Asian ceramics AC17-10 Edition

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AC17-10

CICA IN FOCUS A M E ETI NG OF M I N D S

IN FOCUS:

Y o u r 2018 y e a rp l a n n e r F R EE IN S I DE

China’s spreading influence Province Profile: Shandong Hotelware demand Plus news, views, analysis and much more!

News

Contents: AC 17-10 News

Features

4 Inside Asia

28 Hotelware demand drivers

Bangladesh: a time to shine.

6 Welcome

Morbi: a change for the better.

8 Across The Continent

Openings, closures and industry moves from across Asia.

20 International News Our eye on the international arena.

36 Tableware: a special report

In a departure from his usual column, William Hunter looks at how changes in tableware manufacture are causing ripples in the usually calm waters of supply and demand.

40 Province Profile: Shandong

24 Material Matters Raw materials news and views.

In the latest of our exclusive Chinese Province Profiles, we turn our attention to Shandong – a region that has undergone substantial change in the last 18 months…

26 Comment & Analysis

50 The CICA report

Zibo: strangled by the Greens…

28

AC provides its unique insight into the Ceramic Industry Club of ASEAN Annual meeting, as the only invited magazine to be present at this hugely important conference.

42

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Yogender Malik Asian Ceramics look at the demand drivers for ceramic hotel ware in three of Asia’s key markets: India, UAE and Thailand.

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Analysis 52 Talking Shop Sk Bashir Uddin, managing director of Akij Group discusses how the company’s ambitions in the tile sector are producing dividends, and on the general future of the ceramic industry in the country.

56 Insight

Analysis and insight into China.

60 The Hunter And The Hunted

William hits 50 not out, and gets all philosophical…well… for a minute anyway!

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Inside Asia BANGLADESH: A TIME TO SHINE Bangladesh's ceramics industry has carved a niche in the global market. According to BCMEA, the industry earns more than USD 42 million through export and of the different ceramic products, tableware is exported to more than 50 countries including the US, Canada, European Union, Australia; tiles to India, Nepal and Bhutan; and sanitary ware to

the Middle East, especially to the UAE. Tableware accounts for more than 90 percent of Bangladesh's ceramics export. One of the main challenges to the growth of the ceramics industry is inadequate supply of natural gas. Natural gas is not only the key energy source for the industry but also crucial for maintaining quality of the products as the local natural gas does not contain any sulphur which makes locally produced ceramic products look brighter and shiny. Shirajul Islam Mollah MP, President of BCMEA, shares that the government has assured them of resolving the crisis by June or July 2018, when liquefied natural gas (LNG) will come into operation. It will reduce the burden on the natural gas reserve and productive sectors, and the ceramics industry in particular will receive supply of grid-gas.

AC was fortunate to be present at the inaugural Bangladesh Ceramics Expo in late November, and is working to establish this exciting new event as a firm favourite on the calendar.

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AC17-10

EDITORIAL

Every calendar year in Morbi has seen the regular addition of new units and up gradation/ capacity addition by existing players. Indeed, the total number of ceramic tile manufacturing units had reached to 713 by the mid of November 2017.

C ICA IN FO C U S A M E ETI NG OF MINDS

Y ou r 2018 In 2017 alone, 46 new producers have joined the ye arpl a nn F R EE IN er manufacturing fray in this once sleepy and dusty SID E IN FOCUS: town, located about 200 Kms from Gujarat’s capital China’s spreading influe nce Province Profile: Shan dong Gandhinagar. Of the 46 new units, 32 produce ceramic Hotelware demand tiles in wall and floor segments, while the rest 14 units Plus news, views, analy sis and much more! produces sanitary wares. Of the 32 new ceramic tile units, 23 units produce floor tiles and nine plants are dedicated to wall tile production. These 32 units units will add a capacity of 80 million square meters of ceramic tiles from the town.

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

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

AC COVERS.indd 2

13/12/2017 12:46

Speaking to Asian Ceramics in Gandhi Nagar, President of Morbi Dhua Tile Association, Nilesh Jetpariya said , “ Ceramic tile industry in Morbi is growing at usual rates despite some slowdown in domestic tile consumption. A slight slowdown in domestic consumption has been offset by the growth in export markets. With the right infrastructure, availability of key raw materials, right pricing of natural gas, ceramic manufacturing in Morbi has been able to achieve new heights year-on-year.”

Looking at the rickety infrastructure, dusty by lanes and frequent power outages, no one would have believed ten years back that Morbi would emerge as one of the top global ceramic tile production and exports hub in near future.

CONTACT DETAILS

CERAMIC TILE INDUSTRY IN MORBI IS GROWING AT USUAL RATES

Currently, ceramic tile producers in Morbi are exporting about 240 million square meters of tile to a number of destinations in Middle East, Africa and some European and South American countries. Most of the sizable producers in the town have set up a dedicated exports department ( such terminology was unheard of a decade back in Morbi) to handle the exports.

A large part of new capacity addition and units are being set up with focus on export markets.

Rising ceramic tile manufacturing cost in China due to a number of factors ( rising labour , raw material costs and environmental issues, which have led to closure of a number of units) has provided Indian ceramic tile producers with a unique opportunity to capture export markets in a number of key consuming countries in West Asia and Africa in last two years.

Bharat Aghara, Joint Managing Director of Simpolo Ceramics, one of the largest ceramic tile producers in Morbi says, “ Last few years have been very conducive for the growth of exports of ceramic tiles from India. Proximity to major ports and development of infrastructure have enabled us and many ceramic tile manufacturing units to cater to export markets in an increasing manner.”

Happy Reading…and best wishes for the New Year!

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

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AC 17-10

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

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Since 1970 the System Group has been anticipating the future with cutting-edge automated solutions for the ceramic industry, intralogistics, electronics and packaging.

The Digital Factory has come to reality.

system-group.it

New Pearl signs agreement with System • Jaquar Group aims for expanded turnover • RAK plans to build new til Ceramics showcases Gujarat comeback • Tile imports surge as China rail link kicks-in • Chinese exporters look to production line • Exhibition provides domestic stimulus • Foshan hits back at anti-dumping...

CHINA

New Pearl signs agreement with System An important partnership agreement has been signed between New Pearl, the leading producer of tiles in China and System, the international reference company in technological innovation for the ceramics industry and in high-performance industrial automation.

New Pearl has chosen System as its exclusive worldclass technology supplier to work alongside it in its industrial conversion program.

The core of the partnership is New Pearl’s undertaking to renew its industrial assets with innovative production processes with low environmental impact. In order to achieve this objective, the Chinese Group, leader in

the production of tiles, has identified System as the ideal technological partner, thanks to System technology, to complete this process started several years ago.

The partnership was sealed between the companies’ top managements during the evening organized by the New Pearl Group at the Lamborghini Museum at Funo d’Argelato (Bologna, Italy).

The event took place in the same week as the Cersaie international trade fair.

In his official speech, given during the evening, Engineer Franco Stefani, President of System Group, explained how research and development are crucial for being able to create and offer cutting edge solutions, unique in the world, to the globalized market, such as System Lamina, the technology which permitted, for the first time, the production of large-size ceramic tiles, now a “must-have” for the entire sector.

The process for New Pearl’s large ceramic surfaces, developed by System Lamina, will come into operation by the end of 2017; at the heart

of the technology there is the Lamgea mouldless press which, besides guaranteeing flexibility in changing sizes, is able to make surfaces in porcelain stoneware with unmatchable characteristics: a high-performance industrial process with low energy impact.

System technology is also present in New Pearl’s plants, with the Creadigit inkjet digital printing system: a significant investment in a production that looks towards the future making use of innovative industrial processes, in which the technologies of System’s solutions are of recognized excellence in the field of industrial automation for the ceramic sector.

INDIA

Jaquar Group aims for expanded turnover Bath fittings and sanitary ware major Jaquar Group is eyeing USD 1 billion turnover by 2022, as the company is expanding its product portfolio and global footprint.

The company, which aspires to be a global brand in the segment, is in the process of opening 15 exclusive brand showroom 'Jaquar world' across the globe.

Jaquar, which has presence in around 40 countries, is expecting over three-fold jump in its international sales to USD 50 million in FY 2018-19 as it plans to consolidate its position there.

"Our aim and vision is to make it to a global brand in our segment and in order to present the brand in the right manner, we have initiated concept of Jaquar world," Jaquar Group Director and Promoter Rajesh

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Mehra told.

The company is setting exclusive showroom of its brand and products in 5,000 to 6,000 sq feet area in collaboration with its country partners, which will have products from its premium brand Jaquar and luxury brand Artize.

"We are already operating four at -- Dubai, Vietnam, Singapore and Addis Ababa, Ethiopia as 15 such show rooms are under execution at different stages," he said.

The other countries includes - Tunisia, South Africa, Iran, Tanzania, Malaysia, Sri Lanka, Guinea, Nigeria, Uganda and Ivory Coast.

"Our major focus is now to expand and take this brand to the global market and we are working on the overseas market in the last few years

AC 17-10

and we are happy with the response we are getting in those territories," Mehra said.

Jaquar also has plans to introduce its value segment Essco in the later stage.

"We want to go one by one. At the moment we are strengthening our portfolio because country to country we have different requirements," he said.

The company will eventually follow the hub spoke model in the overseas market.

"Dealers and distributors would create a mini 'Jaquar world' world, which would be called as Jaquar partners, which would be in shop-inshop concept," Mehra added.

Jaquar is expecting a turnover for Rs 3,500 this fiscal and is expecting to cross Rs 5,000 crore by 2020.

On being asked by when the

company would cross a USD one billion sales, Mehra said: "Total turnover of Jaquar Group by 2022 would be one billion US dollar".

Besides bathing segment, Jaquar is also in the lighting section and has a range of LED (light-emitting diode) products.

It has plans to invest Rs 150 crore to set up a manufacturing plant in FY 2018-19. It is also investing Rs 150 crore for faucets manufacturing plant in Bhiwadi, Rajasthan.

In July last year, Jaquar Group has acquired a majority stake in the South Korea-based Joeyforlife by investing USD 1.2 million, as part of efforts to expand its business in South Korea and Southeast Asian countries.

While, in April this year, Jaquar Group had acquired Kutchbased Euro Ceramics.

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le plant • Brick industry continues to deny government clean-up • Vibrant price commitment • H&R eyes leading tile position • Simola invests in new UAE/INDIA

RAK plans to build new tile plant RAK Ceramics, among the world's top five producers of ceramic tiles, plans to build a third plant in India to almost double its production capacity there next year, according to the company's chief executive.

“Our target in India is to have 20 million square metres of capacity by 2018. We are bullish on growing our capacity and increasing our market share in a fast-growing economy,” said the chief executive

Abdallah Massad.

Plans to set up a greenfield plant in the western Indian state of Gujarat are at an advanced stage, Mr Massad said.

The company's two existing facilities in India have a combined capacity of 11 million square metres of tile.

RAK Ceramics has been pulling out of businesses such as real estate, construction, warehousing and leasing to free up resources for growth in

its core business.

The Abu Dhabi-listed firm makes 110 million square metres of tile annually as well as 5 million pieces of sanitary ware. It has facilities in the UAE, India, Bangladesh and Iran.

It reported revenue of Dh2.11 billion for the first nine months of 2017, a fall of 1 per cent.

A slowdown in construction in the region had not affected the company, Mr Massad said,

noting RAK exports about 70 per cent of its UAE output to 150 countries.

Revenues at RAK Ceramics Bangladesh have been rising at a rate of 35 per cent this year, he said, adding that RAK Ceramics planned to expand in line with market growth there.

A plant in China that was shut down two years ago will be sold once a buyer is found, Mr Massad said, without elaborating.

BANGLADESH

Brick industry continues to deny government clean-up Flouting the government directive to switch to more energy-efficient and environment-friendly methods, at least 32% of the brick kilns located in the Chittagong division continue to operate using conventional methods that are harmful for the environment.

The Department of Environment (DoE), under the Ministry of Environment and Forests, issued the directive back in September 2010, instructing all the brick manufacturers to upgrade their emission system to modern and environment-friendly version by September 2012, later extending the deadline until June 30, 2016.

This directive was set because the traditional emission system poses serious threat to the environment.

The Brick Making and Kiln Establishment (Control) Act, 2013 mandates transformation of traditional kilns into “energyefficient and modern” ones.

It also suggests converting conventional fixed chimney kilns (FCK) into environment-friendly technologies like Zigzag, Hybrid Hoffman, Vertical Shaft and Tunnel kilns.

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Apart from the Tunnel system, the three other technologies emit less amount of carbon dioxide, black carbon, and carbon monoxide.

However, while the FCK still remains the most popular method used in Bangladesh, the Zigzag system is gaining popularity among brick manufacturers.

According to the DoE office in Chittagong region, 99% brick kilns in Comilla have adopted low-emission technologies. Meanwhile, 30% brick kilns in Chittagong, 68% in Chandpur, 93% in Feni, 91% in Brahmanbaria, 92% in Noakhali, 68% in Lakshmipur and 28% in Cox’s Bazar have already adopted a modern eco-friendly technology.

Md Bodrul Huda, assistant director (technical) of DoE in Chittagong, said the reason why many kiln owners are still reluctant to convert their kilns into environment-friendly ones is mainly due to financial crisis, a lack of knowledge about the modern technologies and a lack of awareness about the environment.

However, the DoE is working

to encourage them to adopt the environment-friendly technologies, he added.

“We are taking tough measures against the errant brick kiln owners.

Anyone running an illegal system will face a maximum one-year jail term or a Tk1 lakh fine or both, while all equipment will be confiscated,” Bodrul told the Dhaka Tribune.

“The brick kiln owners should keep in mind that adopting modern technologies are costeffective, which would minimize the production cost and maximize profit.

“In addition, brick kilns using outdated technologies are a major source of air pollution.

Toxic emissions from conventional kilns interrupt photosynthesis, and cause respiratory diseases,” he added.

Md Sahabudin, president of Chittagong Lohagara Brick Kiln Owners’ Association, said the cost of converting to modern manufacturing and emission systems is “astronomical.”

“Setting up an FCK costs around Tk25 lakh, but converting to a Zigzag system costs Tk70-80 lakh. Moreover,

the law forbids installation of a brick kiln within one kilometre of a residential neighbourhood, school, arable land, forest, marshland, city corporation, municipality, and upazila headquarters. Now it seems there is hardly any place to set up a kiln in the country,” he lamented.

Md Edris Ali, vice-president of the Chittagong chapter of Poribesh Bachao Andolon, a green organization, said the conventional brick kiln owners should adopt the modern technologies of brick manufacturing without delay, as the traditional brick kilns are responsible for 30% of air pollution in Bangladesh.

“The traditional brick kilns emit more smoke than any other factory as the burning process is lengthier.

“They are also to blame for the emission of harmful gases like carbon monoxide, sulphur dioxide, nitrogen oxide and other particles into the air, which causes serious respiratory diseases like bronchitis and asthma. The pollution also weakens the human body’s immune system,” he added.

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News

INDIA

Vibrant Ceramics showcases Gujarat comeback The four-day Vibrant Ceramics exhibition in Gandhinagar in the state of Gujarat came to an end on 19th November 2017. Spread over 13 spacious halls, the event was one of the largest ever-organised show in Indian ceramic tiles and sanitaryware industry.

With about 250 exhibitors for the finished products ( tiles and sanitary ware) the event witnessed participation from who’s who of Indian ceramic tile production industry. Ranging from leading organised sector producers to fast growing tile producers from Morbi, the event attracted more than 16,000 visitors according to the show management.

Most of the key executives from the exhibiting companies Asian Ceramics spoke to were confident about the future growth of Indian ceramic industry.

Gaurang Mehta, General Manager, Operation at ceramic tile producer, Ambani Ceramic Group told AC, “ Indian ceramic tile industry is expected to reach a turnover of INR 50,000 crore by 2020. The growth will be driven by rising domestic consumption, exports to Middle East region

and new destinations in Eastern Europe and Africa.”

Jigar Darji, Senior Manager at newly established ceramic tile producer, Lioli Ceramica at Morbi told AC, “Indian producers are competing and outmaneuvering Chinese ceramic tile exports in a number of key markets.

For example, in last two years, tile exports from India has been able to drive out Chinese exports from Saudi Arabian market in a major way. Saudi Arabia has emerged as one of the most important ceramic tile export markets globally due to its size and demand of premium products.”

He further adds, “ It is not Saudi Arabia alone, where Indian exports are dominating.

Indian ceramic tile exports share is growing by very healthy numbers in a number of key African and East

European markets.”

Vonod Patel, Managing Director of Italus Vitrified shares the same optimisim about the export potential of Indian ceramic tile industry. He tells AC, “ A large part of new capacity addition in Indian ceramic industry in last two years has been done for export market only. Pointing to a number of foreign delegates from African countries, he says, “ Africa would be a very huge and important market for Indian ceramic tile producers in coming years.”

Bharat Patel from Watero Sanitary Ware Company told AC, “ Sanitary ware production in Morbi has made steady progress in last five years.

Whereas, earlier Thangadh was considered the epicenter of sanitary ware production in Gujarat, but in last few years Morbi has seen a very healthy growth in capacity addition and a number of new sanitary ware producers. In next two years, it is expected that number of sanitary ware producers will reach in the range of 150- 175.”

Speaking to Asian Ceramic, Nilesh Jetpariya, President of Morbi Ceramics Tile Industry Association said, “ Gujarat’s

ceramic industry and especially Morbi based ceramic tiles producers have made great progress in line with the key agenda of the Government of India of Make in India, Skill India, and Swachh Bharat Abhiyaan.

It is our constant Endeavour to keep innovating and contribute to the country’s economic growth and create further employment across states. At present, we are contributing to close to $ 4 billion in revenues and employ more than 10 lakhs skilled and unskilled personnel.”

According to Sandip Patel, CEO, Vibrant Ceramics Expo & Summit, “Vibrant Ceramics is the initiative that aims towards unifying and synergizing the key players in the ceramics industry. We have brought forward different business resources in ceramic industry to a common destination to enable flawless interaction, channeling and networking."

According to show management, “First edition of Vibrant Ceramics held last year witnessed more than 610 foreign delegates from more than 22 countries. This year more than 2000 buyers from more than 60 countries attended the show.”

RUSSIA

Tile imports surge as China rail link kicks-in According to the statistics just released by Manzhouli Customs, from January to May 2017, Manzhouli port railway station has exported 13,000 tons of architectural ceramics, which is 2.1 times of that of 2016 and accounts for 99.1% of the total exported ceramic products.

The exported value reached 100 million yuan, 88.1% up on 2016.

Manzhouli locates in the west of Hulunbeir grassland of Inner Mongolia. It is not only an important route for China to export goods to Russia and other CIS countries and Europe but also the largest port railway stations in China.

According to the data published by the Economy Ministry of Russia, from January

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to May 2017, Russian GDP increased by 1.3% year on year . On May, Russian GDP risen by 3.1%. It is reported that, the huge growth of GDP in May is due to the strong development in construction industry, processing industry, extractive industry and wholesale and retail trade. Under the statistics reported by Russian National Statistics Institute and the World Bank, Russian economy is expected to recover and be positive in this year(up 1.5%). What’s more, there is a possibility to consolidate this growth in 2018(up 1.7%).

Russian News Agency reported that, by the end of 2019, Russian government will allocate 7.44 trillion roubles to finance the

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construction of domestic houses. And according to the project plan of Russian national housing construction, the housing area may reach 81 million sq. in this year, and nearly 120 million sq. in 2025. So, Russia’s construction industry is expected to realize recovery and development. Russia’s huge demand of housing construction will be beneficial for the exports of Chinese architectural ceramics.

According to statistics, China ranked top five in the countries that exported ceramic tiles to Russia with a total volume of 2.6 million sq., which dropped 42.2% sharply over 2015. But, as Russian economy continues to trend positively, and China

continues to build-up its BeltRoad Initiative, there is every possibility that the next 2-3 years will see a substantial growth in ceramic imports by Russia right across its territory, as well as in the neigbouring Central Asian states.

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News

PAKISTAN

Chinese exporters look to price commitment companies(see table 2). The definitive antidumping duty rate for the companies selected in the sample range from 9.35% to 36.35%, and the rate for the cooperating companies not selected in the sample is 17.83%. The rate for all others is 36.35%.

Anyway, for those companies who have signed the price commitment, they can refrain from the antidumping duty by exporting tiles at prices higher than that given in the table.

According to industry observers, this investigation was triggered by some Shandong exporters who went for low price competition. “Low price competition is bad as their export prices are much lower than the true value of the tiles. So, it is natural to set off alarms among local (Pakistan) companies.”he said disapprovingly.

Fortunately, signing price commitment will greatly soften the impact of reducing imports to Pakistan. Is it really true that it has big effects? It’s true. For example, from January to July this year, Guangdong EntryExit Inspection and Quarantine Bureau have issued 272 certificates of origin for the exports to Mexico with price commitment. The value of the goods reached 13.63 million dollars. And the tax breaks mounted 18.77 million dollars.

Actually, the price commitment will not only help Chinese companies avoid the antidumping duty, but also promote the exports of Chinese tiles and the upgrading of “Made in China”. Besides, it is important for setting up the brand of “Made Excellent in China”.

Companies signing price commitment

CFR Price (US$/sqm)

FOB Price (US$/sqm)

Guangdong Overland Ceramic Co. Ltd

17.83

Super Ceramics Co. Ltd

17.83

Floor tile (porcelain); up to 60x60 cm

5.25

4.4

Foshan Huashengchang Ceramics Co. Ltd

17.83

Qingyuan Nafuna Ceramics Co. Ltd

17.83

Floor tile (porcelain); >60x60 cm

6.35

5.5

Lixian Xnpeng Ceramics Co. Ltd

17.83

Wall tile up to 45x45 cm

3.55

2.7

Guangdong Yongsheng Ceramics Co. Ltd

17.83

Wall tile >45x45 cm

4.35

3.5

Foshan Chan Cheng Jinyi Ceramics Co. Ltd

17.83

IN order to guide the companies to conform the price commitment for exporting tiles to Pakistan the Department of Commerce of Shandong Province and Shangdong Entry-Exit Inspection and Quarantine Bureau have jointly held the Conference on Policy of Price Commitment for Exporting Wall/Floor Tiles to Pakistan.

The representatives of the coorganizers and the companies that have signed the price commitment presented at the conference. It is reported that, only these companies and exporters who have signed the price commitment can gain the qualification to export tiles to Pakistan.

As early as in February this year, Pakistan National Tariff Commission made an affirmative preliminary antidumping duty determination on imports of Chinese tiles with antidumping duty ranging from 5.21% to 59.18%.

After that, JINCHENG TONGDA&NEAL and China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters started to negotiate with the side of Pakistan actively.

Finally, they successfully help Chinese companies to reach an agreement on price commitment which will come into effect with the final ruling.

On 11th October, Pakistan National Tariff Commission made the final ruling and decided to impose definite antidumping duty at the rates mentioned below on C&F value on the imports of tiles originated in China for a period of 5 years effective from February 18, 2017, on the following exporters/ Size/Area

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Location

Company

Qingdao

Qingdao Shirun Supply Chain Industrial Co. Ltd

Zibo

Zibo Yige International Trade Co. Ltd Zibo Mingjia Ceramics Co. Ltd Zibo All-King Import 7 Export Co. Ltd Zibo Yuehaijin Trade Co. Ltd Zibo Aoliang International Trading Co. ltd Zibo Green Key Ceramics Co. Ltd Zibo Kapuer Ceramic Co. Ltd Zibo Dita Trading Co. Ltd Zibo Fuchang International Trading Co. Ltd Zibo Jiaxi Group Co. Ltd

Linyi

Shandong Jiabao Ceramics Co. Ltd Shandong Dianshi Ceramics Co. Ltd Shandong Dongsen Ceramic Co. Ltd Linyi Jabest Ceramics Co. Ltd Linyi Hongdu Building Ceramic Co. Ltd Shandong Huasheng International Trade Co. Ltd Shandong Lianzhong Ceramics Co. Ltd Linyi Aoda Construction Ceramics Co. Ltd

Companies signing price commitment Company

Anti-dumping rate (%)

Fujian Mingqing Xinfeng Ceramics Co. Ltd

19.37

Guangdong Haosen Ceramics Co. Ltd

26.62

Heyuan Dongyan Eagle Brand Ceramics Co. Ltd

36.35

Eagle Brand Ceramics Industrial (Heyuan) Co. Ltd

36.35

Huida Sanitaryware Co. Ltd

36.35

Foshan Hexin Chuangzhan Ceramics Co. Ltd

9.35

Zibo Huabang Ceramics Co. Ltd

9.35 9.35

Co-operating producers not in sample

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News

INDIA

H&R eyes leading tile position Buoyed by the positive outlook in the real estate and construction sector in the festive season, ceramic tiles maker H&R Johnson is aiming to be the top player in the segment in next two years.

The company is relying on its innovative line of products to challenge the current market leader, Kajaria Tiles.

“Both of us are growing pretty neck and neck. It’s only a matter of time. We keep on launching innovative products in the market and the competition keeps on copying us. We are confident that in a year or two, we’ll be back to our No. 1 position,” said Ketan Trivedi, Senior General Manager, Marketing, H&R Johnson India.

The company had lost the top position to Kajaria due to production issues at its manufacturing facilities.

Kajaria, H&R Johnson and Somany Ceramic are the top three companies in the tiles category. Kajaria leads the tiles market in terms of volumes and sales, followed by H&R Johnson and Somany.

The company is now expecting growth to pick up as the effects of demonetisation and RERA implementation are waning and the festive season has started on a solid note.

"Things are looking better now.

We are almost approaching our peak season time as festivals are on in different parts of the country. This is a stable time for all the building material companies,” said Trivedi.

The approximate size of the tiles market in India is worth Rs 24,000 crore. The unorganised players make up 60 per cent of the total ceramic tiles market of India.

Trivedi said the company would actually gain market share with GST coming into the play as the unorganised sector wouldn't be offering cheap prices anymore because they'll fall under the tax net. Tax and duty evasion is expected to reduce under GST. "The unorganised brands are forced to comply on the taxation front, with GST coming into play. Our price differentiation has narrowed down. We are very happy with this move. If everyone is on a common plane, then organised brands will gain.

Things are going to become much simpler as all taxes will merge into one kind of tax. More importantly, the unorganised sector has to pay taxes now.

Ultimately, the product has to meet quality norms.”

The ceramic tiles industry has a huge scope to grow as only 22 per cent of India has tiled floors.

The rest is cemented flooring.

Trivedi believes the unorganised sector is definitely a competition for the industry. Nearly 300 ceramic tiles companies are located in Morbi, Gujarat. “I will call them competition because if I look at it from a customer’s point of view, the customer will either buy their or our tiles.

Unfortunately, in our category, people choose tiles on their looks and to some extent on

budget. It’s our job to educate them on what to keep in mind while buying tiles,” Trivedi said.

H&R Johnson’s topline sales is about Rs 1,900 crore.

The company is banking on the print and digital advertising campaigns to reach out to consumers. The brand is using augmented reality on the website to give a real-time experience to its consumers.

Talking about the advertising strategy, Trivedi said, “On television, we cannot really talk about the product’s features as it’s a very expensive medium. We continue to use print and digital as the preferred medium.”

“We believe it is extremely important to be very active in the digital space. We are continuously raising our presence on the digital medium.

We are also getting into virtual reality, where you can wear VR headsets and see how a tile will look in a room,” said Trivedi.

Hungama is the digital agency of the company. The brand is reaching out to consumers through content marketing and has a blog, ‘It’s your world’, to educate people about the right ways to buy tiles.

The company has not increased its marketing spend in recent times due to the turbulence in the realty sector but intends to hike it going forward. The ceramic tiles maker spends two per cent of the topline sales, around Rs 3540 crore, in a year on marketing.

Functioning in a category where the touch and feel factor

is important for the consumer before buying, the company distributes the marketing spend equally between mass media and on-ground activities.

Recently, H&R Johnson launched the second phase of its “Red Ramp Project” to spread awareness in order to make India accessible for the visually impaired with the use of tactiles in public spaces. This campaign is a second initiative of the “Red Ramp Project” executed in 2015 by Johnson Tiles. It was conceptualised by Soho Square.

This is one of the brand’s social and cause marketing campaigns.

It continues to advertise through its brand ambassador and Bollywood actress Katrina Kaif.

Trivedi said H&R Johnson was the first brand in the category to get a celebrity ambassador on board.

Commenting on the campaign, Anuraag Khandelwal, ECD and Creative Head, Soho Square (Mumbai), said, “We always knew the “Red Ramp Project” couldn’t be a one-off initiative.

We had to follow through. And that’s when tactiles came into the picture. After months of research and meetings with the visually-impaired, we realised that for some, even a 50-metre journey is akin to climbing a mountain. And that became the driving force behind the current TVC. It’s not the disability that stops them, but the lack of appropriate infrastructure that doesn’t allow them to live their lives independently."

INDIA

Simola invests in new production line Morbi based Simola Tiles is in the process of starting a new production line for the large ceramic tile slabs in formats up to 1.2 x 2.4 meters to cater to the brisk growth in large format tile segment.

The company expects to start the commercial production in the third week of the month.

Simola has imported a 22,000 ton moldless press specifically for the production of the large

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format tiles. In addition to cater to Indian market, the company aim to export more than 50 % of the total production from the new line to Europe and USA markets.

The company has also acquired a high-definition digital printing system for decoration at 400 DPI featuring precision and definition of every detail. Also to be installed on the same line are Rotocolor systems to further improve the aesthetic quality of

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the products.

Simola had an installed capacity to produce 10,000 square meters of tile per day from its existing facilities. The new line will take the overall capacity to 30,000 square meters per day. Along with the spacious works facility, Simola has a vast and spacious warehouse in the vicinity, which provides with ample storage capacity for storing the products. The company also

has a state-of-the-art testing facility is equipped with highend testing equipment that can validate the strength, resistance and durability features of the tiles produced According to the company management, “ Our strength lies in pioneering technology, which we used at our plants A technical collaboration with leading Italian technology providers ensures that Simola’s ultra-modern plant is equipped with the state-of-theart machinery.”

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BANGLADESH

Exhibition provides domestic stimulus Ceramic and porcelain wares made in Bangladesh are gaining popularity in international markets for their superior quality and affordable prices, claimed industry leaders following the successful implementation of the 1st Bangladesh Ceramics Expo, which took place at the end of November.

They said all major Bangladeshi ceramic companies have been expanding their plants and operations, propelled by increasing demand both at domestic and international markets.

The observations came at the closing ceremony of the country's

first three-day ceramics expo organised by the Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA) at International Convention City Bashundhara.

Around 4,500 visitors thronged the event that saw some 60 participants with over 100 brands. Besides, four seminars for professionals were also conducted by university teachers.

Chief guest Tawfiq-e-Elahi Chowdhury, prime minister's energy affairs adviser, found it very inspiring that the new generation was taking charge of the sector and that 400 foreign

delegates attended the expo. He asked entrepreneurs to conduct research and develop products as per needs of international clients. Chowdhury said, giving priority to the ceramic industry, the government already addressed its demand for electricity. There will be no shortage of gas from next year as liquefied natural gas or LNG will be imported, he said.

MA Mannan, state minister for finance, said he has learnt a lot about the ceramic industry from the expo.

The industry is changing at great speed towards a better future, he said, adding that the government would always stand

beside the sector.

Md Sirajul Islam Mollah, president of BCMEA, said there were currently 62 ceramic factories in the country and more were in the pipeline.

Bangladesh's ceramic exports amounted to nearly $50 million last fiscal year.

Though the industry has a good chance to earn more through exports, it faces a number of problems, he said, pointing out that one has to wait for months to get his imported raw materials released from the Chittagong port. “This delay pushes our cost of production up,” said Mollah, also a ruling party lawmaker.

CHINA

Foshan hits back at anti-dumping When Indian customs announced that it will take the final determination about Indian anti-dumping duties on Chinese ceramics published by the Ministry of Commerce and Industry. The final result was: the products involved in anti-dumping final ruling will be levied 0-1.87 US dollars/sq.m of anti-dumping duties for 5 years(with Tax No.6907\6908 and 6914). The product does not cover Micro-crystal tiles, Full Body ceramics and thin panel ceramics below 5mm thickness. In fact, many other countries also launched anti-dumping investigations against Chinese ceramics so as to protect their local ceramic industry.

According to incomplete statistics, since China entered the WTO, Chinese tiles has suffered 20 anti-dumping investigations in these 15 years.

As the most important ceramics base in China, Foshan’s exported ceramics accounts for more than half of that of nation.

Thus, the ceramic companies most closely affected are in Foshan. They also suffered greater losses than the ceramic companies in other production bases.

For example, in 2011, the EU levied anti-dumping duties

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on Chinese ceramics. As a consequence, the volume of ceramics exported to EU dropped by over 50%; In 2015, Mexico imposed anti-dumping investigation on Chinese ceramics, which value totaled $115 million. The number of Foshan ceramic companies that have been affected reached 157, accounting for 62.5% of that of the nation. Due to the new rules of anti-dumping, in the fist 3 quarters of 2016, the value of exported ceramics in Foshan only reached $56 million, decreased by 54%.

In such a critical situation, the government department concerned took active action to deal with the cases of antidumping. At the end of last October, they issued the certificate of origin for the exports to Mexico with price commitment. 224 Chinese ceramics companies who have the certificate and have been recognized by the Mexico were exempt from the heavy anti-dumping duties. Among these ceramic companies, 123 of them were in Foshan which accounts for 54.9% of that of the nation. And, the duty concessions for then reached nearly $115 million.

A representative of Foshan bureau said that One of the

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most important reasons that Chinese ceramics suffered antidumping duties is that some Chinese ceramic companies harmed the reputation of Made in China via low-price competition. These ceramic companies triggered off foreign countries’anti-dumping actions.

Unfortunately, a number of excellent ceramic companies were affected too. However, Foshan bureau has taken many new measures to help Foshan ceramic companies to export products.

Firstly, Foshan has deepened the reform of applying for the certification of origin for the convenience of Foshan ceramic companies. Due to the production techniques of Foshan ceramics, the ceramics in Foshan are given the exemption from the investigation of records of certification of origin. Foshan bureau will help the ceramic companies to make the records and certification in one step and cancel the annul examinations and use paperless certification.

Secondly, Foshan bureau will actively build a demonstration zone of exported ceramics,and launch some incentive mechanisms for exporting ceramics, and facilitate the customs clearance

and introduce technical trade measures for the ceramic companies.

In Cerambath this year, foreign importers were under the spotlight. When they were asked the question about anti-dumping, they said that increasing anti-dumping investigations made Chinese tiles lose competitiveness in prices. But, considering the fast progress of quality and technology of Chinese ceramics, they hoped that anti-dumping investigations can be deducted so as to import Chinese tiles to meet the demand of domestic markets and strength the communication with China in the field of technology.

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INDIA

RAK Ceramics looking for 10 m.sqm acquisition in India RAK Ceramics, one of the largest global ceramic tile and sanitary ware producers is looking to make an acquisition of a 10 million square meters per annum tile producing unit in state of Gujarat.

Though, RAK India is looking for acquisition in Gujarat for quite some time but the

deal has not materialized for some time due to a number of reasons. The company is studying to acquire a joint venture plant to produce big slabs in India. This acquisition in Greenfield will give company a capacity of 10 million square meter in India, in addition to eight

million square meter, which the company currently has in the country.

Speaking to AC in Gandhi Nagar, during the recent Vibrant Gujarat exhibition, a key executive from the company told, “ Grwoing popularity of big slabs in the sizes of 1200 – 2400 mm in

domestic and international markets have made the company to focus on larger size tiles for the acquisition.

We have registered a 12.6 % growth in the July- September quarter in the country. RAK India is optimistic about the future growth of Indian ceramic market.”

INDIA

Morbi cluster to be political king-makers?

A thick cloud of ceramic dust welcomes you as soon as you enter the boundaries of Morbi, a small district on the western fringes of Gujarat’s Saurashtra region. To see so many people with their faces covered is surprising, especially if you are entering the city from the calm, lowly-populated Kachchh. As apocalyptic as it may sound, Morbi accounts for 80% of India’s ceramic tiles and furnishings production. Lined with hundreds of tile factories and paper mills that manufacture boxes to pack these tiles, Morbi presents itself as one of the biggest beneficiaries of the industrial drive that the “Gujarat model” boasts of.

During November, the city has turned into a hotbed for the political war between the 24-yearold Patidar leader Hardik Patel and Prime Minister Narendra Modi. As if to directly challenge the prime minister, Hardik timed his public meeting to clash with Modi’s on November 29. A day before, political observers in the state were keenly waiting to see the turnout in both meetings. Social media too was abuzz with speculations.

Eventually, both the BJP and the Patidar Anamat Andolan Samiti (PAAS) led by Hardik claimed to have defeated each other as far as gathering crowds was concerned. Both Modi and Hardik posted photos on Twitter and Facebook that showed a mass of people attending their respective meetings. But with no real way to count the people gathered, the social media debate turned out to be yet another exercise by both leaders to swing the political narrative in their favour.

The district is dominated by Patidars, who also control most industries here, including ceramics. The ceramic industry started in the 1970s, but got its real boost with the opening up of the market in the 1990s, when it turned export-oriented. Modi’s 13-year stint ensured that the industry in Morbi received enough incentives to boost Gujarat’s growth. Morbi, over the years, has become the ceramic capital of India. As most of these factories are owned by influential Patidars, the BJP benefitted electorally too from the growing ceramic industry.

But since 2015, the district, along with Amreli, has metamorphosed into the nerve-centre of the Patidar agitation against the ruling BJP in Saurashtra. The large-scale agitations showed that not everything is glittery in Morbi’s growth story.

Currently, Hardik claims that Patidars are filled with anger and will vote to oust the saffron party from power.

On the other hand, the saffron party thinks that it has managed to address a number of the issues that Patidars raised in Morbi and, therefore, is making its last-minute moves – one of them being Modi’s meeting – to win them back.

Modi issues a reminder Modi reminded people that it was during his terms as the state’s chief minister that Morbi became a ceramic hub, a result of his “Gujarat development model”. Most of his speech, however, appealed to the poor. He said that his government brought water and sufficient power, which benefitted many in the region. This indicates that it may be the Patidar peasants reeling under a farming crisis, who have become Hardik’s foot soldiers and harbour negative sentiments towards the saffron party, that he was trying to appease.

“There were three main demands of the ceramic industry owners”

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A rich/poor split?

The situation in Morbi is a little more complicated than it appears. A strong sense of antiincumbency, arising out of a long spell of BJP rule and triggered recently by harsh government policies like demonetisation, is clearly visible in rural areas. But affluent and middle-class Patidars in the city appeared confused about their political choice, while remaining critical of BJP’s policies like the Goods and Services Tax (GST).

The BJP has been aware of this resentment against the party. Thus it has been trying very hard to appease the powerful industry owners, who have been under duress because of a complicated GST structure and the government deciding to raise the tax slab on ceramics from around 18% VAT to 28% under the new system.

While some sources in the Gujarat BJP claim that it has managed to bring a large number of factory owners back into the saffron fold, a few Patidar entrepreneurs The Wire spoke to indicate that there could be a split within the affluent Patidars too.

K.G. Kundariya, an influential player in the ceramics industry based out of Morbi, told local media, “There were three main demands of the ceramic industry owners. One, bring the GST down to 18%.

Two, remove the newly-added tax on exports. Three, cancel the 18% GST on procuring an export promotion capital goods license, which helps us import machinery at a low cost to set up a tile plant. The government has agreed to all our demands.”

He added that the situation has become favourable for the industry again. Commenting on the political clash between Hardik and Modi, he said, “Now, the conditions look good. We are hoping that our exports will jump to Rs 10,000 crore next year. So I do not see much negativity in the industry currently. In rural areas, there is some resentment but we may be able to contain that.”

“Around 20-30 people from each village around this area work in around 840 tile factories. The owners, too, are connected to their

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villages. If we say that around 100 local people work in each factory, then 8,400 people will work to influence the outcome of the election of at least four seats in the area. The Congress has gained a competitive edge, undoubtedly, but I do not see anything more than 5% split in Patidar votes against the BJP,” he added.

But there is another view. According to Bhavesh Patel, vice-president of ceramic industry association (floor tiles), many other issues remain to be addressed. He raised three points.

“One, in the earlier system, the tax that we paid remained around 14% effectively, after all the cuts and incentives from the government. There was a single system of filing returns. But the GST, which claims to ease the taxation system, is much more complicated than the previous one. We are ready to pay tax but it should be levied from either the traders or manufacturers, not at both levels. The government has to understand that we work on credit. The traders pay us after six months of purchase. The GST has broken their backs and thus, demand is at an all-time low.”

In the previous system, the Centre charged 12.5% and the state government collected 15% VAT. But in a decision that was probably taken with the elections in mind, the state government gave the ceramics industry 10% relief from its share.

Also read: Modi’s Congress Bashing in Gujarat Indicates BJP Is Grappling to Keep Patel Votes Intact “Two,” Bhavesh said, “The new policy intended to boost exports has actually made things worse. Earlier, for every export worth Rs 100, we used to get a throwback amount of Rs 10. Now, according

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to the new policy, we get only Rs 1.50 as against Rs 17 for China’s exporters. How does the government expect us to compete against China in the global market?”

“The government has been incentivising the use of clean energy. So despite high costs, many of us had started to partially use natural gas as the source of energy. But now natural gas is exempted from the GST (and still subject to high indirect taxes), most of us have gone back to coal-based energy. If you look around, the already-polluted Morbi will only deteriorate because of this,” he continued.

“The point is that,” he summed up, “we pay so much tax but in terms of services and city infrastructure, we have hardly got anything in return. There is no rail and air connectivity, not even a decent hospital in Morbi. There is no democracy in Gujarat, only afsarshahi (bureaucratic high-handedness). They want us to pay our returns on time, but most of them want tiles for their homes without bills. And they claim we are chors (thieves).”

The ceramic industry drives the economy in four assembly constituencies – three in Morbi (Morbi, Tankara and Wankaner) and one in the adjoining Surendranagar district (Dhrangadhra). Barring a few pockets in Wankaner, the Congress had almost negligible influence here. The Patidars, who have stood with the BJP through its good and bad times, have historically influenced the region’s electoral outcome the most.

Now, while it remains to be seen where a majority of them will vote on December 9, the rising discontent among them is perceptible.

If the urban Patidars join hands with their rural counterparts, the BJP may be on a sticky wicket.

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International News

Teraplast increases Depaco stake Romania

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omanian plastic products manufacturer Teraplast Group has acquired a further 7% shareholding interest in local roof tiles producer Depaco, increasing its stake in the company to 67%.

The transaction is pending approval from the country's antitrust body, Teraplast said in a press release.

In June, Teraplast acquired 10% of Depaco, boosting its stake to 60%.

"The expansion of the Teraplast Group's participation in Depaco represents a reconfirmation of the trust that Teraplast has in

the company. We are confident that we will continue our solid partnership along with business development," Depaco's general manager Valeriu Irimescu said.

"Depaco's growth in the first nine months of 2017 also confirms the strengthening of our collaboration and is the result of a dynamic business."

Depaco booked a net profit of 10.31 million lei ($2.6 million/2.2 million euro) in 2016, up an impressive 88% on the year, on turnover of 127 million lei, up 27%. As part of Romania's Wetterbest group Depaco operates 40 automated lines for

metallic tiles with various profiles in Baicoi, in the southern county of Prahova.

Teraplast's net profit more than halved to 15.9 million lei in the first nine months of 2017, compared to 30.3 million lei in the year-ago period.

In October,Teraplast opened its TeraSteel sandwich panels factory in Serbia. Teraplast bought the factory, formerly known as Interlemind, for 4.3 million euro ($5.07 million) in June.

Earlier in October, Romania's anti-trust regulator approved the takeover of plastic products manufacturer Politub by Teraplast.

The agreement for the takeover was signed for an undisclosed sum in August.

In September, the group increased its planned 2017 investment by 14% to 96 million lei. Teraplast sought the increase due to the multiple acquisitions made by the company in the first half of the year.

Teraplast is Romania’s leading PVC manufacturer and one of the main manufacturers of materials for the construction and installation market. The company was founded in 1896 in Bistrita, in northern Romania, as a ceramic tiles manufacturing unit.

Tile duty extended against China Europe

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he European Commission has extended duties on Chinese ceramic tile imports for a further 5 years to November 2022, maintaining the levels that had been in force since 2011 (between 30.6% and 69.7% depending on the behaviour of the Chinese exporters during the preliminary investigation).

The investigation lasted more than a year and confirmed the

evidence put forward by the European ceramic industry represented by the European Ceramic Tile Manufacturers’ Federation CET. In particular this includes the continued practice of dumping by Chinese exporters as well as the level of China’s overcapacity, equivalent to four times the EU’s entire tile output.

Confindustria Ceramica

welcomed the extension of the measure. "This is a vital measure for the Italian and European ceramic industries because it ensures a level playing field in terms of trade amongst all companies operating in the EU market," said Chairman Vittorio Borelli. "The extension of duties will create a stable reference framework for the Italian ceramic industry at a time when

it is making major investments in new plants and technologies, giving it greater confidence to tackle the growing competitive challenges in international markets."

Chinese ceramic tile imports to Europe have fallen by 77% since antidumping duties were introduced in 2011, dropping from more than 66 million sq.m to around 16 million sq.m.

Victoria acquires Keraben Spain

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loor coverings manufacturer and designer Victoria has agreed to buy Keraben, a European manufacturer of branded floor and wall ceramic tiles, for a total consideration of €274.1m from Tensile-Keraben Holdings.

The consideration, which is payable in cash on completion, will be satisfied in part through a placing of just under 23m shares at 783p each, to raise to raise gross proceeds of around £180m.

The balance of the consideration will be funded from a new €178m

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banking facility provided by the company's existing group of lenders.

Victoria said the deal is expected to be significantly accretive to earnings per share for its shareholders in the first full year of ownership. In the year ended 31 December 2016, Keraben generated audited revenues of €118.3m, adjusted EBITDA of €36.4m and adjusted EBIT of €27.5m.

Chairman Geoff Wilding said: "We believe that Keraben is a high-quality addition to the

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group.

Notwithstanding its further strong organic growth prospects, the acquisition of Keraben will be materially earnings accretive in the first year of ownership and continues to increase our geographic diversity. Post-completion, over 50% of Victoria's earnings will be generated from outside the UK continuing our transformation into a genuinely international flooring business.

"We are delighted by the level of support we have received from both existing and new

investors, with the placing oversubscribed by a multiple of the funds sought."

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International News

Stoke: return of a sleeping giant?

United Kingdom

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nce the pride of Stoke-onTrent’s ceramics industry, from the outside Josiah Spode’s factory buildings look ragged and run down, but in good enough functioning shape.

Across the city a similar story is repeated across a citywide canvas; empty factories, warehouses, and other industrial buildings, which have gone south. Many are empty but in only low-grade disrepair. Others are too far gone, both urban wilderness sanctuaries and totems to the ravages of the long recession.

The Spode Factory site, dating from the 1780s, like so much of the pottery industry had been fighting a losing battle. After many years of trying to fend off competition from an increasingly globalised market place it finally closed its doors in 2008, another casualty of the economic crash taking its toll on Stoke.

Walk through those doors, though, and it’s a different story.

Although demolition razed some of the historic buildings, much of the site narrowly avoided the bulldozers, before regional development funding helped give Spode a new lease of life. In 2009, the company was acquired by ceramic giant Portmeirion.

That same year, the city saw a major regeneration initiative, the first British Ceramics Biennial (BCB), held in various sites around the city. Two years later, the cavernous China Hall, with Arts Council support, was turned into the BCB’s centrepiece venue. It’s remained there ever since.

Now onto its fifth iteration, this year’s clay-fest took place between September and November. The huge space hosts leading British and international ceramicists, this year including multiple exhibitions, including FRESH, focused on the current crop of UK graduating ceramics students; Power is Knowledge: 6 Towns, where clay tablet versions of Stoke’s libraries

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favourite borrowed books are gradually being added; and a variety of further community oriented projects.

For its organisers The Clay Foundation, along with an increasing number of others – whether council and development officials, TV production companies, academics and ceramic artists – BCB is only the most visible face of a shift that some are saying is remaking the fortunes of a city that has long found it difficult to lay negative associations to rest.

names such as Wedgwood, along with Dudson, Churchill, and Royal Derby, all of which outsourced production to factories in the east.

This came on the back of thirty years of decline through the 70’s and 80’s, brought on by the fact that the manufacturing industries which supported ceramics – notably steel and coal – had also disappeared. Changing tastes also meant that long fashionable traditional tableware simply stopped selling.

Eight years on, the Biennial, has become the main cultural event in

“All this was part of the broader impact of globalisation.”

Like other post-industrial cities, there’s a familiar landscape of communities living beside, rather than with each other. Bentilee – one of the largest estates in Europe – in Longport is overwhelmingly white working class, while Burslem, one of the original Pottery towns north of Hanley, is overwhelmingly Bangladeshi and Pakistani, accounting for around a third of Stoke’s 9000 ethnic minorities population.

“The 2000s was the nadir,” BCB’s executive director, Iain Cartwright, says of the state of ceramics in the city. In its 1920s heyday, the local ceramic industry employed 100,000 people. By 2009, the hollowed out sector accounted for only 9000 jobs, with 20,000 jobs shed in the previous decade alone. At Spode, 80 per cent of production was moved to Indonesia.

Other industrial-scale companies, primarily serving catering and hospitality, followed suit. These included international

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the city’s calendar, with 40,000 plus expected to visit this year.

This resurgence is mirrored in large-scale industry, where investment has been growing.

Last year, Dudson committed £500,000 to production development. Companies have also been returning overseas production to the city, the result of increased labour costs in the east, plus problems with technology and quality control.

While the connections between the large industrial and artisan scales of ceramic production are unclear, the words “turning point” and Stoke are today increasingly heard spoken in the same breath.

What’s been frustratingly evident to the Clay Foundation team and others – but only recently taken on board by local development agencies – Is the city’s singular opportunity as Britain’s only pottery city. The City of Culture bid now envisages link ups with one of the Chinese ceramics cities, and a string of

signs pointing to the rebirth in ceramics culture have been increasingly visible over the last half dozen years.

These days the Spode Factory also now includes an Arts Council supported community development, with 45 artists’ studios, while Great Pottery Throwdown star Keith BrymerJones is opening a factory on another part of the site, reintroducing porcelain (bone china) back into the Potteries.

A quiet trickle of small-scale and artisan potters have been returning to find cheap studios and workshops in Stoke. “That’s been driven by the South East over heating” says Cartwright. “There are lots, maybe 300 plus, little companies now, working with ceramics, in all its myriad forms, and with the larger companies.”

The influence of the very successful Emma Bridgewater ceramics factory, which Brigdewater and partner, Matthew Rice opened in 1985 – long predating the regeneration effort – has shown what can be done with imagination, while creating local jobs. Likewise, the more recent restoration of Stoke’s oldest purpose built ceramics factory, Middeport Pottery, funded by the Prince’s Regeneration Trust to the tune of £9m, have also helped the perception of this revival in Stoke’s ceramics fortunes.

Unsurprisingly, the BCB team’s main out focus between festivals is educational outreach. Clay School, the main initiative, is working with all 90 schools in Stoke, though this is relatively recent. Ceramics A-levels have been reintroduced into 12 schools, and North Staffordshire University is moving towards supporting the ceramics culture at a city community level, with the new management team “getting,” in Cartwright’s words “that ceramics has to be central to the vision of what Stoke is about”.

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Raw Materials News

Raw Material News ZIA: digi-tiles spark glaze upswing The Zircon Industry Association has told AC that despite the fears that digital printing would see the demise of traditional decoration techniques, it has in fact given the glaze industry a considerable leg-up. In an interview with Yogender Malik, the ZIA explains its thought process: demanded by tile makers. The pigments used for the digital printing ZIA: In general terms, the flexibility and quality of decorative machines are also of higher quality and, in many cases, applied effects offered by digital printing favours glazed over unglazed at lesser amounts than conventional decoration. So, the colours tiles – which would result in more use of glazes, particularly for demand excellent quality and whiter background media in order high-end tiles. to stand out and become vibrant. Similarly, frits for the engobes have to be made at higher whiteness level and quality for the most AC: How has digital printing affected the traditional glaze and effective digital printing. frit industry in ceramics?

ZIA: Digital printing has enabled tile makers to produce highAC: Has there been a volume drop in glaze consumption definition (HD) tiles that were simply impossible to make with previous because of digital printing. If yes, what is the quantum of this technologies. This has led to a fast take-up of the technology across drop? many tile-producing regions worldwide. Notably, the trailblazers in ZIA: No, quite the opposite. As noted above, conversion from ceramic tile design and production innovation, Spain and Italy, in non-glazed porcelain tiles to glazed porcelain tiles has driven the a few years shifted more than 90% of their production to digital demand higher for glazes and frits. This is seen from the level of printing. conversion that occurred since the advent of the digital printer. Iluka The largest tile-producing countries, China and India, also prepared a chart showing the conversion of ceramic tile product embarked on a steep curve to adopt digital printing, as evidenced mix in China (attached Qualicer paper) by the highly-visible growth of digitally printed glazed tiles in these countries, at the expense, mostly, of un-glazed porcelain tiles.

AC: What other changes have occurred in the glaze/ frit This rapid adoption of digital printing resulted in two main impacts industry because of digital printing. on the glazes and frits industry: Firstly, the industry has seen a ZIA: We have seen that the overall quality of ceramic tiles has been greater demand for their frits/glazes, with conversion from nonincreasing, driven by digital printing..With this drive to quality digitally glazed to glazed porcelain driving the demand higher. printed designs, higher-quality glazes and frits are increasingly Secondly, the industry has had to produce better and higher quality required from the glazes and frits industry. Finally, and importantly, products - the effectiveness of the HD design demanding higherzirconium silicate (zircon), acts to improve quality and effects a quality glazes and frits. High quality glazes effect a good ‘canvass’ whiter “canvasses” for digital printing decoration. As a value-adding (or background) for the design – as an artist prefers a quality material to glazes and frits, zircon continues to play an increasingly canvass on which to paint. High quality, whiter glazes are better at important role in the growth of digital printing technology letting the digitally-printed colours come alive where needed and

Iluka to restart Jacinth-Ambrosia mine More than 180 jobs will be created following the restart of the Jacinth-Ambrosia mineral sands mine in the state’s far west, with further expansion a possibility.

Iluka Resources has told local media that the JA mine, to the northwest of Ceduna, will fully restart by the middle of December.

The mine was mothballed in April last year, however favourable demand/supply profiles in the global minerals sands markets made the case for its reopening.

The company is also considering a $40 million expansion at JA, with a definitive feasibility study expected to be finished by the middle of next year.

If that were to be signed off by the board it would be scheduled for completion in the second quarter of 2019.

“To offset declining ore grades, Iluka is planning to expand the operation, increasing plant throughput by about 30 per cent,’’ Mr O’Leary said.

“The scope for this expansion includes an upgrade of the wet concentrator plant; a second mining unit to handle additional ore; and a capacity increase at the site’s accommodation camp.’’

“The restart of mining and concentrating activities at JacinthAmbrosia reflects the continued tightening of the zircon market and follows the substantial drawdown of Iluka’s heavy mineral concentrate inventory over 2017,’’ he said.”

“It will ensure Iluka is able to continue to support its customer base for zircon.

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“In announcing the suspension of these activities in February 2016, Iluka stated that this action would accelerate inventory drawdown; and, to the extent that perceptions of an inventory ‘supply overhang’ might impact international market dynamics, the company’s view was that reduced inventory at the world’s largest zircon operation would impact those dynamics positively.

“A range of planning and work has been undertaken both during the suspension period and following the restart announcement in June to ensure operations recommence on time and on budget.

“The company is focused on delivering a rapid return to targeted production.”

“The restart of JA reflects the continued tightening of the zircon market and follows the substantial drawdown of Iluka’s heavy mineral concentrate inventory over 2017,’’ Mr O’Leary said. “It will ensure Iluka is able to continue to support its customer base.

“Following four years of declining prices, Iluka has successfully implemented three price increases in 2017, with US$50 per tonne implemented in February; US$130 per tonne in July; and a further US$130 per tonne effective for a six-month period from 1 October.

“The company’s view is that in the absence of a deterioration in global economic conditions, the demand outlook for zircon in the short to medium term remains for moderate growth.

“Against this demand setting, the supply chain remains lean.

Zircon from existing producers is declining due to both depletion and a decline in the grade and assemblage of current deposits.

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News Anaylsis

News

26

asian ceramics

Zibo: strangled by the Greens…

T

he city of Zibo, China’s ceramics capital, is undergoing environmental shock therapy to clear its filthy skies and transform its economy - and not everyone is happy.

Much of Zibo’s sprawling industrial district has become a ghost town of shuttered factories, empty showrooms and abandoned restaurants after a clean-up campaign that began last year intensified this winter. Dozens of chimneys stand inactive.

“There used to be a lot of workers here but now they are demolishing the entire place,” said a caretaker who gave his surname as Wei, pointing at the deserted warehouse of an abandoned factory he was guarding. “We have no idea what they will build here - that’s the boss’s decision.”

Zibo, home to 4.5 million people about 260 miles south of Beijing in Shandong province, is one of 28 northern Chinese cities targeted in an unprecedented six-month antipollution blitz as China scrambles to meet air quality targets.

The city is also at the heart of a wider, long-term government effort to upgrade China’s heavy industrial economy.

Once responsible for about a quarter of China’s ceramic output, mainly floor and wall tiles, Zibo has slashed capacity by 70 percent and shut more than 150 companies and 250 production lines as part of a ruthless war on pollution.

Surviving plants have rushed to comply with tough new standards, but business is still threatened by constant production suspensions ordered by the government, as well as natural gas shortages this winter as northern cities switch to the fuel from coal.

“It is a brave step that China is taking, but they have to take it,” said Alex Koszo, the founder of Vecor, a Hong Kong-based company that has built a joint-venture plant in Zibo to manufacture environmentallyfriendly tiles from fly ash.

“They have the will, the money, and access to technology, so I think we are looking at a very different Zibo, and a very different Shandong, in five to ten years time.”

The local environmental bureau

AC 17-10

declined to be interviewed, telling Reuters that clean-up efforts were “still at an early stage” - but changes are already conspicuous.

With old factories marked for demolition, new apartment blocks, shopping complexes and roads are being built. The city registered growth of 7.8 percent in the first three quarters of this year, driven by the service sector, according to the local government. Displaced workers have shifted to construction sites and other industries like textiles, residents said.

Zibo has also established a “greentech” incubator in the old district and opened a new high-tech industrial park in order to attract companies and encourage innovation in ceramics.

But some local businessmen accuse Beijing of running roughshod over local industry and paying too little heed to circumstances on the ground, with one boss accusing inspectors of behaving like “imperial envoys”.

“There is a ring of 28 cities and pollution only needs to appear in Beijing - even just medium-level pollution - and all our factories have to shut,” said the owner of a large local factory who declined to be named, fearing repercussions.

“It doesn’t matter whether you meet the standards or not, you have to shut.”

Over the past decade, Zibo’s ceramics makers took advantage of closures elsewhere to drive up output and seize market share in China. Zibo’s tiles were used throughout China and exported around the world. In recent years, however, the industry was weighed down by poor quality and chronic overcapacity that eroded prices and exposed the sector to European Union anti-dumping measures.

Beijing’s war on pollution served as an opportunity to tackle those problems. Now, the mainstay of the local economy is a shadow of its former self.

With annual production capacity slashed to 246 million square metres, compared to 827 million square metres before the campaign began, the government hopes surviving manufacturers can upgrade and compete with higher-end producers.

“I think the steps the government are taking now will push the costs up,

and therefore the price of the goods will be up and the quality will meet international standards,” said Koszo.

But the local factory owner said the campaign has inflicted long-term damage, eroding cost advantages and driving customers away.

“If Zibo was the only place producing tiles in the whole country, then it wouldn’t be a problem. But this is an unfair policy: they are closing us but not others,” he said.

Environmental officials deny the pollution crackdown or the heightened vigilance of inspectors will cause deep harm to China’s economy, saying any losses would be compensated by the long-term benefits of clean investment.

But in Zibo, even environmentally compliant manufacturers are losing customers. The factory owner said he has lost 80 percent of domestic clients and half his overseas ones, with many frustrated by the stopstart nature of production.

Zibo’s ceramics companies are not only hit by emergency closures aimed at curbing smog. A year ago, they were ordered to switch from coal to gas, but suppliers are giving priority to residential winter heating.

“People are losing patience and manufacturing is shifting to the south,” said Bryan Vadas, director at the Tile Agencies Group in Australia, which used to source products for export from Zibo but has now started buying elsewhere.

Environment Minister Li Ganjie said this year that China would not adopt an “indiscriminate onesize-fits-all approach”, adding that companies have plenty of leeway to clean up and survive.

“Only enterprises that have no clear survival value, pollute heavily and have no hope of being rectified will be shut down,” Li said.

But local enterprises have struggled to cope with repeated policy changes, with industry entry requirements adjusted four times in less than two years, the local factory owner said. ”I have worked hard to build up this business,“ he said. ”Personally, I just think the government should tell us directly that they don’t want us to stay in operation.

“There’s no need for them to torture me.”

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Analysis: Hotel ware

A brush wit quality hotel ware demand drivers

Yogender Malik Asian Ceramics look at the demand drivers for ceramic hotel ware in three of Asia’s key markets: India, UAE and Thailand.

G

one are the days when only food mattered and presentation was secondary in hotel industry.

Today, chefs are pushing the boundaries both in the kitchen, with unique dishes, and in plating them as a work of art. While the taste of the dish may lead to a guest overlooking a lackluster presentation, sampling an aesthetic, well laid-out dish, undoubtedly gives the hotel an opportunity to win the heart of its diners. Over the last few years, high end tableware has gained paramount importance in hotels across the continent as a marker of high quality and a way of segregating out those establishments keen to display a more high quality edge.

Market overview

Among the three major end user segments for ceramic tableware industry- hotels, airlines and retail, hotel industry has emerged as the most important sub-segment for the tableware industry because of its size and demand of premium products. Most of the notable global and Asian ceramic tableware producers have formed a dedicated hotel ware division in their organization to cater to the demand from this sub-segment.

Increase in number of nights booked with leading hotels and addition of new hotels are expected to keep the growth momentum in the hotel ware sub-segment for ceramic tableware industry for a number of years to come. According to a recent report ( Tourico Holiday’s Global Hotel Trends Report), which examined hotel booking data from nearly 80,000 hotel properties located on more than 4,500 destinations around the world – and compared it to booking data captured at the same time last year, room nights booked globally has shown marked increase. Among the Asian countries, UAE (+65% YoY) and Thailand (+29% YoY) have seen significant growth in hotel room nights booked for 2017.

While, The Emirates and Thailand’s ceramic tableware industry has benefited immensely from the record number of tourist arrivals in their countries, Indian ceramic tableware industry from the hotel

28

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ware sub-segment has been able to register steady numbers due to sheer size of the country and increased domestic travel and hotel stays.

Thailand

Having the most vibrant tourism industry in the region, Thailand has continued to attract maximum number of tourists in the region. In fact, the country is a tourism hub of the ASEAN region. Contributing around 20% to the national GDP in 2016, travel and tourism plays a crucial role in the development and economic growth of Thailand.

For ceramic tableware producers in the country, hotel is the most attractive segment due to the sheer size of demand and high value attached with these products.

Thailand has a well-developed hotel industry. Strong growth rates in the tourism industry have resulted in major investments in the country’s hotel industry, particularly in the high end of the market.

Country’s ceramic tableware producers have reaped rich dividends from the hotel industry in last few years.

As most of the new hotels are opening in upcoming destinations such as Koh Lak, Krabi and Koh Samui, tableware producers have opened their retail outlets in these areas to cater to upcoming demand.

Key players in Thailand’s hotel industry include Accor, InterContinental, Starwood and Marriott. The country has also established domestic hotel groups with a high degree of brand recognition, such as Centara Hotels and Resorts, Dusit International and Minor International.

A key executive from leading ceramic tableware producer from Thailand told on the condition of anonymity, “ The trend that is likely to propel the ceramic tableware demand in Thailand in coming years is the emergence of more independent restaurants and outlets with the food being the key component to that outlet and not relying on the backing of a large name brand, hotel or celebrity chef.

Currently, these outlets form a small part of total tableware demand from the hotel industry. But, I see this category accounting for 15-18

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th % of total tableware demand of hotel industry by 2020.”

One of the most recoginised ceramic tableware producers from Thailand , Royal Porcelain, which signed a contract with one of the world’s renowned tableware designers in September this year to make special collections for the hotel industry is aiming to aggressively approach the hotel market in coming days.

According to Chokchai Lertiendumrong of Royal Porcelain, ““We will see new phenomenon of Royal Porcelain, which will make a splash in the tableware market in terms of function for hotels.”

Royal Porcelain began making bone China and hard porcelain tableware products 34 years ago at a factory in Saraburi province, which can produce 40 million pieces of ceramic tableware annually.

The products are exported to more than 60 countries in Europe, the USA, the Middle East, Asia and Australia. Royal Porcelain reported 1.6 billion baht in revenue for 2016.

United Arab Emirates

United Arab Emirates has one of the highest per capita consumption of ceramic tableware in hotel industry. Record number of hotels in the country has made almost all the global tableware producers to have their marketing offices in the Emirates.

Most of the world’s top hotel chains run five-star hotels in all the seven emirates and locally based companies operate luxurious

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Analysis: Hotel ware

THE ROLE THAT TABLEWARE PLAYS TODAY IN THE OVERALL APPEAL OF THE RESTAURANT CANNOT BE DENIED destinations and popular resorts. Majority of the hotels in the UAE are outstanding examples of modern architecture and the decor and exceptional services. Ceramic tableware industry in the country has immensely benefited from the flourishing hotel industry in the Emirates.

Among the seven emirates, Dubai alone accounts for about 50 % of the total 1265 hotels in UAE. Emirate of Dubai has been ranked one of the top three cities of the world in terms of tourist arrivals. Dubai received a record number of first half visitors, which rose 10.6 per cent yearon-year according to the data of Dubai’s Department of Tourism and Commerce Marketing. Over 8 million overnight visitors arrived in Dubai in the first half of the year, with Western Europe taking the lead as a region and accounting for 21 per cent of total numbers. Dubai’s hotel room supply increased 5 per cent to more than 104,000 rooms from 676 establishments at the end of June 2017, compared with the same period last year.

With nearly 100 hotel projects under construction at the end of October 2017, Emirates would be a leading demand driver for ceramic tableware industry in the region for a number of years to come. Currently 99 hotels are being built in the UAE, the highest in the region. The ongoing projects represent 17 per cent of the 556 properties in the entire Middle East that are either under construction or in the final and planning stages.

AC 17-10

asian ceramics

29

Analysis: Hotel ware

Ceramic tableware demand from UAE’s hotel segment is expected to register explosive growth as the Expo 2020 draws closer. The Dubai Expo 2020 is expected to bring 25 million visitors, 70% of whom will come from abroad. A number of new hotel projects are in the pipeline with Dubai Expo in perspective. These new hotels are expected to increase the ceramic tableware demand in the Emirates by many % points.

Catered by almost all the international ceramic tableware producers, UAE’s tableware consumption from hotel sub-segment has registered one of the healthiest growths in recent years.

High proportion of star hotels in the Emirates as compared to other regions of the world/ Asia has led to steady consumption of ceramic tableware.

RAK Porcelain, the domestic tableware powerhouse and one of the emerging forces in global tableware industry has immensely benefitted from this growth in domestic hotel industry. Employing the latest production technologies, the company has a production capacity of 25 million pieces of tableware, all bearing European certifications.

In order to serve the hotel industry in an effective manner, RAK Ceramics has set up a new entity, Restofair RAK. The new venture is a joint venture between RAK Porcelain & ECF France. It has a central warehouse in Ras al Khaimah with Dubai Cash & Carry outlet, offices in Ras al Khaimah, Dubai, Abu Dhabi and direct sales agents all over UAE. According to RAK Ceramics management, “Hotel is an important segment for our tableware business. We are present in more than 20,000 five-star hotels around the world. RAK Porcelain blends exceptional quality with a creative spirit, while incorporating current trends. We have recently launched Karbon collection. To meet customers’ expectations, we adhere to extremely rigorous qualitative criteria, both for the production of white porcelain and massproduced sets with carefully crafted designs. We also provide a flexible and tailored production of customized pieces. Inspired by the greatest designers, our contemporary collections appeal to both the gastronomy purists and creative chefs.”

“There has been a major shift in the tableware needs of Middle Eastern hotels over the last few years, from traditional established designs to Far-Eastern sizes and shapes," according to Rakesh Chawla, General Manager at Radisson SAS Hotel Dubai Deira Creek.

Leading European tableware producer, Villeroy & Boch has supplied its tableware products to a number of hotels in UAE, including luxury hotels such as the Emirates Palace in Abu Dhabi.

According to the company, ”White is always en vogue like the black dress in fashion, decorations are popular and also color is coming back. Villeroy & Boch has a strong competence in design, in general and in decoration, in particular. Since the beginning in the 1980’s the Hotel & Restaurant Division offers customized solutions, which mean that we design individual patterns exclusively for our clients.”

India

Ceramic tableware industry in India has added a sizable capacity in last few years on the back of steady demand from the consuming sub-segments. Demand from hotel industry has started to form a major proportion of total ceramic tableware demand in the country as number of hotels and quality of service has registered a steady growth.

“Let’s go with Porcelain, “ was the most effective rule to choose tableware for a number of years in hotel industry. An exception would be the use of silverware for high-end dining or shiny copper

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Number and size of hotels in Thailand by region Region and size of hotel establishment

Number of Hotels

Whole Kingdom

10,018

Fewer than 60 rooms

8,171

60-149 rooms

1,259

Over 150 rooms

588

Bangkok

704

Fewer than 60 rooms

321

60-149 rooms

207

Over 150 rooms

176

Central Region

2,532

Fewer than 60 rooms

2,025

60-149 rooms

362

Over 150 rooms

145

Northern Region

1,854

Fewer than 60 rooms

1,601

60- 149 rooms

202

Over 150 rooms

51

Northeastern Region

1,215

Fewer than 60 rooms

1,044

60-149 rooms

140

Over 150 rooms

31

Southern Region

3,713

Fewer than 60 rooms

3,180

60 -149 rooms

348

Over 150 rooms

185

Source- National Statistic Office, Thailand

in restaurants like Bukhara or Frontier. However, these days the demand from hotel industry is very dynamic. It keeps changing very rapidly. A number of hotels use a combination of porcelain, bone china and in some cases stoneware, “ according to Vimal Sharma from Hotelier Supplier, a leading supplier of domestic and international tableware products to Indian hotel industry.

New tableware ventures such as Umberto Ceramics, which commenced tableware production in India three years back have put special emphasis on hotel sub-segment. According to Jayaraj Gopinath, senior GM with the Gujarat based tableware producer, “ Demand from hotel industry is by far the most important subsegment in ceramic tableware industry. Currently, more organic and uneven shapes are being preferred over the traditional ones, to give novelty to the food presentation. A mixture of contemporary shapes along with organic and traditional finish or glaze, is also preferred by the chefs in order to give more variety and vibrancy to their food presentation.”

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Analysis: Hotel ware

“The role that tableware plays today in the overall appeal of the restaurant cannot be denied, and thus selecting tableware needs careful consideration not only of the chef’s vision of presenting the food, but also the theme, the design, décor, and of course the price point,” says Vinay Bhat, director Foods & Beverage, at Eros Hotel, New Delhi. “Currently, the trend seems to be focusing on materials such as stone, slate, matte finished metal mixed with porcelain pieces to enhance the overall appeal and experience at a restaurant.”

Jitender Singh of Feather Touch a leading producer and supplier to hotel industry says, “ Hotel industry consider four different elements (tableware, cutlery, glassware and linen) while selecting tableware products . It is important that each element

complements the others, creating a harmony on the table and ensuring that the creations are showcased to their very best advantage. While selecting tableware, hotel’s sourcing teams pick products and styles that are appealing and will be perceived as being of high quality by their customers. It is a wrong perception that hotels have unlimited budgets for sourcing important components such as tableware. It is very common for their sourcing teams to carefully examine and evaluate about how each item of tableware would be used and look for products that multi-task, thereby making cost savings.”

Speaking to Asian Ceramics, Darshan Chatwal, Managing Director of Chatwal Ceramics, a Khurja based ceramic tableware producer say, , “Tableware in a hotel is selected according to the theme,

Average number of customers per day using restaurant in Thailand Region and size of hotel establishment

Average number of customers per day

Thai Number

Whole Kingdom

Foreigner %

Number

%

281,926

102,345

36.3

179,581

63.7

94,571

39,169

41.42

55,402

58.6

60- 149 rooms

64,585

29,091

45.04

35,494

55.0

Over 150 rooms

122,770

34,085

27.76

88,685

72.2

Fewer than 60 rooms

Bangkok

47,965

15,492

32.3

32,473

67.7

Fewer than 60 rooms

4,402

1,346

30.57

3,056

69.4

60- 149 rooms

10,247

2,745

26.79

7,502

73.2

Over 150 rooms

33,316

11,401

34.22

21,915

65.8

Central Region

77,540

35,252

45.46

42,288

54.5

Fewer than 60 rooms

27,856

14,775

53.04

13,081

47.0

60-149 rooms

22,441

11,172

49.79

11,269

50.2

Over 150 rooms

27,243

9,305

34.15

17,938

65.8

Northern Region

27,288

16,098

58.99

11,190

41.0

Fewer than 60 rooms

11,628

6,615

56.89

5,013

43.1

60- 149 rooms

10,594

6,396

60.38

4,198

39.6

Over 150 rooms

5.066

3,087

60.92

1,979

39.1

Northeastern Region

12,445

10,304

82.8

2,141

17.2

Fewer than 60 rooms

4,276

3,742

87.51

534

12.5

60- 149 rooms

4,376

3,438

78.56

938

21.4

Over 150 rooms

3,793

3,124

82.37

669

17.6

Southern Region

116,688

25,199

21.59

91,489

78.4

Fewer than 60 rooms

46,409

12,691

27.3

33,718

72.7

60-149 rooms

16,927

5,350

31.54

11,587

68.5

Over 150 rooms

53,352

7,168

13.44

46,184

86.6

Source- National Statistical Office, Thailand

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Analysis: Hotel ware

Number of hotels and rooms in India by category Five Star

Four Star

Three Star

Two Star

Total

Others

Year

Hotels

No. of Rooms

Hotels

No. of Rooms

Hotels

No. of Rooms

Hotels

No. of Rooms

Hotels

No. of Rooms

Hotels

No. of Rooms

2016

256

38,945

163

9,278

712

32,189

103

2,480

845

32,670

2,079

115,562

2015

242

36,660

156

8,280

694

31,375

126

2,840

830

31,885

2.048

110,680

2014

225

33,750

164

9,010

660

30,870

138

3,100

819

30,110

2,006

106,840

2013

217

32,540

149

7,640

634

29,110

128

2,790

802

29,540

1,930

101,620

2012

198

29,700

138

7,180

640

29,480

140

3,080

780

28,055

1,896

97,495

2011

184

27,480

130

6,845

620

28,755

130

2,605

758

27,110

1,822

92,795

2010

169

25,709

134

6,710

579

27,010

142

3,110

741

25,900

1,765

88,439

Source- Ministry of Statistics and Programme Implementation, Government of India

ambience, and the kind of food served at the restaurant. A client ( hotel) looks for tableware with a unique design, quality, variety, customisation option, quick service, and the supplier’s ability to provide repeat orders. However, since tableware is an investment just like any machinery used in a restaurant – it is not replaced or changed easily. We have also realized that keeping our designs simple yet elegant, with a unique range of shapes, has proven to be a big advantage. White is the most sought after color in the HoReCa range of products as it is easier for the client to present his products to a customer in a vibrant manner. Bone China by itself defines class and luxury.”

Deepak Agarwal, Director of Clay Craft , India, one of the most prominent names in Indian ceramic tableware industry says, “ Traditionally hotels and restaurants are known to use a lot of white dinnerware with maybe a little logo or lines for a personalised touch. But in recent past, the experts and chefs have been doing more experiments, not only with their tableware but with their décor, food presentations etc. Clay Craft now also focuses on providing customised solution by providing options to choose colours, glaze effects, sizes etc, to help the professionals select their preferred tableware.”

Commenting on the rise of special demands by the hotels, he says, “Yes, the hotel and restaurant owners/ chefs tend to prefer the products which can be molded to cater to their specific requirement. Be it adding colour as per the ambience of the hotel or providing the customised shape and size of the products.

Some producers go over the fence with experiments which may result in a jaw-dropping look or feel that may lack the basic utility of a product.”

Anil Singh, Sourcing Manager for Park Group of Hotels in New Delhi told Asian Ceramics, “ Since, high quality tableware cost a lot there is a general practice of not to over-use these product.

But, on the other hand we have to make sure the brand or shape has continuity to keep up with replacements while placing an order. The style and ambience to be achieved for each restaurant, and whether the selected range has different shapes and sizes available to select from is an important consideration. We also need to consider whether the selected line offers various cup sizes, as coffee and tea are becoming increasingly important for restaurant sales, and each coffee and tea variation requires its own appropriate vessel.”

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Anil further says, “ Another important consideration for the selection of tableware is the durability of the selected line. If gold or platinum rims are applied ensure that the rims are not around the plate’s edge, as the plate corners are the first to fade. For all silver, platinum and gold-plated plates we chose suppliers that we know fire the porcelain at extremely high temperatures, thereby guaranteeing a minimum of 1200 washing cycles.”

Thailand: tableware production (tonnes)

Thailand: domestic tableware market (tonnes)

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4/28/17 3:24 PM

RT PO RE L IA EC SP

What next for tableware?

In a departure from his usual column, William Hunter looks at how changes in tableware manufacture are causing ripples in the usually calm waters of supply and demand.

R

ecently whilst in Bangladesh, I asked the owner of a tableware factory if the business was good and if the anti-dumping duty on Chinese tableware had helped him get business in the European Union. He was dismissive 'The customers get around the ADD by shipping through Malaysia or Sri Lanka so that hasn't helped us at all. Also, the customers in Europe keep comparing our prices with cheap Chinese products even when we are not talking about the same quality. So we aren't winning new business that way. Now we get US buyers asking us to sell our plates at US$1.50 when before we could get US$4.00; how can we cut that much of the price and still make the same quality? Some of these people don't appreciate what they are looking at. So now we look for business in other places – the domestic market is getting better but still, local people will not buy the highest price products – so we look at the Middle East countries and for customers that appreciate quality'. I sympathise it seems a difficult time for tableware customers facing competition from 'Cheap Chinese'.

So I asked a tableware factory owner in Chao Zhou about all

36

asian ceramics

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the business he must be winning at the expense of his Asian neighbours – surely he is doing well?

'We are getting a very big order for the USA which we are hoping to replace an Indonesian supplier.

The order is very big and would we hope to keep us in production for a few years if we get repeat business. But it's over 50 different shapes so it's complicated. Then the customer wants us to be better than the previous supplier. And we are – but the product can't look exactly the same – and be better, can it? So now we have to make many many reports and audits to explain how we will manage production and control quality – but the local customer quality team has different ideas to the bosses in the USA – we are stuck in the middle. Every time we make an improvement – they want another report detailing how we will implement the improvements and control in the future. But these people aren't ceramics people so they ask for measurements that don't matter at all and I don't know what they are expecting to do with all the reports. In the end, we wonder if really the order is worth it. You know we say the other factories 'suicide themselves' – it means that they start to chase this business because it is such a big volume but then after investing a lot of time and money to try to get the business it just becomes so big a headache – they suicide the order – make an excuse to stop because its not worth it. If you

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RT PO RE L IA EC SP keep going after the orders then next there will be all sorts of compliance audits and interference in the running of the factory. I wonder if the customer is really so interested in running my factory why not just buy my factory?! That's why people 'suicide' the order – look to find easier orders and customers to deal with – otherwise it isn't worth it.'

What about the ADD – is that causing problems too? 'Not so much – we have to absorb some of the cost and then everyone else absorbs some cost and perhaps the people in Europe – do they have to pay more money? I don't know.'

So based upon those anecdotes things are not rosy for tableware but that would be to paint far too grim a picture.

Tableware faces changes and challenges for sure but new factories open regularly in South Asia and there are some new technologies becoming available that could be monumental for the industry.

Compared to sanitaryware or tile, tableware often seems the poor cousin – not in terms of skill or design but it feels somehow to be a little left behind. Sanitaryware new regular feature robotics or improvements in efficiency using state of the art technologies.

Tile has for years enjoyed respect for invention and ability to make incredibly attractive and functional products – tableware? Maybe a few more pink roses on this plate?

But there are signs things are changing. So there may be a revolution coming to tableware also. At recent trade exhibitions, more than a few people noticed that on one of the tile inkjet manufacturers (Kerajet) were displayed some flatware that had been decorated by the ink jet printer. Now, this is in itself a Big Thing. Before tableware people had looked enviously at he tile ink jet designs, admired the speed and resolution, the convenience – but then qualified such feelings with 'Ah but they are decorating completely flatware – that's the easy bit'. Previously the ink jet streams could not be controlled to give a defined print that would cover more than a couple of centimetres and still have the same resolution. So frankly speaking unless your plate was totally flat (& therefore of no practical use except for pizza) it couldn't be decorated. Now it seems that technical limitation is being overcome. Further, there are ideas of how to decorate holloware to some degree too. There are limitations – the surface of the ware has to be absorbent – we are talking about an under-glaze or inglaze system at the moment. But as this has come from the tile industry it has brought to tableware ideas for designs and effects that previously tableware would have found hard to do. So the ink jet printer – capable of printing sink in fluxes and printing well enough so that the design looks like a reactive effect even if printed with normal ceramic pigments means there are 'new' designs previously not considered or practical available. I have seen also gold printed which begs the question – what will happen to decal?

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TABLEWARE FACES CHANGES AND CHALLENGES FOR SURE BUT NEW FACTORIES OPEN REGULARLY IN SOUTH ASIA A few years ago I saw one of the first inkjet printers in Modena.

For sure it was nice that it could print a beige stone effect – but it was very weak and limited. Yet within a few years whole tile factories were being designed & built around ink jet machines.

Screen printing, rotary colour and other decorating techniques were all obsolete. It's about the same situation now for tableware – the inkjet machines for tableware are in their infancy – though already in advance of what the first ink jet machines were to the tile industry. If this progress continues very soon ink jet could replace decal decoration, pad printing, banding and hand painting, lithographers, technicians.... would all go. I think its inevitable – the people working on these machines have a wealth of experience and very smart minds working on software and with the print head and colour/ink manufacturers.

Inkjet printers arenot cheap but already one trading company has eagerly noted that one machine would pay for itself in less than a year based upon replacing decal purchases alone – given the issue of cost and price I mentioned at the very beginning this is going to be a massive driver and yet the inkjet people really see tableware as a small industry – maybe only 10% of the potential of the tile industry. We shall see and I think sooner rather than later. I'm specifically interested in if we will see tableware factories designed around printers – rather than an attempt to simply replacing the lithographing department; these machines operate so quickly they really need a constant flow of feed-stock – tableware, to be effective – changing designs isn't the issue – keeping the machine fed with 'ammunition' is.

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ADVERTISER FEATURE

Trend unveils newly formulated kiln furniture material for heavy clay sector

Trend Industrial Ceramics has revealed that development work on a new, environmentally friendly material has resulted in high performance kiln components for the heavy clay sector and encouraging early reactions from key users.

“We developed a material designated TUZ especially for use in viaduct blocks, deck blocks and other kiln furniture used in the heavy clay industry,” explained Trend’s technical director, Xia Xiayun. “The main raw material in TUZ is reclaimed cordierite-mullite, combining to offer two principal advantages; the thermal shock stability of cordierite and the high temperature strength of mullite.”

When selecting and developing the particle size, Trend opted for a distribution of coarse grain size of 2mm to a finer particle of 0.1mm. This results in the optimum loose packed density. It allows the finished product to reach a density of 2.0g/cm3, MOR (modulus of rupture) to 13MPa and thermal expansion coefficient of 2.4 x 10-6 K-1, guaranteeing good strength and safety in what is an elevated temperature and high loading environment.

Trend has subsequently announced that TUZ has been successfully trialled by leading Australian brick manufacturers, with the expert support of the company’s agent there, Annexus (WA). “I am happy to report that the trials of the newly formulated TUZ material are running extremely well,” confirmed Wayne Horne, the managing director at Annexus. “As the agent for the Trend range of heavy clay kiln furniture products in the Australasian region, it is extremely important that we continue to improve our products, services and delivery to all our customers. With this in mind it was identified 18 months ago that we needed to offer the brickmaking industry a more competitively priced product, while however still maintaining or exceeding the current product performance benchmarks. That’s when we got to work.”

Trend developed both extrusion and pressing manufacturing methods for these brick kiln products and with the extrusion method more hollow shapes can be manufactured, lowering the overall weight of the piece, and therefore also increasing thermal efficiency at the end user’s kiln. This is achieved without any loss in product strength.

Moving forward, having two manufacturing methods gives Trend more options to better satisfy customers’ requirements and creates the ability to offer a full service to the heavy clay industry worldwide.

Proving new TUZ components in Australia is providing a solid

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reference and is a great base from which to launch future initiatives. “I was pleased to learn of the close partnership that has existed for some years between Trend and Annexus on my arrival in late 2015,” said Trend international sales director, Steve Tingay.

“It is always good to have local people with local knowledge with whom to work; people who understand the customers’ needs, and opportunities in the market. After identifying an opportunity to develop a new area of business for the Trend/Annexus partnership in Australia, we formulated a new recipe and launched the TUZ product group.

“This was initially in Western Australia but has gradually also spread out to the east coast of Australia, where trials have been very promising. The feedback we have had from all the heavy clay industry leaders so far has been very positive, with reliability and cost effectiveness being the main driving factors behind our success.”

Wayne Horne added: “We set ourselves the brief of delivering a quality product, within agreed lead times, at a competitive rate. With real-time market research and feedback from ourselves, backed up by the technical expertise from Trend, we were able to achieve our goal. We have successfully designed and formulated a new product that is achieving all the required performance benchmarks, our lead times are competitive, and we are able to offer a more competitively priced product to the industry.”

“With the dedication of Wayne Horne and his team at Annexus, coupled with the industry experience and technical expertise of Trend, I’m pleased that we have perfected a winning formula and have had the opportunity to introduce this new product range into Australia,” concluded Steve Tingay.

Steve Tingay – International Sales Director Trend Industrial Ceramics Co Ltd Matou, Huoxian Town Tongzhou District Beijing 101109, China Office: +86 10 8058 6196 Mobile: +86 1381 151 6531 E-mail: steve.tingay@beijingtrend.com.cn

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39

Analysis: China

Province Profile:

Shandong tile lines close as capacity crashes

In the latest of our exclusive Chinese Province Profiles, we turn our attention to Shandong – a region that has undergone substantial change in the last 18 months…

P

resently, there are all together 203 ceramic tile production lines in Shandong, with a daily production capacity of 3,145.4k. sq metres.

Among which, 24 are marble ceramic tile (including full-body marble, soft marble and microcrystal soft marble tiles) lines with total daily capacity of 268.9k.sq.metres; 33 are polished glazed tile lines with total daily capacity of 487k.sq.metres; 72 are interior wall tile lines with total daily capacity of 1,509.3k. sq.metres; 28 are rustic tile(including wood finish tile and small rustic tile) lines with total daily capacity of 413.6k. sq.metres; 8 are polished tile (including inkjet printing polished tile) lines with total daily capacity of 146k.sq.metres; 1 is micro-crystalline tile line with daily capacity of 10k. sq.metres; 27 are other ceramic tile lines including paving tile, large-size panel, endurable tile, small floor tile, acidproof tile, gold plated tile, full-body tile, glazed tile and so on, with total daily capacity of 310.6k.sq.metres; and 1 is western roof tile line with daily capacity of 180,000 pieces.

Under consideration

There are a number of lines under consideration also, and the development status and planning of each of these ceramic enterprises is different. The five production lines under construction or approved for construction are for the following purposes respectively: • One interior wall tile line is under construction with a planned daily capacity of 35k.sq.metres • One polished glazed tile line is under construction with a planned daily capacity of 25k.sq.metres • Three large-size ceramic panel lines are approved for construction In addition, 388 ink-jet printers have been put into operation in Shandong. There are 48,859 people in Shandong working in the ceramic tile enterprises of which 42,572 are working directly for production.

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A sharp drop

When, however, this is compared with the status of 2014, it can be seen there has been a considerable contraction in the industry. Just three years ago, there were 512 tile lines with a total daily capacity of 5,218,900 sq.metres. Now, this has dropped by some 2,000,000 sq metres whilst the number of lines has fallen by more than 60%, to leave 203 left operating. Overall, this has had the effect of reducing capacity in Shandong by some 600m. sq metres, based on a 300 day operating year.

A period of attrition

In the period of 3 years from 2014 to 2017, the number of polished tile lines was reduced from 58 to just eight, slashing the daily capacity from 625k.sq.metres to 146k.sq.metres - a reduction rate of as high as 76%.

The number of wall tile lines was also decreased from 165 to 72, lowering daily capacity from 2,101.1k.sq.metres to 1,509.3k.sq.metres with a reduction rate of capacity of 28%.

The number of polished glazed tile lines was also decreased from 78 to 33, hammering daily capacity down from 694.5k.sq.metres to 487k.sq.metres, or a reduction rate of 29%.

The number of rustic tile lines is decreased from 60 to 38, with daily capacity falling from 514k.sq.metres to 413.6k.sq.metres, or a reduction rate of 19.5%.

The number of micro-crystalline tile lines almost completely disappeared, slumping from 20 to 1, meaning that daily capacity has decreased from 130.5k.sq.metres to 10k.sq.metres.

Finally, the number of other tile lines plummeted from 117 to 27, with a slashing of daily capacity from 1,061.8k.sq.metres to 310.6k. sq.metres or a capacity reduction rate of 71%.

Concentrating resources

Nowadays ceramic tile enterprises of Shandong are mostly concentrated in Zibo and Linyi cities, with others scattered in another seven cities such as Binzhou, Jining, Tai’an, Weifang, Qingdao, Yantai

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Analysis: China

48,859 PEOPLE WORK IN TILE COMPANIES, OF WHICH 42,572 ARE INVOLVED IN PRODUCTION and Weihai. In these, there are three enterprises in Binzhou and one in each of the other six cities.

Affected by rising prices of ceramic raw material the production costs of tile enterprises have also been pushed up recently. However, the prices of ceramic tiles have managed to largely stay the same meaning all the time that the profit margin of ceramic enterprises has been massively narrowed. In addition, the end market has been soft in recent years as too many similar products hit the market. Not surprisingly this has increased competition levels like never before, and most of the ceramic tile companies are facing big pressures in terms of sales.

A Zibo renaissance?

Compared with its status three years ago, a total change has taken place in the Zibo production area. According to the our local investigations, as of today, there are only 41 ceramic tile enterprises left in Zibo, possessing 72 production lines with daily production capacity of 686.4k sq.metres of ceramic tiles and 180k.pcs of western roof tiles.

In addition, there is just one interior wall tile line under construction, having a daily capacity of 35k.sq.metres.

All along, the low added value and serious homogenization of the products have been the shortcomings of the development of Zibo ceramic tile industry. Therefore, the local government of Zibo is now determined to carry out an industrial renovation of Zibo ceramic tile industry, in order to enhance the overall strength of the whole producing area.

Many ceramic industry people comment that, actually, the ceramic industrial transformation and upgrading in Zibo actually started in 2015 with the implementation of the document “Opinion on Quickening Transformation and Upgrading of Ceramic Tile Enterprises in the Southern Part of the City”, during which, the local government issued several significant policies for capacity reduction.

In February 2016, Zibo government sped up its effort for the reformation and upgrading of the ceramic tile industry and in September the same year, the local government further issued the document “A Program for Specific Transformation of the Ceramic Industry”, indicating specific and particular details, to push the transformation and upgrading much further such that that finally only an annual production capacity of 200m. sq metres of ceramic tile

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would be allowed to be retained in Zibo.

During 2016, the ceramic tile industry of Zibo experienced a number of production cessations and restrictions, further reducing overall capacity. At the end of that year, the local government further issued a notice, asking ceramic tile enterprises to achieve a strict standard of emission in 2017 for environmental protection, the “Shandong Regional Integrated Standard for Emission of Air Pollutants (DB37/2376-2013)”, that is now a for pollution control in key areas to achieve namely 10mg/m3 for PM, 50mg/m3 for sulfur dioxide, and 100mg/m3 for nitric oxide.

It is said that this earlier implementation of “Shandong Regional Integrated Standard for Emission of Air Pollutants (DB37/2376-2013”) for pollution control in key areas lead to a quickened withdrawal of some enterprises from the ceramic industry.

Indeed, such has been the success of the directives, that having experienced a hard period of more than one year for transformation and upgrading, the target being planned by the local government has been largely achieved in Zibo production area. It is the common believe of many insiders that the unprecedented hard change Zibo experienced for the purpose of capacity reduction is worthwhile, that is just like “burning oneself for a new life”, and the enterprises left in the burning have strong power and big potential for development.

Relocation issues

In fact, before the accelerated transformation and upgrading of ceramic tile enterprises, the Zibo government had already basically completed the disposal of some ceramic elated enterprises, amongst which frit manufactures were the ones to suffer most effect. In accordance with the request of the local government, all frit enterprises in Zibo had to close down by the end of 2016 at the latest.

It is known that Zibo city, as the largest frit production base in China, possessed approximately 200 frit production factories of different capacity as well as a lot of frit melting furnaces before the transformation, which meant the region had developed a reputation for rapid product innovation as well as design development.

As stricter requirements for pollutant disposal were put in place, from January 2016 a great many, some frit enterprises of low competitiveness chose to shut down of their own accord, whilst others simply chose to move out to other areas. In addition to frit enterprises,

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41

Analysis: China

many associated enterprises previously located in Zibo also gradually moved their major activities to other production areas.

In terms of a long-range view for development, the relocation of these associated enterprises is of course bound to cut down the advantages of Zibo production area. Furthermore, some ceramic tile enterprises have chosen to move to other production areas due to the effect of capacity restrictions in Zibo. At the same time, enterprises in other production areas began head-hunting in Zibo for technical or sales professionals. With the moving out of technical staff, the technical superiority of Zibo over other production areas nearby has quickly narrowed.

Dry powder breakthrough

Despite all the negatives, fortunately, the innovative efforts of the remaining ceramic enterprises in Zibo has not been prevented.

Indeed, especially during 2017, many ceramic enterprises in Zibo made huge efforts to produce new tile types. For example, Zhilian Ceramics, Jinyi Ceramics, Dongyue Industry, Xinbo Ceramics and others produced soft marble tile, Guorun Ceramics produced modern rustic tile, Huayue Ceramic Tiles produced 65° soft marble tile of golden- thread pattern and Fengxia Ceramics produced 55° soft series tiles.

Some ceramic tile enterprises have also made full use of their advantages for much further development in terms of product research and innovation. For instance, a new series of tiles called “double zero real ceramic” produced by Zhilian Ceramics means that the water absorption of the product is controlled at a level <0.04%, so as to achieve a more completed vitreous, a higher hardness, as well as a better wearresisting and pollutant- resisting nature. It is known that the current state standard of water absorption for similar products in China is usually 0.5%.

It is also worth mentioning here about the technology and equipment for dry powdering that has also now been developed

by Zibo Letaoshi Energy Conservation Technology Company during the last 12 months, and which has now been put into operation successfully in the 2nd phase of Xinkongjian Ceramics.

Compared with the technology of wet granulation, heat energy conservation by this technology and equipment is over 80% and electricity energy conservation comes to over 35%. In addition, it can also reduce the amount of water reducer and other additives such as ballstone, and also conservation of water resource as well as manpower. While compared with conventional ball mill, land occupation by the new technology is less, lower cost for environmental protection than that by conventional wet powdering technology and hence, having a better economic benefit and social benefit. Compared with conventional powdering technology, Cost of RMB 70-80 can be saved for production of onetone powder by using the new technology. Furthermore, this new technology can meet the need for normal production of rustic tile and interior wall tile.

Nowadays, after this round of industrial adjustment, Zibo ceramic tile enterprises not only have a stronger sense of

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environmental protection, but also focus on brand development, and furthermore, began to have more confidence for higher added value and development towards differentiation.

Linyi City: integration

Linyi, as the largest production base of interior wall tiles in China, has an early starting of ceramic tile industry. Nowadays, Linyi has experienced many years market competition and capacity elimination by government policies, its ceramic tile industry has achieved great upgrading.

Reporter’s on-the-spot investigation shows that there are 59 ceramic tile enterprises currently in Linyi production area, and most of them are concentrated in Luozhuang district that possesses 85% production capacity of the total in Linyi area, with interior wall tile and floor tile being the major products. Having experienced constant market competition, the product structure there is gradually improved and as of today there are 115 production lines in operation with a total daily capacity of 2,146,800 sq.metres and a big variety of interior wall tiles, polished tiles, rustic tiles, glazed tiles, marble tiles as well as largesized panels. Development programs of some ceramic tile enterprises show that another three production lines for large-sized panels will be constructed in the Linyi production area.

Green futures

The state policies for environmental protection are becoming stricter and stricter over recent years and after experiencing the serious requirements in 2015, development of ceramic tile industry is Linyi already has a new style of green production as well as energy conservation and emission reduction.

In fact, during the 2-year strict requirements for environmental protection in 2014 and 2015, especially in 2015, the Luozhuang production area took many measures and its environment- friendly production did achieve such a good level that even the inspection this year by state environmental protection supervision group doesn’t have much to say.

Luozhuang production area’s measures for environmental protection are earlier and the management effect thereof is better, therefore, it is the one to have the least impact by strict requirements of environmental protection. However, it is undeniable Luozhuang is of an industrial area with many heavy industries and therefore a bigger pressure for environmental protection. Linyi government took some measures against Luozhuang’s situation, including moving its ceramic tile enterprises out of the city and concentrating them in an industrial park, keeping headquarters and reducing production capacity and so on.

An unbalanced development of interior wall tiles and floor tiles in Luozhuang has been existing for years. The interior wall tile capacity accounting for 58% of the total production capacity of ceramic tiles, at the same time, a number of high-quality interior wall tiles took the priority, while the high-end products by Jabest Ceramics and Marshal Ceramics accounts for 20% of the total capacity of interior wall tile of the whole production area.

In addition, Linyi area has made great progress in research and development of new products this year, many typical functional

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Analysis: China

products come into being, such as large-sized panels, anion ceramic tiles and water permeable tiles.

Higher entry levels

Our investigations show that as a result of much more intensive environment management, many ceramic enterprises have further invested more in environmental protection, and as of today, more than 10 enterprises have invested totally about RMB 20 million on the technology of dry desulfurization and dust control, paving the way for a green development of ceramic tiles.

In the beginning of 2017, Linyi municipal government decided that Luozhuang ceramic tile should go along the road of industrialization and relatively centralization development, and approved the construction of Linyi ceramic industrial park so as to steadily push transformation and upgrading of Luozhuangâ&#x20AC;&#x2122;s ceramic tile industry. Currently, preliminary works such as road construction, ground leveling, as well as water- power- gas supply works are in good progress. According to the government program and schedule, construction for infrastructure of Luozhuang ceramic industrial park will be completed by end of this year and it will be ready in 2018 for ceramic enterprises to move in.

It is introduced by a government official of Luozhuang that construction of Luozhuang ceramic industrial park can lay a good foundation for transformation and upgrading as well as product structure adjustment of Luozhuang ceramic industry, and it is bound to help Lnozhuang to have a new image.

Itâ&#x20AC;&#x2122;s worth mentioning that the qualification required for admittance to the industrial park, instead of moving in one group and another, standard for admittance to the industrial park is by certain market and administration qualification determined by the local government.

Diversity the key

This year, the emergence of new products such as large-sized panels, anion ceramic tiles and water permeable tiles and other functional products indicates that priority of Linyi ceramic enterprises is shifting from production capacity to variety of ceramic tile products.

A government official of Luozhuang also makes comments that completion and operation of Shandong Zhiqiang Ceramic

44

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New Materials Company, especially its new product of large-sized thin tile is unprecedented and it is leading a leap development of Luozhuang ceramic industry.

Research and development of new products depend on professionals and bringing in needed professionals is a vital measure for development of Luozhuang ceramic industry. In recent three years, Linyi production area continued to bring in research and production professionals, even spent a lot for bringing in professional group, and such effort is growing more obvious in 2017. Besides, ceramic enterprises also emphasize training of their own professionals in different fields.

Linyi production area established strategic cooperation in 2017 with over 20 universities and colleges, scientific research institutes, as well as some professional research institutes in Foshan and Jingdezhen. This time the cooperation is different from previous one, namely itis not mainly for purchase, but a joint effort for research and development, and the research results are owned by the enterprises.

While the intensifying market competition is growing, Linyi production area is facing a huge sales pressure for its products, but with helpful assistance of Linyi government at different levels, and with the active guidance of Luozhuang Ceramic Association, ceramic enterprises are making effort to speed up the transformation and upgrading, and Linyi ceramic enterprises are progressing towards

Elswhereâ&#x20AC;Ś

In addition to the two production bases in Zibo and Linyi, there are three ceramic enterprises in Binzhou, while Weihai, Weifang, Yantai, Jining, Taian, and Qingdao each has one ceramic enterprise. As of today, 15 production lines have been completed in other areas (except Zibo and Linyi), with a total daily capacity of 301,000 sq.metres, and it is a program of some ceramic enterprises that one production line for polished tile is under construction and its designed daily capacity is 25,000 sq.metres.

Due to pressure of growing market competition in recent years as well as growing stricter requirement for environmental protection, some enterprises of poor competence are forced to shut down, which, on the other hand is a good opportunity of development and upgrading for the enterprises that works hard for brand development and continues to upgrade its brand influence.

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EXHIBITION PREVIEW

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EXHIBITION PREVIEW

EXHIBITION PREVIEW

AC 17-10

asian ceramics

45

Analysis: China

Zibo

City Zhichuan

County/ District

Zhandian

1 polished glazed tile line: 15; marble tile line: 15; 1 rustic tile line: 10 40

7

5

Tile line & capacity (k.m2/d)

Company

30

3

4

Foshan Weineng Ceramics Co., Ltd.

1 rustic tile line: 10; 1 marble tile line: 10; 1 interior wall tile line: 10

23.3

5

Total capac- No. inkjets ity (k.m2/d)

Shandong Yadi Building Ceramics Co., Ltd.

2 rustic tile lines: 23.3

33

3

15

Zibo Golden Lion King Ceramics Co., Ltd.

2 rustic tile lines: 18; 2 marble tile lines: 15

22

2

1 polished tile line: 8; 1 rustic tile lines: 7

Shandong Lion King Ceramics Co., Ltd.

2 polished glazed tile lines: 22

20

6

Shandong Guorun Ceramics Co., Ltd.

Zibo Xinbo Ceramics Co., Ltd.

1 marble tile line: 20

43.3

2

3

Zibo Shiwang Ceramics Co., Ltd.

4 interior wall tile lines: 43.3

20

2

30

Zibo Kapuer Ceramics Co., Ltd.

2 marble tile lines: 20

20

2

3 rustic tile lines: 30

Shandong Shunwei Ceramics Co., Ltd.

2 marble tile lines: 20

20

3

Shandong Tongyi Ceramics Co., Ltd.

Zibo Jinghao Ceramics Co., Ltd.

2 marble tile lines: 20

11

2

2

Zibo Yuanfeng Ceramics Co., Ltd.

2 rustic tile lines: 11

30

3

15.3

Zibo Shunchang Ceramics Co., Ltd.

2 rustic tile lines: 30

20

4

2 rustic tile lines: 15.3

Shandong Liangjian Ceramics Co., Ltd.

1 polished glazed tile line: 20

12

Zibo Jinka Ceramics Co., Ltd.

Zibo Shunyuan Building Ceramics Co., Ltd.

1 interior wall tile line: 12

20

3

3

Zibo Gelunkai Ceramics Co., Ltd.

1 paving tile line: 10; 1 acid-proof tile line: 10

10

4

23

Shandong Tianzhao Ceramics Co., Ltd.

1 rustic tile line: 10

32

1 marble tile line: 13; 1 micro-crystalline tile line: 10

Zibo Huipeng Ceramics Co., Ltd.

2 full body marble tile lines: 16; 2 soft marble tile lines: 16

Shandong Asia Ceramics Co., Ltd.

Zibo Jinyi Ceramics Co., Ltd.

2

0

2

180k.pcs/d

7.5

9

1 western roof tile line: 180k.pcs/d

20

1

Zibo Boguan Roof Tiles Co., Ltd.

1 marble tile line: 7.5

30

2

4

2 rustic tile lines: 20

11

1

13

Zibo Fengxia Ceramics Co., Ltd.

3 rustic tile lines: 30

5

4

2 rustic tile lines: 13

Zibo Jinchuan Ceramics Co., Ltd.

1 small rustic tile line: 11

5

Shandong Gengci Group Co., Ltd. (Yuxi)

Zibo Fulaite Building Ceramics Co., Ltd.

1 polished glazed tile line: 5

18

5

Zibo Meiquan Building Ceramics Co., Ltd.

1 polished glazed tile line: 5

20

Zibo Jingqili Building Ceramics Co., Ltd.

1 interior wall tile line: 18

2 polished glazed tile lines: 20

Zibo Zhilian Building Ceramics Co., Ltd.

Shandong Gengci Group Co., Ltd. (qidu)

Zibo Huaruinuo Ceramics Co., Ltd.

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AC 17-10

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46

Analysis: China

Linyi

Luozhuang

Hi-Tech Zone

Linyi Jiabao Ceramics Co., Ltd.

Linyi Haosen Building Ceramics Co., Ltd.

Linyi Aosen Building Ceramics Co., Ltd.

Linyi Hualun Building Ceramics Co., Ltd. No 2 Factory

Linyi Hualun Building Ceramics Co., Ltd. No 1 Factory

Linyi Shuncheng Building Ceramics Co., Ltd.

Linyi Jiabeite Ceramics Co., Ltd.

Linyi Hongyu Skirting Tile Factory

Linyi Dongyu Building Ceramics Co., Ltd.

Linyi Tianli Ceramics Co., Ltd.

Linyi Aoxing Building Ceramics Co., Ltd.

Linyi Shengshi Building Ceramics Co., Ltd.

Linyi Jinzheng Building Ceramics Co., Ltd.

Linyi Renxuan Building Ceramics Co., Ltd.

Linyi Shunhui Ceramics Co., Ltd.

Linyi Chenggong Ceramics Co., Ltd.

Linyi Langyu Ceramics Co., Ltd.

Linyi Saide Ceramics Co., Ltd.

Linyi Yongji Ceramics Co., Ltd.

Linyi Meiermei Ceramics Co., Ltd.

Linyi Kunyu Ceramics Co., Ltd.

Shandong Dehuilai Decorative Panels Co., Ltd.

Zibo Qiangqiang Building Ceramics Co., Ltd.

Zibo Xingyue Ceramics Co., Ltd.

Zibo Hengyue Ceramics Co., Ltd.

Zibo Songyue Building Ceramics Co., Ltd.

Zibo Kingsway Building Ceramics Co., Ltd.

Zibo Dongyue Industrial Co., Ltd.

Zibo Huayue Building Ceramics Co., Ltd.

Zibo Tianjia Building Ceramics Co., Ltd.

Zibo Luzhong Building Materials Factory

2 interior wall tile lines: 70

1 endurable tile line: 18

2 interior wall tile lines: 20

1 polished glazed tile line: 20; 1 endurable tile line: 11

1 interior wall tile line: 22; 1 polished glazed tile line: 21; 1 endurable tile line: 14

2 interior wall tile lines: 42

3 interior wall tile lines: 45

1 gold plated tile line: 2

1 interior wall tile line: 38

1 polished glazed tile line: 13; 1 fully body tile line: 14

1 rustic tile line: 12

2 interior wall tile lines: 60; 1 endurable tile line: 24

1 polished tile line: 22

1 interior wall tile line: 25

1 interior wall tile line: 27

3 endurable tile lines: 34

1 interior wall tile line: 54

4 interior wall tile lines: 60

3 interior wall tile lines: 38; 1 polished tile line: 14

1 endurable tile line: 15

3 interior wall tile lines: 40

1 large size panel line: 2

1 polished glazed tile line: 5

1 interior wall tile line: 5

1 marble tile lines: 5

1 marble tile lines: 10

1 marble tile lines: 5

1 micro-crystalline soft marble tile lines: 5

1 marble tile line: 10

1 interior wall tile line: 10

1 interior wall tile line: 10

12

70

18

20

31

57

42

45

2

38

27

12

84

22

25

27

34

54

60

52

15

40

2

5

5

5

10

5

5

10

10

10

1

2

8

4

2

5

5

8

1

4

2

2

7

3

3

7

8

8

4

1

2

2

2

2

1

1

2

2

2

6

1 large size panel line: 12

3

Shandong Zhiqiang Ceramics Co., Ltd.

6

3

2

12

30

1 interior wall tile line: 18; 1 marble tile line: 26; 1 polished glazed tile 59 line: 15

1 rustic tile line: 20

51

20 Linyi Shuangfu 3rd (Shuangxin) Building Ceramics Co., Ltd.

1 interior wall tile line: 30

28

1 rustic tile line: 12

Linyi Shuangfu Building Ceramics Co., Ltd.

1 interior wall tile line: 21; 2 polished glazed tile lines: 30

Linyi Lianshan Building Ceramics Co., Ltd.

Linyi Baoshun Building Ceramics Co., Ltd.

1 polished glazed tile line: 28

2

1

Linyi Yizhou Building Ceramics Co., Ltd.

13

20

Linyi Yongyi Building Ceramics Co., Ltd.

1 wall skirting tile line: 13

Linyi Shuangfu 2nd (Jingtai) Building Ceramics Co., 2 rustic tile lines: 20 Ltd.

Linyi Zhongxin Building Ceramics Co., Ltd.

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AC 17-10

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48

Analysis: China

New Lianshun Building Ceramics Co., Ltd.

Linyi Shengyuan Building Ceramics Co., Ltd.

Linyi Juxin Building Ceramics Co., Ltd.

Linyi Jinzhao Building Ceramics Co., Ltd.

Linyi Lianshun Building Ceramics Co., Ltd.

Jinshengshun Building Ceramics Co., Ltd.

1 interior wall tile line: 9

1 small floor tile line: 15

1 endurable tile line: 12

4 interior wall tile lines: 34

1 interior wall tile line: 20

123

9

15

12

34

20

16

4

2

2

4

1 polished tile line: 8

1 polished glazed tile line:10; 1 small floor tile line: 13

38

42

8

23

1

2

4

4

2

5

Yiluo Ceramics Co., Ltd.

1 interior wall tile line: 24; 1 polished glazed tile line:18

30

2

47

1 interior wall tile line: 54; 1 rustic tile line: 12; 2 polished glazed tile line: 12; 1 small floor tile line: 45

Dongao Ceramics Co., Ltd.

2 interior wall tile lines: 38

20

5

1 interior wall tile line: 33; 1 rustic tile line: 14

Wanxiangyuan Building Ceramics Co., Ltd.

1 interior wall tile line: 30

0.4

5

Huawei Building Ceramics Co., Ltd.

Luoguan Building Ceramics Co., Ltd.

1 endurable tile line: 10; 1 small floor tile line: 10

38

6

6

Linyi Jinchang Building Ceramics Co., Ltd.

1 backgound wall tile line: 0.4

40

40

Linyi Jinyuxi Ceramics Co., Ltd.

2 interior wall tile lines: 38

15

5

2 interior wall tile lines: 40

Linyi Huamantian Backgroud Wall Co., Ltd.

1 interior wall tile line: 40

8

5

Shuangsen Building Ceramics Co., Ltd.

Linyi Dongsen Building Ceramics Co., Ltd.

1 interior wall tile line: 15

36

1

8

Linyi Sanyuan Building Ceramics Co., Ltd.

62

130

1

26

Linyi Shengding Ceramics Co., Ltd.

1 rustic tile line: 16; 2 polished glazed tile lines: 20

20

1 endurable tile line: 8

Linyi Jinsen Building Ceramics Co., Ltd.

2 interior wall tile lines: 62

4 polished glazed tile lines: 70; 2 polished tile lines: 60

14

2 rustic tile lines: 26

Linyi Aoda Building Ceramics Co., Ltd.

2 polished glazed tile lines: 20

Xinjiyuan Ceramics Factory

Linyi New Chengyu Building Ceramics Co., Ltd.

1 polished glazed tile line: 14

Shandong Shenli Building Materials Co., Ltd.

Shandong Yuda Building Materials Co., Ltd.

Hedong Hi Tech Zone

Mingyang Building Materials Co., Ltd.

6

Junan

8

12

35

13

66

60

2 interior wall tile lines: 66

115

1 interior wall tile line: 23; 1 polished glazed tile line: 12

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

Linyi Chengyu Building Ceramics Co., Ltd.

3 interior wall tile lines: 90; 1 polished glazed tile line: 25

Ruida Ceramics Co., Ltd.

Linyi Marshal Building Ceramics Co.,Ltd.

Linyi Hongdu Building Ceramics Co., Ltd.

Yishui Tancheng

4

4

6

Weifang Ziyang Ceramics Co., Ltd.

8

Zhucheng

Weifang

30

3

2

72

15

1 inkjet polished tile line: 30

35

1 interior wall tile line: 20; 2 polished glazed tile lines: 17; 1 rustic tile 53 line: 16

2 interior wall tile lines: 72

2

1 wood finish tile line: 15

Weihai Shengqian New Materials Co., Ltd.

1 full-body marble tile line: 35

5

Qingdao Huadu New Materials Co., Ltd.

Taiâ&#x20AC;&#x2122;an Jushan Ceramics Co., Ltd.

12

3

Laixi

Wendeng

Shandong Wanhao Ceramics Co.,Ltd.

23

Qingdao

Daiyue

1 rustic tile line: 12

30

Sinyih Ceramic ( Penglai) Co., Ltd.

Weihai

Zoucheng

1 interior wall tile line: 23

Penglai

Taiâ&#x20AC;&#x2122;an

Shandong Yuma New Materials Co.,Ltd.

1 interior wall tile line: 30

Yantai

Jinin

Zouping

Shandong Guosheng Ceramics Co., Ltd.

Shandong Lianzhong Ceramics Co., Ltd.

1 polished tile line: 4; 2 polished glazed tile lines: 7; 1 polished glazed 31 tile line: 20

Binzhou

Boxing

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Special report

CICA:

A SPECIAL REPORT

a tough road ahead Jahir Ahmed provides insight into the recent Ceramic Industries Club of ASEAN meeting in Pattaya, Thailand

A

fter years of long discussions and reviews on the impact of opening up ASEAN market for free trade from 2018 to nonASEAN countries and fears of aggressive rivalry by the non-ASEAN countries, the Ceramic Industry Club of ASEAN (CICA) has finally met in its 24the Annual Council Meeting in Pattaya on September 9 this year to get the detailed preparation of coping with real situation to be faced by the member countries, particularly, five ceramic manufacturing-exporting countries of Indonesia, Malaysia, Philippines, Thailand and Vietnam.

Outgoing CICA Chairman Elisa Sinaga, who is also Chairman of the Indonesian ceramic industry association ASAKI alerted the CICA member chapters in last two years about the possible impacts and suggested for possible strategies to cope with the uneven competition, particularly, from China.

From January 2018, ASEAN countries will eliminate or reduce customs duties on goods originating from the non-ASEAN trade partners, particularly, those of the ASEAN-plus countries who have signed duty free agreements with ASEAN. Per 2018 the import duties for ceramic products that are shipped into ASEAN members from ASEAN members will be scrapped to zero, but ASEAN-plus ceramic exporting countries particularly, the global leader China, will also be a beneficiary of the opening up of the market where it is already a dominating supplier. ASEAN-plus countries are not supposed to cause harm to the newly born or weaker or immature industries, but it is not clear how this could be saved.

Sinaga is speaking loudly about the weaknesses and strengths, while CICA was unable to provide a safety strategy, although, all the member chapters are always critical about the uneven competition from the Chinese ceramics, as well as smuggled ceramics originally produced and shipped from China.

In the 24th CICA council meeting Sinaga urged the members chapters to exchange information about industrial situations such as trade, export, employment, energy, and updated law and regulations related to the ceramic industry, to help predict market situation for making business plans and strengthen relationship under CICA.

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The meeting was told that according to the new mandatory standards from Malaysia issued on July 15, 2017, all suppliers of ceramics, exclusively tablewares, must obtain the certificate of analysis (COA) for preparation, packaging, storage, delivery or exposure of food for human consumption issued by Ministry of Health in compliance with Regulation 28, Food Regulations 1985 before importation of their products into Malaysia.

In the meeting Indonesia handed over the presidency of CICA to Malaysia. The meeting set the time and place for the next CICA meeting, to held in Malaysia in October 2018.

The meeting set the site seeing activity for the next CICA meeting at SIRIM Berhad which is an organization owned wholly by the Malaysian Government, under the Minister of Finance Incorporated.

The institution is the place for standards testing and quality, and a supporter of technological excellence for Malaysian manufactures.

The meeting invited Cambodia, Laos and Myanmar to join the next meeting at the level of observer in order to encourage them to be CICA member.

The meeting decided to upgrade the status of CICA from a non-legal association to a legal-bodied association which has a permanent office and fundraising systems from members in order to accomplish objectives for supporting and developing ceramic industry in ASEAN region. A working group will be set up to discuss important issues that CICA members are facing and encourage the coordination among CICA members accordingly.

The gas issue

The large increase of prices for natural gas, manpower and raw materials have led to an increase of the production cost for ceramic tiles, with Indonesia particularly affected adversely. This has not only brought about many challenges to the ceramic tile enterprises, but also many problems to the enterprises of ceramic houseware and sanitaryware enterprises. The chairman of ASAKI, Elisa Sinaga, expressed that â&#x20AC;&#x153;Almost all industries in relation to ceramics are affected by the increased production cost. Taking the natural gas price increase as an example, it is the main cost in production of ceramic tiles.â&#x20AC;?

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Special report It is introduced by ASAKI that in 2009 the price of natural gas in Indonesia is only 5.85USD/ MMBTu (approximately USD 0.2088 / m3 or RMB 1.42/m3. (Note: USD 1/ MMBTu is about USD 0.0357/m3 or RMB 0.2426/ m3; 1MMBTu is about 28 m3, and USD 1equal to RMB 6.7962). While in 2013, the price is increased to USD 9.1/MMBTu. In other word, the price for natural gas in Indonesia has been higher than that in other Southeast countries since 2012. It is expressed by Elisa Sinaga that the price difference for natural gas like this leads to a weakened competitiveness of Indonesian ceramic tile products, as the cost of natural gas accounts for 30- 40% of the total cost of ceramic tile production in Indonesia. It is also expressed by ASAKI that Indonesian ceramic tile enterprises has been affected since 2015 by the excessive high price for natural gas as well as short supply of natural gas. ASAKI is opposed to the unreasonable adjustment of price for natural gas by the government, and it is said that if the government can adjust the natural gas price in a reasonable way, the cost of ceramic tile production can be hopefully reduced by one third.

Besides, there is a price difference of natural gas among different areas inside Indonesia. For example, natural gas price in West Java is USD 9.17/MMBTu, that in East Java is USD 8.06/ MMBTu, while that in North Sumatra is USD 12.4/MMBTu. ASAKI

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wish the government could set up a unified and reasonable natural gas price throughout the country.

Elisa Sinaga said that Indonesian ceramic tile industry is waiting to see the government commitment to reduce the natural gas price and even though the price reduction canâ&#x20AC;&#x2122;t lead to an immediate growing of the sales volume of ceramic tile, it can mitigate the cost pressure for the ceramic tile enterprises.

It is said that Indonesia president Joko Widodo has a plan for natural gas import to support its industry development. The industry minister Airlangga Hartanto said that Indonesia government has approved an import plan for the purpose of meeting the market demand for cheap natural gas as well as stimulating the domestic economy. Some government departments concerned are thinking about a price adjustment of natural gas for ceramic and glass industry, hopefully to see a price lower than USD 6/MMBTu. It is worth mentioning that the increased production cost of ceramic tile in Indonesia not only attributes to increased price of natural gas, but also to increased price for manpower, logistics operation and imported raw materials. Furthermore, little effort for timely technical innovation or improvement of production efficiency also leads to a weakened competitiveness of ceramic tile factories in a hot competition, especially in ceramic sanitaryware factories.

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51

Talking Shop

Talking Shop Banglambition? a revolution in the making

Sk Bashir Uddin, managing director of Akij Group discusses how the company’s ambitions in the tile sector are producing dividends, and on the general future of the ceramic industry in the country.

The ceramic tiles industry holds immense growth prospects both at home and abroad as Bangladesh is producing high quality products at competitive prices, said a noted entrepreneur.

Today, locally made ceramic tiles are competitive in terms of cost at global level. The quality is also better than those made in countries such as China.

“We think we are better and we are introducing new technologies every day to achieve global standards,” said Sk Bashir Uddin, managing director of Akij Group.

The group made foray into the ceramic industry only five years ago to tap both the growing domestic and international markets.

Akij Group started with a daily tiles production capacity of 220,000 square feet. Now it makes about 500,000 square feet of tiles daily.

“This was the biggest plant when we started. Today, we are also the biggest plant.”

The company has introduced many new tiles into the market and was the first one to roll out digital printed tiles. Akij Group has also started exporting tiles, albeit irregularly.

“We think that irregular efforts will once be converted into regular exports,” said Bashir.

“What we are trying to do is to have a comprehensive ceramic plant where we will be making tiles, sanitary ware and eventually insulators for electrical transmission lines. Of them, tableware will be largely export-oriented,” he said.

According to Bashir, table wares hold huge export opportunity compared to other products because it is manually processed.

“It is very labour-intensive and anything labour-intensive has an opportunity in Bangladesh,” he added.

“With tiles, sanitary ware and table ware in our basket, we think we will soon become the largest exporter in the ceramic sector in Bangladesh and earn a respectable position within the country,” said Bashir.

One of the reasons behind Akij's entry into the ceramic industry is to create a building material basket from a single source. The group already produces cement and is in process of making steel.

High import tariff protection offered by the government has also encouraged Akij Group to enter the ceramics business and fortify position in the building materials market, which grows 12-15 percent annually.

Currently, the annual market for building materials, which include steel, cement, ceramic and sanitary wares, and plastic pipe, is roughly Tk 45,000 crore. The estimate excludes glass wares, according to Akij Group.

“From various surveys, we have come to know that there will be a

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boom in the building materials sector in near future,” said Bashir.

Public sector construction is rising in recent times, driving the growth of cement consumption, he said.

The number of households will also increase from 3.2 crore to 4.3 crore by 2025, he said, citing a survey of the Bangladesh Bureau of Statistics. Households are gradually shifting from wooden and corrugated sheets to brick and concrete. By 2025, brick-built houses will account for 24 percent of all households in Bangladesh from 13 percent in 2011.

“So, we foresee a good demand for building materials,” said Bashir.

Son of noted entrepreneur Sk Akij Uddin, Bashir steers Akij Group's more than 20 concerns ranging from jute, textile, particle board, food and beverage, tobacco, plastic, cement and ceramics.

The founder of the group started his entrepreneurial journey with only 17 rupees in capital 75 years ago. Now the group's annual gross turnover stands at $1.5 billion, including $200 million from exports. It employs more than 30,000 people.

Bashir said the primary enablers for the group's success are reinvestment of retained earnings, ensuring financial discipline and having a dedicated human resources base.

“These factors have largely enabled the group to grow,” said Bashir, who wants to create jobs for 100,000 people in the coming days.

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Talking Shop

He said his father believed that there were two kinds of companies in the world.

“In one type, owners are rich but the companies are poor, while in the other, owners are poor but the companies are rich,” said Bashir.

“From the inception, it has been a zero dividend company and we are maintaining the principle. All the retained earnings are reinvested.”

At Akij Group, shareholders draw a fixed salary like other employees.

“So, Akij is a company where the company is rich but the owners are poor,” said Bashir.

He said the reinvestment of retained profits allows Akij to expand business and employ more people.

“We are in an expansionary mode. Every year we are building something.”

Recently, it set up a flour mill with a daily production capacity of 1,300 tonnes.

Bashir is also upbeat about the country's economy.

He urged the authorities to fix infrastructure bottlenecks, ensure adequate supply of energy, curb corruption and create enabling regulatory environment so that businesses can flourish and create jobs.

He also shared his vision about the group.

“I want to make Akij Group the most respected company in the country. This is where I want to take the company, not necessarily in terms of revenue.

I don't want to be the richest man in Bangladesh.”

Bangladesh in focus

Currently, more than 500,000 people are engaged in the local ceramics industry. To create skilled manpower for the sector specialised departments and institutes have been established in the leading universities of the country such as the department of glass and ceramic engineering (GCE) in Bangladesh University of Engineering and Technology, Rajshahi University of Engineering and Technology, Bangladesh Institute of Glass & Ceramics, Faculty of Fine Arts in Dhaka University, and so on.

Bangladesh's ceramics industry has carved a niche in the global market. According to BCMEA, the industry earns more than USD 42 million through export. Of the different ceramic products, tableware is exported to more than 50 countries including the US, Canada, European Union, Australia; tiles to India, Nepal and Bhutan; and sanitary ware to the Middle East, especially to the UAE. Tableware accounts for more than 90 percent of Bangladesh's ceramics export.

One of the main challenges to the growth of the ceramics industry is inadequate supply of natural gas. Natural gas is not only the key energy source for the industry but also crucial for maintaining quality of the products as the local natural gas does not contain any sulphur which makes locally produced ceramic products look brighter and shiny. Shirajul Islam Mollah MP, President of BCMEA, shares that the government has assured them of resolving the

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ANYTHING LABOURINTENSIVE HAS AN OPPORTUNITY IN BANGLADESH crisis by June or July next year when liquefied natural gas (LNG) will come into operation. It will reduce the burden on the natural gas reserve and productive sectors, and the ceramics industry in particular will receive supply of grid-gas.

There is shortage of raw materials for ceramic goods in Bangladesh and manufacturers are heavily dependent on imported raw materials. Moreover, the ceramic companies have to bear a huge amount of cost due to duties and advance income tax on import of these raw materials. The ceramic manufacturers urge the government for zero-duty benefits on import of raw materials and 25 percent incentive on exports like the garments industry.

They also feel the urgent need for developing the port and communication facilities to fast-track import of raw materials and delivery of finished products.

The ceramics industry leaders also highlight the importance of building a strong backward linkage. Many tools and machineries that are currently being imported can be manufactured in the country. It will increase efficiency as well as reduce production costs.

Bangladesh's ceramics industry has experienced 200 percent growth in production in the last five years. This growth momentum is expected to sustain for a considerable period of time thanks to the robust development of the real estate sector and rising living standard of the people in the country. The industry is also positioned to expand rapidly in the global market with its highquality products, low labour costs and creative entrepreneurs.

Traditional manufacturers of ceramics such as Italy and Spain have been experiencing difficulties in remaining competitive due to rising labour cost and the ongoing global financial crisis.

Therefore more orders are being placed to low-cost countries like Bangladesh. In terms of quality Bangladeshi ceramics can easily compete with the products of its close competitors China and India.

Now, if the industry gets proper incentives and support from the government, it has all the potential to be one of the top ceramicsexporting countries in the world. Much like the garments industry this would be another manufacturing success for Bangladesh.

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Insight

CHINA Ceramic tiles export value (top 10 destinations, US$m., Jan-Sept 2017)

Ceramic tile output (million sq metres, Jan-Sept 2017)

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Ceramic tiles export value (11-20 destinations, US$, Jan-Sept 2017)

Ceramic sanitaryware output ('00,000 pieces Jan-Sept 2017)

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THE FUTURE OF CERAMICS

24 / 28 SEPTEMBER 2018 . RIMINI . ITALY

www.tecnargilla.it

ORGANIZED BY

IN COLLABORATION WITH

WITH THE SUPPORT OF

Insight Ceramic tile exports by Province (Jan-Jun 2017, US$m.)

Ceramic tile imports by source (Jan-Jun 2017, US$m.)

Ceramic tile imports by Province (Jan-June 2017, US$m.)

Market share (%) of Chinese tile exports (2017, Jan-Sept, US$)

Tableware export value (US$m., Jan-Jun 2017)

Sanitaryware export value (US$m., Jan-Jun 2017)

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5-9 FEB 2018 / Valencia (Spain)

CREATE YOUR OWN REALITY #cevisama18

www.cevisama.com

Hunter and the hunted

The Big Five-Oh. Dear Diary,

Please indulge me as this is a little more personal Hunter

column than usual.

made it to fifty years old this year and given the It comes as a bit of a shock but no surprise to find out I've a mid-life crisis (IF I live to be 100) or at the very least immensity of such a milestone it is typical to have at least so far and where one hopes to go and what is to be ed happen what's to take stock of one's life and review both achieved in the future. both my children are now studying at the Which was all very good as I could look happily at the fact and our businesses are doing pretty well. married happily I'm and Universities and courses they both wanted to work to pay for those university places, pension, I have some ideas of what I want to see and do – if having medical & mortgage allow it of course. ceramic industry – an industry I joined whilst I was But it is also a milestone of thirty-two years working in the basically I joined the ceramic industry in the first place deciding whether to go into further education or not. Yes, nal' pottery area the ceramics industry was the 'traditio a in living and because I didn't know what I wanted to do a coal pit or trying to sell second-hand vehicles. obvious choice for someone that didn't fancy working down is about as low a technical position as you can I started off therefore as a trainee laboratory assistant which toilet towel rolls and prepare laboratory change tea, make to how start from. I learned in my first few weeks I what expected and it was, fortunately (in samples and tests for other people. It was fair to say it wasn't unique little snowflake – I was working in a and pretty a not was hindsight) quite a humbling experience; I nearly everybody else had a better idea of what factory where hard work and grafting where respected and to college seemed a better option. back going – ere was going on than me. I didn't think I'd persev of learning to fit in the realisation I was But, I actually started to enjoy it – there was, after a few weeks importantly working with an almost surreal cast of working (really working), getting paid for working and most all over the world. I realised it was a fascinating work we though characters, many that are still friends now s of it, the commercial, how international it was, the industry – you could be interested in the technical aspect , marketing and all manner of relationships and science & h researc methods of production, the business skills, d and to a small degree could make the world a the simple realisation that the work you did actually mattere tic and important for health and sanitation. aesthe al, practic be can better place. Simply because ceramics academic or skilled at business, I took an interest I was though very fortunate. Rather than being especially problems. If people needed a presentation doing I'd in how and where products were used and trying to solve and meet people. This in itself was a most valuable places to travel to do it even when petrified because I liked anywhere or doing anything the ceramic industry took education & probably because I wouldn't say no to going and putting me into situations I honestly hadn't going of t though even me around the world to places I'd never much of an idea how to get through. at a time when I thought of changing direction and It has been a quite wonderful (mostly) ride and I was lucky me to locate to Asia. A decision which is wholly ask to d decide with was leaving the industry that the company I responsible for the mortgage, wife and two children I guess! some very talented people I have also been incredibly luck to have worked for and with having businesses of my own, Now from. benefit and whose skills I have happily tried to adopt yet. years few a for y industr this in be to expect I say, our own I should

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

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Connecting Global Competence

International importance. Global relevance.

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

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

ceramitec 2018 â&#x20AC;&#x201C; international component in a global future

Hunter and the hunted

I've learned a few things ove r the years but I wonder how much the industry has really reasons I was able to develop changed. One of the my career was that what I lear ned years ago was still app to different areas of the wor licable as I moved ld. I used to complain to an employer that customers nev brought the same types of er seemed to learn and problems over and over aga in 'Be thankful – when they need to pay you' he pointed stop doing that I won't out. In other ways, the indu stry has changed a lot. Thr mind and no doubt you will ee things quickly come to think of many others; digital printing, heavy metal legislat generally, and the movement ion/hazard management of both the industry and the related change in the retail and supply chain.

Digital printing well within a decade transformed tile pro duction. Wiping out jobs and could be decorated and wha revolutionizing what t effects were economically possible. I have no doubt tha technology will cross over to t in the near future this tableware decoration creatin g similar upheavals. Legisla posed by elements and che tion concerning the risk micals has changed what is used in ceramics especially health and safety and the env decoration and labeling, ironment are finally receiving greater respect as slowly but realise the implications of igno surely countries ring abuses in these areas.

However, the changes reta il and the supply chain hav e had the greatest effect. Not always good.

Ceramic production has alw ays moved – its relatively hea vy stuff and typically, tradition it was needed so its unders ally was made where tandable as countries develop and the middle classes gro will move to meet demand. w the ceramics industry But in recent years it isn't just the convenient and econom market that has effected whe ically realistic route to re things are made and why . Reading online ceramic foru the West will decry the movem ms often potters in ent to 'cheap Far East' manuf acture as though the industry responsible for moving jobs itself was solely out of Europe or the USA. To an extent that is true but it is or at best forgotten that the a fact often ignored whole retail and supply cha in has transformed over the in 'The West' do not buy from last thirty years. People specialized shops anymore or even department stores. mega supermarkets, online Mostly we buy from or discount shops. Those out lets have to be filled and tho have sourced far and wide se retail behemoths looking for ways to maximise profits. Not only that but the example means any buyer Canton Show as an can meet literally scores of suppliers, if not hundreds for a very limited time and very any product group in conveniently. Now that sea rch can be done online. This sup put in its own sourcing and ply chain has to compliance teams, quality control and assurance – this industry in its own right. The has become a massive problem is these things now happen over great distances all manner of bad practice and it's easy to hide in a complex paper trail tha t effectively hides suppliers remote locations. We simply and factories in relatively don't have the contact anymo re with what manufacturing are part of it; it is easy for con is all about unless we sumers to be willfully naive and ignorant about the sup a health scare or expose in ply chain unless there is the media. The result of the se changes is constant pressu this encourages cutting cor re to reduce price and ners and taking risks.

The challenge facing the cer amic industry now is, therefo re, to embrace the new tech new markets but to resist the nologies and exploit urge to exploit labour, the env ironment and not race to the some profit-obsessed corpor bottom to satisfy ation – the industry needs to deal with end customers market domestically and reg as directly as possible and ionally – the will only ever be one cheapest supplier and not the best way to survive in my experience that is and prosper.

Okay, maybe if I make ano ther 32 years in the industry I'll do an update to this artic things change in that time. le and see how

much

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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