trade Minister, Tim Groser, met in Brussels in November to explore a future bilateral free trade agreement.

A deal is expected to go beyond the classic tariff reduction agreement and also address regulatory harmonisation and trade facilitation issues.

Given the potential clash between EU and New Zealand agricultural interests, talks could be protracted.

A trade deal could boost the New Zealand industrial minerals sector, the development of which "is constrained by the population’s concerns about the environmental issues related to mining, the ecological sensitivity of the country, and New Zealand’s location far from major industrial markets", according to a US Geological Survey (USGS) report.

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Bernie Napp, policy manager for Straterra, the collective voice for the New Zealand minerals and mining sector, stressed that New Zealand is currently "more of a niche exporter of these goods". While current duties for New Zealand mineral exports were low, he said an agreement could have a positive impact on investment guarantees.

Imerys Tableware New Zealand Ltd, based northwest of Whangarei, quarries and processes halloysite. Part of the Paris-based Imerys group, a world leader in mineral-based specialities for industry, the company could also benefit. Its products are exported globally for ceramics applications and New Zealand is the only location where Imerys works this mineral.

Currently, the EU represents only a small percentage of sales for Imerys Ceramics’ New Zealand division.

The Crown Minerals Group, under New Zealand’s ministry of economic development, is responsible for managing all state-owned minerals in the country, which includes all minerals on or under crown-owned land. www.asianceramics.com

News Anaylsis

News

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asian ceramics

For tiles, hope springs eternal Extracts from comments by Hemberto Valles

“

2015 has been a very though year, even though many people predicted that this year was going to be better than last it ended being the worst in the past 10 years according to what I have heard.

Most companies are facing extremely difficult situations like deciding to stop one, two or more kilns, letting people go, closing showrooms, or the one decision I absolutely hate the most: reducing their prices to make the products more attractive for the distributor and the consumer to buy.

I can almost assure you that every single company has had to take decisions on any of the issues above. Even when culturally speaking no one in China is willing to openly say they are not doing well and always try to hide the reality somehow, I always say that you cannot cover the sun with one finger.

If you just go out in Foshan and start counting the number of showrooms that have been closed (At least at a rate of 10 per month if not even more) and the number of kilns stopped (This qty is almost impossible to tell) but the information is out there and sometimes shared by other people of the industry like glaze and raw material manufacturers. I heard the other day for a glaze manufacturer that according to his real knowledge and information there were at least a dozen companies fully closed or that stopped production at 100%.

The current situation is without a doubt extremely difficult but my question here to you is more like this: What are you doing to face it?

What did you learn from your trip to Italy to the fair? How are the Spanish and Italian manufacturers facing this recession?

I have read articles from media people, magazines, newspapers, etc. on action things to face this negative situation like Branding, product segmentation, focusing on basic products and so on. While all

december/january 2016

these comments are valid some take long time and others are very difficult to make them happen and the companies just wait until the big brands launch their products and see which ones work well and start making their own versions.

I am afraid that this time during the fairs, the same things keep happening. Some of the big brands will introduce some new things and there will be some sort of a waiting game and then BOOM the copy season starts. It will not be until someone finally has the guts or do it because they have no choice make something DIFFERENT happen. Don’t be afraid of doing something different, you should be afraid of doing the exact same as everyone else. If you do nothing, nothing will happen!

When I was in Italy at CERSAIE Fair in Bologna I found out through some reliable sources that several Italian Brands are planning to start manufacturing facilities in the USA. I had an interesting conversation with one of them at the show who is planning to open next year and it is actually in construction right now: ATLAS CONCORDE. I spoke with their future commercial VP who is going to move to America and lives right now in Modena, Italy. Their future factory will be located in the state of Tennessee near the city of Nashville, which will be quite possibly the new little Sassuolo in the USA. We know it is quite clear that the current situation in Italy is not very favorable and the existing capacity is being only used at slightly over 50%. Italy has an estimated capacity of 50 million square meters per month or 600 million square meters per year of which only a little over 300 million is the current output.

They are hurting and there is no real significant improvement seen clearly anytime soon. But now the USA market which is one of the most important tile importers of

tile in the world is healing from the previous years of recession and is on a very positive path of improvement and as a result the tile demand is increasing.

The USA has currently the lowest cost in the world for the following two things that are extremely important variables in the cost of manufacturing ceramic tile: gas and energy.

Usually for most ceramic tile manufacturers in the world the cost of gas and energy needed to produce one square metrr of tile represent about 25% of the cost.

So if we do some simple math as follows: If your cost of production is 40 RMB per square meter then about 10 RMB represent energy and gas. In the USA with its new existing methods of gas subtracting like fracking are driving the costs down amazingly to levels of one third the current existing cost of Europe and Asia.

So in USA the cost wouldn't be 10 but maybe only 3.5 saving approximately 6.5 RMB per square meter, and if you produce 1,000,000 meters a month the savings could be 6.5 million RMB or 1 million US dollars.

I understand that there are other variables involved in the cost that could be significantly higher in USA than China like labor costs, but not with Europe. So it is quite interesting the opportunity that this represent specially for the Italians if they also have the market to sell this production.

I heard like I said from good sources than is not one or two but up to 7 or 8 companies that may be opening manufacturing facilities in Tennessee in the next year or two maybe up to three at the most. And if this work for them who knows how many more may move to America shrinking the need to import from China, Mexico or Italy which by the way are the 3 countries that represent more than 80% of the tile imports to America.�

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Analysis: Heavy clay

Cleaner, leaner builds China turns to upgraded technology In the first of two part in-depth analysis of China’s brick and roof tile industries, AC talks to Xu Mingi, Wang Yajuan and Zou Jiyu about how technological developments are proving the driving force behind the country’s evolving heavy clay industries. With 70,000 companies having “substantial” capacity, this can only be a good thing for the environment.

I

t is estimated that the gross assets of the brick and roof tile (hereafter referred to as brick) industry amounts to nearly RMB 7 trillion, sales revenue amounts to 3 trillion, the number of employees in the industry 6-7 million and some 100 brick and tile equipment enterprises. The industry ranks first place in the world in terms of numbers of enterprises, product output and employment.

The basics

Currently the number of brick producing enterprises amounts to some 70,000 with major enterprises amount to some 100. Among them, large enterprises with an annual output of over 60 million pieces (converted standard brick) account for 15% of the total enterprises, 50% of the medium enterprises with annual output 30-60 million pieces accounts for 50% and the small enterprises with annual output below 30 million pieces accounts for 35%. Number of large enterprises is increasing and small ones decreasing although the majority remains medium and small enterprises. Moreover, some 100 scaled manufacturing enterprises of brick and tile making equipment are available.

Chinese brick industry has made tremendous progress with major breakthrough in the technical aspects since the start of the 21th century. Techniques and equipment with independent intellectual property rights emerge, such as JZK70/70-25 (with capacity of 25,000-30,000pcs/h), JZK75Y-35, TKY900/900, TKY800/700 large extruder, wet wheel mill, cutting, setting and conveying equipment, and automatic robot arm setting system and automatic handling system.

Kiln techniques were also developed, such as flat sprung wide section (3.3m、4.6m、6.9m、9.2m、9.4m、10.4m ) tunnel kiln, drying waste heat utilization technology, motor local compensation technology, motor frequency conversion speed control technology, internal blending fuel supply technology and waste heat utilization and power generation technology of tunnel kiln etc. These techniques have been implemented in the industry promotion

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However some techniques of the brick industry still require improvements. Most brick factories still use the simple raw materials processing technique with two step rolling and two step mixing. The plastic extrusion technique is widely used and product drying is still dominated by natural drying. Small tunnel kiln and circular kiln account for the majority of the kilns used in the industry. 20% output are from advanced tunnel kilns. Techniques like mechanical setting in kiln, automatic coat feeding and pulverized coal spraying equipment and kiln temperature automatic control and recording system are only implemented in a minority of enterprises.

Brick enterprises generally do not reach the standard operating procedure in terms of national and industry standard, ensuring environmental friendly production, energy saving etc. Some of the enterprises are still operating with violations to the industrial rules.

Adjustment and improvements are to be made in order to reach the goal of energy saving in the 12th five-year plan, and to achieve greater financial, ecological as well as social benefits.

Output and energy

The annual output of the brick industry amounts to 900 billion pieces (converted to standard brick). Among them, 340 billion pieces are clay solid bricks, 260 million pieces are various hollow bricks, 260 million pieces are waste residue (or mixed) bricks, 20 billion pieces are coal gangue bricks, 20 billion pieces re fly ash bricks and 20 billion pieces are various autoclaved bricks. Annual coal consumption is some 70 million tonnes. Among all brick enterprises, 90% of them operate circular kilns and the rest 10% operate tunnel kilns. The average standard coal consumption by every ten thousand pieces of bricks is 600-800 kg. Some enterprises use industrial solid wastes such as coal gangue, fly ash and many other wastes, which enable them to benefit from the national policy for recycling wastes as energy. Then, the average coal consumption by every ten thousand pieces of bricks is lower to around 400 to 500 kg.

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Analysis: Heavy clay

Category of brick and roof tile in China Category

Variety

Size (mm)

Void ratio %

Void shape

Load-bearing cellular brick or insulation brick

240×115×90 240×115×115 240×180×115 190×190×90 180×180×90 216×190×90 240×240×90 240×180×90

28～35

Perorated rectangular

Non-bearing hollow brick, insulation block, composite insulation block

240×240×115 190×190×90 290×290×150 300×200×115 300×240×150 240×180×180 240×175×115

40～47 40～42 40 40～45 50 52 45～53

Rectangular, circular

Hollow block, composite insulation block

190×190×190

40～50

Rectangular

Decorative panel

300×300×15 300×605×15 217×1520×40 267×1520×40

Common brick

240×115×53

Sintered roof tile

400×240～360～220 320×320～250×250

Autoclaved aerated concrete block

600× 60/100/120/150 /180/200/240/250/300 × 200/240/250/300

Concrete solid brick

240× 115× 53

Concrete hollow block, composite insulation block

390×190×190 290×190×190 190×190×190 90×190×190 290×290×190 490×190×190 290×300×190 390×240×190 290×240×190 190×240×190

30～50

Rectangular

Autoclaved lime sand brick

240×115×53

Autoclaved fly ash brick

240×115×53 240×115×90

25～35

Circular

Concrete roof tile

425×330～360～220 320×320～250×250

Sintered brick & roof tile

Non sintered wall materials

Current consumption

Most of the country’s brick enterprises are not scaled ones and not to be taken into account in national statistics system of energy consumption. The energy consumption of various sintered bricks account for over 90% of the brick industry. Comprehensive energy consumption of the brick industry ranks up to the second in building materials industry after cement industry. Under the guidance of government policies, the efficiency of energy consumption in brick industry has been improving greatly, but there are still small enterprises with high energy consumption of up to (1.2 tce)every 10 thousand bricks. The energy consumption varies greatly among enterprises and lacks strict supervisions.

Product structure

Under the guidance of government policies, great changes have taken place in the brick industry. New products of various kinds and sizes emerge. Raw materials change from merely clays to a comprehensive utilization of multi resources and shale, coal gangue, fly ash, river silt, construction waste, sludge, tailings and other waste etc. have become the major raw materials. Products are also

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developed from single clay solid brick to sintered products such as solid brick, cellular brick, hollow brick, hollow block, insulation brick, insulation hollow block, composite insulation brick, composite insulation hollow block, wall and floor brick, paving brick, wall decorative panel and sintered roof tile etc., and non-sintered products such as steam-cured lime-sand brick, autoclaved fly ash brick, concrete brick, concrete block, composite insulation brick, composite insulation hollow block, aerated concrete, and concrete roof tile etc.

Industrial changes

Great progress in brick production technology and equipment has been made as well.

From the original simple process, simple equipment, single product, backward production capacity and heavy manual labor to fully automatic control production process with world level technology and equipment. The capacity of single production line can reach 601200 million pieces while product quality has been improved steadily.

In order to improve the concentration of the industry production bases of wall materials are planned in some areas.

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The key to your success

BONGIOANNI

Leader in the manufacture of machinery for the production of bricks, with over 100 years of experience in the sector, Bongioanni supplies solutions for success. From design to the construction and installation of complete lines for the production of bricks and tiles using the wet process, Bongioanni covers every need, from the raw material to the wet-formed product with specially-created dies and moulds. The service comprises after sales advice and assistance to guarantee the installation, entry into operation and ordinary and extraordinary maintenance of the machinery.

Our solutions are custom-made for every customer.

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

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

Analysis: Heavy clay

Brick & roof tile producers Province

Company (English)

Product & capacity (m.pcs/y)

Anhui Dingyuan Mingyou Wall Materials Co., Ltd.

Sintered shale/coal gangue hollow brick (150)

Hefei Jia’an Building Materials Co., Ltd.

Sintered coal gangue hollow brick (200)

Anhui Dachang Mining Group

steam cured brick (120)

Chongqing Jinning Building Materials Co., Ltd.

Sintered hollow block (120)

Chongqing Haiheng Building Materials Co., Ltd.

Sintered hollow brick/block (0.25m.m3/y) & sintered brick (60)

Chongqing Liangkou Goal Gangue Brick Factory

Sintered hollow brick (0.18m.m3/y) & sintered brick (40)

Chongqing Jinnuo Building Materials Co., Ltd.

Sintered shale hollow brick (0.20m.m3/y)

Xiamen Yihui New Building Materials Co., Ltd.

Autoclaved coal gangue cellular/solid brick (140)

Fujian Yongbao New Building Materials Co., Ltd.

Sintered solid/hollow brick (90)

Gansu

Lanzhou Shajingyi Building Materials Co., Ltd.

Sintered shale hollow brick & block (0.25m.m3/y)

Guangdong

Chaozhou Nanfang Jincheng Co.

Sintered shale hllow brick (100)

Tangshan Qiangsheng Building Materials Co., Ltd.

Sintered shale cellular/hollow brick (200)

Handan Shilong Building Materials Co., Ltd.

Sintered coal gangue/shale hollow brick & block (400)

Laishui Guoxing Zhaoye Building Materials Co., Ltd.

Sintered shale brick (120)

Qinhuangdao Power Co., Ltd. Chenlong Building Materials Co.

Sintered shale brick etc (250), 2 lines

Jiamusi Dingxiang New Wall Materials Co., Ltd.

Sintered shale cellular/hollow/solid brick (70)

Hebi Huayun New Building Materials Co., Ltd.

Sintered coal gangue hollow brick (240)

Zhenping Xinxing Shale Bricks Co., Ltd.

Sintered shale cellular/hollow/solid brick (76)

Jiyuan Zhongxin New Wall Materials Co., Ltd.

Sintered shale cellular/hollow/solid brick & block (170)

Xiantao Henglida Industrial Co., Ltd.

Sintered hollow brick (100) & autoclaved aerated concrete block (0.15m.m3/y)

Dongfeng Motor Corp., Power Plant

autoclaved fly ash brick (150)

Hunan Guanghua Yinhong Building Materials Co., Ltd.

Sintered shale brick (180)

Hunan Niannianhong New Building Materials Co., Ltd.

Sintered coal gangue/shale cellular/hollow/solid brick (180)

Anhui

Chongqing

Fujian

Hebei

Heilongjiang

Henan

Hubei

Hunan

As a result, elimination of backward production capacity in brick industry will be strengthened. Part of the brick enterprises with small scale, backward technology and low quality products will be shut down and another part transformed and upgraded.

Conservation concerns

Energy conservation and emission reduction in the industry has long been a problem concerned. The major pollution of the industry is air pollution and the main pollutants are particulate matter and sulfur dioxide. There is huge number of brick enterprises and the majority of the enterprises are small ones with backward technology. Emission of pollutants for single enterprise is relatively small, but total emission for the industry is enormous. A small part of the factories adopt flue gas purification and desulfurization, a few factories adopt bag dust collector in raw materials and fuel crushing process and part of the coal gangue brick factories adopt flue gas desulphurization facilities.

Overview of e nergy conservation and emission reduction of the industry during the 11th Five Year Plan.

(1). In 2010, comprehensive energy consumption of wall materials industry is 74.2 million tonnes of coal (converted to standard coal), decreasing by 13.8% compared to 2005.

(2). Discharge of main Pollutants has decreased significantly.

30

asian ceramics

december/january 2016

Emission of carbon dioxide has decreased by 14.7%, from 224 million tonness in 2005 to 191 million tonness in 2010.

(3). Driven by government policies, recycling of solid wastes such as coal gangue, fly ash construction waste and sludge in the production of energy saving, soil saving, waste utilizing and environment protection new wall materials has been increased rapidly. The annual use of waste is 300 million tonnes, which saves up to 237 million tonness of soil and10.96 million tons of coal. Such improvements bring huge social and economic benefits.

Association elements

The China Brick & Tile Industry Association was established on July 5, 1996. Now, there are 3783 members distributed in the fields of building materials industry , coal industry, construction industry, power industry etc. everywhere in the country.

The association is composed of 156 directors with 45 permanent directors out of which the president and 13 vice presidents have been elected. Seven function departments are set up in the association, namely the secretariat, production technology and information, personnel training, enterprises management, mechanical equipment, sand-lime brick and technical consultant services.

www.asianceramics.com

Analysis: Heavy clay

Main activities

1. A comprehensive survey of fundamental date was conducted over the whole industries in the aim to assist the government in drawing up the industrial development program; 2. Technical service was conducted according to the present state of the industry, existing problems and demand of the enterprises so that enterprises progress has been accelerated and economic effects have been rapidly raised; 3. Forcefully promoting the production of hollow blocks in saving raw materials and energy, and making full use of the waists to accelerate the walling materials renovation; 4. Checking on and supervising over products quality 5. Conducting workshop of technical training, quality control and new products development etc. to raise the overall enterprise quality; 6. Send various technical materials, magazines, the association journals and other useful information timely;

7. Report to the government departments concerned the demand and desire of the member enterprises in light to help the government to strengthen industrial management; 8. Promote technical and economic alliance and cooperation among enterprises; 9. Carried out international exchanges and cooperation among enterprises; 10. Maintain equal competition and market price and save guard the legal right of the enterprises; The activities have been very fruitful and highly praised by both government and members.

All organizations and enterprises that are related to brick and tile industry are welcome to join us and/to form cooperation in diversified ways with us to contribute our joint efforts to the development and prosperity of the industry.

Brick & roof tile producers - conintued Province

Company (English)

Product & capacity (m.pcs/y)

Jiangsu

Kunshan Tonghai Building Materials Co., Ltd.

Paving brick (1m.m2/y)

Jiangxi

Ji’an Qingjian New Building Materials Co., Ltd.

Sintered shale hollow, cellular & solid brick (50)

Jilin

Jilin Guangda Group, New Wall Materials Co., Ltd.

Sintered coal gangue hollow/cellular brick (520)

Shenmei Group, Coal Gangue Brick Factory

Sintered coal gangue brick (220)

Dalian Zunyuan Building Materials Co., Ltd.*

Sintered paving brick (20), Thin face brick (100)

Lingyuan Hongling New Building Materials Co., Ltd.

Paving brick (1.5m.m2/y)

CECEP Ningxia New Materials Co., Ltd.

Sintered coal gangue/shale cellular/hollow/solid brick (320), 4 lines

Linyi Tianyuan Bricks Co., Ltd.

Sintered coal gangue cellular brick (100)

Zibo Bunge Building Materials Co., Ltd.

Sintered brick etc (2,000m2/d)

Zibo Zhongbo Building Materials Co., Ltd.

Sintered hollow brick etc (100)

Jining Chengkun New Wall Materials Co., Ltd.

Sintered coal gangue/shale cellular/hollow/solid brick & block (120)

Shanghai Xinjingshan Building Materials Co., Ltd.

Sintered silt brick (35)

Shanxi Orchild New Wall Materials Co., Ltd.

Sintered coal gangue hollow brick (60)

Shanxi Juyi Group, New Wall Materials Co., Ltd.

Sintered coal gangue hollow brick (60)

Furong New Building Materials Co.

Concrete cross wall (1m.m2/y), self insulating concrete block (0.20m.m3/y)

Sichuan Yibing Wuiao Building Materials Co., Ltd.

Sintered hollow brick & autoclaved aerated concrete block (0.35m. m3/y)

Tianjin

CECEP Guohuan New Material Co., Ltd.

Sintered coal gangue/shale brick (1,000), 11 lines

Tibet

Tibet Hongqiang Sintered Bricks Co., Ltd.

Sintered shale hollow brick (60)

Zhejiang

Zhejiang Terraa Construction Materials Co., Ltd.

Sintered shale insulation block (450)

Lin’an Datang New Wall Materials Co., Ltd.

Sintered shale cellular/hollow brick & block (120)

Zhejiang Changguang Shidai New Wall Materials Co., Ltd.

Sintered coal gangue cellular brick (160)

Pinghu Xincang Brick & Roof Tile Co., Ltd.

Sintered hollow/cellular brick (120)

Pinghu Guanglun New Building Materials Co., Ltd.

Sintered insulation brick (165)

Zhejiang Haiyan Chengxi Brick & Roof Tile Factory

Sintered brick & roof tile

Kaihua Jintai Bricks Co., Ltd.

Sintered brick (80)

Zhejiang Zhongxia New Building Materials Co., Ltd.

autoclaved copper tailing brick (200)

Liaoning

Ningxia

Shandong

Shanghai Shanxi

Sichuan

Zhejiang

w

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asian ceramics

december/january 2016

www.asianceramics.com

Analysis: Heavy clay

Brick & roof tile machinery manufacturers Company

Product

Hengshui Baixing Building Materials Machinery Co., Ltd.

vacuum-extruder, crusher, feeder, crusher

Qinhuangdao Hailan Building Materials & Metallurgy Machinery Co.,Ltd.*

complete set of brick-making equipment

Nanjing Feiyi Building Materials Machinery Co., Ltd

vacuum-extruder, crusher, feeder, setting machine

Nanjing Shuangyang Building Materials Machinery Co., Ltd.

vacuum-extruder, crusher, feeder, setting machine

Yancheng Building Materials Machinery Co., Ltd.

vacuum-extruder, crusher, forming machine

Nantong Hengda Machinery Co., Ltd.

vacuum-extruder, crusher, cutter, forming/pressing machine

Hangzhou Xiaoshan Xiehe Brick & Roof Tile Machinery Co., Ltd.

vacuum-extruder, crusher, feeder, setting machine

Hefei Lehua Building Materials Machinery Co., Ltd.

vacuum-extruder, crusher, feeder, setting machine

Anhui Xinlin Machinery Group Co., Ltd.

vacuum-extruder, crusher, cutter, forming/pressing machine

Brick output in 2015 Province

Jan-Mar 2015 Output (m.pcs)

China total

Jan-Jun 2015

Growth rate (%)

Output (m.pcs)

109,542.84

12.29

Beijing

12.06

-23.82

33.15

Tianjin

293.44

14.69

748.61

Hebei

238,036.30

Jan-Sept 2015

Growth rate (%) 5.32

Output (m.pcs)

Growth rate (%)

384,758.51

6.7

-37.7

49.22

-34.17

18.17

1,183.08

19.23

1,172.88

19.7

3,231.98

7.25

4,759.30

-11.58

Shanxi

113.14

-31.73

534.68

-28.63

873.34

-37.16

Inner Mongolia

789.48

-33.25

2,166.33

-45.81

3,671.02

-38.4

870.9

-36.14

3,103.69

-36.13

5,406.16

-34.18

Liaoning Jilin

1,204.64

-2.1

4,982.11

10.71

9,567.95

21.63

Heilongjiang

2,263.41

259.69

3,256.15

56.83

6,499.18

65.24

Shanghai Jiangsu Zhejiang

66.35

13.25

152.09

7.42

219.68

-5.46

916.83

-0.55

2,133.89

14.35

3,133.20

14.7

498.37

13.12

1,222.39

6.37

1,910.40

5.53

Anhui

8,802.50

10.53

20,506.24

10.9

31,660.72

13.07

Fujian

3,417.53

34.77

7,362.74

36.38

11,431.47

36.39

698.82

8.49

1,392.90

16.11

2,230.72

17

Jiangxi Shandong

6,658.18

-3.7

14,830.17

-4.33

23,147.00

-3.28

Henan

32,564.55

5.49

68,944.90

-0.99

108,989.90

-3.36

Hubei

14,751.04

11.73

27,494.54

7.22

52,041.73

24.36

Hunan

5,795.69

10.48

13,654.85

4.61

22,959.59

4.21

Guangdong

2,756.55

29.29

5,682.04

30.81

8,900.66

32.74

Guangxi

3,446.68

12.87

8,623.79

11.19

14,315.20

12.45

0.74

-14.94

2.17

-0.91

3.19

1.56

Chongqing

2,715.56

26.1

5,852.85

-0.63

9,424.05

-3.15

Sichuan

9,329.90

0.29

19,383.95

8.42

29,888.21

5.49

Guizhou

5,750.11

174.28

9,358.04

22.55

10,929.45

27.57

493.31

11.51

1,075.98

8.78

1,626.92

-2.95

Hainan

Yunnan Tibet

-

-

12.6

-6.8

17.23

-23.15

3,888.91

8.89

11,192.70

26.6

18,278.12

31.01

Gansu

45.47

-28.85

322.17

11.09

643.2

-0.53

Qinghai

1.52

-84.61

45.52

-22.91

140.02

3.78

Ningxia

44.28

-17.71

184.72

41.48

381

41.01

Xinjiang

180.02

247.7

548.36

148.54

477.61

29.65

Shaanxi

34

asian ceramics

december/january 2016

www.asianceramics.com

Analysis: Heavy clay

Brick & roof tile machinery manufacturers - contiued Company

Product

Xianyou East Machinery Co., Ltd.*

vacuum-extruder, crusher, cutter, forming/pressing machine

Jiangxi Zhenda Machinery Co., Ltd.

brick making machines, sintered brick making line

Jinan Golden Bull Brick & Tile Machinery Co., Ltd.*

vacuum-extruder, crusher, cutter, forming/pressing machine

Zibo Gongli Machinery Co., Ltd.

vacuum-extruder, crusher, feeder, crusher

Shandong Jianneng Yingsu Brick Machinery Co., Ltd.

vacuum-extruder, crusher, feeder, crusher

Xintai Taixing Machinery Co., Ltd.

extruder, crusher, feeder, crusher

Leshan Xinxin Brick & Tile Equipment Manufacturing Factory

vacuum-extruder, crusher, feeder, crusher

Shaanxi Baoshen Mavhinery (Group) Co., Ltd.

vacuum-extruder, crusher, cutter, forming/pressing machine

Shaanxi Huangcheng Building Materials Machinery Co., Ltd.

vacuum-extruder, crusher, cutter, forming/pressing machine

Output of roof tiles 2010-2015 Province

2010 Output (m.pcs)

China total

2011

Growth rate (%)

Output (m.pcs)

2012

Growth rate (%)

Output (m.pcs)

2013

Growth rate (%)

Output (m.pcs)

2014

Growth rate (%)

38.92

10,980.75

34.97

11,082.57

3.88

Beijing

2.7

-9.55

3.09

14.44

2.19

-29.29

-

-

-

-

Tianjin

-

-

-

-

-

-

-

-

Hebei

23.58

10.55

0.02

-89.42

0.01

-19.44

0.01

-42.76

44.46

27.73

Shanxi

13.85

2.62

15.97

15.27

30.52

91.11

87.51

186.73

112.85

28.96

Inner Mongolia

Jilin Heilongjiang Shanghai Jiangsu Zhejiang

-9.3

Growth rate (%)

8,135.61

Liaoning

9,912.29

Output (m.pcs) 13,914.02

20.52

2.43

1,617.31

-

-

-

-

-

-

185.48

28.88

187.59

6.17

192.82

2.89

18.04

-62.4

7.95

-17.49

2,255.45

124.32

2,653.14

23.9

2,588.37

-2.44

3,060.41

18.24

3,653.26

19.37

39.59

0

-

-

-

-

-

-

-

3.87

6.8

116.79

-11.69

75.2

-

-

-

-

-

-

-

-13.23

23.87

2.1

18.17

-23.88

3.05

81.55

52.9

-2.26

32.02

14.36

33.2

3.69

34.11

2.74

31.1

-29.39

Anhui

233.85

66.68

115.12

23.03

141.69

75.07

114.08

-32.22

167.08

0.41

Fujian

162.13

14.41

178.29

9.97

235.47

32.08

140.58

19.12

106.64

-24.14

Jiangxi

39.24

15.68

-

5.61

20.39

6.52

16.22

82.67

1,167.94

2,342.99

37.47

4,991.71

96.11

4,765.98

0.97

3,882.62

-18.53

4,663.07

18.1

Shandong Henan

922.58

28.75

1,226.33

104.07

1,058.43

-13.83

748.96

-36.11

833.39

15.05

Hubei

483.25

-35.61

173.33

6.04

384.95

100.67

572.44

48.7

3,286.62

44.47

Hunan

380.42

19.33

455.55

26.51

461.4

27.4

540.71

29.63

594.63

9.97

-

-

-

-

-

-

-

-

-

61.77

34.78

193.38

56.33

44.36

58.25

3.41

55.06

-5.48

-

-

-

-

-

-

-

-

-

Guangdong Guangxi Hainan Chongqing

39.02

145.41

28.74

35.7

650.95

86.9

23.26

110.2

26.81

8.13-

-26.23

Sichuan

544.6

25.19

723.56

32.86

800.59

10.65

320.93

-60.53

4.77-

-39.51

Guizhou

3.3

0

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Yunnan Tibet

-

-

-

-

-

-

-

-

-

116.03

65.24

28.55

-53.43

66.72

-38.01

91.76

37.53

71.91

-27.82

Gansu

1

-85.44

46.56

4,556.00

147.5

216.8

107

-27.46

0.34-

-96.82

Qinghai

-

-

-

-

-

-

-

4.54

0.8

Shaanxi

Ningxia

-

-

-

-

-

-

-

63.35

36.06

Xinjiang

2.4

16.5

-

-

-

-

-

-

-

36

asian ceramics

december/january 2016

www.asianceramics.com

25 th International exhibition of technology and supplies for the ceramic and brick industries

The future of ceramics

26 -30 SEPTEMBER 2016 RIMINI - ITALY th

Organized by

In cooperation with

With the support of

tecnargilla.it

th

Analysis: Heavy clay

Roof tile output (2015) Province

Jan-Mar 2015 Output (m.pcs)

China total

Jan-Jun 2015

Growth rate (%)

Output (m.pcs)

Jan-Sept 2015

Growth rate (%)

Output (m.pcs)

Growth rate (%)

2,548.56

-1.34

5,508.55

-14.04

9,079.61

-12.21

Beijing

-

-

-

-

-

-

Tianjin

-

-

-

-

-

-

19.28

-16.1

45.13

14.25

66.5

6.35

-

-

-

-

-

-

Hebei Shanxi Inner Mongolia Liaoning Jilin Heilongjiang Shanghai

-

-

-

-

-

-

1.21

24.74

2.84

19.33

5.35

18.36

575.13

14.96

1931.2

3.32

3,335.65

10.43

-

-

-

-

-

-

-

-

-

-

-

-

Jiangsu

0.11

-82.54

0.39

-79.26

1.79

-36.75

Zhejiang

7.76

60.37

20.17

55.17

30.52

20.94

Anhui

28.26

-7.11

147.38

-6.1

225.81

-8.29

Fujian

38.42

44.13

95.39

46.46

154.93

49.2

Jiangxi

16.8

546.15

55.3

32.36

78.78

34.64

Shandong

573.23

-38.19

1,321.74

-43.17

2,059.19

-43.05

Henan

205.09

34.26

513.92

16.1

858.44

11.17

Hubei

898.02

17.34

1,153.00

-4.22

1,859.61

-5.56

Hunan

117.76

37.77

70.14

23.93

167.17

20.34

1.18

-58.95

3.28

-50.75

4.3

-59.97

11.56

-8.11

11.56

-65.54

11.56

-74.35

-

-

-

-

-

-

Chongqing

18.6

39.85

40.75

45.02

61.15

41.88

Sichuan

16.9

52.12

37.07

70.91

51.53

26.49

Guangdong Guangxi Hainan

Guizhou Yunnan Tibet

-

-

-

-

-

-

4.23

45.36

8.4

35.27

10.76

73.27

-

-

-

-

-

-

Shaanxi

6.15

21.33

20.13

8.29

38.99

-4.39

Gansu

0.45

-50

1.45

-39.58

2.15

-36.76

Qinghai

0.33

8.03

1.33

-2.04

1.66

-42.31

Ningxia

8.09

5.2

26.91

0.3

51.89

7.21

Xinjiang

-

-

1.09

-10.88

1.88

-14.24

38

asian ceramics

december/january 2016

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Speciality Alumina Chemicals for

CERAMIC APPLICATIONS

The need for controlling heat and wear forced mankind to develop the art of ceramics, even before the Stone Age. Technological advances over centuries have propagated the use of Ceramic Technology for various applications now so common in our daily lives.

Aluminas & Hydrates are integral raw materials for Ceramics and HINDALCO has developed a range of products for various applications.

Our highly skilled Team of Scientists and Engineers at the state of the art HINDALCO INNOVATION CENTRE, Belgaum, India carries forward the relentless pursuit of developing range of Speciality Aluminas & Hydrates for this fast growing field. The HINDALCO Team is committed to meet customer specific requirements Globally.

For more details, contact :

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40

asian ceramics

3,012.50

december/january 2016

4,282.09

Jiangxi

13,796.08

Hunan

103.5

Hainan

16.13

8.54

2,100.60

487.12

51.2

Yunnan

28.76

43.6

205.47

158.19

1,149.90

Qinghai

Ningxia

Xinjiang

50.27

187.18

Gansu

247.33

281.94

100.53

55.57

6,049.62

-

469.53

2,317.33

32,287.94

4,146.08

2.53

11,613.81

3,365.55

17,852.26

23,431.95

109,830.70

32,105.37

3,200.69

1,823.55

14,301.27

1,533.56

2,269.40

-

6,085.58

7,303.07

10,874.31

3,754.04

1,035.28

15,317.71

1,179.68

291.82

313,127.96

Output (m.pcs)

23.82

30.59

-14.33

-13.14

57.45

-

-38.8

99.64

70.02

17.81

-97.56

49.24

14.22

40.76

100.58

43.62

28.69

46.36

14.41

48.62

11.51

15.77

-

119.34

35.99

13.79

33.74

-0.08

35.69

25.44

-21.9

44.71

Growth rate (%)

2011

Here pcs is converted into standard brick (240mm×115mm×53mm solid brick)

13.19

-35.43

5,024.71

Shaanxi

Tibet

44.89

21,372.07

Sichuan

Guizhou

40.17

39.85

-5.32

60.8

17.65

9.37

61.49

26.84

22.67

20.65

8,078.34

Chongqing

12,336.16

Guangxi

3,918.98

27,143.55

Guangdong

100,043.03

Henan

Hubei

34,026.21

3,034.43

Shandong

89.05

16,067.66

Anhui

Fujian

35.06

9.19

4,527.76

Zhejiang

19.87

4,496.32

-15.68

214.88

52.32

-15.37

35.33

-39.39

16.71

22.99

-5.65

29.88

Growth rate (%)

Jiangsu

34.56

3,563.83

Heilongjiang

Shanghai

8,265.83

Jilin

11,181.74

Inner Mongolia

Liaoning

1,886.90

3,250.05

15,993.59

Tianjin

Hebei

Shanxi

926.77

310,706.31

Output (m.pcs)

2010

Beijing

China total

Province

Output of bricks 2010-2015

385.29

236.9

139.21

1,216.25

8,728.26

-

1,455.28

5,298.52

29,283.42

5,411.55

-

13,031.59

4,312.29

24,354.05

39,735.57

103,710.47

34,895.51

3,015.81

3,854.58

16,546.81

1,512.27

2,377.26

122.81

875.14

8,417.74

11,978.59

3,947.83

2,475.84

8,260.95

875.6

121.04

344,406.42

Output (m.pcs)

20.82

-15.97

-22.2

639.09

47.5

-

76.43

39.62

0.91

11.31

-

9.13

37.69

18.68

56.76

-5.24

5.99

0.35

41.48

3.22

-1.38

4.04

26.31

44.53

33.68

19.22

8.67

134.59

25.83

-23.52

-49.35

9.99

Growth rate (%)

2012

786.3

200.89

116.91

1,071.73

14,070.04

-

1,440.40

7,884.50

32,709.06

6,899.66

-

14,674.97

6,724.37

27,760.18

50,364.94

151,850.55

34,302.00

2,873.23

6,786.14

21,191.97

1,765.26

2,271.32

249.19

7,010.05

8,600.95

1,553.20

4,715.33

2,607.30

7,793.28

904.36

40.56

429,218.66

Output (m.pcs)

-16.05

-15.2

-16.02

80.52

51.61

-

-3.63

67.8

12.97

5.73

-

8.22

56.61

7.52

12.17

16.28

-0.79

-7.27

52.98

21.26

1.18

-3.81

24.34

-18.27

4.2

-8.03

19.44

0.15

-3.83

3.28

-66.49

34.63

Growth rate (%)

2013

546.64

1885.38

461.5

978.92

18,840.82

-

2,140.75

8,776.21

37,786.07

12,384.16

-

18,889.74

10,249.14

33,726.11

64,020.00

157,604.82

30,523.59

2,719.27

10,891.51

38,684.06

2,229.74

3,579.20

329.7

5,852.82

15,491.71

10,907.39

6,545.82

1,900.60

7,773.78

1,296.87

-

505,319.46

Output (m.pcs)

-33.66

20.46

120.40

-16.61

18.37

-

37.62

53.21

13.85

26.34

-

28.64

39.52

14.30

9.27

-1.72

-13.39

-5.36

24.08

25.45

-2.34

32.19

11.00

-29.28

44.93

-15.36

11.78

-25.45

-24.66

27.80

-

17.73

Growth rate (%)

2014

Analysis: Heavy clay

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Analysis: Tableware

A giant awakens…

Iranian porcelain looks for higher profile Yogender Malik presents an overview of the Iranian ceramic tableware industry with an emphasis on the country’s progress in the production of the porcelain form.

B

enefiting from a long ceramic tradition, excellent production costs, a strategic location within the Middle East and the adoption of cutting-edge technologies, Iran is on the path of becoming one of the world’s leading ceramic tableware producers. While expanding its domestic market, the country is also focusing on geographically distant export markets.

Developing in the shades of tough economic sanctions imposed on the country’s exports, Iranian ceramic tableware industry has exhibited a remarkable resistance in past few years.

It hasn’t merely survived, rather has been able to flourish on the back of high quality of wares, one of the lowest production cost and technical acumen of ceramic entrepreneurs engaged in ceramic tableware production.

Iranian producers have continually added to the installed capacity and vastly improved on the quality of their products in these tough years. Though, number of new start ups in the tableware arena has been very low in these years, but it is most likely to change after the withdrawal of economic sanctions.

Why Iran works

With one of the lowest energy costs, which is one of the most important factor determining the competiveness of ceramic tableware industry, one of the most technically adept workforce ( which is often available at abysmally low wages and salaries), abundance of raw materials needed for tableware production, Iran scores well above most of the large tableware producing nations.

According to Saeid Mashayekhi, Managing Director of porcelain tableware producer, Nastaran Chini Porcelain company “ Whereas porcelain tableware producers in other countries/ regions captalises on one favouring factor, we in Iran has a set of factors,

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which work in our favour and thus we have been able to offer even the premium porcelain products at very reasonable prices.”

His company, Nastaran Porcelain has an installed capacity of 6000 TPA pf premium porcelain tableware and is a leading exporter from Iran.

On the demand side, the economic and cultural development of Iranian society together with steady rise in disposable income has been fuelling rapid growth in Iranian ceramic tableware consumption. Iran’s strategic location within a region that includes some of the world’s biggest importers of porcelain tableware such as Saudi Arabia, United Arab Emirates and Iraq and its proximity to other potentially big users offers a rare opportunity for Iranian porcelain producers. The high national per capita income of Qatar, the astonishing economic growth of India and Central Asian countries and changes in population, lifestyle and consumption patterns are all factors that have contributed to an increase in the volume of use of porcelain tableware in the countries in the region.

According to Mohammad Roshanfekr, president of Iran’s Ceramic Producers Syndicate, “One of our key goals is to increase Iranian ceramic exports worldwide, largely by opening up new export markets. To do this it is important to improve the levels of design and quality of our products in conformity with international standards so as to establish an effective presence in new markets in the European and American continents while maintaining and developing our existing regional markets.”

He further says “To develop export markets, our Association is asking for measures to support Iranian ceramic exports, to boost export infrastructures and means of transportation, and to improve the quality of customs administrations. For the domestic market, we are calling on the government to secure the support of the banking system.”

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Analysis: Tableware

IPL – a regional leader

Iranian porcelain tableware industry has emerged as undisputed leader in the Middle Eastern and Northern African region in last few years. Despite, the harsh sanctions and not a very rosy domestic economic conditions, Iranian producers have not been able to survive rather some of them have emerged as significant exporters on the global scale. While, some of the prominent names ( those profiled in detail in this article) have been able to thrive during adversity there are many who are waiting on the sidelines. Currently, these smaller producers doesn’t have the capacity and financial stability as that of the established lot, but some of them are getting them ready to reap benefits of the coming halcyon days of Iranian porcelain tableware industry.

However, amidst all the good signs of development of Iranian ceramic tableware industry there are alsosome grim realities, which are summed by the Export Manager of a leading porcelain producer on condition of anonymity “ It is true that Iranian porcelain producers are looking at a bright future but there are some serious challenges, which no producer can choose to ignore. The main challenges facing the industry is energy, in terms of both access and price, and environmental regulations. Another crucial issue is that of the political changes and developments under way in a number of countries in the Middle East, which risks destabilising our exports. For this purpose Iranian producers will need to adopt effective measures.”

The elephant in the room…

Over the past few years, the nuclear deal has dominated news about Iran. The landmark deal recently agreed to between Iran and the United States and other world powers sets out arrangements for handling that issue. No doubts, that nuclear stalemate have had an adverse impact on Iranian ceramic tableware producers in various ways. Strict control on foreign exchange, which became a major handicap in acquiring the latest technology and import of key raw materials needed for high quality porcelain tableware production were limited to a select few in the industry. Iranian porcelain producers are eagerly waiting for sanctions to go so that they can invest in state of the art technology and can export their products to lucrative European markets without many hurdles.

One can safely assume with going away of sanctions, Iranian ceramic porcelain tableware producers will be able to export a sizable proportion of their production in regional and European markets after streamlining and enhancing their production capacity. Low production cost and years of average growth in their domain will further act as a catalyst for these producers to capture a large share of regional and European market currently dominated by Turkish, Chinese, Indonesian and Bangladeshi ceramic porcelain tableware producers in the mid and upper middle segment of porcelain tablewares.

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Ceramic tableware production, consumption and exports in Iran Year

Production

Consumption

Exports

2014

97,205

65,780

39,398

2013

91,646

64,200

35,211

2012

87,349

63,296

29,156

2011

87,745

66,718

26,345

2010

84,956

66,167

23,076

Leading tableware companies Company

Location

Nastaran Porcelain

Tehran

Chini Hamid Company

Tehran

Chini Hamgam

Tehran

Milad Chini Company

Tehran

Mahdi Porcelain Company

Yazd

Marjan Porcelain Company

Qazvin

Eshfahan Porcelain Manufacturing Company Khazar Porcelain Industries

Esfahan Rasht Industrial City

Hamgam Chini Company

Tehran

Kashan China Company

Tehran

Nour Chini Company

Tehran

HYS Abhar

Tehran

Bargh Avaran Gilan Porcelain Company

Rasht Industrial City

Alborz Porcelain Company

Tehran

Taghdis Porcelain Company

Tehran

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Analysis: Tableware

Some of the more established Iranian producers will gain respectable share in premium and super premium porcelain tableware categories, which currently has a monopoly of European, Japanese and some Turkish producers. All in all, further development of Iranian porcelain tableware industry will bring a much needed and healthy competition in regional porcelain tableware industry in the short term and a welcome change in global industry in the medium and long term.

Zarin Iran Porcelain Industries

With an installed capacity of 8000 TPA of porcelain tableware, Zarin Iran Porcelain Industries is a leading Iranian producer and exporter of the premium quality porcelain ceramic tableware for homes, hotels, restaurants and airlines. A family owned company with a background of over 130 years in ceramics, Zarin Iran was established in 1984 as a producer of high quality ceramic tableware products. Utilizing latest state of the art technology, Zarin Porcelain is considered a pioneer porcelain manufacturer in the Middle East and one of the most technologically advanced porcelain producers in the global ceramic table ware industry.

According to Abbas ali Ghassai, Managing Director of Zarin Iran “ Due to technological superiority and use of high quality raw materials, we have become a pioneer porcelain tableware producer in the Middle East region. On the back of strong quality, we have been able to export our products to over twenty major countries including some of the highest quality aficionado consumers based in Canada, Italy, Germany, Spain, France, England, Sweden, The Netherlands, Turkey, Russia and India.”

He further says “We hold the rare distinction of being selected Zarin iran as the “Exemplary Exporter” as well as “Exemplary Manufacturer” and the Green Industry in Iran. We have more than a century old history of offering a wide range of ceramic art wares. Now we are the sole manufacturer of fine In-Glazed decorated tableware in shapes and collections, which suites a broad scope of tastes from classic to the most modern and contemporary.”

Zarin Iran claims that it is one of the most technologically advanced factories for porcelain tableware production in the world. The company further claims that by using state of the art robotic iso-static presses and fast firing kilns, it is the only porcelain manufacturer in the region utilizing in-glaze decoration system to produce dishwasher and microwave safe products.

Espidar Porcelain

Espidar porcelain co. was among first few ceramic tableware companies with dedicated porcelain tableware production. When established in 1982, it started with a meager capacity of 600 TPA, but subsequent capacity additions and modernizations exercises has resulted in achieving it an overall installed capacity of 2300 TPA of high quality ceramic porcelain tableware .

The company claims that it was the first factory in Iran to receive ISO 9001 certification in porcelain industry. It further claims to have begged multiple awards for high quality of its ware in countries like Spain , Italy, France and Canada.

Mohammad Jamalian, Managing Director of Espidar Porcelain says “ We have achieved an enviable position in Iranian and regional ceramic porcelain tableware industry due to our commitment and adherence to highest quality standards. In the coming days, we would strive to increase the share of our exports to regional and European countries.”

Currently, Espidar Porcelain serves the high quality porcelain demand of some of the most prestigious hotels and government

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organization in Iran such as Narenjestan International Hotel, Simoorgh International Hotel, Darioush International Hotel, Iranian Ports And Shipping Organization Aerospace Organization, Iran Khodro Company, SAIPA Company, Pars Oil Company, national Iranian Gas Company and Iranian Mines and Industry Ministry among others.

Maghsoud Porcelain

Maghsoud Porcelain Inc. manufactures hard porcelain tableware. The company was founded in 1992 and is based in Mashhad, Iran. Located on a mamooth 90,000 sqm. piece of land ( manufacturing complex located on 29,000 sqm of this area) at the Toos Industrial Park produces porcelain tableware for domestic and export markets.

Maghsoud’s manufacturing complex is designed to utilize the most up-to-date technology and machinery such as the ISO-static presses and fast-firing kilns and render a fully automated system.

With the addition of the casting division a couple of years back, the production capacity has been raised to 6,000 tons which, according to the management would be double in next two years.

The company claims that a large part of its 1000 strong workforce are engineers and experts, who apart from relevant academic education, have also completed specialized ceramic training and courses in other countries, such as Germany and England.

The company boasts of one of the most modern laboratory and research unit dedicated to materials engineering, which is charged with the responsibility of material analyses and provision of formulation. Maghsoud Porcelain also operates a decal printing company ,Golanghsh Toos, with a capacity of 2000 sheets per day.

The company is also a leading producer of glass tableware with an installed capacity of about 10.000 ton per year.

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Analysis: Tableware

Pardis Chini

With an installed capacity of 10,000 TPA of high quality porcelain tableware, Pardis Chini is among the top five porcelain tableware producers in Iran. The company, which has been in operation for more than twenty years claims to have more than 10 % share of the domestic porcelain tableware market.

According to Mostafa Damavandi, Managing Director of Pardis Group “ Besides domestic porcelain tableware market, we are trying to promote our products in international market. We have deployed cutting edge technology at our manufacturing operations and will continue to strive for updation of technology.”

Toos Hard Porcelain

One of the largest ceramic tableware producer in Iran and greater Middle East region, Toos Porcelain has created a niche for its products in domestic and international ceramic tableware markets. The company, which commenced production of ceramic tableware at Mashhad in 1984 with a modest capacity of 2000 TPA has continually upgraded and added new capacity at its parent plant .

With an installed capacity in excess of 10,000 TPA, the company takes pride in supplying tableware needs of many of the prestigious clients and occasions in Iran and international market.

Mehdi Kamlan, Managing Director of the company claims “We are the largest ceramic tableware producer in the Middle East region and second largest on the globe. We have about 25 % share of the domestic ceramic tableware market.

Our success is as a result of in house design, modeling, printing house and advanced laboratory.

We have one of the most extensive decal designing and printing department in the Middle East, where its design team carries out studies in order to find out what are the most wanted decals by local and global markets.”

Taghdis Porcelain Company

Tahhdis Porcelain is a relatively new player in Iranian ceramic porcelain tableware industry. The first phase of the company, which came on stream in 2005 had an installed capacity of 2600 TPA. Later in 2010, the second phase was brought on line, which have raised the overall installed capacity to 7600 TPA. The factory’s machinery and equipment have been supplied by Germany’s Sama and Dorst, which also collaborated in installing and training the company’s staff to operate the machines.

Employing more than 900 personnel, Taghdis Porcelain like its other compatriots claims that it has the most up-to-date equipment and machinery available in porcelain tableware production including pressure casting, saucer forming, Iso-static press, automatic robots, dryer spray, fast-baking kilns, automatic glazing machines, and auto-shearing machines. The company

48

asian ceramics

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also takes pride in its state of the art quality control labs, research and development (R &D) and central units such as quality guarantee, client relationship, and design and development.

Akshan Chini

Established in 2008, Ashkan Chini is also a relatively new player in Iranian ceramic table ware industry. With an installed capacity of 7500 TPA, it created a sort of flutter in global ceramic tableware industry as it was among very few companies globally, which went ahead with the installation of such a huge installed capacity in its initial phase.

Equipment for the plant is supplied by Sama, a German member-company of the Sacmi Group, the leading international supplier of ceramic-making machines and plants to the tableware industry. According to, Sama, “ From a technological standpoint , Ashkan Chini plant represents a marked level of innovation compared to the usual standards in the area, especially as regards the innovative spray drier processes, iso-static press, pressure casting and fast firing.”

New entrants?

RAK Ceramics, which is one of the leading porcelain table ware producer in UAE might be the new entrant in Iranian ceramic tableware industry according to industry grapevine. However, the company hasn’t yet disclosed its plans of starting up a tableware production facility in the country.

In the 10 years since RAK Ceramics opened a $40 million tile manufacturing plant in Iran, the United Arab Emirates-based firm has racked up millions of dollars in losses in the Persian country, fired hundreds of employees and all but stopped its kilns from burning.

But then Iran struck a nuclear deal with the U.S. and other foreign powers this summer. Now with sanctions expected to ease, RAK Ceramics is looking to boost its operations in Iran.

In August this year, RAK Ceramics acquired 20 per cent of the minority share in its Iranian subsidiary RAK Iran, fully buying the unit. With full ownership of the subsidiary, RAK Ceramics said that it has “a long term vision for the Iranian market both domestically and as an export centre in Central Asia as the sanctions regime gets lifted.”

Executives for one of the world’s most known ceramic producer are now betting the long wait on Iran is about to pay off. “We were a patient investor,” says Abdallah Massaad, RAK Ceramics’ chief executive.

RAK Ceramics is one of a handful of Arab-owned firms positioning their businesses to profit from a post-sanctions neighbor, even as frosty political ties between Iran and most of the Gulf Cooperation Council–Saudi Arabia, Bahrain, the U.A.E., Oman, Qatar and Kuwait–show few signs of thawing.

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Analysis: Sanitaryware

Building the f sanitaryware makers choose a production route Jahir Ahmed discusses how the continued rise in sanitaryware capacity across Asia is creating two distinct groups: the multinationals, and the smaller, independents. How will this thinking evolve in the next few years?

A

sia is continuously building up ceramic sanitaryware capacity. Along with small and medium sector manufacturers who are exploiting the benefits of rapid access of masses to sanitation and hygienic toilets, the larger manufacturers, specially, the multinational companies are leading the major investment developments as the older generation bathroom users are switching to the usage of improved and high-tech sanitarywares to enjoy luxury and wellness.

In large-scale and high-tech sanitaryware sectors, the capacity build up is mostly done by joint venture collaborations as well as acquisitions and merger of the production units by the larger and multinational manufacturers. Spain’s Roca and Japan’s TOTO and Lixil are typical examples among those companies or groups. Lixil suggested the Asia Pacific region has emerged as most potential area for this new development as housing sector is showing a tremendous growth since past several years.

Larger brand operators and multinational groups are in better advantage for quality and mass manufacturing with very high

50

asian ceramics

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level of variations in designs and products of various consumer segments. But smaller and medium types of manufacturers still have their niche markets and opportunities to grow, according to Dr. K. N. Maiti, Director and technical expert of Cera Sanitaryware Limited, a major operator in India. “Smaller manufacturers are catering to the needs of larger operators as contract manufacturers and OEM suppliers,” said Maiti.

“Outsorcing by larger companies is prevalent in a particular country or elsewhere and small and medium factories have been supplying goods as per agreed quality specifications to large manufacturers who later on market it,” Maiti explained.

In a situation of tax exemption and other perks enjoyed by the small and medium unorganized operators, India’s larger organised manufacturers are using the capacity of small operators since long and such contract manufacturing has been running profitably for the both. Expansion of unorganised sector equipped with improved Chinese machinery and reconditioned plants supplied from the European countries have made this highly potential. Organised Indian operators find such small units much lucrative for acquisition.

www.asianceramics.com

Analysis: Sanitaryware

future The merger and acquisition by the larger companies and multinationals are taking place in major sanitaryware manufacturing nations including India, China, and Southeast Asian countries. This has helped capacity buildup parallel to the increase of consumption of sanitarywares in the region with double digit annual growth. The resulted expansion in manufacturing in Asia has been grabbing more market shares in Europe and North America where rising uneconomic operating cost in sanitaryware factories are continuously blocking the growth of the existing units. In recent years, several Western and Japanese operators, such as TOTO, Kohler and others, have shifted their export operations to various Asian locations, particularly, to India and other Southeast Asian countries to stay in the business.

“The continuous efforts in developing innovative techniques, processes and products result in the reduction of labour and energy costs, and improvement in productivity and quality,” said Maiti. “Lower cost of production with efficient usages of inputs and drastic reduction in scrap volume leading to minimal environmental problems make the manufacturers compliant,” added Maiti, who is a ceramic scientist and former Director of India’s union government run .Central Glass & Ceramic Research Institute, Naruda Centre, Ahmedabad, Gujarat.

Larger Asian players like 12-13 million pieces of sanitarywares a year production capacity Lixil, and the global leader Roca with an annual production of some 36 million pieces are favouring acquisitions and mergers for rationalization and consolidation of operations for ensuring profitability. Maiti said these help in strengthening the companies themselves and complement each other in sharing information regarding high-tech products, trade and technology resulting in dramatic reduction of administrative expanses and product costs.

With such acquisitions and mergers Lixil and Roca have reportedly eliminated inefficiencies of individual enterprises in Asia. Acquisitions have been followed immediately by restructuring and plant rationalization including possible relocation of production.

In South and South East Asian countries the premium brands are also manufacturing and selling sanitarywares for both the mid and high scale segments of consumers in competition with the domestic and alien products. The high-tech manufacturer, TOTO has built up a substantial capacity for manufacturing sanitarywares for both middle class and higher end consumers in China, Taiwan, Indonesia, Malaysia, Vietnam, Thailand and India. Its total global production capacity is estimated to be over 18 million pieces of sanitarywares a year.

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TOTO Group Location: HQ, Kokura, Kyushu Island, Japan Original factory: TOTO Ltd and Washlet manufacturing plant located in Kitakyushu, Japan Products: Ceramic sanitarwares Others: TOTO’s mother factory, TOTO Ltd. based in Kitakyushu, Japan, was founded in 1917. It is the world's largest toilet manufacturer. It has two-thirds of Japan's bathroom market, seven factories in Japan and a presence in 16 countries. The name "TOTO" is an abbreviation of the two Japanese words forming its full name, Toyo Toki (Oriental Porcelain). The company invented and patented the Washlet. The TOTO Washlet is an innovative toilet seat that features an integrated bidet.

LIXIL Group Location: HQ, Chiyoda-ku, 100-6036 Tokyo, Japan Products: Ceramic sanitarwares and other building materials.

Markets: Domestic and world markets through its worldwide manufacturing units.

Brands: LIXIL sanitarware brands include, American Standard, GROHE, INAX, JAXSON, etc.

Others: LIXIL is now investing heavily in East Asia for production of building materials, including sanitarywares. Its product ranges meet a diverse categories of consumers from the middle to upper-ends.

P.T. Surya TOTO Indonesia Location: Tangerang, Indonesia Products: Ceramic sanitarywares Markets: Domestic and export markets Others: P.T. Surya TOTO Indonesia is TOTO’s first overseas factory. Its products include water closets, urinals, bathtubs, washbasins, bidets, sanitarywares with bathroom cabinets and fixtures, etc. The products are exported worldwide.

American Standard Indonesia PT Location: Cileungsi, Cibinong 16820, Jawa Barat, Indonesia Products: Ceramic sanitarywares Markets: Domestic and export markets Others: American Standard Indonesia PT is a major sanitaryware manufacturer in Indonesia to cater the domestic markets and for exports.

PT INAX International (INA Sanitaryware) Location: Semarang 50121, Indonesia Products: Ceramic sanitarywares Markets: Domestic and export markets Others: INAX is the leading Indonesia based ceramic sanitaryware manufacturer, founded decades ago.

Siam Sanitary Ware Industry Co Ltd Location: Khokyae, A. Nongkae, Saraburi 18230, Thailand Products: Ceramic sanitarwares Markets: Domestic and export markets Others: Siam Sanitary Ware Industry produces sanitary wares under the COTTO brand name. The products include, bidets, urinals, lavatories, and other bathroom accessories.

Offers bathroom design and installation.

American Standard Sanitaryware (LIXIL (Thailand ) Public Company Ltd) Location: Mabkha, Nikompattana Sub District, Rayong 21180, Thailand Products: Ceramic sanitarwares Others: Full range of ceramic sanitarwares. American Standard is part of LIXIL Group of Japan

december/january 2016

asian ceramics

51

Analysis: Sanitaryware

Indonesian ceramic sanitaryware industry production in million pieces Ceramic Commodities

Sanitarywares

2013

2014

Est. 2015

5.1

5.4

5.4

Source: ASAKI

Indonesian gas prices Classification

2013

2014

2015

SBU 1 (West Java Region)

7.56 usd/mmbtu + Rp.750/Nm3

7.56 usd/mmbtu + Rp.750/Nm3

7.56 usd/mmbtu + Rp.750/Nm3

SBU 2 ( East Java Region)

6.43 usd/mmbtu + Rp.750/Nm3

6.43 usd/mmbtu + Rp.750/Nm3

6.43 usd/mmbtu + Rp.750/Nm3

7.25 usd/mmbtu + Rp.660/Nm3

7.25 usd/mmbtu + Rp.660/Nm3

Rp. 167,600/mmbtu

Increased as of 1 Aug 2015 SBU 3 (North Sumatera Region) Source: ASAKI

Pending premium

TOTO’s Indian operation is newly installed and located in Gujarat state in western India. In contrast to other Asian markets, the Asian leader has targeted the middle segment in India. “The main market in India is middle-class customers. TOTO has developed a specially tailored products for them, it is not for the premium segments,” said Madoka Kitamura, President and CEO of TOTO Group. TOTO has plans to develop the Indian base for exports to the Middle East, Europe and North America in future.

TOTO’s present Indian products are priced at a level quite competitive to the leading local rivals, HSIL, Parryware.and Cera.

The plant will initially produce some half a million pieces of such items, about a half of which will be exported to the Middle East and Europe until the current whole production is absorbed in the Indian markets.

In a nearly similar move of capacity building in Asian markets in face of competition from the Western and local brands and to increase exports to the world markets, Lixil is seeking to catch up by capitalizing on the US. and European brands it has acquired in recent years.

In mid 2014 Lixil opened a flagship showroom, the Crystal Design Center, in Bangkok to to promote the products of Inax and American Standard, Lixil acquired American Standard in 2013. It aims to position the brands competitively jn Thailand, where exist many strong locally made rivals, from Thai and foreign owned companies, including famous Thai brand COTTO. Lixil plans to work closely with sanitary fittings company Grohe Group, which it owns.

In recent years, Lixil’s mergers and acquisitions has helped the multinational company build up a massive capacity of American Standard Asia Pacific with easy access to the regional markets spanning China, South Korea, Southeast Asian countries, and Australia, where it has local products. American Standard has already earned considerable reputation in the regional countries.

Lixil President Shinji Ito said the grup is going to increase its investment in Vietnam’s building materials sector including sanitarywares. Currently Lixil Vietnam produces sanitary ware brands American Standard and Inax in Vietnam for domestic and export markets.

Meanwhile, TOTO is gaining increasing market shares in the region for expansion of manufacturing in cost effective base like Vietnam and Indonesia. In 2013, TOTO's sales in Asia, excluding Japan and China has reportedly represented an 86 percent increase over a four-year period. Operating profit grew by 130 percent to US$27 million.

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asian ceramics

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KOHLER (Thailand) Public Co Ltd and Karat Sanitaryware PCL Location: Tandieo, Kaeng Khoi, Saraburi, Thailand Products: Ceramic sanitarywares Markets: Domestic and export markets Others: KOHLER and Karat are leading vitreous sanitarware manufacturers.

Thailand-based Karat became part of the KOHLER Company, and is now known as KOHLER (Thailand). Their products include full range of sanitarwares, such as, water closets, squats, lavatories, urinals, bidets, washbasins, bathtubs, accessories and other sanitarywares of vitreous china.

Star Sanitaryware Co Ltd Location: Nongkae, Saraburi 18140, Thailand Products: Ceramic sanitarwares Markets: Domestic and export markets Others: Star manufactures a wide range of products including vitreous china bathtubs, water closets, washbasins, urinals, bidets, squats, soap holders, etc.

Nahm Sanitaryware Co Ltd Location: Bangkok, Thailand Products: Ceramic sanitarywares: Markets: Domestic and export markets Others: Manufactures full range of ceramic sanitarwares, such as, water closets, washbasins, urinals, bidets, bathtubs and other accessories. It is part of Villeroy & Boch of Germany.

Cristina Sanitary (Thailand) Co Ltd Location: Huay Kwang, Bangkok 10320, Thailand Products: Ceramic sanitarwares Markets: Domestic and export markets Others: Manufacturer of full range of sanitarywares, with exclusive bathtubs and wasbasins.

Mogen (Thailand) Co Ltd Location: Lumlukka, Pathumthani 12150, Thailand Products: Ceramic sanitarywares Markets: Domestic and export markets Others: Mogen manufactures and distributes sanitary wares made of vitreous China, such as, water closets, basins, bathtubs etc for both home and export markets.

www.asianceramics.com

Al Jawdah company for plastic pipes and fittings: The company was founded in 1994 and is engaged in the production of plastic pipes of the (PVC) and (C-PVC) and (UPVC) and (PP-R) This addition to the production of links all kinds of plastic in all sizes and different thickness are used in various fields such as extensions of water lines with high and low pressure and sewage extensions, telephone and electricity and agricultural extensions, according to the Saudi Arabian Standards for Standards, Metrology and international standards.

AL-JAWDAH pLASTIC PIPES & fITTINGS cOMPANY

Al-Jawdah Ceramics Company was established in 1995 and produces ceramics wall and floor tiles with a wide range of products. The Company produces all decorative products such as Listello,skirting etc, to match the tiles. The Company continuous growth to fulfill the Saudi Arabian and Middle East market requirement.

AL-JAWDAH CERAMICS

Group of Companies Abdul Rahman and Abdul Karem Saleh Al-Omran were established in 1975 under the name of Al Omran sanitary ware and specialized in wholesale and retail trade of sanitary ware and accessories, as one of the largest companies imported sanitary ware in the kingdom and the Middle East, where the importation of the major companies and factories World finest varieties and the latest models to suit all tastes and in very large quantity to cover all the request for the large projects and the Group is one of the largest and most famous companies working in this field in Saudi Arabia and the Gulf states in the framework of the Group’s commitment to provide distinctive products has added industrial ACTIVITY through the creation of the group of companies large industrial sophisticated and includes four leading industrial companies under the name of Aljawdah companies, namely:

www.alomran.sa / www.aljawdahgroup.com

Visit us at

Email: alomran@cyberia.net.sa / info@aljawdahgroup.com Tel: Al-Jawdah: +966 11 265-0228 / Al-Omran: +966 11 422-3316

Emirates Quality Mark

The photo shows the owner, Mr. Abdul Rahman Saleh Al-Omran center, with son Dr.Saleh Abdul Rahman Al-Omran.

The new production plant of Al Jawdah Porcelain & Ceramics owned by Abdul Rahman Saleh Al-Omran, is currently undergoing installation of machines.

Located in Riyadh, The facility is an impressive INVESTMENT project which when completed will have an output capacity of 110,000 square metres per day.

The centerpiece of this plant is the new PH 6500, a hydraulic press. The first largest press ever INSTALLED in Saudi Arabia, it has a maximum pressing force of 64,000 kN and an inter-column clearance of 2,450 mm, making it ideal for the manufacture of very large tiles.

Two presses of this kind have been installed for the new facility. The first was delivered in early July and a second with similar dimensions and characteristics has now been added to complete the first phase of the INVESTMENT, capable of producing 40,000 sq.m per day.

They join four PH 3200 presses which have already been INSTALLED in the shaping department.

Sacmi has also supplied the other key machines in the production line, including three spray-driers and two high performance mills. The project will be completed by machinery and equipment for the drying and firing deparments.

AL-jawdah PORCELAIN

One of Abdul Rahman, a group of companies and Abdul Karem Saleh Omran TRADE and industry began commercial production of the plant in early 1999, the factory is located in riyadh Second Industrial City and a production capacity of up to (400,000) electric water heater annuall annually.

The factory produces electric water heaters sizes (30.50,100,200,250,300 liters) multiple different colors and models, including horizontal and vertical-fashioned style and ground-style central and style.

AL-JAWDAH WATER HEATER

Analysis: Sanitaryware

Malaysian ceramic sanitaryware sector performance in 2014 Product

Production (million)

Sanitary ware

3.2

Import (million)

1.1

Export (million)

1.5

Domestic Market (million)

2.8

Unit

pieces

Source: FMM MCIG

Malaysian ceramic sanitaryware sector’s production and consumption in million pieces Particulars

2012

2013

2014

Domestic consumption

3.00

3.30

2.80

Production

3.00

3.30

3.30

Source: FMM MCIG and Department of Statistics, Malaysia

Viglacera Corporation Established in 1974.

Location: Hanoi, Vietnam.

Products: Ceramic sanitarywares, tiles and heavy clay products.

Annual production capacity of sanitarywares and others: Three sanitary wares and fitting companies have a total annual production capacity of 1.3 million pieces of assorted products.

Markets: Domestic and export markets.

Trademark/brand: As a trademark or brand, Viglacera is known worldwide as a major ceramic sanitaryware and tile producer of Asia.

Production unit: Thanh Tri Viglacera Sanitaryware JS Company Location: Thanh Tri Ward, Hoang Mai Dist, Hanoi, Vietnam.

Product: Full range of quality ceramic sanitaryware products under Viglacera brand.

Markets: Domestic and export markets. The products compete with leading foreign company manufactured products at the domestic markets. The products also have export markets in Asia and other continents.

Building Materials Corporation No.1 (FICO)

Malaysian ceramic sanitaryware sector’s exports and imports in million pieces Particulars

2012

2013

2014

Exports

0.80

1.10

1.50

Imports

1.00

1.00

1.10

Source: FMM MCIG and Department of Statistics, Malaysia

Malaysian energy prices Source

Location: Ho Chi Minh City (Factories of the subsidiaries are located in different places).

Vietnam.

Products: Ceramic sanitary wares and other building materials.

Markets: Domestic and export markets. FICO products are exported to many countries, including, USA, France, Russia, Australia, Korea, Singapore, Taiwan and Japan.

Others: FICO is a state-owned company, belonging to the Ministry of Construction, and owner of many ceramic manufacturers, including, Thien Thanh (sanitary wares), Vitaly (ceramic tiles), Thanh Thanh (ceramic and porcelain tiles) and Donai (bricks and roofing tiles).

Thien Thanh Sanitaryware JS Company 2014

2015

Average Electricity

33.50 sen/kWh USD 0.11/kWh

33.50 sen/kWh USD 0.078/ kWh

Natural Gas

19.63 MYR/mmBtu USD 6.00/mmBtu

21.50 MYR/mmBtu USD 5.05/mmBtu

Source: FMM MCIG

Location: Binh Chuan industrial zone, Thuan An district, Binh Duong, Vietnam.

Annual production capacity: Over 700,000 pieces of ceramic sanitarywares.

Products: Ceramic toilet suites, washbasins, urinals, bidets, water filters, bathroom fittings, etc, Markets: Domestic and export markets.

Others: At Thien Thanh, sanitarwares are produced in a modern production line with technology and equipments imported from Italy, United Kingdom, Germany, and France.

Meets European standards. And has diverse products, designs and colours. Price conscious and has sales support services.

INAX-Vietnam Sanitary Ware Co Ltd (VINAX)

TOTO controls about 10 percent of Vietnam's sanitaryware markets. Its market share is much higher in high-end hotels, condominiums and spas. Compared to the locals, its products are targeted for the upper end customers. Its main toilet features include the Washlet.

TOTO said in Asia Pacific it will continue efforts to strengthen its brand in the high-end markets for which its capacity buildup will concentrate more on the premium products. TOTO said it’s Asian manufacturing has focused on global markets for which it has been developing suitable products in its Southeast Asian plants for global markets. With the aim of consolidating TOTO’s already established market leadership in Asia as a leading brand, in terms of a global supply chain, it is working on building an optimal global production structure, including expansion of operations in China and India.

As part of expansion of local market share, TOTO’s South and Southeast Asian operations have developed products for the local consumers in the countries of its operations to match with local culture and economic segments. In Indonesia it has been manufacturing locally invented ‘Eco Washer’ toilet as alternative to the hand spray for over years. The Indonesian plant is exporting its long established products, Washlets, to various countries, including neighbouring Singapore.

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Status: Foreign investment Location: Gia Lam District, Hanoi, Vietnam Annual production capacity: 3,000,000 product pieces. Has seven factories. Three in Duong Xa, and four in Hung Yen. Products: Water closets, lavado, wash basins, urinals, bathtub, fittings in bathroom, etc Total investment: US$133 million.

Markets: Domestic and export markets.

Share holders: INAX Corporation (Japan), Hanoi Housing Investment and Development Corporation (Vietnam), Itochu Corporation (Japan), Hanoi International Manpower Supply And Trade Company (Vietnam).

Others: INAX Vietnam is a leading manufacturers of ceramic sanitarwares in Vietnam.

American Standard Vietnam Co Ltd Status: Foreign investment Location: An Phú, Thuận An, Bình Dương, near Ho Chi Minh City, Vietnam.

Annual production capacity: 400,000 pieces of sanitarywares.

Products: A wide range of ceramic sanitarywares and bathroom fixtures and accessories Markets: Domestic and export markets. Major export destinations are Middle East and Europe.

Others: The products include exquisite luxury design to standard range models.

www.asianceramics.com

Analysis: Sanitaryware Thailand’s expenditure on energy consumption Description

Unit

Natural gas

USD/MMBTU

13.33

14.00

13.24

12.77

9.11

USD/KG

0.70

0.94

0.98

0.92

0.69

USD/kWh

0.10

0.10

LPG Electricity

2011

2012

Exchange rate

2013

2014

0.11 US$1=Thai Baht 30.61

2015

0.10 US$1=Thai Baht 32.50

0.10 US$1=Thai Baht 33.27

Source: Energy Policy and Planning Office (EPPO) and CICT

Thailand’s ceramic sanitaryware industry in 2015 Description Sanitarywares

Actual production

Domestic market

Unit

9.1

5.4

Million pieces

Source: CICT

a

Thailand’s ceramic sanitaryware exports Products Sanitarywares

Export value in 2014 in million US$

Growth from 2013

175.07

1 percent

Note: Exports during Jan-Aug 2015 was US$111 million, against US$112 million of Jan-Aug 2014. Source: CICT

Thailand’s ceramic sanitaryware imports t Sanitarywares

Import value in 2014 in million US$

Growth from 2013

34

13 percent

Note: Imports during Jan-Aug 2015 was US$24 million, against US$19 million of Jan-Aug 2014. Source: CICT

TOTO Vietnam Co Ltd Status: Foreign investment Location: Thang Long Industrial Park, Dong Anh Dist, Hanoi, Vietnam.

Products: Full range of ceramic sanitarywares.

Markets: Domestic and export markets

KOHLER Vietnam Status: Foreign investment Location: Le Thanh Ton Street, District 1, Ho Chi Minh City, Vietnam.

Products: Ceramic sanitarywares.

Markets: Domestic and export markets.

Johnson Suisse Sdn Bhd / ROCA Malaysia

TOTO’s Thailand based plant, located in in Saraburi province, is expecting a major breakthrough in expansion of production of Washlet lines of toilets and accessories for capturing the newly emerged high-end consumers. It is also campaigning for better access to the high-end hotels and other upper class establishments and luxury houses. By 2017, it expects to reach a substential goal at the domestic markets and also for exports.

The Japanese player plans to promote its Washlet water-saving toilets across the globe in the near future. It expects its watersaving toilets to account for 80 per cent of its total exports within two years, up from some 54 percent now. The rest are standard models..

"We have planned to achieve a 20 percent annual growth on average until 2017,”. Said Tsuyoshi Morita, Vice President, Sales and Marketing, TOTO Thailand.

From 2018 onwards, the company will penetrate the medium market through expansion of distribution channels in the provinces and continue to promote Washlets. It has plans to produce and sell its sanitaryware with Actilight (light-activated) technology in Thailand.

In Thai market, local flagship brand COTTO of the largest sanitaryware manufacturing group, SCG, is the most dominant player for its high quality and competitive edges. Established since long as the world-class premium manufacturer and most comprehensive brand with full range of bathroom solutions, COTTO sanitarywares are produced with advantageous domestically sourced raw material resources, including Lampang kaolin and Rayong glaze sand.

In its core South Asian markets, India and Bangladesh, the UAE based RAK Ceramics has been expanding its existing

56

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Location: Petaling Jaya, Selangor, Darul Ehsan, Malaysia.

Products: Ceramic sanitarywares Markets: Domestic and export markets Others: Johnson Suisse has one of the leading ceramic sanitary ware factories in the region. It is recognized as the largest sanitary ware manufacturer in Malaysia, with leading brand name and market position. In 2006, the company was acquired by Spain’s ROCA Corporación Empresarial S.A. Formerly, it was Shanks Malaysia Sdn Bhd / Armitage Shanks Malaysia Sdn Bhd / Sanitec Johnson Suisse Sdn

Clay Industries Sdn Bhd (CISB) / Claytan Group (Sanitaryware manufacturer) Location: Kluang,Johor, Malaysia Products: Ceramic sanitarywares Markets: Domestic and export markets Others: CISB has a market niche with its own brands of ‘GLOBE’, ‘CLAYTAN’ and ‘LEGEND’ in Malaysian and export markets. CISB also manufactures and supplies OEM items for renowned international sanitaryware manufacturers from Australia, Japan, United Kingdom and USA under their brands.

Potex Industries Sdn Bhd Location: Masjid Tanah, Malacca, Malaysia Products: Ceramic sanitarwares Markets: Domestic and export markets Others: It manufactures full range of sanitarywares. It constantly improves products for the customers.

INNO Ceramitec Sdn Bhd Location: Ayer Hitam, Johor Darul Takzim, Malaysia Products: Ceramic sanitarywares Markets: Domestic and export markets Others: INNO produce vitreous china sanitary wares. It produces complete range of products to customers in low, middle and high end market.

www.asianceramics.com

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Analysis: Sanitaryware

sanitaryware productions. In Bangladesh, its expansion is continuously rising with the growth of the domestic market.

Currently it has been utilizing nearly full capacity of 1.10 million pieces of sanitarywares per year.

In both, India and Bangladesh, RAK is focused on improving profitability and its sales and distribution strategy along with steady increase in production by expanding Indian plant’s sanitaryware capacity from 2,100 pieces to 3,000 pieces a day in 2015; and increasing Bangladesh plant’s capacity from 3,350 pieces to 4,350 pieces a day also this year.

Higher demand

asian ceramics

Products

2011

2012

2013

2014-2015

Sanitarywares

13.1

13.6

14.7

15.05

Source: VIBCA

Vietnam’s ceramic sanitaryware consumption in million pieces.

Products Sanitarywares

Indian Prime Minister Narendra Modi’s Swachh Bharat Abhiyan (SBA), launched in October, 2013, has showed a spectacular rise in expansion of sanitarywares production in 2015 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 are to be constructed over five years or 160 million toilets per year, according to an Indian research firm, Reliance Securities Ltd. “Things have started happening and the industry is reaping,” said Sandip Somany, Joint Managing Director of HSIL, India’s leading sanitaryware manufascturer, which operates under the brand name of Hindware. Somany, however, pointed out that for the organised ceramic sanitaryware sector, it is still a matter of wait and see, because, the products that are going into the SBA campaign are basicvally tendered by various state governments, where the quality requirements are not strict enough.

“Hopefully,” said Somany, “the next round of their consumption will represent a better product category,” said Somany..”The resultant benefits will eventually come in, but not immediately,” Somany added.

Reliance Securities observes, under the SBA, the orders are largely flowing to unorganized players of Thanghad and Morbi of Gujarat state as their prices are almost one-third of the organised players. The unorganized sector with hundreds of players are currently operating at full capacity to meet the demand of SBA. 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.

Newly entrant alien manufacturers like Kohler and TOTO were 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 utilizes capacity at full-scale, according to the industry sources. HSIL Chairman and Managing Director Rajendra K. Somany said India is currently witnessing a new

58

Vietnam’s ceramic sanitaryware production capacity in million pieces.

december/january 2016

2011

2012

2013

2014-2015

9.3

8.5

8.6

9.2

Note: The output is mainly consumed in the domestic market. Source: VIBCA

Vietnam’s ceramic sanitaryware exports in million US$.

Products

2010

2011

2012

2013

2014

Sanitarywares

46.5

64.3

77.80

107.2

130

Note: The Vietnamese sanitarywares are mostly exported to Japan and Taiwan. Source: VIBCA

Vietnam’s ceramic sanitaryware imports in million US$.

Products

2011

2012

2013

2014

Sanitarywares

12.54

13.17

10.5

9

Note: The Vietnamese sanitaryware markets source sanitarywares from Thailand, China, Italy and Japan. Source: VIBCA

Major local and foreign sanitaryware manufacturers in India Companies

Main brand

Location

Annual production capacity (est)

HSIL (Hindustan Sanitaryware Limited )

Hindware

Bahadurgarh, Bibi Nagar and Dahej

5 million pieces

Parryware/Roca India (Roca Bathrooms Products Pvt. Ltd)

Roca/ Parryware

Dewas, Ranipet, Alwar, others

5 million pieces

CERA

Kadi

3 million pieces

KOHLER

Jhagadia

1.5 million pieces

TOTO India

TOTO

Halol

0.5 million pieces

RAK Ceramics India

RAK

Kakinada

1 million pieces

Duravit

Tarapur

0.5 million pieces

Golf

Mehsana,

1.5 million pieces

Cera Sanitaryware Limited Kohler India

Duravit India Golf Ceramics Ltd

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Analysis: Sanitaryware

ASIA...

housing boom, rapid urbanization and lifestyle changes and the government has planned to spend about Indian Rs.2,000 billion on sanitation in five years ending on October 2, 2019, with a long term vision and going ahead providing toilets to every Indian household.

Meanwhile, in Southeast Asia, the sanitaryware manufacturers are going to face new challenges in changing situations.

Malaysian government is going to remove energy subsidy. This will increase production cost and competitiveness in the world export markets as well as in the domestic markets.

According to emphasis of the 11th Malaysia Plan 2015-2020, the manufacturers will be restructured to remain competitive, while they are being encouraged to increase productivity through automation and innovation. FMM Malaysia Ceramic Industry Group reported in the Ceramic Industry Club of Asean meeting last October, Malaysia’s introduction of Construction Industry Development Board (CIDB) Act 520 (Amended) 2011 will regulate imported and local construction materials. Construction materials shall comply with Malaysian Standards or other International Standards.

In Indonesia, sanitaryware manufacturers are still healing the wounds as their export markets were affected following increase of gas prices that resulted in rise of production cost and making exports uncompetitive. Gas prices were lowered by the government after some months, but export oriented investors in sanitaryware sector is still experiencing the impacts. The export value of the sanitarywares were 12-13 percent of the total earning of the ceramic wares shipped from Indonesia to the world market.

ASAKI said Indonesia’s export of ceramic products have declined in 2015 to US$205.8 million in terms of value from US365 million in 2014 and US341.9 million in 2013, However, in Thailand, there was an overall capacity and production increase in sanitarywares in 2015. Exports marked increase in ASEAN countries, but decrease in European markets.

Due to mandatory effect of sanitary flush bowl TIS (Thai Industry Standard), imports were slow, according to the Ceramic Industry Club of Thailand. Thailand is now considered one of the ceramic powerhouses of Asia alongside China and India with industry average growth rates of 13 percent for sanitarywares.

Vietnam Building Ceramic Association said there are some new investments in sanitarywares in 2015 in Vietnam. The government has targeted to export 6-8 million pieces of sanitary products per year by 2020. Vietnam’s major exporters-manufacturers in sanitarywares are: TOTO, Lixil Inax Vietnam, Caesar Vietnam, Viglacera, American Standard and Hao Canh. China is currently the leading source of imported sanitarywares in Vietnam.

Industry sources said, Chinese enterprises become more competitive through continuous research and development, independent innovation, brand management, and expanding their product structure from the low and mid-end market to the foreignbrand-dominated high-end market. Major Chinese manufacturers include Arrow, Faenza, Monarch, Huida, Hegii and Bolina, while the foreign owned companies operating in China are TOTO, Kohler, American Standard and Roca, among the leading ones.

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december/january 2016

asian ceramics

61

Analysis: Tile trade

Chinese tiles eye a bite at the apple With the resurgence of the US economy, Chinese tile companies are looking across the Pacific as a potential outlet for their under-utilised capacity…

A

t present, because of the overcapacity and slow domestic consumption, “going out” becomes the new context for China’s ceramic industry, even a slim chance of survival for a small part of enterprises.

Han Ming, general manager of US Ceramics Mall (Los Angeles), expressed his feelings with a simile after attending Canton Fair and Ceramic Expo, “China domestic market is like a giant steel cage with the beast-like ceramic enterprises being trapped in it. Realizing the insufficiency of food inside the cage, beasts are so anxious and try every means to get more food from passers-by, but few figured out that the key is how to open the door and get out.”

Throughout the global ceramic market, US become the only vast free market without many limitations. It can be easily seen from the number of Chinese ceramic enterprises attending US Expo that US market has drawn increasing attention and become the main overseas market for Chinese ceramic enterprises.

On 12th August 2015, the first strategic cooperation between US Ceramic s Mall and Chinese building Material enterprises was launched, with 18 Chinese enterprises settling down in the Mall.

Moreover, Guangdong Macro Polo Ceramics invested and built a plant in the United States. How to understand the inner connection and logic behind all these phenomena as a whole?

The cage is opened step by step. Whether to plunder the US market with the “weapon” of low price as what we did in other international markets or to find a way of establishing Chinese brands and demonstrating the image of Chinese ceramic industry by advancing gradually and promoting Chinese brands? In the face of real tempt and permanent developing ideal, Chinese ceramic tile enterprises with different scales making money in US market haven’t settled yet.

Big market: no limits?

After the implement of anti-dumping policy in EU in 2011, Chinese ceramic tiles were packed as “Chinese Products” and returned, which led to the dramatic dropping of market share of Chinese ceramic enterprises in EU. Soon after, other countries like Brazil held the antidumping flag as well, so that the export of Chinese ceramic tiles was restricted. The fluctuating exchange rate in 2014 caused the market stress in Southeast Asian market which was complicated. While markets in Africa and Middle East have the main demands for lowgrade products, which are not appropriate for the product positioning

62

asian ceramics

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of Chinese ceramic export enterprises.

Why there is a bullish view on US market, world business manager of Macro Polo described the global map of ceramic market and said, “Throughout the world’s market, only a few markets are left for Chinese ceramic enterprises, with anti-dumping against Chinese products everywhere. While in US, there is relatively few limitations.” The flexible operation in US market is one essential reason for Cantop Wood Tile to try into US market. Since 2014, Cantop has attended the US Expo twice, which is an epitome of Chinese ceramic enterprises entering US market under the “New Normal” in ceramic industry. According to data, the current export of Chinese ceramic tiles is not limited by local regulations or policies in us. While some government or public projects may have higher requirements on the products used.

Firstly, the physical and chemical tests of products must conform to US standards for ceramic tiles test. Secondly, it is the anti-slip performance for floor tiles. Meanwhile, there are certain differences about test methods between US national standards and international standards.

Though these regulations bring in some troubles to the export of ceramic products from China to the US, US market is the only overseas market with increasing volume of import from China. In light of foreign trade, the US market is of better condition with large volume. At the same time, requirements for the quality are high and the demand for various grades of products is huge.

As a great consumer of ceramic tiles, the US has been ranking in the top 10 consumption list over the years, which can be seen from the consumption increasing trend from 2009 to 2013. While there are only some 10 domestic ceramic tile enterprises in the US, and the production capacity can’t meet the national demand, so that 70% of the ceramic tile consumption are imported. From 2009 to 2013, except 2012, the US ranked the first on the list of ceramic tile importers in the world.

Such a huge market attracts ceramic enterprises from many countries. Due to geographical advantages, Mexico has been the largest supplier to US from 2008 to 2012. Although the place has been overtaken by China in 2013, Mexico exported 505 million square feet

www.asianceramics.com

Analysis: Tile trade

HOW TO MANAGE THE US MARKET IS STILL THE MAJOR CONCERN FOR CHINESE CERAMICS ENTERPRISES.�

besides the wholesale sector. G&G Tiles is one of the suppliers to many large hotels, including Hilton, and all these show that the hotel industry and business activities are steadily improving in the US. (46.9 million square meters) to US market in 2014, occupying 29.5% US market share, which once again became the biggest exporters to US. In 2014, Italy ranked the third by 18.1% market shares, with Spain and Turkey following for the market share of 6% and 4.3%, respectively. China, by virtue of the advantages of capacity, has maintained the second largest exporter to US. As a local enterprise, the original enterprise of US Ceramics Mall, G&G Tiles explained the issue well through its performance. And now it's clear that the US economy is recovering strongly, whether from real estate, or employment, the economy has been recovering from the bottom that it touched a few years ago. In the sector of building and decoration materials, the US market went up significantly and sales of G&G Tiles grew by 30% with the profit increasing by 15% from 2013 to 2014. Since 2013, projects orders have increased by over 200%,

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Slowly, slowly‌

In view of the export volume, China has taken up a large share of the US ceramic tile market. But can we say that China's ceramic enterprises, through "going out" and establishing Chinese brand to show the world the image of China's ceramic industry, have fulfilled the ambition of becoming international brands?

The import value reminds us that even though the export volume of China ranked second, Italy is in the absolute leading position in US import. In terms of CIF price, the import value of ceramic tiles from Italy ranks the first, followed by Spain, Turkey, China and Mexico. Though the export volume of ceramic tiles from China to the US ranked second, there is still a gap to bridge before we catch up with Italy or Spain in the import unit prices.

A manager from Marco Polo said this has a lot to do with cultural differences between the East and the West. Italy operate in the US market much earlier. Besides, the business model of Italy enterprises is similar to that of US. The Americans pay more attention to product quality and Italians also pursue high quality and added value, so

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Analysis: Tile trade

that Italian enterprises can firmly occupy the high-end market.

He also believes that as China is in pursuit of scales all the time, the overcapacity for years created price competition and mutual suppression of Chinese ceramic products in the world market. This is a big difference between Chinese ceramic enterprises and enterprises in Italy.

Han Ming, who stayed in the US for nearly twenty years and knows the building materials market very well, pointed out that Chinese enterprises now have a big problem in the American and European markets. At present, bigger Chinese enterprises with larger export volume are unknown in the world market. For example, a well-known domestic brands of rustic tile with large export volume in the US, is less fame even than a private polished tile enterprise in Nanzhuang.

Products from private polished tile enterprise shipped to the US without changing the packaging and enabled others at least to know the source of products.

In contrast, some large Chinese enterprises dare not to print their own logos on the export packaging or ceramic bodies because.

These enterprises do not have their own brands, nor do they have marketing awareness. The more goods they export to the world market, the more help they do to promote the popularity of their dealers.

If there is any political or economic crisis in the market, dealers who take supremacy of interests may select new partners, and Chinese ceramic enterprises trained their own competitors in the local market without awareness. This is a universally existing problem of most Chinese ceramic enterprises. They are afraid of losing customers at any slight sign of any crisis, because customers come to them for their output and product quality instead of their brands.

"In the 80% of US building materials sector, dealers mostly sell Chinese low grade products, even some smaller dealers hit the market with low-price Chinese products, while quality products from big enterprises are rarely seen in the US" said Han Ming.

Either making OEM for the US local brand for no logo, or selling products at low prices, Chinese ceramic enterprises, in the face of huge export data, are slightly embarrassed. Why? Zheng Hongyuan, sales general manager of world business of Foshan Cantop Ceramics told us his understanding. In his view, some Chinese enterprises deal with the US market with the luck mentality or enter the market looking for left-out chances. Taking the US market as a channel for the digesting overcapacity, enterprises did not invest much in the market or explore the market, nor did they make any strategic planning. When participated in the past two years’ US Expo, Zheng Hongyuan found more and more Chinese ceramic enterprises, but it is strange that some good Chinese brands seemed humble.

As the rising star trying to enter the US market, Zheng Hongyuan admitted that the effect of Cantop’s participation in the last two Expos in the US is not very good for their poor preparation. Developing a market is a systematic project, which is also a part of the strategic

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objectives of the entire enterprise. Participation of the two US Expos, Cantop just got a better understanding of the US market.

Han Ming directly pointed out the problem that Chinese ceramic enterprises have. He said that many enterprises have spent a lot on the Expo, but they invest little on the real consumer market.

They do not know where to go or what to start with. “For example, some Chinese ceramic enterprises spent RMB0.8-0.9 million on the US Expo, afterwards salesmen of these participants would take the left samples of their products and rush to dealers in different cities. Salesmen left their samples to deals and ask them to contact whenever there is an order. For there’s no stock, and even if someone asked, it is hard to get products because of the time needed to make products, dealers usually left the samples unattended, and then samples will be thrown into the garbage can and disappear. When understand the marketing way of Chinese ceramic enterprises, wholesalers wouldn’t like to cooperate with Chinese enterprises in order to protect themselves.

These enterprises rushing around for possibilities are like flies going around without aims.

Lessons to learn

Italian enterprises had already reached their hands to the US market long before Chinese ceramic enterprises actively or passively entered the US market. Messages display that some Italian enterprises are planning to construct production base in the US. What makes people feel more urgent is that some factories are under construction and will be put into operation next year. If the messages are true, we can predict that many Italian enterprises will move to the US, which will eventually leads to the shrinking of import demand from China, Mexico or Italy, although the three countries now take up 80% of the US import market.

In terms of the initial motivation, this round of Chinese ceramic enterprises’ entering into US market is mainly an emergency reaction to the slack domestic market, so that few enterprises manage their products and brands from the strategic level. In this round of competition, Chinese ceramic enterprises revealed their poor preparation in entering the US market. Italian enterprises have been operated in US for many years and they move their plants to the US because US has the lowest cost resources: natural gas and energy, which are two important but unsteady factors in ceramic production.

At the same time, Italian enterprises have done a good job in preparation to be localized in the US and some European enterprises have established a number of production lines in the US, close to Mexico. These enterprises could have moved to Mexico for the low cost advantage with the same raw materials as that in the US, zero tariffs to the US and mature producing region, but they didn’t. Han Ming said: “their purpose is very clear, that is, through a few years of localization, these businesses will have the ability to compete with Chinese enterprises in the “trade war”. They may start anti-dumping policy against China's products. While many Chinese enterprises added to American's loathing for Chinese products by competing with low price rather than quality, without long-term plan, which had bad habits of Chinese enterprises being fully exposed to the US market. "

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Analysis: Tile trade

Some Chinese enterprises have been operating in the US market for over ten years and are ready to promote their brands, even invest to construct plant in US. But a manager of Marco Polo made clear a disturbing truth: the biggest problem for Chinese enterprises is the internal strife. "The first group of enterprises entering US market started from zero and certainly got margins in return. Then a large number of enterprises followed up and entered the US market with quality and price. The lower the price, the smaller the profit and the survival pressure is greater. With more suppliers, customers have more choices. On one hand, enterprises cut the prices for competition against each other. On the other hand, dealers also squeezed the margin to get a lower price." When the price war began, the antidumping in the US market is not far away.

In such a harsh reality, how to manage the US market is still the major concern for Chinese ceramics enterprises. Zheng Hongyuan talked about his experience of first entering US market. What impressed him most is that the product is crucial. The first time he attended the Expo, he went there with a sample used at home, which is not appropriate in product design or style for the US market. "The common case is that we give suggestion to our R & D persons before developing new products for export so that we can achieve a balance to be both satisfied. But this practice is difficult to be implemented in the export. The overseas market and domestic market are different in style." It is a systematic project to do a good job in foreign markets, and setting up a world business department is not enough. After all overseas marketing involves the design and production and requires certain resources scheduling and coordination, belonging to the

overall strategy of an enterprise. At present, the boss of Cantop attached great importance to the development of the US market.

Next year, products for export will be developed separately and some products and several series are under planning.

The manager of Marco Polo believes that the key to do a good job in the US market is how to locate the market. The different development directions include OEM, brand orientation or digesting overcapacity. Quality products with proper prices should be put in the first place. Requirements for quality are different in the US compared with that in China so that Chinese enterprises need to provide real quality products. Products at low prices are mostly disqualified. It is difficult for Chinese products to compete in the high grade market which is basically dominated by Italian and Spanish products. If Chinese enterprises really want to be part of the US market, product quality is important and we should give cients the confidence. Clients need to be convinced that you are operating rather than doing shortterm trading business, so that clients will consider the investment and will also be willing to invest.

Besides enterprises' own operation and efforts, Han Ming also saw the importance of industrial association. He said: if Chinese enterprises want a breakthrough, the industry must play a leading role, while now it does nothing. Ceramic tile industry should be stronger and more dominant. As we can see, to a certain extent, the Italian Ceramic Association is very professional. In addition, Chinese ceramic enterprises should promote brands by professional platform and make their own brands more international. Without brand, everything counts zero."

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65

Talking Shop

Talking Shop Onwards and upwards RAK Ceramics presses home the advantage Mr. Abdallah Massaad, CEO, RAK Ceramics, speaks openly with regional media organization, Zawya, about his hopes and plans for the coming year.

AC: How did you grow over the course of years to become one of the world's largest ceramics manufacturers?

AM: We became a leading player in the GCC region in 2000. From 2000 to 2004 we invested heavily, expanding the company, and exporting to almost 120 countries by 2004. We now have a strong global client base. We invested further in customising products to meet the needs of specific markets. We always try to produce something unique, and this has made us one of the largest players in the field. We are pioneers in many ways; we were the first company to produce antimicrobial and luminous tiles. In 2005, we produced the largest porcelain slabs available at that time at 1.2 by 1.8 metres, a breakthrough in the industry. We are continuing with our vision.

Most recently in 2015, we launched Maximus Mega Slab, a 1.5 by 3 metre large format tile and are the only factory in the region with the capability to do this.

We are blessed to be based in an area that has also expanded at a phenomenal rate. Manpower is accessible in the UAE, particularly from the Indian subcontinent, as well as worldwide. The UAE has great infrastructure. We have the best airlines and ports, which enable us to access world markets, and in Ras Al Khaimah our raw materials are delivered directly to the port in RAK City. We are uniquely positioned to sell to the entire GCC with no barriers.

Each of these factors contributes to our success.

When I joined RAK Ceramics in 2005, it was an exciting time. I was lucky to be surrounded by visionary entrepreneurs and was privileged to become part of a highly driven and ambitious team.

I witnessed the development and the vast growth of the ceramics industry in general and RAK Ceramics in particular which grew from manufacturing close to 1 million m2 of tiles in 1991 to a worldwide market leader, which has supplied 1 billion m2 worldwide.

RAK Ceramics continues from strength to strength as global markets recover and an increase in infrastructure investments and construction is registered globally. Tiles market is expected to register a 9.2 annual growth by 2019 as per a report by Transparency Market Research, with Asia Pacific dominating the global market for ceramics.

Today, RAK Ceramics is one of the world's largest manufacturers

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of ceramic tiles and sanitaryware with a global production output of 117 million sq.mt of tiles, 4.6 million pieces of sanitaryware and 24 million pieces of tableware per annum, which accounts for a US$ 1 billion annual turnover. The company exports to over 160 countries in 5 continents, a testament to the global appeal of its products and its excellent reputation in the ceramics industry.

AC: How is the ceramic industry performing in the GCC? AM: There have been mixed opinions about the direction of growth in the construction sector; however we anticipate that the GCC has been and will continue to experience a significant increase in construction activity, encouraged by factors such as an increase in tourism, positive macroeconomics, and high-budget allocations towards mega-projects. Saudi Arabia, the UAE, and Qatar are the leading consumers of ceramic tiles in the region, which will continue to increase as these countries win the rights to host international events, such as the FIFA World Cup 2022 in Qatar and the Dubai Expo in 2020. Furthermore, following the announcements of mega projects at this year's Arabian Travel Market 2015, it is evident that construction growth will accelerate as work commences on these new projects.

As ceramics is a crucial component in the completion of the majority of construction projects, the growth of the construction industry is positive for RAK Ceramics specifically and the ceramics industry at large. Furthermore, the GCC has an advantage, as it is able to competitively price its products, primarily due to the availability of raw materials. The GCC imports almost 40 percent of its total demand; with China, Spain, Italy, Egypt and India supplying the largest number of tiles. The GCC also "actively" exports tiles to countries in the Middle East and Africa.

AC: What are some of the bottlenecks that often stand in the way of ceramics manufactures in this region?

AM: Several challenges from an economical and operational standpoint may create situations where output would be limited.

Examples in the ceramics industry could include increased demand caused by a construction boom that cannot be met by companies,

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Talking Shop

old technology producing outdated designs that cannot be sold, or inefficient operational networks causing long delays in shipment and delivery.

At RAK Ceramics, we have implemented an ERP SAP system to circumvent these bottlenecks. The highly advanced system supports business automation and IT processes, integrating key business functions, which aims at improving the company's overall transparency, efficiency and productivity, with solutions rolled out across all plants globally, warehouses, showrooms and offices to ensure accuracy and consistency in data collection and data management. Phase I, which was completed in a record of 8 months, commenced in April 2012 which was then followed by phase II of the project in the 2nd quarter of 2014.

AC: What trends are driving manufacture?

AM: Advanced digital technologies, rising urbanisation and increased construction projects are considered key driving forces that have led to the development of unlimited flooring options ranging from basic aesthetics and functionality to eco-friendly, hi-tech, and designer-based ones in terms of appearance, feel, finish and touch.

Customers are beginning to understand that ceramics is the best alternative to any flooring material due to its strong technical and aesthetic characteristics. Most recently, the trend is for nature inspired designs in larger format tiles. We have seen strong demand for our Maximus Uni range in the markets of GCC, India and Europe because of their unique finish and designs which give the collection a distinct look. Also our Marble and Wood ranges are popular because of their distinct designs, marble-like and wood-like finish which enhances the look of both residential and commercial interiors.

At RAK Ceramics we have been ahead of the trend and already produce many ranges of nature-inspired and eco-friendly products. Our Wood Art and Stone Art collections provide that highly sought after natural look in durable, cost-effective tiles.

We have also started producing RAKSLIM, a revolutionary 4.5 mm thick, eco-friendly tile. It helps in a significant reduction of dead load on the building structure because of its slim design.

RAKSLIM is also easy to install, utilises less space and has energy-saving features.

AC: What does innovation mean to your business?

AM: In recent years, the UAE has achieved great strides in diversifying its economy through focusing on innovation and technology development. At RAK Ceramics we have always invested heavily in research, development and the latest technologies to ensure that we remain at the cutting edge of ceramics' production in the region. Being a technology leader means staying ahead of the curve, and to be competitive in the global marketplace, we must continue to drive innovation in our products. For us at RAK Ceramics, innovation means cutting edge design and state-of-the-art technology and we will continue to keep an open mind regarding the latest developments in ceramics. We possess a deep passion to become a lifestyle brand that is a first choice for everyone in the business. Innovation is what drives and inspires us and I believe it will ultimately help us to remain an industry leader.

AC: What are the latest technologies that are taking the ceramics industry forward?

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december/january 2016

THE GCC IMPORTS ALMOST 40 PERCENT OF ITS TOTAL DEMAND AM: RAK Ceramics is proud to be at the forefront of technology and has its finger on the pulse of new developments in the ceramics industry. The company has started implementing new technologies in the production of brand new designs in sanitaryware and tiles.

Our sanitaryware and tableware plants are equipped with stateof-the-art high pressure casting machines and robotic spraying technology which produce high quality pieces with a consistently impeccable finish. RAK Ceramics is the first manufacturer in the GCC to introduce Continua+ technology to manufacture large format Porcelain+ tiles such as Maximus Mega Slab. These large format tiles are twice as strong as traditional porcelain and can be used on walls, floors and faรงades or to replace kitchen counters or bathroom vanity units. We have also invested in a new glow-in-thedark Luminous series and Antimicrobial, a hygienic easy to clean tile especially suited for use in schools, healthcare facilities or the hospitality industry.

AC: What are your plans for the next few years?

AM: We have a clear three year vision, underpinned by our Value Creation Plan. In the next few years RAK Ceramics is expecting major improvements and innovations in its corporate and production strategies. We are focusing on our "core business operations," identified as tiles, sanitaryware, tableware and faucets, and at the same time scaling down "non-core businesses," such as joint ventures, construction companies, and less profitable overseas expansions.

The company's market priorities remain to be in the top three players in focus markets -GCC, India and Bangladesh, to be among the top five exporters to value markets -Europe and MENA, and to strengthen its presence in frontier markers--USA, Africa, South-East Asia and Russia.

RAK Ceramics will also focus on improving profitability and sales and distribution strategies through a significant expansion in the sanitaryware business and investing in the distribution platform in Saudi Arabia.

Our sanitaryware production capacity is set to increase significantly with the expansion of production lines in India, Bangladesh and the UAE. We have already invested in building a showroom and employing a sales team in Saudi Arabia. As a result, RAK Ceramics will have a wider footprint in the region and consequently expects a significant rise in sales. RAK Ceramics' priorities remain to be in the top three players in focus markets -GCC, India and Bangladesh, to be among the top five exporters to value markets -Europe and MENA, and to strengthen its presence in frontier markers--USA, Africa, South-East Asia and Russia.

Ultimately, our goal is to become a provider of total ceramics' lifestyle solutions and be the most recognised brand in the world.

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Insight

CHINA Porcelain tile output Q1-Q3 2015

Porcelain tile output Q1-Q3 2015

Porcelain tile output Q1-Q3 2015 Province

Growth rate (%)

Province

Growth rate (%)

Province

Growth rate (%)

Province

Growth rate (%)

China total

0.25

Jiangsu

-41.61

Hubei

2.31

Guizhou

4.81

Hebei

7.54

Zhejiang

-20.23

Hunan

-4.88

Yunnan

19.64

Shanxi

6.67

Anhui

-18.79

Inner Mongolia

8.38

Fujian

6.87

Guangdong

-0.82

Shaanxi

8.25

Guangxi

24.49

Gansu

5.65

Liaoning

-28.85

Jiangxi

5.27

Chongqing

-8.13

Ningxia

-12.28

Heilongjiang

50.85

Shandong

-2.68

Sichuan

6.84

Xinjiang

-36.15

Shanghai

-24.52

Henan

6.18

Export delivery value of architectural ceramics in 2015Q1-Q3

Export delivery value of ceramic sanitarywares in 2015Q1-Q3

Month

Month

The month Value (RMB’000)

Cumulative

Growth rate (%)

Value (RMB’000)

Growth rate (%)

The month Value (RMB’000)

Cumulative

Growth rate (%)

Value (RMB’000)

Growth rate (%) 10.53

Jan-Feb

-

-

1,417,831

-3.37

Jan-Feb

-

-

1,527,537

Jan-Mar

776,005

-13.71

2,020,078

-18.82

Jan-Mar

953,077

-9.28

2,572,388

0.07

Jan-Apr

784,818

-15.92

2,807,379

-17.96

Jan-Apr

932,934

-7.71

3,505,540

-1.64

Jan-May

822,009

-11.22

3,672,285

-15.63

Jan-May

989,198

4.51

4,494,703

-0.33

Jan-Jun

703,946

-16.65

4,169,678

-18.24

Jan-Jun

969,329

-2.72

5,467,701

-0.66

Jan-Jul

651,586

-5.06

4,897,552

-15.49

Jan-Jul

908,193

-2.88

6,416,938

-0.8

Jan-Aug

632,816

-21.55

5,522,227

-16.36

Jan-Aug

916,347

-7.75

7,333,307

-1.8

Jan-Sept

730,428

-13.19

6,252,655

-15.09

Jan-Sept

954,136

-8.87

8,326,678

-2.21

70

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december/january 2016

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Fine earthenware tile output Q1-Q3 2015

Fine earthenware tile output Q1-Q3 2015

Fine earthenware tile output Q1-Q3 2015 Province

Growth rate (%)

Province

Growth rate (%)

Province

China total

5.04

Anhui

1.68

Hunan

Tianjin

128.6

Fujian

1.49

Guangdong

Shanxi

36.46

Jiangxi

-6.76

Shanghai

9.22

Growth rate (%)

Province

Growth rate (%)

-24.43

Guizhou

2.28

Yunnan

11.44 2.23

Guangxi

272.66

Shaanxi

6.29

Shandong

-2.12

Chongqing

-35.68

Gansu

-7.93

Jiangsu

-14.71

Henan

-20.47

Sichuan

19.23

Xinjiang

-18.17

Zhejiang

2.14

Hubei

13.78

Export delivery value of special ceramics in 2015Q1-Q3 Month

The month Value (RMB’000)

Export delivery value of daily ceramics in 2015Q1-Q3

Cumulative

Growth rate (%)

Month

Value (RMB’000)

Growth rate (%)

The month Value (RMB’000)

Cumulative

Growth rate (%)

Value (RMB’000)

Growth rate (%)

Jan-Feb

-

-

828,971

-3.26

Jan-Feb

-

-

2,158,480

8.07

Jan-Mar

602,791

-1.03

1,436,064

-1.72

Jan-Mar

1,398,713

-2.93

3,560,497

2.97

Jan-Apr

500,377

-11.76

1,937,353

-8.26

Jan-Apr

1,461,617

-0.85

5,018,392

3.45

Jan-May

550,361

-8.1

2,488,445

-6.29

Jan-May

1,724,230

3.49

6,752,748

3.39

Jan-Jun

549,555

-18.41

3,045,385

-11.21

Jan-Jun

1,734,891

-3.75

8,493,150

1.86

Jan-Jul

567,378

-8.79

3,705,501

-8.79

Jan-Jul

1,504,142

0.89

9,988,541

1.94

Jan-Aug

689,257

21.33

4,696,019

3.32

Jan-Aug

1,798,805

17.76

11,774,424

4.25

Jan-Sept

581,096

-7.95

4,762,513

-5.85

Jan-Sept

1,776,787

7.27

13,538,291

4.68

Ceramic sanitaryware output Q1-Q3 2015

Ceramic sanitaryware output Q1-Q3 2015

Ceramic sanitaryware output Q1-Q3 2015 Province

Growth rate (%)

Province

Growth rate (%)

China total

Growth rate (%) 3.38

Jiangsu

Province

-32.44

Shandong

6.06

Province Guangxi

Growth rate (%) 16.03

Beijing

-7.81

Zhejiang

18.86

Henan

6.34

Chongqing

4.39 -10.11

Tianjin

-9.04

Anhui

-10.29

Hubei

2.33

Sichuan

Hebei

8.74

Fujian

41.22

Hunan

-0.73

Guizhou

10.62

Liaoning

7.92

Jiangxi

9.99

Guangdong

-4.95

Yunnan

-20.21

Shanghai

-41.25

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73

Hunter and the hunted

Is China Stumbling or Falling?

Dear Diary, At the beginning of 2015 I suggested China may have a difficult year and it has transpired that indeed it has – economically, socially, politically and environmentally. It is a fair indication though of how resilient China is that this difficulty has not been more obvious in terms of unemployment or social disharmony.

Anyone visiting the major cities of China will be impressed by the building and infrastructure; if a counties success and prosperity was based upon impressive sky scrapers that China is up there with the very best. A friend who visited China recently after a couple of years absence commented that Guangzhou was far more developed than they remembered and that traveling to suppliers and factories was '...not as bad as it used to be.'

But all of the shiny buildings and new cars only tell part of the story and there is a distinct feeling that China is either going to fall flat on its face as its various bubbles burst or at least its 'slowing down' will be more severe than the Communist Party would like to admit.

The most recent news regarding China is that the RMB will be included in the International Monetary Funds reserve currency status – commentators say this will encourage further reform – but tellingly fail to explain how. Reform is something China suggests it is doing and positive about doing more but often this seems to be more about managing expectations and telling a nice story rather than making practical changes.

China's continued growth post 2008 was to put cash into the market and encourage house building and infrastructure with the result that there have been improvements in housing and better roads & airports but also there has been massive speculation in property prices and overbuilding. Since the Chinese have limited scope for investments and want to get rich quick this has led to individuals owning multiple properties that they can't afford repayments on, local governments selling off land for building projects of questionable worth and the phenomena of ghost towns and cities built for people that simply – aren't coming to buy.

The housing bubble though meant that people looked at other ways to invest and that meant the stock market which grew in leaps and bounds in the last year. Once again people saw it as a great way to get rich quick so they ran up debts with family, friends, banks and the 'black' or underground banking system to lend money to buy stocks. Given China has very poor accounting standards and endemic corruption these 'investments' are at best questionable.

Sure enough come Summer and various Chinese financial institutions realised how over valued the market was, dumped stocks and wiped trillions of Yuan off the market value. Some would say – including the CCP that this was intentional sell off following illegal practices (short selling & insider trading). Many Chinese citizens lost much of their savings.

China makes much of its GDP which is supposed to be around 6.9%. Supposedly. People are saying now (at last) that this is a figure plucked out of the air. Growth has become a Chinese God and so it has to continue – the government tries to keep talking of a figure around 7%. In a country where imports have dropped 20% and the economy is still based on exports and when the EU in its anti dumping duty investigation into Chinese tableware noted none of the companies involved in the investigation could provided a single set of audited accounts – how can the government insist that GDP will be around 7%? In fact investigation by Bloomberg analyzing the most pessimistic figures to the most optimistic suggests GDP could be anywhere from ~3% to ~7%. That's a fair spread.

To try to stop capital out flow China has to keep talking up growth but inevitably problems can't be hidden for ever – you can't hide unemployed people and the ceramic industry has seen many factories close, you can't hide ghost towns when you are also trying to encourage

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Hunter and the hunted

more visitors, tourism and investment.

Which is why China starts to appear to simply be a massive contradiction. Take this example – to continue growth China needs big new infrastructure and vanity projects and it needs other people to invest in them. President Xi's plan is the not so catchily titled 'One Belt One Road' – a plan to rebuild the Silk Road through Central Asia and also open up business in Africa and the M. East by utilizing China's ports and port building prowess. So – it needs international cooperation and frankly speaking – friends. On the other hand at the self same time it acts belligerently in the South China Sea building enforced islands, trying to limit free navigation and enforce its territory demands over those of its nearest neighbors. So which China does the world get – the friend or the bully and how does this build trust and thus build a stable & growing economy?

Look at some of China's other problems (from Bloomberg): '...China’s economic pain points: bloated state-owned companies; banks with rising bad loans and local governments drowning in debt; massive overcapacity in the property market; bad investment in the wrong places. That’s just what hurts now. Here are some chronic headaches: an aging population; a wide wealth gap; a lack of innovation that could make it hard for China to improve the lives of its middle-income citizens the way it lifted hundreds of millions out of poverty; underfunded health and pension systems; environmental degradation; water shortages; corruption; rigged courts. Add to all that a stock market that lost $4 trillion last summer, uncertainty about the value of the currency and the slowest annual GDP growth in 25 years. Nobody knows all this better than China’s leaders, who have issued a raft of policies to deal with the problems arising from the country’s economic maturation. It’s not clear how far they are willing to go to fix the system — or stay out of the way and let it fix itself.'

And many of the solutions are contradictory – reluctance to follow international accounting standards whilst wanting inward investment. Shifting policies with regard to the stock market & financial reforms. Restricting internet freedom severely yet wanting to be a place to do international business...

The problem for China ceramics industry is that all of this impacts on the ability to invest in improvements and maintain export business. Outside of internationally managed factories and a very few domestic companies the industry is wasteful and inefficient. Management is primitive and there is little attempt to learn and follow proven international practices. Simply because the attitude exists that foreigners can't teach the Chinese anything because over the last few years China has been a roaring success whilst other countries suffered from the financial crimes and meltdown.

As orders dry up from the USA which is tending towards buying from other emerging countries and domestic supply and the EU which increasingly is sourcing inside the EU or countries with favoured trading terms with the EU (and less dumping) the Chinese ceramic industry is facing less construction and weak domestic demand for its products. Even the anti corruption drive decimated the market for expensive ceramic liquor bottles. So China and China Ceramics are faced with a problem which is increasingly difficult to ignore. Make changes, strive for transparency and efficiency or suffer the consequences of losing export business whilst not having an affluent domestic demand. 2016 may be very interesting.

s t h g t h ou

or f m le cs b o r p T h e ce ra mi a Chi nst ry is s i i n d u a ll of t h t h at s o n t h e t ct i nve s a p i m ty to nts i e a bil p ro ve m in im

Until next year, 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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