Asian Ceramics - AC17-2 Edition by Bowhead Media Ltd

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AC17-2

OFFICIAL MAGA ZINE:

IND IAN CERAM ICS 2017

AHME DABAD, INDIA

SEE INSIDE

IN FOCUS:

Indonesia: whiteware woes? The rise of Andhra Pradesh? North African sanitaryware China frits and glazes Plus news, views, analysis and much more!

e h t s e k a t I n k e ra le a d

AL Jawdah Group of companies Abdul Rahman & Aldul Kareem Saleh Al-Omran were establish in 1975 under the name of Al-Omran Sanitary ware and specialized in wholesale and retail trade of sanitary ware in the kingdom and the Middle East, Where the importation of the major companies and factories world nest varieties and the latest models to suit all taste and in very large quantity to cover all the request for the large projects and the group is one of the largest and most famous companies working in this eld in Saudi Arabia and the Gulf States in the framework of the Group’s commitment to provide distinctive products has added industrial ACTIVITY through the creation of the group of companies large industrial sophisticated and i n c l u d e s f o u r l e a d i n g i n d u s t r i a l c o m p a n i e s u n d e r t h e n a m e o f A L - J AW D A H C o m p a n i e s , N a m e l y Mr.Abdul Rahman The Owner of AL-Jawdah Groups

Al-Jawdah Ceramics Company was establish in 1995 and produces ceramics wall and oor tiles with a range of products. The company produces all decorative products such as Listello, Skirting etc to match the tiles. The Company continous growth to fulll the Saudi Arabian and Middle East market requirements.

Al-Jawdah Company for Plastic Pipes and Fittings, The Company was founded in 1994 and is engaged in the production of plastic pipes of the (PVC) and (C-PVC) and (UPVC) and (PP-R)This addition to the production of links all kinds of plastic in all sizes and different thickness are used in various elds such as extensions of water lines with high and low pressure and sewage extensions to the Saudi Arabian Standards for Standards, Metrology and international standards.

One of Abdul Rahman, a group of companies and Abdul Karem Saleh Omran Trade and Industry, Begun commercial production of the plant in early 1999, The factory is located in Riyadh Second Industrial City and a production capacity of up to (400,000) electric water heater annually. The factory produces electric water heaters sizes (30, 50, 100, 200, 250, 300 liters) multiples different colors and models, including horizontal and vertical fashioned style and ground style central and style.

Al-Jawdah Porcelain and Ceramic Company is the new establish by Al-Jawdah Group of Companies near to our existing complex in 2nd Industrial City, Riyadh, Kingdom of Saudi Arabia. The Company is under construction and installment of the machines are in progress with ITALIAN company machines which are include SACHI, SYSTEM CERAMICS, CIMES, TECHNO FERRARI, MARPAK, BMR and FRACCAROLLI/CAMI with latest technology. Plant equipped with special SACHMI Hydraulic Press PH 3200 and PH 6500 and attractive KILN for the production of Procelain Tiles with the capacity 13.0 Million square meters per annum. The complete building of 9,200 square meter area built for the future expansion to double the Plant capacity. Plant expected in operation in 2nd Quarter of 2017 with full support of Ministry of Kingdom of Saudi Arabia with supply of natural gas and electricity, The investment done by AL-OMRAN GROUP Mr. Abdul Rahman S.Omran and Mr. Abdul Karem S. Al-Omran to fulll the Saudi Arabian Market demand of Ceramic and Porcelain Tiles.

ABDUL RAHMAN & ABDUL KAREM SALEH - AL-OMRAN GROUP OF COMPANIES

Tel: 00966-11 265-0228 Fax: 0096-11 265-0158 265-0159 265-0160

Email: info@aljawdahgroup.com Site: www.aljawdahgroup.com

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Mosaic: Stone mosaic, Glass mosaic, Wood mosaic, Shell mosaic, Ceramic mosaic, stainless steel mosaic, crystal mosaic. As the permanent Venue of CeramBath, which is held biannually in Foshan, China, CCC attracts buyers of ceramics & bathroom industry from home and abroad all the year round. See you at the 29th CeramBath Fair on Apr.18-21, 2017! Letâ&#x20AC;&#x2122;s Meet in Foshan! Web:www.eccc.com.cn CeramBath Web: en.cerambath.org Email: export@eccc.com.cn Add: No.2, Jiangwan 3rd Road, Chancheng District, Foshan, China City, Guangdong Province, China

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AC 17-2

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Advertiser feature

INKERA TAKES THE LEAD IN INDIA DIGITAL INK MARKET Innovation returns to Indian Ceramics 2017 with new offerings from Inkera. Indian Ceramics, for so many years a platform for European companies selling their technology, materials and design to the Indian market will see a shift of focus this year with the innovation supplied by a local company. At the exhibition in Ahmedabad, Inkera Inks will be in center stage alongside the leading Italian and Spanish companies. Rajkot based Inkera Inks is steadily increasing its production and market share in the competitive Indian digital ink and effects market and has now become a market leader. Four years since the start of production, Inkera’s monthly output is approaching 100 tons of high quality ink, and the company serves an impressive customer list in all ceramic sectors with wholly Indian developed technology. Inkera, led by the Detroja family of Morbi together with the Varmora Group, is based on 15 years’ experience in tile manufacturing and digital inkjet technology. It owes its rapid rise to its young team, led by Mayur and Devang Detroja, driving the marketing and technology. Their far-reaching vision is based on a family history in ceramic tiles that they see developing into the high technology decoration materials that are the basis for added value in this industry.

New Innovations

Inkera’s strategy of developing formulations based on Indian and Asian materials, together with close technical support for the customer and an ink portfolio reflecting Italian design trends allows it to enter every level of Indian tile production. In Ahmedabad this March, Inkera will be launching its new line of digital inclusion pigment inks with shades of Canary Yellow and Coral Red, as well as a new Aqua ink and surface effects. The new pigment inks have been developed in conjunction with Inkera’s Italian partners and for the first time in years offer tile factories the possibility of new designs with a coloration not previously available in the ceramic digital gamut. The inclusion yellow gives a stronger shade and is stable on all types of GVT glaze, while the red shade will allow reproduction of natural stone effects never before possible. Production trials over the past six months have proven the ink stability and readiness for launch. Devang Detroja, Director of manufacturing, insists that all production processes revolve around constant quality assurance and control. Not only are costs reduced in customer support, but wastage is kept to a minimum. “We test-print every batch of ink and we test all physical parameters of the work-in-progress on an hourly basis” he says. “End to end control allows competitive pricing”. “Inkera never stops developing” he adds, “we are constantly

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AC 17-2

evaluating new pigments as they become available. Our Rajkot R&D Center is equipped with all necessary equipment to produce trial batches and print them”. Printheads supported are Xaar 1002 GS6, GS12 and GS40, Fuji Dimatix Starfire, Seiko and Toshiba TTec. Inkera maintains strong links to the global industry. Warren Green, the CTO and a fifteen year veteran of digital printing for industry is constantly steering the technology and manufacturing processes. Equipment is sourced from leading world-side suppliers. Design, a crucial part of the company’s offering is guided by a longstanding partnership with the leading Italian company Stylgraph from Sassuolo, led by Maurizio Cavagnari. Inkera recently opened a design studio for customers and potential customers, where new trends are showcased and they can interact with the Design and Color Science team to get the most from the inks and the effects. The manufacturing facility in Rajkot has doubled in size since being opened in 2013, a necessary step to include the nano-milling equipment and tankage constantly being added, together with sufficient storage for the material stocks required. The laboratory is at the center of the plant, which is staffed by a young team of graduates in Chemistry, Electronics, Process Engineering, Color Science and Logistics. The company’s stability is due to the Marketing and Sales team led by Mayur Detroja. “We flow with our customers” says Mayur. “We are not dependent on any overseas head office, so we supply our customers exactly what they need at the right price, so they are always competitive in the markets they serve.” An air-conditioned warehouse in Morbi holds the stock for that market, in order to provide stability and a long shelf life. Customers in other parts of India receive product straight off the production line, guaranteeing freshness that cannot be matched by a long import supply line from Europe or China. “Our customers know our reputation for reliability” he adds, “and they know the depth of our commitment to innovation”. The Customer Support team works with R&D on the new shades or effects and then installs the ink, profiles it and introduces the new designs that take advantage of the innovation. Inkera’s reputation rests on its ability to control color variation and reduce wastage. All customers enjoy the same level of support, with Inkera licensed by Kerajet, EFI Cretaprint, TecnoFerrari and Projecta, and inks also installed in Hope, Keda, Meijia, NKT and other machines. “We see the world becoming more digital, not less”, says Mayur. “We intend to be the leading Indian ink company for all industrial inks in our market.”

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News

Contents: AC 17-2 News

Features

8 Inside Asia

32 The rise of Andhra Pradesh

A time to change…

12 Welcome

Vietnam looks for upturn.

14 Across The Continent

Openings, closures and industry moves from across Asia.

Whilst the focus of ceramics manufacture in India is always drawn towards Gujarat, the reality is that increasing investments are being played out across other areas of the country. AC looks into how Andhra Pradesh is picking up the pace…

40 Indonesian whitewares

22 International News Our eye on the international arena.

Jahir Ahmed discusses why one of the engines of the Indonesian ceramic industry has continued to struggle in the last 12 months and faces another tricky year…

26 Material Matters

56 Sanitaryware markets in North Africa

Raw materials news and views.

28 Comment & Analysis Bangladesh bricks remain "unmoved".

Yogender Malik looks at some of the key sanitaryware markets of North Africa and assesses their prospects in a changing political landscape.

68 Pigment pressures for China

AC talks to some of China’s leading pigment producers about how the sea-change in decoration across the whole ceramic industry is having an impact on the sector.

Your favourite magazine is now available at the App Store… download today to see your first sample issue! Asian Ceramics: now for mobiles, ipads and androids

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AC 17-2

Anaylsis 76 Talking Shop

AC looks at the myriad issues affecting the profitability and long-term viability of Pakistan’s brick industry, and discusses possible remedies to the current malaise.

78 Insight

Analysis and insight into Japan.

82 The Hunter And The Hunted

William continues to surf on his tide of optimism for 2017 whilst looking at what Mr D.J. Trump might mean in terms of Asia-US ceramic trade…

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Inside Asia A TIME TO CHANGE… Outdated technology is the single largest factor behind the poor performance of South Asian brick manufacturing industry. The question for countries in the region is how to improve technology, particularly in the informal sector, which is more interested in using cost effectiveness as a selling point. Across the region, each country is working on different policies, from banning inefficient and highly polluting kilns to developing new materials (hollow and fly ash bricks). But it is clear that as yet, the efforts have not obtained overwhelming success and there seems to be little in the way of joined-up thinking. The technology employed determines the fuel usage and economics of brick production from a brick kiln. The FCBTK – which produces more than 65 per cent of the bricks made in India – is highly resource-intensive. Clamp technology is equally polluting but because it does not have any fixed structures, the initial cost of setting up the kiln is very little, but fuel usage per unit of production is higher than FCBTK. The problems remain, but undoubtedly, this sector offers massive potential for modernization. The key to the issue is, when?

PEARL CASTING PLANT

MOULD DRYER

MULTI DECK WARE STORAGE SYSTEM

RAK CERAMICS

NEPTUNE’S INNOVATIVE DEVELOPMENT FOR SANITARY WARE INDUSTRIES

WET SCRUBBER SYSTEM FOR INSPECTION / DRY FINISHING BOOTH

eptune has introduced a new concept in the area of inspection & dry finishing by developing multiple booths integrated with common wet scrubber unit”. Conventionally these booths are connected with “bag filter unit / Exhaust Chimney” so that dust particles goes and gets settled in to it BUT over a period of time, bags of filter unit gets chocked and then real problems start as under,  Filtration efficiency of bag filter unit goes down and it starts creating back pressure.  This will ultimately results in poor suction of dust particles from booths and the whole area will become

un-interruptedly with practically no maintenance and helps in improving sent to ware house recovery. The dust particles collected in wet scrubber are also recovered fully, to be re-used in the body. So, it offers great saving in body cost too,

REJECTED WARES / PITCHER / CULL CRUSHING & DRY GRINDING PLANT

eptune has developed Pitcher Crushing & Grinding System which provides total solution from sorting line Conventionally in

most of the companies, Pitcher (Fired Reject) is primarily broken manually which is very unsafe and

dusty due to flying dust particles And then most dangerous situation will be sticking of these flying dust particles on glazed ware pieces  And ultimately, fired rejection percentage will be suddenly increase Hence after detailed study of this problem of industry, Neptune has introduced this new & innovative concept where the booths are connected with “wet scrubber” and here, all dust particles generates by the way of dry finishing process, goes to wet scrubber unit and gets settled by water jet spray effect and only clean air goes out from chimney duct. This new system keeps the area clean



The primary breaking & crushing of there is all possibilities of man hazard, WHOLE PITCHER is done by specially Broken pieces are further crushed designed GC TOWER & ROTARY using jaw crusher and then it is either SHREDDER. This offers crushed output given for land fill requirement or it of < 6mm and this crushed output is is further ground to fine mesh SAFE sent to continuous ball mill to get fine around 100 or 240 # to be DISPOSAL powder of 100 # or 240 # final output, used in fresh body as 100% to be used in fresh body as per per company UTILIZATION IN BODY company requirement. requirement, Hence after Advantages detailed study of this problem of industry, 1. No handling from sorting line. Neptune has introduced this new & 2. Zero disposal with 100% innovative concept where the WHOLE utilization PITCHER can be PUT to the system and 3. Cost effective at the end, you get fine powder. It is 100% 4. 100% Human Safety safe operation. It is cost effective too,

MODULAR MULTI DECK AUTO STORAGE SYSTEM WITH MANIPULATOR

ow a day in sanitary ware industries have big Problem for ware storage (Mainly Green ware & Glazed ware) Neptune has introduced a new trend for the storage of Wares by developing a ‘Multi Deck Chain Bench with Loading & Un-loading Manipulator’. If we are talking about existing problem for handling a Green pieces in sanitary ware industries as below.  Caster have only 1 day storage capacity at front of casting bench so caster has to move casting piece after one day than, Green ware had to store in transfer trolley which Trolley are stored in plant area so people has to use hidden capacity of plant  Required numbers of trolleys  Create congested environment inside the plant  Handling Rejection is higher due to

+ 91- 9687695944 PHONE : + 91- 2762 - 224551/224331

many times loading unloading in rack & trolley.  Caster efﬁciency will down Hence after detailed study of this

deck than chain will move by motorized and that piece will collect and transfer in 2nd deck with help of manipulator than in next cycle of casting, same manipulator will move 2nd deck’s ware in 3rd deck, 1st deck’s ware in 2nd deck so 1st deck is again ready for new casting pieces. So by way of this working method we can use in this chain bench in multi level 1. 2. 3. 4.

problem of industry, Neptune has introduced this new & innovative concept where we are providing Multi storage deck at front of Casting Bench which caster will de-mould the green ware in 1st

WEB : www.neptune-india.com

5. 6. 7.

E mail :

Advantages of the system Saving caster time for loading & unloading Saving caster physical effort Easy operation Saving of plant space which are hidden capacity of plant Less Quantity required of Transfer trolley Less handling loss Particular product can use as per market prospect

hardik.thaker@neptune-india.com ceramics@neptune-india.com

Welcome

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Convenience in setting up firms - such as free online business registration from the beginning of this year - will promote private investments into the economy, Minh said.

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OFFICIAL MAGA ZIN E:

After a year of record firm foundations, which is considered a silver lining although the country failed to meet its growth target, the Vietnamese Government has signaled ongoing determination to improve the business climate and national competitiveness this year. “I believe that business confidence will strengthen and help boost economic growth,” said Tran Thi Hong Minh, Director of the Business Registration Department under the Ministry of Planning and Investment.

ibe online at www.asiance

AC17-2

IN D IAN CE RAM ICS 2017 AH ME DABAD, IND IA

SEE INSIDE

IN FOCUS:

Indonesia: whiteware woes? The rise of Andhra Prad esh? North Afric an sanit aryw are China frits and glazes Plus news, views, analy sis and much more!

tak es Ink eralea d

the

According to the General Statistics Office, 8,990 new firms were founded in January with a total registered capital of VND90.3 trillion (US$4.01 billion), representing increases by 8.1 per cent and 52.3 per cent, respectively, over the same month of last year. Registered capital averaged VND10 billion, a whopping rise of 40.9 per cent. Existing firms registered to increase capital by a total of VND114.6 trillion in January, statistics showed. In addition, over 5,560 firms resumed operation, up by 14.2 per cent. The reform effort is being geared up across many sectors. Minister of Finance Dinh Tien Dung said that finance-related policies will continue to promote private investment and business foundation, especially start-ups. Dung added that the ministry will focus on issuing policies which will encourage the application of technologies to create high-added value products. The number of new firms hit a record of more than 110,000 in 2016, two years since the amended laws on Enterprise and Investment came into force. The ministry’s statistics showed that it now took an average of only 2.9 days to handle procedures for setting up a firm. All business registration status were now updated on a national information system.

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

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

RESEARCH

IT IS CRITICAL TO IMPROVE THE CLIMATE TO CREATE CONDITION FOR BUSINESSES TO GROW

However, new firms are mainly of small and medium sizes with the average registered capital of around VND8 billion. Tran Dinh Thien, Director of the Viet Nam Institute of Economics said that the record number of 110,000 new firms in 2016 was just a number. “It is more important how to develop strong private companies in the next five years, which will become the backbone of the economy,” he said. The tiger is snarling again… Happy reading!

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

HEAD OFFICE

Andy Skillen Publishing Director

Bowhead Media Ltd, 57 Oaks Avenue, Worcester Park, Surrey, KT4 8XE United Kingdom

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AC 17-2

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

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Roca to make “considerable” investment • RCL reports modest earnings increase • Argentina hits back on tile imp • Business park will boost ceramics • Consumer choice will drive industry recovery • Political tensions to affect cer hit by gas issues • Indian Ceramics & Ceramics Asia to set new records INDIA

Roca to make “considerable” investment With an eye on sourcing plastic products like toilet seats out of India, Spanish sanitaryware major Roca is planning to acquire a unit here and also planning to increase its market share in the mass premium segment, said a top official of the Indian subsidiary. He said the company will also increase its distribution network across the market segments. He said demonetisation has affected unbranded sanitaryware makers which in turn offers an opportunity for organised players. "Roca has 79 factories in the world and except in India it does not have plastics product factory in other countries. The Indian plant is sufficient to meet the domestic demand. Now there is a new thinking of sourcing plastic items out

of India," K.E.Ranganathan, Managing Director, Roca Bathroom Products Private Ltd, told select media here on Tuesday. "We will soon be signing an agreement to buy a unit making plastic components for automobile industries at Sriperumbudur near here. We need to make certain modifications before we can start making toilet seats and other products by this October," Ranganathan said. Declining to reveal the financial details of the deal, he said the acquisition is part of the company's overall annual capex plan of around Rs 100 crore. The Spain based Roca is around a Rs 13,000 crore group and the share of the Indian company is around Rs 1,000 crore.

According to Ranganathan, Roca in India is present in all the segments in the Rs 2,000 crore Indian sanitaryware market -luxury (Armani Roca), premium (Roca, Johnsson Suisse), mass premium (Parryware) and budget (Johnson Pedder). He said the company will be increasing its Roca brand sales outlets by 100 to 300 in two years; Johnson Peddar outlets by ten times to 5,000 outlets while there are around 6,000 Parryware outlets. According to Ranganathan, there are around 25,000 sanitaryware outlets selling unbranded products out of which around 10,000 outlets are potential points for selling Parryware branded products. He said the company sees good opportunity for its budget brand Johnson Pedder

as there are still lots of Indian homes that do not have a toilet. "We plan to redefine the sanitaryware buying experience for the customers in our outlets. Currently the sales are based on the product price at the outlets," Ranganathan added. Queried about the demand mix he said 60 per cent of the demand is from the new building segment and 40 per cent is from the replacement market. Ranganathan said the company is targeting a growth of 15 per cent for the next couple of years. With a total capacity of four million pieces, Roca in India would look at capacity expansion by 2018 as it is targeting a turnover of Rs 2,000 crore by 2020.

SRI LANKA

RCL reports modest earnings increase Leading floor tile and bathware manufacturer, Royal Ceramics Lanka PLC (RCL), made an earning of Rs.8.85 cents a share or Rs.980.3 million for the quarter ended December 31, 2016 (3Q17), recording a modest increase of 8.5 percent from a year ago, the interim results showed. The gross revenue grew by 14.9 percent year-on-year (YoY) to Rs.8.79 billion. For the nine months ended December 31, 2016, the RCL group made an earning of Rs.21.13 a share or Rs.2.34 billion, an increase of 10 percent YoY. This was on revenue of Rs.21.5 billion, which grew by 10 percent YoY. The RCL group, controlled by the business magnet Dhammika

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Perera, commands a virtual monopoly in Sri Lanka’s porcelain and ceramic tiles industry. However, the budget 2016 proposed to remove import tariff protection on domestic ceramic tile manufacturers, ending the monopoly enjoyed by RCL. This will also remove the items such as tiles, ceramics and sanitary ware from the negative list enabling the Board of Investment (BOI) companies to import the above items freely, as they enjoy tax breaks. “Despite the present protection, the tile industry faces intense competition from imports from China, India, Bangladesh and

Indonesia,” Bartleet Religare Securities has then said in its budget analysis. Meanwhile, First Capital Equities has said in a note that the tile sector might suffer from increasing competition stemming from lower margins and new entrants to the industry. RCL in January announced the company’s decision to replace one of the existing kilns in its Eheliyagoda factory at an estimated cost of Rs.978 million. The replacement process is expected to be completed in June 2017. After which, the company expects to increase its capacity and capability to produce large format cost-effective tiles. RCL in August ceased the

operations of its paints and allied products business by way of disposing of its fullyowned subsidiary, Ever Paint and Chemical Industries (Private) Limited. Meanwhile, the December quarter also saw a steeper increase in the finance cost as such has risen by as much as Rs.91 million to Rs.304.2 million. The nine months’ finance cost rose by 33 percent or Rs.208 million to Rs.845.6 million. As of December 31, 2016, Perera’s investment vehicle, Vallibel One PLC, had a 51 percent stake in the group while the state-controlled private sector pension fund, the Employees’ Provident Fund, had a 13.79 percent stake.

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ports • Sanitaryware boost from 2017 budget • Brique aims at efficiency drive ramics industry? • Marabi tile plant moves into production • Dhaka traders CHINA

Argentina hits back on tile imports The Argentina Ministry of Production (MINISTERIO DE PRODUCCIÓN) has issued Resolution 701-E/2016 which the unglazed tile imported from China to carry out the anti-dumping review of the investigation. The customs code of MERCOSUR products is 6907.90.00. The Resolution shall enter into force on the date of promulgation. This latest blow comes at the end of a long recent history of trade barriers. Back as far as January 25, 2013, Argentina's former Ministry of Economy and Finance decided that, on the products involved in antidumping final ruling, polished

tiles from China and unpolished tiles were levied 12.20 US dollars/ sq.m, 8.77 US dollars/sq.m of anti-dumping duties. On January 5, 2016, ILVA and CANTERAS CERRO NEGRO applied for a review of the environmental changes in the implementation of the anti-dumping duties. Even further back, on July 27, 2011, Argentina initiated anti-dumping investigation on the ceramic tiles imports from China (HS Code 69079000), following this In 2012, Argentina announced a five-year antidumping duty on Feb 21 on ceramic tiles from China ranging from $8.77 to $12.2 per square meter, the Ministry of Commerce

said. On August 28 that year, the State Secretariat of the Department of Economy and Public Finance delivered a notice to the economic and commercial department of the Chinese Embassy in Argentina, notifying that in accordance with Resolution No. 470 on August 27, Argentina decided to impose preliminary anti-dumping duties on the ceramic tiles imports from China (HS Code 69079000), tariff rate is US $4.62/m2. The resolution went into effect on August 28 and was valid for 6 months. In tableware, there is a similar situation. On August 4, 2008,

the Argentine Ministry of Economy issued Resolution No.187/2008, originating from China's ceramic tableware (porcelain and pottery dishes) anti-dumping investigation. Products involved in the case had customs HS codes 69,120,000 for the HS codes 69111010,69111090,69119000. This was followed in September 18, 2009, as Argentina originated in China's ceramic tableware and other household or sanitary porcelain in anti-dumping final ruling, with a minimum limit measures, valid for 5 years. This makes China the product concerned fixed the minimum export price FOB USD 4.65/ kg.

INDIA

Sanitaryware boost from 2017 budget The Union Budget 2017 has ensured that sanitation is one of the top priorities for the government in the next financial year. Significant developments with respect to the Swachh Bharat Mission and sanitation in rural areas are expected, based on the proposed budget allocations in these areas. Increasing the sanitation coverage of funds under the

Swachh Bharat Yojana from 42% to 60% for rural areas is a step in the right direction. The budget has proved that a constraint of funds will not impede infrastructure activities and the vision for a clean India. The granting of infrastructure status to affordable housing scheme is a welcome move to ensure the efficacy of the same. The decision can be expected

to increase the allocation of resources for the sector, which in turn will boost the housing supply. The allocation of Rs. 23,000 crore for the Pradhan Mantri Awas Yojana to reach the goal of 1 crore homes for the homeless by 2017 is one of the best points from the budget. The construction of more homes will provide an impetus to the sanitary ware

industry, and increase the demand for products. The increase in allocation of funds for MGNREGA, and target to increase the involvement of women under the scheme is commendable. As a result, more women will receive benefits from the scheme such as training and employment, especially in rural areas.

construction sector in recent years. Tunisian construction sector is slowly coming out of the slowdown of last few years as a result of the government's efforts to modernise and upgrade public infrastructure and residential buildings, the sector is expected to grow at an average annual rate of 5.5 % in 2017, well above the annual average of 3.7% of the period 2008-2015, which was driven by social housing programmes and growth in

foreign direct investments in the real estate sector in the country. Ideal Brique’s modernization exercise involved overhauling of the kiln and a complete overhaul of all existing automation, from cutting, loading and unloading of the dryer to stacking and unloading of the fired products. The firm’s flagship products are its floor block work packs, which the company can configure in three different ways to meet the market demand.

TUNISIA

Brique aims at efficiency drive Tunisia based Ideal Brique has modernized its heavy clay products in order to achieve better energy efficiency and increase the quality of finished products. The 1000 TPD plant of fired products is one of the largest in terms of size and output capacity ever built in Tunisia. Located at Beni Hassan, Ideal Brique is one of the most

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prominent names in Tunisian heavy clay industry. The company specializes in production of hollow and solid bricks for rapidly growing construction industry of Tunisia. Besides, domestic market the company also exports its products to other neighbouring countries in North Africa. Demand of high quality clay products has seen a steep growth in Tunisian

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News

OMAN

Business park will boost ceramics Omanâ&#x20AC;&#x2122;s first integrated light industries park, Sandan, has achieved progress in building the facility, which is spanning over an area of 250,000 square metres near Mabela. Talking to Times of Oman, Said Nasser Al Rashdi, chief executive officer of Sandan Development, said that structure of two to three buildings have been completed, out of 16 planned buildings. The project, which will cater to automobile and building material businesses, will open for customers by the third quarter of 2018. The purpose built shops are

mainly for automobile and building material industries and the total cost of the project is estimated at OMR100 million. â&#x20AC;&#x153;Construction related units include sanitaryware shops, ceramic tile shops and carpentry and aluminium workshops. As many as 4,500 units, including studio apartments, will be opened when the whole project is ready. Further, there will be other facilities like banks, money exchanges and restaurants. The average area of a workshop is 76 square metres, showrooms are of 96 square metres each

and studio apartments are 50 square metres area each. The front line of the project is planned to host 50 auto showrooms with a capacity of over 1,000 vehicles â&#x20AC;&#x201D; supported by workshops necessary for the industry. There will be more than 1,200 workshops offering repair, spare parts and other automotive requirements. The next division of the park will host building material showrooms, workshops for carpenters, blacksmiths, and aluminium and ceramic shops. The third division will host 400 office units for companies, which are based in the park.

The project will include 1,800 residential units for workers as more than 10,000 people are expected to live within the area. It will also feature facilities such as hypermarkets, restaurants, hospitals and mosques. Taking further steps to make sure the work progress goes smoothly, Sandan built a plant for ready-mix concrete inside the project location with a capacity of 500 cubic metres a day. The total number of workers engaged now at the project is 700 people and is expected to increase to 2,100 in the near future.

PAKISTAN

Consumer choice will drive industry recovery Consumer-centric quality standards, better services and marketing will determine which companies will remain in the Pakistani market a decade later. Consumers in Pakistan have started giving premium to better quality and better services in Pakistan. For instance, the craze for three-year-old used cars is not because of price, which is higher than the prices of a similar brand new version produced in Pakistan. The consumers in fact pay for the extra gadgets installed in imported used cars. The air bags give them a sense of security; the rear view camera makes reversing easier and safer for the drivers. Similarly, consumers find that electronic gadgets and automatic transmission reduce a lot of burden on the driver. Domestic manufacturers of cars have not added these features for a long time, fearing that the consumers may not be able to bear the additional cost. When they realised that the chunk of the market had been lost, these gadgets were added in some of their high end versions. However, they still do not dare to introduce these features in small cars. This perhaps is the reason that the import of below 1000cc used cars has increased

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in the country. Our first industrial policy was based on import substitution. This meant we established small manufacturing units of same products that were being imported in the country. In order to ensure use of locally manufactured goods, we slapped high tariff on the imports of similar items. The domestic industries, based on import substitution minted money off that protection. Most of the large corporate sector flourished on that protection. The huge protection or total ban on imports of protected products ensured heavy profits and monopoly for them. Absence of foreign competition also meant that they could enjoy the luxury of compromising on quality and service. These entrepreneurs were caught by surprise when the Pakistani market was opened to foreign products at very low tariffs. The quality of the imported products naturally was better than the similar products produced in Pakistan. Consumers paid higher price for better quality. The domestic industries started losing their grip on the market. However, even this did not prompt local manufacturers to make better products, up to the global standards. Today, we even

find imported products like shampoo and toilet soaps cheaper than similar products made in Pakistan. The same is the case in ceramic tiles. Manufacturers allege that tiles are imported at very low rates and importers save huge sales tax, making their products cheaper. However, Italian tiles, even after under-invoicing pay the same sales tax as the local producers pay. The difference is in quality. The Italian tiles are sold at three times the price of Pakistani or Chinese tiles. Pakistan could have competed globally had it improved the quality of its tiles to Italian standards. When quality is produced, it is not possible for under-invoiced items to grab the local market. The motorcycle tyre market in Pakistan is dominated by locally produced tyres. Indian underinvoiced tyres are occasionally imported but they lack quality. Pakistan in fact is exporting motorcycle tyres to dozens of destinations in Europe, Africa, and Asia on the strength of quality. Industries first produce top quality for home market and then scale up to venture into foreign destinations. About a decade back, imported televisions from Japan dominated the Pakistani market. Today 90 percent of

television market is in the hands of domestic producers. Some of them have ventured into exports as well. They have well developed service centres to address the complaints of the consumers. In textiles, the country concentrated on exports only and neglected the domestic market. The result of this policy was that 85 percent of textiles produced in the country were exported and only 15 percent consumed in Pakistan.

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News

CHINA/INDIA

Political tensions to affect ceramics industry? Actions just coming to light have thrown fresh question marks over the changing trading relationship between India and China. On 8th October, 2016, a village court at Obra panchayat in Aurangabad, Bihar banned all Chinese goods from being bought or sold in the region in the wake of China’s support of Pakistan on the recent Uri attack. The gram kachahri has also branded China an enemy for its stance on Pakistan (and Kashmir) and passed a consensusbased provision that will see people punished in case they are found violating this order. Officials have said that a fine would be imposed in such a case. This is the first time that such an action has been taken in this eastern Indian state. The village has a population of at least 10,000 people and this order is expected to affect the prospect of Chinamanufactured products in the region. Officials such as Gudiya Devi, Sarpanch of the Obra village panchayat, and Baban Mehta feel that this decision would weaken the economy of China. At present, there are around 24 shops in Obra that sell products made in China. During the festive season in 2015 the value of Chinese

goods sold in the village ran up to around lakhs of rupees. Most of these goods are toys, plastic products, fancy lights, decorative goods and gifts. Goods made in China are especially popular in the rural parts of India, since they are cheaper than the ones made in India. What has happened in Bihar can rightly be regarded as a microcosm of what is going in the rest of India, what with many people calling for a ban on goods made in China. Recently, the district administration in Sagar, Madhya Pradesh has placed a ban on importing firecrackers from other countries. The decision has come after a notification provided by Petroleum and Explosive Safety Organisation (PESO) on 27th September. In fact, the District Collector has also provided orders to each and every police officer and Executive Magistrate to check various shops and go-downs of firecrackers to make sure that they are not keeping any such stuff in a clandestine manner. Similar orders have also been passed in the following districts by collectors: Indore/ Uj ja in/ R at l a m/S haja p ur/ Khandwa/Gwalior/Bhind The Ujjain Municipal Corporation (UMC) banned

the sale of products made in China on 4th October for the occasion of Kartik Mela, a fair that is organized over 25 days and is expected to have more than four lakh visitors. On 9th October, the Swadeshi Jagaran Manch (SJM) had organized a demonstration in Bhopal against Chinese products. Activists belonging to SJM, too, said the same thing that the officials in Obra have said – terming China as the top enemy because of its support for Pakistan. They have also called for people to buy goods made in India. In fact, a number of BJP leaders are known to have strict reservations – to put it mildly – against Chinese products being sold in India. One of the most prominent names in this regard is Kailash Vijayvargiya, who happens to be the National General Secretary of the party. While one can understand the reasons behind such decisions, there are a few aspects that have to be highlighted as well. First of all, it is expected that before such major festivals – celebrated by a huge majority in India – this decision would act as a major boost for Indian manufacturers who have so far seen their higherquality products left unsold

because of the acheaper Chinese alternatives. The Indian economy is at such a critical stage that it needs the manufacturing sector to thrive and do so for the longest term possible. Thus, when the Chinese products are off the market Indian buyers will have to use the Indian ones. What has started in Obra is significantly much more important than what is being done in Delhi and Madhya Pradesh considering the fact in the former, there is a blanket ban on all Chinese goods and in case of the latter, it is just the firecrackers. The decision in Obra will give much breathing space to the local manufacturers who are critical to the longterm well-being of the national economy. Manufacturing is one sector, which has now become primary in an Indian context and if Indian goods are offering better quality then definitely the inferior products available at cheaper rates need to be banned. What also needs to be seen in this context is how far this movement spreads, the extent to which it affects the prospect of Chinese products in India, and the effect it has on China’s support towards Pakistan.

RUSSIA

Marabi tile plant moves into production On January 24, the Marabi plant LLC designed to produce floor and porcelain tiles was officially put into operation in Kumtorkalinsky district of the Republic of Dagestan, the press service of Dagestani Head and government administration reported. The project, which was launched in April 2013, is designed to produce floor tiles and porcelain tiles. The full-process production involves the delivery of raw materials, the manufacture of tiles and automated packaging. The

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ceramic tiles are being fabricated using Italian pigment and porcelain enamel that provides high consumer characteristics and the best price-quality ratio. It should be noted that the high quality of the production, its compliance with the Russian and international standards is confirmed by the official certificates, technical certificates and expert opinions. The production of Marabi factory will be delivered to the regions of North Caucasus Federal District, Moscow and as well

as Kazakhstan, Azerbaijan and Turkmenistan. The competitive advantage of Marabi factory will become its high quality and relatively a low price. Dagestan Prime Minister Abdussamad Gamidov, being an adviser of the investment project, has inspected the implementation of a plant construction since 2013. The project capacity of manufactory is over 2 million square metres of tiles per year whilst total investment in the project amounted to almost 1.5

billion rubles. The entire process is automated: from preparation of raw materials to products packaging. The 75 job places were also created. Marabi plant intends to launch a second production line in 2018.

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BANGLADESH

Dhaka traders hit by gas issues The merchants of boiler tubes, ceramic tiles and sanitaryware products in Dhaka remain let down by the government, as the downturn they have experienced in the last two years continues. The government ban on gas connection to industries has hit these vulnerable businesses very hard while the downward trend in freight made a big dent in the sale, the traders have stated. Visiting the markets in Suritola, Siddique Bazaar, Nawabpur Road and Hazi Osman Gani road area across the capital, it became evident. According to the businessmen, rise in package VAT on shops located in Dhaka and Chittagong City Corporations from Tk28,000 from Tk14,000 for the current fiscal year is a burden for them. The retailers and wholesalers said they supply MS Pipe, Semles, SS & PVC Pipe, Gas Valve, Steam Valve, Boiler Fitting, Ceramic and Sanitary goods to different parts across the country. Md Afzal Hossain Hiron, a proprietor of Afzal Trading Corporation, said he had been in the business over the past few

years, but never faced such a situation earlier. “Once I made a sale between Tk1 lakh and Tk1.5 lakh on a day, but those are bygone days. Even some proprietors are forced to close their shops as they have failed to pay their employees.” Afzal shared his experience by saying that over the past couple of days he could not make any sale while around Tk1 lakh is spent per month on shop rent. “However, recently we have encountered more business cost than what we make as profit.” The trader added that they are not happy as they did not witness any proper initiative by the government. Earlier, “Bebosayi Oikkya Forum” held rally closing their shops in Dhaka Mohanagar, protesting the new VAT law which imposes a uniform 15% VAT on all types of products and services. On anonymity, a merchant said harassment of buyers in loading and unloading of products by the police is also another reason for the nosedive in sale. The lawmen are also alleged to seize products if buyers don’t

pay money as per their demand over parking van or truck on road to load products. Asked about it, Officer-inCharge (OC) of Bongshal Police Station Nur-e-Alam Siddiqui refuted the allegation. Md Murad Hossain Tipu, Al-Aksha Trading proprietor, said the country’s economic condition is not well. The government runs the state on debt and so the VAT fixed in this fiscal year has been increased that has affected general people, added the trader. According to Md Shohel Rana of M/S Ananda Trading, the dullness on their business is a spillover effect of global economic recession, plus nonstop strike by opposition parties in previous year. Md Abdus Salam, proprietor of Green Agency, alleged that some local businessmen do not pay them on time. They purchase goods on credit but get away without paying. “For this reason, new traders cannot continue their business.” However, the country’s ceramic industry, which has employed around 5 lakh workers, has

so far invested Tk5,000 crore and witnessed 200% growth in the last five years, according to Bangladesh Ceramic Wares Manufacturers Association. Currently, there are over 50 local industries that meet the local demands and export products to many other countries. All these industries are involved mainly in production of tableware, tiles and sanitary ware. Ceramic trader Rony Sarker said: “We have no language in this regard. We are facing much trouble with our families over the business downturn. We are waiting to get the moment back.” Bangladesh Pipe & Tube-well Merchant’s Association President SM Akkas told the Dhaka Tribune that the recession is actually going on in all business sectors across the country. He also said increase in VAT, License fee and price of different goods put a heavy pressure on their business. Akkas, however, called for proper initiatives to ensure a favourable business climate. “We are hopeful that our business will thrive again.”

INDIA

Indian Ceramics & Ceramics Asia to set new records Approximately one month before it is due to begin, Indian Ceramics & Ceramics Asia has set a new record in the amount of booked exhibition space, according to organisers, Messe Muenchen GmbH. To meet increased demand, the trade fair for the ceramics industry in Southeast Asia, which already increased the amount of space it occupied in 2016, had to do so again. From March 1 to 3, visitors at the Gujarat University Exhibition Centre in Ahmedabad will find the Who's Who of the domestic and international ceramics industry on more than 11,000 square meters of exhibition space (2016: 9,500 square meters). Besides the latest industry solutions that are tailored to the Asian market, visitors can also look forward to a unique supporting program.

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All well-known companies in the ceramics industry have registered for Indian Ceramics & Ceramics Asia 2017—many of them requesting more space than organizers had expected. On more than 11,000 square meters of exhibition space, visitors can gather information about the entire value chain in the ceramics industry, from classic to high-tech ceramics, from some 250 exhibitors. Among other things, industry giants such as Colorobbia, Cretaprint, De Boer, Dorst, Eirich, Esmalglass-Itaca, H&R Johnson, Imerys, Netzsch, Sabo, SACMI, Sibelco, SITI B&T, Smalticeram, Smaltochimica, System, Torrecid and Verdes will be represented in Ahmedabad. The number of international exhibitors participating in this year's fair in particular has increased by another 20 percent.

Dr. Robert Schönberger, Exhibition Group Director for ceramitec & Indian Ceramics, is pleased that interest among companies is so high: "Even now, the number of registered companies is already higher than the final number from last year. The increased number of exhibitors underscores the fair's significance for the southeast Asian ceramics market." Besides the fair, visitors attending Indian Ceramics & Ceramics Asia can enjoy the added value of a first-rate supporting program that includes the Innovation Exchange Forum, the cfi Ceramic Forum International Workshop, the I-Bart Workshop and the new Buyer-Seller Forum. This combination of a trade show and a forum program is unique for the industry in this region. The Innovation Exchange

Forum is a know-how forum where the latest trends and new technologies in the ceramics industry are introduced in bestpractice presentations. This is the fourth time that the forum is being held in conjunction with the fair. To provide trade visitors and other interested parties with the best possible information, topics are selected in close cooperation with industry partners in India. Renowned speakers from the industry, from trade associations and above all from the show's exhibitors will lead visitors through the program in 30-minute slots. The title of the first I-Bart Workshop is "Mechanization of Traditional Indian Clay Brick Industry: Challenges and Opportunities." It takes place from 10:00–13:00 on March 3, 2017.

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International News

Sacmi reaches new heights in 2016 Spain

United Kingdom

acmi has strengthened its position on the Spanish market, with sales in 2016 higher than those in the previous year, demonstrating that Sacmi continues to be esteemed by long-standing customers and is more than capable of attracting new ones, even in technological areas traditionally dominated by competitors. This, then, was the conclusion reached by the Group Ceramics Division’s analysis of its performance in Spain, one of the world’s top five ceramic-making nations and, along with China and Italy, responsible for two-thirds of global exports. A look at the data for the Spanish market shows that the increased sales regard all the machine types in the range, from energyefficient EKO kilns (a total of 17 over the two years, 9 in 2016) to hydraulic presses (in total 11 machines sold in 2016, 25 in the two years assessed); key orders have been placed for high tonnage presses specifically designed to handle large formats. Note also the 7 multilayer driers sold since the beginning of the year (out of a total of 17 horizontal and vertical driers sold during the two-year reference period). Following the excellent feedback obtained at the Tecnargilla fair in Rimini - in terms of both interest shown and the flow of visitors to the Sacmi stand - the Group continues to lead the Spanish market in the ceramic body preparation field: 7 modular mills of varying size and dimensions were sold between 2015 and 2016, plus 4 spray driers, including the all-new ATM 250, a next-generation machine launched this year and specifically designed to meet the needs of the Spanish market. All orders were placed by customers of primary importance, such as the Cenusa-Stylnul Group, which this year started up a spraydrying plant with the first ATM 250 and two modular MMC 180 mills. Then, of course, there was the Pamesa Group, a key player on the Iberian market, a colossus based in Almassora, in the Castellón

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della Plana district: following their takeover of Tau Ceramica, they deemed Sacmi to be the provider of the world’s best technology for all the main ceramic-making machines and thus selected it to complete a plant engineering overhaul of the historic Taulell brand. In addition to the all-new ATM 250 – the second such machine sold on the Spanish market – Sacmi also supplied PH 6500, PH 7500 and PH 10000 presses, thus covering virtually the entire range of solutions for the efficient production and management of large tiles. Completing the Pamesa-Taulell order were three large-capacity driers (the 33.9-metre ECP 307) and the same number of EKO kilns (with 3500 mm intakes) of different lengths. Note also Pamesa’s decision to place its trust in Sacmi as regards handling and storage: an area which, even though competitors have always been particularly strong, now sees Sacmi as the provider of the most effective, efficient technology currently available on the market (LGV vehicles supplied by SacmiNuova Fima manage all handling of both unfired/fired products and packaged/palletized products). Similarly, in 2016 Baldocer, another top player on the Iberian market and a Sacmi customer since 2014, completed its installation of the CONTINUA+ line, the revolutionary Made in Sacmi compaction technology that allows raw materials to be transformed into decorated ceramic slabs of varying size and thickness directly from raw materials. With this new order, then, Sacmi now has two CONTINUA+ solutions installed in Spain (the other was completed at the end of 2014 at Inalco) and some thirty such solutions installed worldwide with leading manufacturers. Going back to the Spanish market, the two already-up-and-running solutions will, in 2017, be joined by a third CONTINUA+ line commissioned by Living Ceramics, a new Sacmi partner that sees this technology as essential to manufacturing highadded-value, great-looking slabs.

It should also be pointed out that, during 2016, Colorker completed a major renewal of its existing lines; this project included the purchase of an all-new Sacmi EKO kiln and two 28.2-metre horizontal 5-channel driers. In addition to the projects completed with these new partners, in 2016 Sacmi continued to supply all its customers acquired over the years, including highcalibre names such as Porcelanosa, Argenta, Ceramica Saloni and Peronda. More specifically, Porcelanosa, already a longstanding purchaser of Sacmi machines, decided to give Sacmi the task of renewing its entire handling system for the Monker factory. Ceramica Saloni, instead, is investing in an all-new factory in which Sacmi is the key partner for the entire plant, from presses to drier and kiln (including the sorting machine and the squaring/ chamfering system) and, again, the handling and end-of-line solutions. “These results”, explains Claudio Marani, General Manager of the Sacmi Group, “have a dual meaning. On the one side, Sacmi has maintained performance levels with long-standing customers as regards the machines with which it has traditionally led the industry (presses, kilns and driers). On the other, gaining the trust of customers new and old also as regards product handling solutions reinforces and extends the Sacmi Group’s role as an all-round supplier, as the handling market has traditionally been dominated by competitors. This year, then, lays the foundations for a ‘repeat performance’ of these outstanding results in 2017, in terms of both quantity and quality of sales”. This competitive advantage – highlighted by these recent orders from Spanish producers – goes beyond technology to include service. This is because of the Group’s unique capacity to provide customers with close support right from the design stage and supply fast spare parts and assistance services throughout the working life of machine and plant.

aar Technology Group headquartered in Cambridge, UK, is pleased to announce the appointment of Lily Liu as Chief Financial Officer, Company Secretary and Director of the Board from Tuesday 2 May 2017. Lily has spent the past four years at FTSE 100 Smiths Group PLC, where she has held a number of senior financial and management roles. Most recently, from 2014 to 2016, Lily was CFO of the Smiths Detection Division, with reported revenues of £526m for financial year 2016. Prior to this, Lily was Director of Financial Planning and Performance Analysis at the Group level, reporting to the Group Chief Financial Officer. From 2005 to 2012 and before joining Smiths, Lily was with Edwards Ltd. Edwards, the world leader in the manufacture and supply of industrial vacuum systems, was part of the FTSE 100 BOC Group Plc until 2007, when it was acquired by private equity firm, CCMP. In 2012, Edwards had revenues of over £500m and listed on Nasdaq. From 2007 to 2012, Lily was the Finance Director for Global Operations, reporting to the Group Chief Financial Officer. Prior to that Lily held a number of other finance and management roles across the Edwards business and in the BOC Group. Lily has an MBA from the Australian Graduate School of Management and a BA in Economics from Shanghai University of International Business and Economics. Lily is a chartered management accountant. Doug Edwards, Chief Executive, commented: “The Board is delighted that Lily chose to join Xaar. Lily’s experience in fast moving Business to Business environments and her expertise in M&A, Operations and R&D means she brings a fantastic range of skills and experiences with her. We are confident she will make a valuable contribution as Xaar continues its progress toward the vision of generating annual revenues of £220m by 2020.”

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International News "Au Revoir" to plastic tableware France

ou’re sitting at a cafe in Paris, waiting for your food. Sunlight and shadow dapples your table as you view the street scene that surrounds you. Your waiter approaches, carrying a mouthwatering croissant...on a plastic plate with plastic utensils. Excusez-moi? If the thought of using plastic tableware doesn’t seem particularly apropos for a country known for its culinary craft, you’re not alone—France is about to ban plastic cutlery, plates and cups. But the ban is not about preserving the country’s notorious foodie culture, it’s all about the environment. Petrequin reports that the measure went into effect last month and will eliminate disposable dishes from nonbiologically sourced, compostable

materials by the year 2020. Given the environmental impact of plastic cutlery and plates—one 2014 study found that between 22 and 36 tons of floating plastic debris, including cutlery, is removed in a single year from the Seine alone, and 25 percent of the volume of trash in dumps is plastic—you’d think the ban would be occasion for a toast in a glass or bio-plastic champagne flute. But not everyone is excited about losing plastics in France. Take the plastics industry: the ban has raised industry hackles and questions about whether it goes against European Union laws that allow goods to freely move throughout the EU, “The European Union needs to tackle this abuse of EU law by France,” Eamonn Bates, who represents Pack2Go Europe,

a European plastics trade association, tells McCormack. Bates tells Petrequin that the association plans to bring legal action against France for the ban, which he claims will mislead consumers into littering with bio-sourced cutlery with the idea these plastics will readily degrade. The ban is the first nation-wide bar on plastic tableware, and advocates say it’s not a moment to soon. The act is an outgrowth of the country’s Energy Transition for the Green Growth plan, a set of environmental measures designed to curb climate change. It’s part of a suite of actions, including banning disposable plastic bags, changing the way the French sort their trash and tackling food waste throughout the country. Now that France is turning to

eco-based disposable goods, you’d think the environmental impact of that café croissant would be mitigated. But not so fast: It turns out that using disposable goods of any kind wastes more food. Lab studies show that the more disposable the plate, the more food people feel they can waste, and food waste has a direct impact on the environment and climate. Maybe the best thing to do is abandon throwaway plates, cutlery and cups altogether—it could make that leisurely Parisian meal as guilt-free as it is delicious. For ceramics manufacturers across Europe and beyond, the news, of course, is hugely welcome and if there is a similar take-up elsewhere, then this could become the single biggest positive influence on the sector for many years.

Leaching tests “probed” over possible errors Europe

he European Commission’s Joint Research Council (JRC) has published a report on its investigations into measurement of metal leaching from ceramic tableware into food or food simulants. The 1984 ceramics Directive sets migration limits into food for lead and cadmium. Recent research by the European Food Safety Authority (Efsa) has prompted the European Commission to consider tougher limits, the JRC report says. Limits on other metals such as arsenic, chromium, cobalt, copper, manganese and nickel may also be on the agenda. The report is one of several projects the JRC is undertaking to support revision of the Directive. It investigates the most representative way to measure migration from ceramics, using a sample of 73 pieces of tableware. Three methods were compared: • using 4% acetic acid as a food simulant at 22°C for 24 hours, with the procedure repeated three times to represent a

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repeated use regime; • using 0.5% citric acid as a simulant for two hours at 70°C, repeated three times for consecutive migrations; and • accelerated testing using a ‘conditioning’ treatment with 10% acetic acid for five hours at 22°C, followed by a single migration in 4% acetic acid for 24 hours at 22°C. The release of metals into tomato sauce was studied as a benchmark food for comparison. The report concludes that, in general, the release of metals was higher into citric acid than into acetic acid, and migration was higher into either of these simulants than into tomato sauce. The migration profile into acetic acid, however, was more representative of that into the sauce. Accelerated testing showed that the conditioning step led to releases well above the level in the third migration in the repeated 4% acetic acid test. The impact of a lag phase

between consecutive tests was investigated and whether containers kept in storage for a long period leached more on reuse. However, both of these procedures made little difference.

Other metals found to leach from the ceramics included aluminium, iron, zinc, cobalt, lithium, barium, manganese, vanadium, antimony, titanium, chromium, nickel, copper and arsenic.

STA buys ADI Italy

he acquisition of ADI Group by Surfaces Technological Abrasives S.p.A., a leading company in the ceramic tile honing and finishing tools market, was finalised on 22 December. The large global group created through the operation will become the major European player in the metal and resin bonded diamond tool sector with a complete range of products for wet and dry machining of ceramic tiles of all sizes and a 2017 turnover of more than 60 million euros. Founded in late 2010, Surfaces Technological Abrasives rapidly

established itself in the sector through its ongoing R&D efforts in the field of new industrial processes and its range of high-productivity, cutting-edge products. At its headquarters in Cenate Sotto (Bergamo) it also produces grinding wheels, rollers and protective brushes for cutting and polishing, while the laboratory at its Sassuolo branch is responsible for developing new products for honing ceramic tiles in close collaboration with the leading machinery and glaze producers and end users. It has two foreign branches, one in Brazil and the other in Portugal.

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News

Raw Material News ILUKA CITES “BIGGEST” LOSS; CUTS JOBS

Australia // Zircon Mineral sands miner Iluka Resources has flagged the biggest loss in its 20year history under new chief executive Tom O’Leary, after logging $201 million of pre-tax writedowns at its Murray Basin assets and a workforce review that will see it cut 90 staff. The announcement came with the news that its recent $425m acquisition of Sierra Rutile and its Sierra Leone mine will not be delivering as expected. On top of the write-downs, Mr O’Leary flagged a tough 2017 because Sierra Rutile would see higher costs than expected and lower volumes. “As a consequence of mine schedule changes at Sierra Rutile over the period prior to Iluka taking control, lower ore grade will be encountered this year,” he told investors yesterday.

“The 2017 financial year will be more challenging for volume and costs. We are addressing this through a revised mine plan.” He said the mine was expected to be back on track in 2018. Iluka said it would declare a 2016 after-tax loss of between $220m and $230m because of the write-downs, which were $141m after tax. Mr O’Leary also flagged increased rehabilitation provisions. Iluka reported annual production of 667,000 tonnes of zircon, rutile and synthetic rutile, just beating 2016 production guidance of 660,000 tonnes. The miner, the world’s biggest supplier of zircon, has told customers it will be increasing zircon prices by about $US50 a tonne, following a $U60 boost in the third quarter. Iluka’s average premium zircon price for 2016 was $US810 a tonne, down from $US986 in 2015.

BASE SETS H1 TARGET FOR ZIRCON SEARCH Tanzania // Zircon Australian specialist miner Base Resources has said that it plans to start exploratory drilling in Tanzania in the first half of this year. It is also conducting drilling to determine whether the life of its $305 million Kenyan titanium mine might be extended, Managing Director Tim Carstens told a conference call with reporters in Nairobi. The project, Kenya's largest mining investment, is in the coastal region of Kwale and has roughly eight years left to run. "We should be in a position to hopefully declare an additional resource, which will mean an extension of the Kwale mine life," Carstens said. Base Resources said it expected to produce between 450,000

to 480,000 tonnes of ilmenite this year, compared with 455,870 tonnes produced in the year to June 30, 2016. The projection is unchanged from its July 2016 forecasts. Its production of rutile is expected to be 88,000 to 93,000 tonnes, up from 85,654 tonnes in the last financial year. In July, it had a forecast of 88,000 to 95,000 tonnes. It expects to produce 33,000 to 37,000 tonnes of zircon, compared with 31,389 tonnes in the last financial year, trimming its July forecast of 35,000 to 40,000 tonnes. Zircon output will be boosted from the production of 8,000 to 10,000 tonnes of low grade zircon, made from re-processing secondary zircon ore.

ALTECH COMPLETES MINE PROPOSALS Australia // Kaolin The Company submitted a mining proposal (MP) and mine closure plan (MCP) to the Department of Mines and Petroleum (DMP) on 1 December 2016. At Meckering, Altech is planning to mine approximately 140kt of kaolin ore in two-month mine campaigns every three years. The resultant kaolin ore will be stockpiled on site, then containerised into standard shipping containers at the rate of about 45ktpa and shipped to Johor, Malaysia via the port of Fremantle, Western Australia. The relatively low annual tonnage of feedstock required for the HPA plant means that the Meckering mining will be a simple quarry-style campaign operation with no blasting required. The mine plan, pit design and associated Ore Reserve for the proposed Meckering mine confirms a 30-year mine life at Meckering, providing

over 1.2Mt of high-quality, alumina-rich kaolin feedstock to supply the proposed HPA plant. Altech managing director Mr Iggy Tan said, "The submission of the mining proposal and supporting mine closure plan marks another important step in the development of the HPA project". The Company's Meckering mining lease M70/1334 is located about 150km east of the port of Fremantle and 8km south-east of the town of Meckering, Western Australia. The tenement is accessible via a number of well-maintained gazetted public roads providing direct truck access to the Great Eastern Highway. Haulage of the ~45ktpa of kaolin ore from the Meckering site to the Malaysian HPA plant will be undertaken by Altech's all-inclusive freight partner, Seatram.

EUROPEAN LITHIUM AIMS FOR CERAMIC MARKET Austria // Lithium European Lithium has made significant progress in its aim to fast track production from its Wolfsberg Lithium Project in Austria. Although the main aim is to produce battery grade lithium carbonate and hydroxide to feed into an integrated lithium to battery supply chain in Europe, management has been cognisant of the potential to supply spodumene concentrate to the European glass-ceramic market. Early production of concentrate would generate cash flow whilst the downstream lithium conversion plant was being developed. At the same time, like all speculative mining stocks, there is no guarantee of cash flow at this stage. Seek professional financial advice before investing. The company has been testing the effectiveness of laser sensor sorting and Dense Media Separation (DMS) with promising results and Chief Executive, Steve Kesler commented, “The successful use of sensor sorting to reject waste dilution from Run of Mine is important for the economic mining and processing of the generally narrow pegmatite veins at Wolfsberg”.

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Kesler highlighted that test work has shown that it is possible to produce a spodumene concentrate of 5.3% Li2O through DMS and magnetic separation of the coarsely mineralised amphibolite hosted pegmatite. Early production through a simple and low capital cost process opens up the potential to fast track lithium sales into the European glass-ceramic market. Samples of this concentrate are now being assessed for suitability by a leading European producer. Kesler said that over the next three months the company would be working on the production of a 6% Li2O spodumene concentrate by flotation and magnetic separation and its conversion to battery grade lithium carbonate and hydroxide. The conversion test work will be carried out in parallel with the flotation test work using the DMS concentrate already produced. Dorfner Anzaplan, Germany, a group with extensive experience in the field of lithium processing has been engaged by EUR to undertake the metallurgical optimisation programme.

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News

Bangla brick sector remains â&#x20AC;&#x153;unmovedâ&#x20AC;?

asian ceramics

t has been observed after six months of the deadline set by the government that nearly 90 per cent of the brickmakers have not updated their production process in keeping with new environmental regulations on fuel, location and use of brick kilns. The Bangladesh Environment Ministry says that a total of 6,637 traditional and modern brickfields are currently in operation in the country. A report by the Bangladesh Centre for Advanced Studies (BCAS) says that only 735 of these brickfields follow the new regulations. The brick business owners say that the remaining traditional kilns will gradually be phased out. Many of the country's brickfield owners have also begun questioning the regulations. The brick business owners say that though older kilns are being converted, they are not given permission to run business because they cannot follow every regulation. Brickfield owners warned that one million workers might be out of work, if the regulations are followed strictly. The BCAS Executive Director said that the brick-makers were given until Jun 30, 2016 to replace the traditional kilns with modern ones. He said: "Our research says 88.65 per cent of brickfields have not obeyed the law". It is illegal for children to work in the brickfields, but there are child labourers who are earning their living by working at brick kilns. As per BCAS statistics, 1,745 of the brickfields in Bangladesh started operations before obtaining any licence. Though the government has regulated the use of modern kilns to combat air and environmental pollution, brick-makers have been reluctant to phase out the older kilns because of profit concerns. According to BCAS statistics, 17.12 billion bricks are manufactured every year in Bangladesh. The amount of earth required for it stands at about 58.38 billion tonnes. Wood or coal is used to fuel the traditional brick kilns. The permanent chimneys are, at best, 120 feet high. Bricks are made during six months in a year - November to April. The smoke released from these chimneys damages the ozone layer and

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pollutes the surrounding areas of the brickfields. The government instituted the Brick Making and Brickfield Establishment (Control) Act 2013 as demanded by environment activists, banning permanent chimney brickfields. At a "Green Brick Convention" arranged by businesses, the country's Finance Minister encouraged the brick-makers to take the advantage of their duty-free facility and convert older brick kilns to modern ones. On the other hand, the owners complained that simply replacing the traditional kilns was not enough to satisfy regulators. The regulation concerning the position of kilns would deny them permissions, even if those were converted, the owners said.

OUR RESEARCH SAYS 88.65 PER CENT OF BRICKFIELDS HAVE NOT OBEYED THE LAW Many are refusing to abandon traditional kilns because of the less availability of brick making raw materials. A partner of Messrs Atik Bricks said that brickfields in Khulna, Noakhali, Lakshmipur and many other areas were yet to shun traditional kilns. He said the permanent chimneys were especially being used in areas where wood was widely available. But the senior secretary of the Bangladesh Brick Manufacturing Owners Association says he doubts the numbers reported by the BCAS are correct. "I believe the report based on faulty sources presents the figure 88 per cent. Most brickfields in Comilla, Chandpur and Narayanganj have already been converted". The association's Vice President also expressed his dismay at the

strictness of the new regulations. He said it is impossible to follow the regulations on transportation and location and run a successful brick business ground. He said, "Why 88 per cent? I thought 99 per cent of brickfields would be illegal". The proprietor of the ARB Enterprise Brickfield in Dhamrai says legal restrictions have prevented him from taking the advantage of the available protection. He said, "We have taken steps to build zigzag kilns for six years, but because of new regulations from the environment ministry, we have not been granted protection. This has created a production slowdown," he said. He also expressed his concern about the public loans granted for construction of modern kilns. "In order to pay the interest on the Tk. 550 million loans, Rangpur Naz Auto Bricks would have to produce 120,000 bricks a day. Do you think more than 100,000 bricks can be sold in an area like Rangpur?" he asked. The owners say the demand for bricks is increasing because of the growing construction work in Bangladesh. Bricks worth nearly Tk 25 billion have to be imported a year. The owners say that Bangladesh could meet the demand itself, if 'restrictions' were relaxed. The director general of the environment ministry questioned the BCAS report that said 90 per cent of the brickfields were non-compliant. He said, "I do not know what sources environment activists are using for their report, but it is incorrect. According to the environment ministry's calculation, almost 63 per cent of factories have already adopted modern methods". Legal action would be taken against those who were yet to comply with, he said. "Recently seven brickfields have been demolished in the Khulna area. Environmental mobile courts are operating in Barisal and Patuakhali," he added. Currently 700 other brickfields are continuing operation after challenging the government order at the High Court. The environment department says there is nothing to do with those fields "for the time being" - so they continue to run in their own fashion.

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Upgrading brick plants in India

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Analysis: Andhra Pradesh

The Rise of Pradesh South East industry set to soar

ased on the South Eastern coast of India, state of Andhra Pradesh has emerged as one of the hottest destination for ceramic manufacturing in last few years. A number of organized sector ceramic players have entered into the state by setting up their manufacturing plants with smaller players or have acquired stakes in already functional ceramic manufacturing units in the state. Ceramic consumption in the state is expected to register huge growth in coming years on the back of a number of investment and construction opportunities in the state. Amaravati, a futuristic capital city is being built from ground up in association with Japan and Singapore. Furthermore, the upcoming three industrial corridors across the state are set to provide a great boost to the ceramic production and consumption in the state. The Government of Andhra Pradesh has undertaken multiple forward looking initiatives to facilitate investments and boost construction sector, which will boost the ceramic industry in the state. Kajaria Ceramics, Cera sanitary ware, H & R Johnson and a number of other organized sector players have realized the importance of having a manufacturing presence in a state, which is often termed as a ‘gateway to South India’. In addition to these organized sector players, a number of smaller players have entered into ceramic manufacturing in the state in last few years.

Bifurcation

We have considered undivided state of Andhra Pradesh in this article. The erstwhile state of Andhra Pradesh was bi-furcated into two states of Telangana and residuary Andhra Pradesh state in early 2014. The epicenter of commercial and construction activities, Hyderabad, the erstwhile capital of undivided state of Andhra Pradesh has gone to the state of Telanagana.

A-P importance

With a population of about 50 million, state of Andhra Pradesh

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is among the leading consumers of ceramic products in India. Rapid industrialization, higher disposable incomes and hub of a number of industry verticals ( IT industry & Pharmaceutical sector) has made the state one of the largest consumer of ceramic products in the country. In addition to its own ceramic consumption, the state is gateway to larger Southern region of the country. Most of the Indian Southern states do not have enough ceramic manufacturing units to meet their captive demand. To a large extent, state of Andhra Pradesh is the gateway to most of the ceramic products to Tamil Nadu and states of Karnataka and Kerala. South India is the area encompassing the Indian states of Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, and newly created Telangana as well as the union territories of Andaman and Nicobar, Lakshadweep and Puducherry, occupying 19.31% of India's total geographical area. Accounting for one fifth of country’s population, the region accounts for 31 % of the ceramic tile consumption and 33 % of the total sanitary ware consumed in the country. On account of high per capita consumption of ceramic tiles and sanitary ware in the region, south India has always been the most important market for ceramic products producers of the country. Anticipated demand of ceramic products in coming years due to healthy construction pipeline in the region is likely to keep the region as highest consumer of ceramic products for a number of years in future. All the above mentioned factors make Andhra Pradesh as one of the most important places in country’s ceramic industry. Though, there is no doubt that Gujarat is the most important state in Indian ceramic map, but the future potential of ceramic manufacturing in Andhra Pradesh looks most promising among all other Indian states. South being the largest market for tiles, is an intenselycompetitive region with branded and unorganised players and Chinese imports. While leading tile makers such as Kajaria and H&R Johnson have plants in the Andhra Pradesh ( or extended South Indian region), rest of the organised sector producers and Gujarat

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Analysis: Andhra Pradesh

Andhra

South Indian states & major ceramic consuming cities State

Population

Area (in Square Kms)

% of Urban Population

Major Ceramic consuming cities

Andhra Pradesh

49,506,799

160,205

29.4 %

Amravati. Vishakhapatnam, Vijaywada, Guntur, Nellore, Kurnool, Kadapa and Tirupati

Karnataka

61,095,297

191,791

34.0 %

Bangalore, Mysore, Mangalore, Gulbarga, Belgaum, Bellary, Bijapur and Hubballi

Kerala

33,406,061

38,852

26.0 %

Trivanthapuram, Kochi, Kozhikode, Kollam. Kannur and Thrissur

Tamil Nadu

72,147,030

130,060

44.0 %

Chennai, Coimbatore, Madurai, Salem, Erode, Tiruppur, Tiruvallur and Tirunvelli

Telangana

35,193,978

114,840

38.7 %

Hyderabad, Warangal, Khammam, Mahbubnagar, Nalgonda and Suryapet

based producers have been spending heavily on freight to cater to the southern market. Speaking to Asian Ceramics, Samrat Patel, owner of Maruti Gold Tiles in Morbi told, “In last two years it has become very tough for us to bid for the projects in state of Andhra Pradesh or Southern region due to high freight costs for ceramic tiles. ”

A second home?

Realizing the importance of state of Andhra Pradesh, leading organized sector players such as Kajaria Ceramics, Cera Sanitary ware and H & R Johnson have invested in setting up their manufacturing units in the state of Andhra Pradesh in last few years. In fact, two of the country’s top producers, H & R Johnson and

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Kajaria Ceramics have invested in two manufacturing units each in the state. Kajaria Ceramics has recently acquired a 51% stake in Floera Ceramics Pvt. Ltd, which is putting up a manufacturing facility of polished vitrified tiles with a capacity of 5.70 million square meters per annum at Nellore in the state. This plant is expected to be commissioned by April 2017. This would be the second plant for the company in Andhra Pradesh. Somany Ceramics, another leading producer of ceramic tiles has expressed its interest in setting up a manufacturing plant and has even zeroed in on a few locations. But, slowdown in the market in last two years has forced the company to go slow on its Andhra Pradesh plans.

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asian ceramics

Analysis: Andhra Pradesh

Robust infrastructure

Andhra Pradesh has robust infrastructure comprising good road and rail network, 4 major ports, 4 active airports and 24X7 power for industrial/ commercial use. Additionally, the state is creating a land bank of one million acres to facilitate industrial development of various industries including ceramics. Mega projects like Visakhapatnam-Chennai Industrial corridor (VCIC) and Chennai-Bengaluru Industrial Corridor (CBIC) will help develop new economic centers in the state, giving fillip to ceramic production and consumption. The state has been rated as the top state in the country for ease of doing business by World Bank and Govt. of India in its latest ranking, up from 2nd position the earlier year. The state offers quality power, robust industrial infrastructure, large industrial land banks, excellent connectivity and availability of a skilled workforce – ingredients of a vibrant and globally competitive investment destination.

Raw materials

There is a huge potential for the development of ceramic industry in the state due to abundant availability of quartz, quartzite and clay resources. The state holds leading position in the country in production of barites, limestone, mica and silica sand in the country. The state holds about 93% share of India’s barites reserves, about 30% share of India’s heavy mineral beach sand reserves, about 18% share of India’s bauxite reserves and over 19.6 MT of limestone resources. Workable deposits of fire clay, ball clay, china clay and ordinary clay are available in Adilabad, Ananthapur, Cuddapah, East and West Godavari, Mahabub Nagar, Kurnool, Nalgonda, Guntur, Nellore, Prakasam, Srikakulam, Visakhapatnam and Vizianagaram districts of Andhra Pradesh. The total estimated reserves of clays in the state are around 21 million tonnes. Fire clays in Adlilabad and East Godavari Districts are being used in sanitary ware and stone ware industries. China clay and ball clay occurring in Ananthapur, Kurnool, Cuddapah, Nellore, Nalgonda, West Godavari and Guntur districts are being used in different sub-segments of ceramic and refractory industries. Ordinary clay is being used in manufacture of Mangalore tiles.

THE STATE HAS BEEN RATED AS THE TOP STATE IN THE COUNTRY FOR EASE OF DOING BUSINESS A new Ceramic City?

In 2016, Andhra Pradesh’s Chief Minister announced the establishment of ‘Ceramic City’ in the state on the lines of Morbi in Gujarat. The government is planning to set up a ceramic industrial township in an area of 3 thousand acres in either Godavari or Krishna district of the state. The Chief Minister held meeting with the industrialists from Morbi and invited them to start industries to manufacture sanitary ware and ceramic tiles. The Chief Minister explained the availability of resources like uninterrupted power supply, abundant gas, water, land and mineral resources for ceramic production in the state. Chief Minister mentioned about the availability of soil, limestone, quartz and silicon sand in Andhra Pradesh needed in the manufacturing of ceramics. He also mentioned that the state possesses highly skilled manpower and elaborated on the ease of doing business with the state. When the industrialists brought to the notice of the Chief Minister regarding the problems of gas supply, the Chief Minister said that the government is in the process of setting up LNG terminal at Kakinada sea port and the works of the gas pipeline are being done at a quick pace. He added that creation of smart cities and

Leading ceramic producers in Andhra Pradesh Company

Products

Location

Capacity

Sanitary ware

Bibi Nagar

2.2 million pieces/ year

Tiles and sanitary ware

Smalkot ( East Godavari district)

30,000 sqm/ day 3500 pieces/ day

Kajaria Ceramics

Tiles

Nellore and Vijaywada

8.2 million sqm from two units

Cera Sanitary ware (Anjani Tiles)

Tiles

Nellore

3.7 million sqm

Sentini Ceramics (JV with H & R Johnson)

Tiles

Krishna Dist

9.2 million sqm

Silica Ceramics (H & R Johnson)

Tiles

Tadepalligudem

9.63 million sqm

Hindustan Sanitary ware Industry Limited ( HSIL) RAK Ceramics

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Analysis: Andhra Pradesh

the increasing urbanisation along with increase in the use of tiles in house building will create enormous demand for ceramics in the state and wider region.

Hindustan Sanitary Industries Limited (HSIL)

Hindustan Sanitary ware Industries Limited is the largest ceramic sanitary ware producers in India. With a cumulative manufacturing capacity of 3.8 million pieces of sanitary ware products from its two plants located at Bibi Nagar in Telangana (formerly Andhra Pradesh) and Bahadur Garh in the state of Haryana, the company is known for its quality sanitary ware products. HSIL entered into state of Andhra Pradesh by acquiring an existing sanitary ware producer, Krishna Ceramics Limited in 1989. Later, HSIL expanded sanitary ware manufacturing capacity at this plant in various stages. Currently, the company is undergoing an expansion exercise at both of its sanitary ware plants. “Both the plants at present are undergoing Brownfield expansion as we are adding one lakh pieces ( 100,000) module at Bahadurgarh and 3-lakh piece ( 300,000 ) module at Bibinagar plant,” according to Sandip Somany, Joint Managing Director, HSIL Limited.

RAK Ceramics India

One of the largest global ceramic tile manufacturing company, UAE based RAK Ceramics operates its ceramic tile and sanitary ware manufacturing units in the state of Andhra Pradesh. RAK Ceramics started its operations in India in 2004 and setup its own manufacturing plant in Samalkot in 2005. The company claims that it has one of the most modern vitrified tile manufacturing plant in the country with manufacturing capacity of 30,000 square meters of vitrified tiles and about 3,500 sanitary ware pieces per day. As part of the ongoing process of modernizing and automating its sanitary ware manufacturing plants, the RAK India installed a new tunnel kiln to give a boost to its facility in Smalkot in 2016. The installation of the new kiln increased plant’s installed capacity to 3500 pieces per day from the earlier 3000 pieces per day. The company also installed a new robotized glazing line. The new glazing line consists of a fourposition carousel with an eight-axis robot, interfaced with a glaze flow feedback control system. The system provides manufacturers with personalized spraying parameters (e.g., glaze flow rate, spray aperture, misting) to suit the different models being coated. The company claims, “Around 80 per cent of our products are premium high end products offering the best quality and value for money. It is in contrast to the competitors whose primary manufacturing of vitrified tiles is of standard technology.”

Kajaria Ceramics

Kajaria Ceramics, one of the largest wall and floor ceramics tiles in the country, currently operates one ceramic manufacturing plant.

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Though, by the end of coming September, company’s second tile manufacturing plant too would become operational. Kajaria is investing INR 1500 million for setting up a polished vitrified tiles making plant near Nellore in Andhra Pradesh. The plant would have the capacity to produce 5.70 million square meters of tiles. Currently, the construction of plant is advanced stage and company is in process of installing the equipments. Earlier, Kajaria Ceramics had acquired 51% stake in Vijaywada based Vennar Ceramics Ltd in April 2012. Vennar Ceramics has an annual capacity of 2.30 million square meters of high end ceramic wall tiles. The company commenced commercial production at this facility in July, 2012 and started operating at full capacity in 2015. Kajaria Ceramics, which closed last financial year ( 2015-16) with revenues of INR 2448 crores has an installed capacity of 68.6 million square meters of ceramic tiles from its nine manufacturing plants located across the country. The upcoming tile plant will be its tenth in the country and will take the company’s overall installed capacity to 74.6 million square meters per annum.

Cera Sanitary Ware

Leading sanitary ware producer from organised segment, Cera Sanitary ware has joined the bandwagon of organized sector players investing in state of Andhra Pradesh by acquiring a 51 % stake in a newly formed ceramic tile company Anjani Tiles. The acquisition was completed in 2015. The JV’s production facility is located at Nellore in the state and has an installed capacity to produce 10,000 square meters of vitrified floor tiles per day. The entire production of the plant is sold under Cera’s brand name. According to Mr. Bharat Mody, strategic advisor at Cera Sanitary ware , “Anjani Tiles has been a good move in a very positive direction for the company. We signed up the joint venture with a 51% stake for us in late 2015. Within five month, Anjani Tiles started commercial production (1st of April 2016 ) and achieved a capacity utilization of 90% by June 2016.” Mody further adds, “We are also investing more in upgrading the technology to help us developing manufacturing capabilities of glazed vitrified tiles and double charged tiles. We are expecting to complete this modernization exercise by June 2017.” "South is a major market for us. And with new capital of Andhra Pradesh, Amaravathi being announced we see greater scope with increased construction activity there. Also, Andhra Pradesh has announced subsidies to encourage businesses to grow," according to Vikram Somani, of CERA Sanitary ware Ltd. "Of the total production at new facility, about 50 per cent is consumed in Andhra Pradesh, driven by boost from new city Amaravathi. The plant is close to Ennore and Krishnapatnam ports, hence exports too would be conducive in future," according to K V V Raju, chairman of Anjani Tiles Ltd.

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Analysis: Andhra Pradesh

Ceramic tile consumption in Southern States 2011

2012

2013

Sanitary ware consumption in Southern Indian States 2014

2015

2011

2012

2013

2014

2015

Andhra Pradesh

64.2

70.7

75.1

79.6

85.1

Andhra Pradesh

2.30

2,34

2,38

2.40

2.43

Karnataka

45.3

49.1

53.0

58.1

63.3

Karnataka

2.39

2.43

2.48

2.52

2.57

Kerala

21.8

23.3

25.1

27.0

29.7

Kerala

1.12

1.14

1.17

1.19

1.21

Tamil Nadu

57.6

60.1

62.5

65.9

69.7

Tamil Nadu

2.36

2.38

2,41

2,45

2.48

Total

188.9

203.2

215.7

230.6

247.8

Total

8.17

8.29

8.44

8.56

8.69

Unit- In million square meters

H & R Johnson

H & R Johnson has the highest installed capacity of ceramic tiles in the undivided state of Andhra Pradesh. The company has its manufacturing presence in the state through two manufacturing units. Sentini Ceramics, H & R Johnson’s first venture in the state is a 50 : 50 joint venture between H & R and Sentini Ceramics Private Limited. The JV has a state-of-the-art floor tiles manufacturing plant at Chigurukota in Krishna district of the state. The company was incorporated in 2002 and the first phase of the plant was commissioned on 2004. Sentini manufactures ceramic floor tiles under the brand name of “Johnson”. Currently the company has installed capacity of 9.125 million square meters of tiles per annum. Struggling with underutilization of installed capacity, Sentini Ceramics has started utilizing its optimum capacity from mid of last years. Profitability of the company had suffered in 2015 due to non availability of natural gas. However, with the availability of natural gas and significant reduction of process losses and process defects resulting in increase in total production and improved percentage of premium quality tiles. The other manufacturing unit, Silica Ceramics is a majority owned unit of H & R Johnson. Incorporated in 2007, Silica Ceramics Private Limited is a producer of vitrified tiles. It is a 99.63% subsidiary of H & R Johnson. Silica’s manufacturing plant is located at Tadepalligudem, Andhra Pradesh. Based out of Andhra Pradesh, SICPL supplies vitrified tiles to the southern markets especially in Andhra Pradesh and Tamil Nadu. At present it has an installed capacity of 9.63 million square metres of vitrified tiles per annum. In 2016, the company carried out a de-bottlenecking exercise at this plant. With the implementation of coal gassifier plant and availability of natural gas post debottlenecking, Sentini Ceramics has been able to achieve significant reduction is production cost.

Somany Ceramics

Somany Ceramics could be a possible new entrant in the state of Andhra Pradesh in near future. The leading tile manufacturer is scouting for right location in Andhra Pradesh to set up its south factory. It had even initiated talks with the Chandrababu Naidu-led government to acquire lands for the proposed unit. “South is definitely a region where we would like to have a unit. But it also depends on the availability of raw material and gas. However, I will not rule out south at all. It’s a preferred destination as far as Somany is concerned,” according to Chairman and Managing Director of the company Shreekant Somany.

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Noida-headquartered Somany has two factories, one each in Gujarat (Kadi) and Haryana (Kassar), with a total manufacturing capacity of about 22 million square meters of ceramic tiles per annum. Besides, it has additional capacities through joint ventures and outsourced business in Gujarat.

Fuel price hike to hinder progress?

The power sub-committee of the Andhra Pradesh Chambers of Commerce and Industry Federation (APCCIF) has taken strong objection to the tariff hike proposed by the Southern and Eastern Power Distribution Companies Limited (discoms), saying that the industries, particularly small and micro units, would be hit hard by the increase. While the discoms claim that the hike was only 3.79 %, it would be between 11% and 20% for industries with a load factor of just 20%. These small units constitute a vast majority of the industries situated in A.P., said APCCIF General Secretary P. Bhaskar Rao and sub-committee members Ch. Koti Rao and T. Parthasarathy. Addressing the press here on Monday, Mr. Bhaskar Rao said the power cost would be as high as 30% to 40% across the slabs. “By conceding the discoms’ plea, the A.P Electricity Regulatory Commission (APERC) would be doing a great disservice to the industrial sector.” He said the discoms’ request to the APERC to raise the tariff was shocking as on the one hand they were receiving different awards for their operational excellence and on the other pleaded with the APERC for hike in tariffs. “Had they (discoms) been really high achievers, the tariff hike could be avoided,” Mr. Bhaskar Rao observed. Mr. Koti Rao said the discoms had come up with a proposal to increase the demand (fixed) charges from around Rs. 385 per KVA to Rs. 1,000. This would be extremely burdensome for the consumers. T. Parthasarathy, another member of the APCCIF panel, said a huge number of small enterprises in A.P. were suppliers to anchor industries in Telangana because Andhra Pradesh had a negligible presence of such big manufacturing industries. The A.P. industries incurred 2% additional expenditure on that count. The power tariff hike would compound their woes, Mr. Parthasarathi said, adding that A.P. had higher tariffs than other southern States.

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Analysis: Whiteware

Indonesian whiteware difficult times as growth stagnates Jahir Ahmed discusses why one of the engines of the Indonesian ceramic industry has continued to struggle in the last 12 months and faces another tricky year…

ndonesian translucent whitewares, mainly kaolin based porcelain and bone china tablewares and high quality porcelain or similar quality sanitarywares and tiles, are experiencing a hard time following increase of production cost and stagnant growth in consumption at the domestic markets. Indonesia’s quality porcelain, bone china and stoneware tablewares that introduced the Southeast Asian country all over the world as a major ceramic manufacturer are currently faced with a number of problems due to high cost of burning natural gas, wages, rawmaterials, continued currency depreciation and logistics. Indonesia is currently one of the world’s major ceramic manufacturing, exporting and consuming countries. Indonesia Ceramic Industry Association (ASAKI – Asosiasi Aneka Industri Keramik Indonesia) said the ASEAN region’s well reputed Indonesian tableware industry has almost no growth since 2014, the last best year for Indonesian ceramics, when the production was estimated to be about 290 million pieces by the tableware factories, members with the organised sector’s apex trade body ASAKI. The factories were under-utilised. Higher cost of production has marred demands at the domestic retail markets. Quality sanitaryware manufacturers are also facing challenges in planning expansion, while tile makers are in trouble with inventory of three months’ unsold stock. “Almost all sectors of ceramics are affected by the higher cost of production following increase of natural gas prices, one of the main inputs in ceramic production,” ASAKI Chairman Elisa Sinaga told Asian Ceramics. ASAKI estimates that production costs in Indonesia's ceramic industry could come down by one third if the government revises gas price reasonably for industrial usage. Sinaga said Indonesian ceramic producers currently pay an average US$9.1 per MMBTU (million metric British thermal units) for ceramic production, which is nearly double than that of some other neighbouring countries. This difference makes Indonesian ceramic products less competitive. The gas price accounts for between 30 and 40 percent of total ceramic production costs in Indonesia, explained Sinaga. Sinaga informed that sales in the nation's ceramic industry had already fallen by roughly 30 percent in the past two years, 2015 and

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2016. In combination with the 40 percent year on year decline, the picture is horrible. As against sales target of 400 million square metres for 2016, more or less only about 350 million sq meters was possible, against the available production capacity of 550 million sq meters for the year. Sinaga said Indonesia's ceramic stakeholders are still waiting for the government to keep its promise to lower gas prices. Lower gas prices will not increase ceramic sales immediately because of the current slowdown in the market, it could avert more layoffs in the ceramic industry. A longer waiting might be disastrous, said Sinaga. Meanwhile, Indonesian President Joko Widodo is looking for importing gas for industrial consumption. Industry Minister Airlangga Hartanto said the government has approved the import scheme seeking to meet the demand for cheap gas and stimulate domestic economic activities. Indonesian economy has been suffering due to the decline in demand and price of domestic commodities, palm oil, coal, oils and other natural resources, from 2014 resulting in decline of demand in property sector and household consumptions, said ASAKI. The ceramic manufacturers are now waiting for price revision shortly. Earlier, Hartanto, said his ministry is expecting to provide industrial ceramics and glass with gas at prices below US$6 per MMBTU in 2017. Industry sources said the state owned gas supplier PT Perusahaan Gas Negara (PGN) is preparing for the development. Currently, the gas price for ceramics is different according to location. Per MMBTU, the price in West Java is US$9.17. In East Java it is $8.06. For North Sumatra the price is $12.4. ASAKI demanded for a reasonably uniformed price all over the country for better economic and industrial balance nationally. Cost of ceramic manufacturing becoming relatively higher not only because of higher cost of gas, labor, logistics and imported rawmaterials, the Indonesian factories have also become vulnerable to fierce competition without regular upgrade of production efficiency by inducting latest technology, especially for manufacturing whitewares. Older tile production lines need modernization, while the purchase of new production plant and equipment are needed for sanitaryware sector. Capacity of sanitary ceramic facilities in Indonesia have

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Analysis: Whiteware

Indonesia ceramic industry’s total output Ceramic commodities

2012

2013

2014

2015

2016 Est

Tableware in million pieces

275

290

Sanitaryware in million pieces

4.7

5.1

5.4

5.1

Tile in million sq metres

390

430

440+

440=

350

Roofing tile in million pieces

120

130

120

100

Source: ASAKI compiled. Source: ASAKI compiled. Asian Ceramics note: No accurate/reliable data of total ceramic industry of Indonesia is available even with ASAKI. Organised sector’s association ASAKI does not monitor product-category wise real data of capacity, production, consumption and trade (domestic supplies, exports and imports). Data of a significantly large unorganized sector of SME (small and medium enterprises) is ignored although its influence on the markets is substantial.

reached its maximum, said the industry sources The production of tableware ceramics, on the other hand, has not been operating at full capacity, the sources in ASAKI suggested.

Golden days

Till 2014, Indonesia’s advantage over other ASEAN countries was mainly due to large market potential and lower production cost as the country provided cheaper wages, subsidized natural gas and average grade kaolin from domestic sources. A potential market size is still there but slower growth of GDP affected growth of consumption since last two years; on the other hand the cost of production is rising continuously following continued increase of wages. The price of natural gas has increased substantially as the country has started to discontinue subsidy; and lastly the dependence on expensive import of rawmaterials. including quality kaolin, have reduced Indonesian ceramic manufacturers’ competitive edges. ASAKI said since 2015 the ceramic manufacturers have been suffering from exorbitant and unviable prices of gas and also from shortage of gas supplies. ASAKI is crusading against the government’s unusual price increase. Currently it has 63 companies as members, of which only 47 are ceramic manufacturers, while 16 others are suppliers to the ceramic factories. Among the 47 manufacturing members, 29 are tile companies, 12 are tableware

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makers, 3 companies manufacture sanitarywares and the remaining 3 organisations produce roofing tiles. Outside organized sector, there also exists a vast army of small and medium enterprises (SME) for production and export of whiteware ceramics Java, Sumatra, Bali, Kalimantan and other islands. Those many hundred strong producers, particularly, potters, still have some sort of command in their domestic and export markets, but with disappointing profit. A major part of export earnings of tablewares come from the shipments of SME potteries and small tableware manufacturers, who are also rivals in the domestic markets against the organized sector with large and higher-medium operators with modern plants.

The other side

Indonesia’s total active tableware production capacity is over a billion pieces per year. Many of the tableware makers are OEM suppliers to the global brand owners. Currently, Indonesia exports over 30,000 tons of tablewares a year of worth about US$120-130 million, more than a half of Indonesia’s total ceramic ware export earnings. One third of the export receipts is shared by the SMEs and other unorganized small operators, who are not members with ASAKI. They have their woes unheard when domestic and export markets disappoint them with little return owing to fall in prices. Geneva based International Trade Centre (ITC) monitored statistics

AC 17-2

asian ceramics

Analysis: Whiteware Indonesian ceramic tableware and sanitaryware production capacity Ceramic commodities

2012

2013

2014

2015

2016 Est

Tableware in million pieces

275+

290+

Sanitaryware in million pieces

4.7

5.1

5.4

5.4+

Tile in million sq metres

390

430

480-500

550-570

580

Roofing tile in million pieces

120

130+

show Indonesia exported over US$114 million worth of tablewares in 2015, of which, $91.33 million was earned by HS code 6911 category or porcelain and similar products. In previous two years, annual exports reached $127 million. In 2014, shipments of porcelain and china type products earned $109 million. Under organized sector that has 12 large manufacturers of tablwares, including foreign investment units like PT. Doulton Indonesia (UK), PT. Narumi Indonesia (Japan), PT. Hankook Ceramic Indonesia (South Korea), PT. Haeng Nam Sejahtera Indonesia (South Korea), and Indonesia’s market leader PT. Sango Ceramics Indonesia and also several manufacturers’ group PT. Kedaung Oriental Porcelain Industry (KOPIN), are pushing ASAKI to put pressure on the government to reduce gas price by about a half to US$4-5 per MMBTU to remain competitive in the domestic and world markets. ASAKI’s three Japanese operated sanitaryware manufacturer members, PT. Surya TOTO Indonesia, American Standard Indonesia PT, and PT. INAX International (INA Sanitaryware), are also worried about their future expansions in Indonesia to cater their global consumers. Rising production cost led lower demand in Indonesia has forced sanitaryware factories to go for production control to avoid rise in inventories. Decline of production was inevitable as the domestic demand remained stagnant and imported cheaper products showed market expansion.

Slower growth

Indonesia performed badly in 2016 when its production declined to 350 million sq metres of tiles, a record low in recent years, according to ASAKI. The association chief Sinaga blamed the lower demand of the Indonesian tiles in the domestic market following slower GDP growth in two years at about 5 percent, a year, and the higher price of Indonesian tiles as a result of higher production cost due to the government’s increase of gas and other energy prices. “Since 2014, the Indonesian economy has been suffering due to the decline in demand and price of commodities, such as, palm oil, coal, oils and other natural resources, resulting in fall of demand in property,” said ASAKI. “Cost of manufacturing such as energy, labor, and logistics is relatively high, while regulation is not in favour of investors, hence the risk of investing in Indonesia is still high,” ASAKI noted. Indonesian sanitaryware production also declined in 2016 to 5.1 million pieces from the previous two years’ level of’ 5.4 million pieces. Sinaga said that the utilization of the country's tableware ceramics' production capacity is currently at 95 percent and has therefore still room for growth without needing major capital investments. Particularly, production facilities located in East Java can grow due to sufficient gas supplies.

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AC 17-2

PT. Sango Ceramics Indonesia Location: Semarang, Indonesia Products: Porcelain, stoneware and bone china hotelware and household tablewares Markets: Domestic and export markets Others: PT Sango’s porcelain, stoneware and bone china hotelwares are meeting domestic demands and exporting to many countries. Its bone chine plant is producing, specially white ranges, for the hotel and restaurant industries. PT. Hankook Ceramic Indonesia Location: Pasar Kemis, Tangerang, Indonesia Products: Porcelain and fine bone china hotelwares and household tablewares Markets: Domestic and export markets Others: PT Hankook Ceramic Indonesia is a leading quality manufacturer of tablewares with a production capacity of one million pieces per month. It produces bone china, vitrified fine china, porcelain and stoneware dinnerwares and gift items. PT. Haeng Nam Sejahtera Indonesia Location: Bogor, Indonesia Products: Porcelain, fine bone china and stoneware tablewares Markets: Domestic and export markets Others: Brand - Haengnam PT. Lucky Indah Keramik Indonesia Location: Jakarta, Indonesia Products: Ceramic stoneware dinnerwares Markets: Domestic and export markets Others: Lucky Indah Keramik produces ceramic stone dinnerwares. Deep plates, bowls, flat plates, cups and saucers with different sizes. Also hand-painted items, white wares, decorated items, soup plate with embossed designs on brown body, etc. PT. Indo Porcelain (Inti Indokeramik Widya) Location: Tangerang, Indonesia Products: Porcelain hotelwares and household tablewares Markets: Domestic and export markets Others: Decades old Indo Porcelain is one of Indonesia’s major manufacturers of hotelwares and household tablewares. Its white porcelain products are on the market offering a broad choice of shapes, glazes and decorations. It also manufactures OEM for many of the world’s leading tableware brands.

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Analysis: Whiteware INDONESIA Import statistics: 2013 – September 2016 Volume Import (kg)

Category

2013

2014

2015

Value Import (USD) Est. Jan-Sep 2016

2013

2014

2015

Est. Jan-Sep 2016

Tiles (HS 6907 & 6908)

605,563,167

830,092,444

857,297,937

767,294,379

138,748,197

169,370,323

159,230,275

138,092,617

Sanitary ware (HS 6910)

11,595,269

11,765,743

10,337,825

43,177,866

11,463,049

15,916,983

10,181,069

8,065,475

Tableware & Kitchenware (HS 6911 & 6912)

10,348,075

12,324,036

7,989,954

8,786,053

3,227,505

3,236,203

2,242,123

2,375,376

Source: KSO SCISI (through ASAKI)

PT. Doulton Indonesia (Wedgwood Royal Doulton) Location: Tangerang, Banten, near Jakarta, Indonesia Products: Porcelain and bone china hotelwares and household tablewares under the Royal Doulton and Wedgwood brands. Markets: Domestic and world markets Others: Nearly whole of the outputs are exported worldwide. PT. Narumi Indonesia Location: EJIP Industrial Park, Cikarang Selatan, Bekasi 17550, Indonesia Products: Bone china hotelwares and household tablewares Markets: Domestic and export markets Others: The hotelwares produced in the Indonesian plant of the Japanese Narumi are supplied to the hoteliers worldwide.

Per capita ceramic consumption is still low in Indonesia. It is considerably below Thailand and Malaysia. This implies there remains ample room for growth, particularly as the middle class segment of Indonesia is expanding rapidly.

Obstacle course

ASAKI Chairman Elisa said there is serious absence of supporting industries while regulation is not in favour of investments. As a result long time investment is faced with risks, because, Indonesia’s competitiveness is declining, he said. Industry sources said if the situation continues, the domestic market shares of local products will decline from the existing 90 percent. Foreign investors in Indonesian whiteware sector is skeptical about the future prospects. In last three decades, the investors, particularly, in tableware and sanitaryware manufacturing, enjoyed spectacular profits and expansions as Indonesia offered a highly competitive costeffective production base. Existing investors say things are changing now. TOTO Indonesia’s President Director Hanafi Atmadiredja said long term investment is affected by higher production cost. In last four years, the average minimum monthly wage has more than doubled. ASAKI compiled data show average minimum monthly labour wage was Rp.2.780 million in 2014 (US$1=Rp.12,502). Average minimum wage increased to Rp.3.120 million in 2015 ($1=Rp.13,864), rising further to Rp.3.480 million in 2016 ($=Rs.13,060). In 2012, it was Rp.1.700 ($1=Rp.9,685), after an increase by 9 percent. Since past several years, higher prices of natural gas in different

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AC 17-2

PT. Kedaung Oriental Porcelain Industry (KOPIN) (also IKAD Ceramics and KIG) Location: Pasir Kamis, Tangerang, West Java, Indonesia and Kampung Poglar, Kedaung Kaliangke, Jakarta Barat, Indonesia Products: Porcelain and stoneware tablewares Markets: Domestic and export markets Others: KOPIN, IKAD and KIG, under KIG Group of several manufacturers, produce on-glazed quality and decorated porcelain and stoneware tablewares since decades. Most of the high-end products are exported to the main targeted markets in Europe and North America, mostly for retail superstores. PT. Semesta Keramika Raya Location: North Jakarta, Indonesia Products: Ceramic tablewares Markets: Domestic and export markets Others: Brands - SKR, EATON PT. Lucky Kurnia Impact Location: Kelapa Gading, North Jakarta 14240, Indonesia Products: Ceramic tablewares Markets: Domestic and export markets Others: Brands - Mukura PT. Jenggala Keramik Bali Location: Badung, Bali 80361, Indonesia. Products: Ceramic and stoneware tablewares Markets: Domestic and export markets Others: Brand - Jenggala

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Analysis: Whiteware

Helpless local products: industry feedback

While answering to Asian Ceramics’ questions: “How is Indonesian ceramic white ware (tableware, sanitaryware, tile, etc) productions and markets for 2017? Do you apprehend any woes/difficulties?” ASAKI said: “Feedback of some our related members sectors in ceramic industry, in order to ensure the views not merely representing ASAKI, but also briefly Indonesian ceramic industry condition as a whole, is the following, in which Indonesia views slightly of each sector of ceramic industry (tile not included): Sanitaryware: 2017 market is estimated to grow by 5 percent against 2016, while production to maintain stable, no additional capacity nor production volume. Tableware: On the basis of Indonesian tableware market trend, the tableware sector is estimated to grow by 10 percent this year, on assumption of hotel business that is expected to grow well by an approximate 10 percent. However, this expected growing market will not certainly give a bright impact in favour of local tableware products since Indonesia market is flooded by low price imported tableware products, and the imports are tremendously absorbed by local market, though the quality of imported tablewares is not as good as local tablewares. This condition is getting worse by high gas price which impacted increasing cost of produce, and as a result, the local products are quite expensive to the customers compared to the imported rival items. In the domestic markets, the local products are truly helpless as less competitive to the imported products.” regions and irregular gas supplies have affected production cost making Indonesia less competitive. Gas price jumped in 2012 to US$9.1 per MMBTU from $6.75 of 2010 and $5.85 of 2009, according to ASAKI. Since that year gas supplies remain expensive compared to the other competing countries in the ASEAN bloc. The other major obstacle before ceramics is stagnant growth in demand due to slowed growth of economy and exports that block growth in consumption. Expansion of capacity in tile production since 2015 to current level of about 600 million sq metres per year, from around 500 million sq metres of 2014, has added further woes. Slower market has led the production to decline to some staggering 350 million sq metres in 2016 from about 440 million sq metres in 2014, and 400 million sq metres in 2015.

Missed chances

Indonesian ceramic manufacturers, particularly, whiteware tableware makers, could not avail full opportunity of the advantages in European Union where restricted imports from China have opened up prospects to grab more market shares. In its Asian sanitaryware and tile markets, Vietnam has been continuously expanding its sales. In 2016, Vietnam has increased its tile production capacity to some 640 million sq metres, largest in ASEAN, with real production of about 540 million sq mters a year from previous year’s 440 million sq metres, according to Vietnam Building Ceramic Association (VIBCA). Last year, VIBCA said, Vietnam has also increased its sanitaryware production capacity to a massive 20 million pieces a year and increased annual production from 12.5 million pieces in 2015 to about 16 million pieces in 2016, more than 70 percent larger than the region’s biggest producer Thailand. Vietnam’s sanitarywares are capturing the Asian markets of Indonesia, which is experiencing a stagnating situation in production of sanitarywares since 2015 when it

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AC 17-2

PT. Dynamics Mark Indonesia Location: Tanjung Morawa, North Sumatra, Indonesia Products: Ceramic tablewares Markets: Domestic and export markets PT. Sari Keramindo Location: Desa Cicadas, Bogor 16964, Indonesia Products: Ceramic tablewares Markets: Domestic and export markets PT. Jatakekeramindo Kharisma Location: Jatiuwung, Kota Tangerang, Banten, Indonesia Products: Ceramic tablewares Markets: Domestic and export markets PT. Surya TOTO Indonesia Location: Tangerang, Indonesia Products: Ceramic sanitarywares Markets: Domestic and export markets Others: P.T. Surya TOTO Indonesia is Japanese global leader TOTO’s first overseas factory. Its products include water closets, urinals, bathtubs, washbasins, bidets, sanitarywares with bathroom cabinets and fixtures, etc. The products are exported worldwide. American Standard Indonesia PT. Location: Cileungsi, Cibinong 16820, Jawa Barat, Indonesia Products: Ceramic sanitarywares Markets: Domestic and export markets Others: American Standard Indonesia PT is a major sanitaryware manufacturer in Indonesia to cater the domestic markets and for exports. A LIXIL Japan concern. PT. INAX International (INA Sanitaryware) Location: Semarang 50121, Indonesia Products: Ceramic sanitarywares Markets: Domestic and export markets Others: INAX is the leading Indonesia based ceramic sanitaryware manufacturer, founded decades ago. A LIXIL Japan concern. Indonesia Total ceramic exports in value 2014 (million US$)

2015 (million US$)

2016 (million US$)

265

215.7

200.7

Sectorwise total exports Categorised of ceramic

Tile

31%

Tableware

43%

Sanitary

12%

Others

14%

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Analysis: Whiteware

produced 5.4 million pieces with almost no growth. Compared to Indonesian factories which are in the business for a long time, other emerging manufacturers in the neighbouring countries in the ASEAN region have no less efficient production plants to beat the Indonesian products in prices. Vietnamese ceramic ware manufacturers are now top rivals with latest production facilities. The Indonesian manufacturers are more or less dependent on the lower gas price and stable growth of consumption in a captive domestic market. If production cost continues to remain high Indonesian ceramics will face challenges from Vietnamese, Thai and Malaysian rivals in the domestic markets too under free market opportunities provided by the Asean Community.

Import dependence

Dependence on imported raw materials poses as a new threat to the Indonesian manufacturers. Raw material imports have increased largely rising up to 90 percent of the total requirements of the Indonesian ceramic ware manufacturers. All these increases have pushed up production cost substantially. In such a situation, the exports have become expensive, while cheaper imports from China and other neighbouring ASEAN countries have been expanding market shares in Indonesia.

ASAKI member tile manufacturers: PT. Siam Solar Ceramic Jl. Tomang Raya, Lt. 13, Jakarta 10110. PT. Ceramic Industry Jaya Victory Jl. Printing State No. C 261-263, Jakarta 10570 PT. Kimliong Ceramic Indonesia Ngoro Ind Persada Bl O, Mojokerto, East Java PT. Indoagung Multiceramics Industry Jl. P. Jayakarta, No. 33 E PT. Magic Indopenta Teguh Jl. P. Jayakarta No. 3-4, 121 Complex PT. Jui Shin Indonesia Warehousing Pluit, Bl C No. 6, Jakarta 14450 PT. Mingchia Ceramics Indonesia (PT. Ayekeh Team Indonesia) Sand Gombong, Northern Cikarang, Bekasi PT. Satyaraya Keramindoindah Jl. Raya Serang Km.25, Balaraja 15610 PT. Arwana Image Noble, Tbk Puri Sentra Niaga, Bl T2, Jakarta 11610 PT. Asri Pancawarna Dc West Middle-Karawang Cikampek 41 373

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Indonesian ceramic factories usually cater about 90 percent of the domestic demands with some 90 percent of their yearly output. Due to larger imports, the local factories experience pressure of unsold inventories requiring increase of exports at prices less than those of domestic markets when it comes to selling products made according to the specification of the Indonesian domestic consumers. Exports growth remains stagnant since 2015 due to slower demand in the export markets. Indonesia's ceramic industry has cut utilization of its total installed production capacity to the range of 30-50 percent, implying that ceramic manufacturers in Southeast Asia's largest economy are producing some half of what they could produce. Low utilization of production capacity is the result of weakening ceramic sales over the past couple of years mainly due to the sluggish domestic property markets. Some ceramic producers have slashed prices by up to 20 percent in a bid to boost sales and reduce unsold inventories. A World Bank report released in January, 2017, said Indonesiaâ&#x20AC;&#x2122;s reforms to fiscal policy and the investment climate are expected to boost the local economy. The World Bank maintains its economic growth rate for Indonesia in 2017 at 5.3 percent year on year. It emphasizes, like the rest of the international community, Indonesia is also plagued by uncertainty in global economic policy and global financial market volatility.

PT. Indonesia Ceramic Association (KIA Group), Jl. Senen Raya, Jakarta Pusat

PT. National Ceramic Niro Indonesia Cicadas, Gunung Putri, Bogor Regency 16 964

PT. Diamond Ceramic Industries Kemang, Pmp Mampang, South Jakarta 12720

PT. Platinum Ceramic Industry Jl. Panglima Sudirman. Embong Kaliasin Surabaya

PT. Ika Maestro Industry Jl. Pluit Timur Raya No.36 Ab, North Jakarta PT. Muliakeramik Indahraya District. Cibitung, Cikarang, Bekasi 17520 PT. Light Son Asa Ceramic Jl. Majapahit No. 26 Ag, Jakarta PT. Best Ceramic Pegasus (PT. Whitehorse Ceramic Indonesia) Jl. Jend. S. Parman Kav. 77, West Jakarta PT. Sustainable Saranagriya Ceramic Village Sukadanau, Cibitung, Bekasi 17520 PT. Kobin Ceramic Industry Ngoro Ind Persada Block O, Mojokerto, East Java

PT. Sinar Works Duta Abadi Puri Sentra Niaga, Blok T2, Jakarta 11610 PT. Goose Resources Jl. Mangga Dua Raya Blok F2, Jakarta 10730 PT. Granitoguna Building Ceramics Jl. Mi. Ridwan Rais No. 10-18, Gambir, Jakarta Pt. Jui Chang Fang Pluit Mas Com, Jl. Raya Bridge Iii, Jakarta 14450 PT. Concord Industry H Kebon Kacang, Desa Cimahi, Karawang Timur

PT. Perkasa Primarindo M Batavia, Jl. Kh. M Mansyur Kav 126, Jakarta

PT. Solar Multi Cemerlang Jl. Panglima Sudirman, Embong Kaliasin Surabaya

PT. Primarindo Argatile Menara B, Jl. Kh. Mas Mansyur Kav 126, Jakarta

PT. Sun Power Ceramics Desa Lolawang, Ngoro, Kab. Mojokerto, East Java

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Analysis: Whiteware

Lower turnover

information on Indonesian pottery, Indonesia is estimated to have a capacity to produce around 37.523 million tons of pottery products per year, supported by more than 0.1 million skilled potters and artisans of over 30,000 SMEs. Most of the products are belonged to earthenware group, while others are stoneware and porcelain including some bonewares. Porcelain. boneware and stoneware products are best whitewares produced for marketing worldwide including home markets. Porcelain, which is made of kaolin and fired at 1280 to 1400 centigrade, is the purest white ceramics and translucent. Previously porcelain was made mainly for tablewares and other household items, but now saniatrywares and tiles are also made for higher quality whitewares. To increase the competitiveness of pottery SMEs, in domestic and export markets, the Indonesian government through the Ministry of Trade and Ministry of Industry initiated the development of pottery handicraft clusters in three regions, DIY (Daerah Istimewa Yogyakarta/ Yogyakarta Special Administrative Region), West Java, and West Nusa Tenggara. Within each pottery/ceramic cluster in respective region, the government helps cooperative activities among businesses, suppliers, service providers, and business support organizations related to pottery/ ceramics. There are eight major production centers for pottery in Indonesia. Kasongan and Pundong (located in DIY, DIY/Yogyakarta Special Administrative Region), Melikan (near Klaten, Central Java), Klampok (in Banjarnegara, Central Java), Plered (in Purwakarta, West Java), Sitiwinangun (in Cirebon, West Java), Lombok (West Nusa Tenggara), and Singkawang (West Kalimantan).

In Indonesia’s current slower consumption situation, leading sanitaryware manufacturer PT Surya TOTO Indonesia experienced a significantly lower turnover. Yet the company has gone ahead with major expansions. “The continued economic slowdown hampered the company’s sales,” said Hanafi Atmadiredja, President Director, TOTO Indonesia. TOTO Indonesia, set up in 1977 as subsidiary of TOTO Ltd of Japan, produces household goods like sanitary ware, fittings and kitchen systems. Hanafi said the company’s domestic market share was 70 percent, outpacing competitors like Renovo and American Standard. “People are saving on household products expenses,” said Hanafi in response to the slowdown. TOTO Indonesia plans to increase production in following years. In long term, the company is cooperating with construction material distributor PT Surya Pertiwi Nusantara on building a US$29 million plant in Surabaya, East Java. The plant is expected to go on stream by June 2017 with an annual production capacity of 0.1 million pieces, adding 12 percent to TOTO’s production volume every year. The company has three plants located in Tangerang, Banten, with a total capacity of around 2.1 million pieces per year. “In future, this Surabaya plant will also be our main producer, as there is a high possibility of expansion in the area,” Hanafi added.

Diversification

Indonesia is one of the group of countries with biggest number of types and assortments of handicrafts in the world with a substantial economic potentiality. According to Erwidodo, Director General of the government run Trade Research and Development Agency of Indonesia (TREDA) which provided research and

In quantities, Indonesian exports of ceramic tiles (HS 6907 and 6908), sanitarywares (HS 6910) and tablewares & kitchenwares (HS 6911 and 6912). HS Code

Product label (exports to all countries worldwide in quantities

6908

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

6907

2011 Exported quantity, Tons

2012 Exported quantity, Ton

2013 Exported quantity, Ton

2014 Exported quantity, Ton

2015 Exported quantity, Ton

294,620

221,124

188,655

238,175

249,418

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

45,996

44,099

32,081

24,790

21,128

6911

Tableware, kitchenware, other household articles and toilet articles, of porcelain or china . . .

15,202

13,941

18,551

21,841

18,745

6910

Ceramic sinks, washbasins, washbasin pedestals, baths, bidets, water closet pans, flushing . . .

8,874

9,254

7,893

9,791

10,215

6912

Tableware, kitchenware, other household articles and toilet articles, of ceramics other than . . .

17,092

16,636

13,337

11,466

9,707

Sources: ITC (Geneva) calculations based on BPS-Statistics Indonesia statistics since January, 2015. ITC calculations based on UN COMTRADE statistics until January, 2015.

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Analysis: Whiteware

In values, Indonesian exports of ceramic tiles (HS 6907 and 6908), sanitarywares (HS 6910) and tablewares & kitchenwares (HS 6911 and 6912). Exported value in 2011 In 000 US$

Exported value in 2012 In 000 US$

Exported value in 2014 In 000 US$

Exported value in 204In 000 US$

Tableware, kitchenware, other household articles and toilet articles, of porcelain or china ...

91,465

83,775

98,922

108,946

91,331

6908

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

76,465

64,272

59,831

75,448

78,226

6910

Ceramic sinks, washbasins, washbasin pedestals, baths, bidets, water closet pans, flushing . . .

23,914

21,249

19,037

22,513

24,827

6912

Tableware, kitchenware, other household articles and toilet articles, of ceramics other than . . .

31,397

33,261

27,161

27,651

23,076

6907

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

19,718

18,474

14,084

11,612

8,616

HS Code

Product label (exports to all countries worldwide in quantities

6911

Exported value in 2013 In 000 US$

Sources: ITC (Geneva) calculations based on BPS-Statistics Indonesia statistics since January, 2015. ITC calculations based on UN COMTRADE statistics until January, 2015.

Indonesian imports of ceramic tablewares and sanitarywares during 2011-2014, from the main sources Commodities

Country of origin

Sanitary wares, porcelain (691010) and non-porcelain ceramics (691090)

Value in millions US$

2013

2014

22,853.07

10,182.40

13,189.72

12.25

3.00

3.26

Thailand

59.99

22.22

40.21

0.26

0.11

0.21

South Korea

21.27

3.73

0.15

0.03

Other 21 countries

96.99

139.72

223.88

0.58

0.09

0.07

Sub-total

23,031.32

10,348.08

13,453.81

13.24

3.23

3.54

China

16,131.45

11,776.27

8,851.03

15.02

7.71

13.72

Thailand

417.56

371.43

689.12

1.14

0.90

1.42

Philippines

701.74

682.29

390.86

1.18

1.17

0.65

Other 18 countries

981.96

1,857.19

1,244.11

1.54

1.68

2.12

Sub-total

18,232.70

14,687.17

11,175.12

18.89

11.46

17.91

TOTAL

711,890.32

636,443.14

757,258.37

191.13

155.16

167.13

China Tablewares and kitchenwares, porcelain (691110 and 691190) and non porcelain ceramics (691200)

Volume in Tons 2012

2013

2014 (Est)

Source: Sucofindo-Surveryor Indonesia (through ASAKI)

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Analysis: Whiteware

Indonesia ceramic industry gas price No.

Classification

Gas Price/MMBTU

2014 (1USD =Rp12,500)

2015 (1USD=Rp13,500)

2016 (1=Rp13,200)

SBU 1 (West Java Region)

USD 7.56/ mmbtu+Rp750/NM3 =USD 9.27

USD 7.56/mmbtu+Rp USD 7.56/mmbtu+Rp 750/Nm3 750/Nm3 = USD 9.19 = USD 9.15

SBU 2 ( East Java Region)

USD 6.43/ mmbtu+Rp750/Nm3 =USD 8.14

USD 6.43/mmbtu+Rp USD 6.43/mmbtu+Rp 750/Nm3 750/Nm3 =USD 8.06 =USD 8.02

SBU 3 (North Sumatera Region)

USD 7.25 /mmbtu+ Rp 660/nm3 =USD 8.75

Rp 167,600/mmbtu =USD 12,4

USD 11.5

Source: ASAKI

In quantities, Indonesian imports of ceramic tiles (HS 6907 and 6908), sanitarywares (HS 6910) and tablewares & kitchenwares (HS 6911 and 6912). Product label HS Code (imports from all countries worldwide in quantities) 6907 6908 6910 6911 6912

Unglazed ceramic flags and paving, hearth or wall tiles; unglazed ceramic mosaic cubes and . . . Glazed ceramic flags and paving, hearth or wall tiles; glazed ceramic mosaic cubes and the . . . Ceramic sinks, washbasins, washbasin pedestals, baths, bidets, water closet pans, flushing . . . Tableware, kitchenware, other household articles and toilet articles, of porcelain or china . . . Tableware, kitchenware, other household articles and toilet articles, of ceramics other than . . .

2011 2012 2013 2014 2015 Imported Imported Imported Imported Imported quantity, Tons quantity, Tons quantity, Tons quantity, Tons quantity, Tons 294,484

572,084

521,166

734,889

745,304

76,542

103,868

63,609

106,428

126,446

12,597

17,588

10,756

12,324

10,176

21,772

20,817

10,109

12,189

7,942

817

1,540

188

166

131

Source: ASAKI

In values, Indonesian imports of ceramic tiles (HS 6907 and 6908), sanitarywares (HS 6910) and tablewares & kitchenwares (HS 6911 and 6912). Product label HS Code (imports from all countries worldwide in values) 6907 6908 6910 6911 6912

Imported value in 2011 In 000 US$

Imported value in 2012 In 000 US$

85,941

161,133

23,364

Imported value in 2013 In 000 US$

Imported value in 2014 In 000 US$

Imported value in 2015 In 000 US$

127,809

166,457

159,176

32,038

17,927

28,666

32,193

11,770

18,591

11,882

12,829

10,531

11,710

11,865

4,149

3,509

2,329

1,371

2,023

295

649

292

Source: ASAKI

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Analysis: Sanitaryware

a new begi sanitary ware markets in North Africa

Yogender Malik looks at some of the key sanitaryware markets of North Africa and assesses their prospects in a changing political landscape.

espite, a score of negative political and economic events in the region, North African sanitary ware market and industry has undergone significant development over the last few years, offering interesting opportunities for the consumers, producers and other stakeholders. Comprising of four key countries- Algeria, Tunisia, Morocco and Libya, North African sanitary ware industry’s performance has been a mixture of medium and low growth from the comprising countries. Sanitary ware industry of the different countries in the region has gone through highs and lows in last few years due to political and economic factors. Rapid urbanization, a growing consumer base with rising disposable income and significant infrastructure investments are some of the key reasons why sanitary ware companies in North Africa are increasingly investing in capacity additions. In spite of the impact of political upheavals on the region’s economy in recent times, the value proposition for regional sanitary ware producers remain strong. The sanitary ware industry has experienced more than average growth in terms of consumption in Morocco and Algeria, an average growth in Tunisia in last two years. Libyan sanitary ware market, the worst performing among the lot has been badly affected due to ongoing political uncertainty prevailing in the country. North African demographics are very favorable for the sanitary ware industry. On an average the region’s population is growing at an annual run rate of c.2% according to IMF estimates. The population profile is also very young, with more than 31 % under the age of 15. High residential and commercial space demand, coupled with relatively low per-capita consumption of sanitary wares, implies

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growing consumption and high potential for the industry in the region over years to come. Individual governments have also played a vital role in the industry’s growth by investing in infrastructure segment. Despite economic pressures and tight budgets, governments in these countries have continued to make significant investments towards infrastructure, which is likely to spur sanitary ware demand in coming days. Much like the sanitary ware consumption patterns in other parts of the globe, North African consumers too are increasingly going for premium sanitary ware products in an increasing manner. Growth from this sub-segment has registered highest growth among other competing sub-segments. Besides a growing domestic market, North Africa’s strategic geographic location and its skilled labor force at competitive wages, has provided a perfect solution for sanitary ware manufacturers, allowing easy exports in order to cater to the needs of the greater African and the Middle East region.

Morocco

Largest market of sanitary ware in North Africa, Morocco has witnessed steady growth in terms of consumption and production of sanitary wares in last five years. The country’s sanitary ware industry has been almost unaffected by the political and economic upheaval in the immediate neighborhood. With a consumption of 3.864 million pieces of sanitary ware in 2015, the country is largest consumer of sanitary ware among its North African peers. About 84 % of the domestic demand is met

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Analysis: Sanitaryware

inning Sanitary ware consumption in North Africa (m. pieces)

Sanitaryware production in North Africa

Country

2011

2012

2013

2014

2015

Country

2011

2012

2013

2014

2015

Morocco

3.338 m

3.435 m

3.569 m

3.722 m

3.864 m

Morocco

3.700 m

3.807 m

3.925 m

4.049 m

4.238 m

Algeria

3.055 m

3.149 m

3.253 m

3.384 m

3.516 m

Algeria

3.264 m

3.398 m

3.523 m

3.682 m

3.815 m

Libya

456,707

469,494

486,396

499,487

514,016

Libya

Tunisia

1.527 m

1.574 m

1.639 m

1.696 m

1.763 m

Tunisia

1.839 m

1.931 m

1.987 m

2.078 m

2.187 m

Total

8.376 m

8.627 m

8.947 m

9.301 m

9.657 m

Total

8.376 m

8.627 m

8.947 m

9.301 m

9.657 m

through the domestic producers. The remaining 16 % (mostly economy models) are imported from other North African countries (including Egypt), China, India and Europe. With an installed capacity of 5.1 million pieces, country’s sanitary ware industry is largest among its neighbors. Despite being the largest sanitary ware producing market in North Africa, Moroccan sanitary ware industry has the least number of producers. Country’s sanitary ware market is catered by four domestic producers: Roca , SBS Porcher, ORCA and Jacob Delafon ( part of Kohler Group). Domestic market demand to a large extent is met by the four local players. Moroccan producers have also gained a significant share in other regional markets. While, all the four producers export a significant part of their total production, Roca and Jacob Delafon have been large exporters of sanitary ware from the country. Both

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of these companies have been largest exporters of sanitary wares since their establishment in Morocco, allocating about 50% of their production to international markets.

Roca

Operating in Morocco since 1994 , Roca Maroc is the Moroccan subsidiary of the Spanish Group Roca Sanitary ware. The company is the leader in country’s sanitary ware industry with an estimated market share of 58 %. With an installed capacity of 2.5 million pieces from its two ultra modern set ups at Settat, Roca offers a complete range of sanitary ware products through its 21 exclusive distributors and multiple retailers. Company’s first manufacturing plant at Settat, which commenced commercial production in 1994 was followed by the second plant at the same location in 2007.

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Analysis: Sanitaryware

Major Sanitary ware Producers

Roca Morocco posted a turnover of 562 million dirhams in 2015, with a production capacity of 2.5 million pieces. In last 23 years, Roca has made more than 800 million dirhams of investments in Morocco. In addition to the two manufacturing facilities in Morocco, Roca also has its manufacturing presence in neigbouring Egypt to supplement its production portfolio and meet demand from extended North African market.

Morocco Company: Roca Maroc SA Location: Settat Markets: Domestic and Export Markets Other: Roca Maroc SA is largest sanitary ware producer in Morocco and wider North Africa region ( ignoring Egypt for this article). With an installed capacity of 2.5 million pieces of sanitary wares from its two manufacturing plants in close proximity, Roca is counted as one of the best sanitary ware producing companies in the region. Roca entered Moroccan market by establishing its first plant in 1994. Realising the growing demand from the country and wider North African region , Roca decided to augment its production capacity in Morocco in the middle of last decade. The company set up its second plant in the close proximity of its existing manufacturing facility at Settat. Roca started commercial production from the second facility in 2007.

SBS Porcher

SBS Porcher is a joint venture of three companies- Slaoui, Benchekroun and Porcher France (now a subsidiary of the Ideal Standards group). Formed in 1984, the venture begun commercial production in 1986. It was one of the first Moroccan companies to manufacture sanitary products in Morocco, which until then were entirely imported into the country. In the 1970s, the founders of SBS Porcher were the distributors of Porcher France in Morocco. Sanitary ware demand in Moroccan pushed the brothers to establish a modern manufacturing plant in the country. Located at Bir Rami Industrial Area in Kenitra, company’s state of Company- Jacob Delafon Maroc the art production facility has an installed capacity to produce 500,000 Location- Tangier pieces of sanitary ware per year. Markets- Domestic and Export markets Others- French sanitary ware producer, Jacob Delafon Over the past five years, SBS Porcher's export sales have been Maroc is second largest sanitary ware producing increasing. Currently, exports account for 25% of the company's company in Morocco. The parent company was acquired business. About 40% of its exports goes to Porcher France, 40% goes by leading Sanitary ware producer Kohler in 1986. towards the Arab Maghreb (Algeria, Tunisia, Libya) and the rest of French company, Jacob Delafon was born from the association of Emile Jacob and Maurice Delafon at the world accounts for about 20% of total exports. The company is the end of nineteenth century. Founded in 1889, Jacob working to diversify its export markets and trying to reach Libya, SubDelafon has long been known as an embodiment of Saharan Africa (mainly Senegal and Côte d'Ivoire) and, more recently, “French-style bathrooms,” due to its luxurious products the Middle East, the United Arab Emirates, Saudi Arabia, Syria, with meticulously-crafted details. During its 128 years of operation, French emotion and Lebanon and Qatar. elegance are the common threads linking all creations In June 2016, SBS signed a gas supply contract signed, which will of Jacob Delafon. Company’s products are the perfect reduce the cost of production and allow it to be more competitive in blend of exquisite design, innovative technology, and high-end materials. foreign markets. It expects to raise its export turnover from current 25 % to 50% of the total production. Sanitary ware producers in Morocco

Jacob Delafon Maroc ( JDM)

Located at Tangier, Jabob Delafon has an installed capacity to produce 1.5 million pieces of sanitary ware from its state of the art plant covering a vast 10.5 hectares of land. The company exports 50 % of its production to the Maghreb, the Middle East, Africa and Europe. JDM carried out an automation drive at its plant in 2015. Earlier, in 2010 the company doubled its production with an outlay of 220 MAD.

Company

Operational Since

Installed Capacity

Location

Country

Roca Maroc SA

1994

2,500,000

Settat

Morocco

SBS Porcher

1986

500,000

Bir Rami Industrial Area- Kenitra

Morocco

ORCA Sanitaire

2001

660,000

Ain Jaama

Morocco

Jacob Delafon Maroc

1980

1,500,000

Tangier

Morocco

Total

ORCA Sanitaire

Founded in 2001, ORCA Sanitaire is located on an area of seven hectares in the industrial zone From Ain Jamaâ Bouskoura to Casablanca. The company has an installed capacity to produce 660,000 pieces of sanitary ware. Majority of company’s products are sold locally through a commercial network spread across several cities in the kingdom, and a share to other North African countries.

Algeria

Largest country in North Africa (we are not considering Egypt in this

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5,160,000

Morocco

article) in terms of population, Algeria has registered a modest growth in sanitary ware consumption in last few years on account of a number of factors. General economic recession, regional unrest and drop in oil prices ( Oil and gas makes up 60 % of the state budget and 95 % of total exports) in last two years have slowed the consumption of sanitary wares in the country. Like in other oil producing countries, low crude prices have hit Algerian state finances, forcing the government to cut spending and freeze infrastructure investment projects. The government has approved a 14 % cut in spending for 2017after a 9 % reduction in 2016.

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Analysis: Sanitaryware

However, despite the low growth in consumption in last few years, country’s sanitary ware industry is slowly inching closer to the current market leader, Morocco in terms of installed capacity. Process of urban transition, which begun in 1987-88 had been a key driver behind the growth of sanitary ware industry in Algeria in past. The urbanisation drive has led to 70% of the population living in urban areas in 2015. However, in last few years, the urbanisation has reached to saturation levels, which had a significant impact on the growth of sanitary ware consumption. Algerian ceramic sanitary ware industry is composed of eight mid scale producers. Most of these sanitary ware producers are operating in the sub-segment for quite long. Currently, three major producers ( Ceramig, Ceramit Tenes and SCS El Milia) are under different satges of their expansion programme. All three expansions are expected to be completed by the end of 2017. With these three expansions, total installed capacity of sanitary wares in Algeria will jump to about 4.5 million pieces from the current 3.45 million pieces.

Ceramig SPA

Established in 1998, Ceramig SPA, is among leading sanitary ware producers in Algeria. With a current installed capacity of 400,000 pieces of sanitary ware at its Talemcen plant, the company has created a name for itself in the domestic market for its quality products. Currently, the company is carrying out an investment program of more than 20 billion cents to revamp the entire production line of the sanitary wares. The first phase of reorganization has been completed. This phase involved addition of a new generation tunnel kiln capable of producing 3000 pieces of sanitary wares per day and automation of shaping workshop with a new press. According to Abderrachid Nemiche, CEO of the company, “ Modernisation of our facilities is aimed at increasing production, lower the production cost to maintain a competitive price. This will enable us to win a larger share in the domestic market and open up prospects for export in the region.” He further says, “We will go from 400,000 to 800,000 pieces and above all we will place on the market a better quality product with the maintenance of the price if not at least cost in order to compete with the products of the import that come from Egypt, India And China."

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Algeria Company: Ceramig SPA Location: Talemcen Markets: Domestic and export markets. Others: Ceramig Spa is one of the largest sanitary are producers in Algeria. The company has an installed capacity of 400,000 pieces of sanitary ware from its Talemcen based plant. The company is currently under capacity expansion, which is expected to be completed by October 2017. This expansion will catapult Ceramig Spa as largest sanitary ware producer in Algeria with an installed capacity of 800,000 pieces per annum. Company: El Milia Sanitary Ceramics Company Location: El Milia Daira Markets: Domestic and Export Markets Others: With an installed capacity of 600,000 pieces of sanitary ware, El Milia Sanitary Ceramics Company is the largest ceramic sanitary ware producer in Algeria. Company’s manufacturing facility is located strategically in the town of El Milia, which is located in northeastern Algeria, in Constantinois. It is the largest city area of the region and is located halfway between the cities of Jijel, Mila, and Constantine and Skikda.

Sanitary ware producers in Algeria Company

Operational Since

Capacity

Location

Country

Ceramig (Groupe E.C.O.)

1986

400,000/ annum

Tlemcen

Algeria

SCS El Milia Sanitary Ceramics

1978

600,000/ annum

El Milia Daira

Algeria

Ceramit Tenes

1975

400,000/ annum

Chlef

Algeria

Groupe Sanitaire General Algerie SARL

2002

700,000/ annum

Chlef

Algeria

Eter Algerie

1972

250,000/ annum

Guelma

Algeria

Poterie Tradiotioelle khendriche

1996

300,000/ annum

Raliceram SNC

2002

400,000/ annum

Relizane

Algeria

Sarl Tcram

2007

400,000/ annum

Blida

Algeria

800,000/ annum

Multiple

Algeria

Others Total

Algeria

4,250,000 /annum

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Analysis: Sanitaryware

Eter Algeria

An erstwhile public company, Eter Algeria is located in Guelma in Algeria. The company was established in 1972 with Chinese collabration. Over time, Eter became a loss-making entity and the state was forced to privatize in 2007. After privatization, the company entered into a partnership with Italian sanitary ware producing company, Galassia. Currently, the company is in the process of streamlining its operations. Besides ceramic sanitary wares, the company also produces ceramic table wares for domestic and export markets.

Tunisia

In spite of being one of the smaller countries in the region, the sanitary ware industry in Tunisia boasts of presence of MNC sanitary ware producer, Duravit and three mid scale producers, which meet most of the domestic sanitary ware demand. Country’s ceramic sanitary ware has grown at a CAGR of 3.8 % during last five years. Despite, being self sufficient in terms of capacity, Tunisia imports significant amount of sanitary wares. The country from more than 15 different destinations belonging to Europe, North Africa and a few countries of Asia. Egypt, Turkey, the Portugal and Spain were the main suppliers with a 62.5% share of imports of sanitary ware in 2015. These imports affected the domestic sector and the producers of sanitary articles in the country. Since some products imported from Egypt and Turkey have an attractive price but are of lower quality, the Ministry of Commerce has drawn up a list of importers authorized to import the sanitary products. This new measure is expected to limit imports of sanitary wares in the country. This new measure will be reviewed every six months by ministry of trade.

restructured in 2001. After the modernisation of the production facilities and the introduction of new ranges, the brothers Lassaad and Raf Kilani, who owned the company, believed that a strategic alliance with a larger company would be the most reliable way of further developing the company. After the acquisition the MTC changed its name to Duravit Tunisia. Duravit AG acquired a further 44% stake in Duravit Tunisia from Kilani family in late 2012. The remaining 4% stake is owned by German businessman, Thomas Seidensticker.

Sanimed

Located at Sfax, Sanimed is among leading sanitary ware producers in Tunisia and North African markets. Currently, the company has an installed capacity of 630,000 pieces per annum. Owned by Lotfi Abdennadher Group, the company has technical collaboration with The Italian company, "Gruppo Sanitary Italia -

Tunisia Company: Ideal Sanitaire Location: Naassen Ben Arous Market: Domestic and export markets Others: With an installed capacity of one million pieces of sanitary ware, Naassen Ben Arous ( located in Tunisi’s industrial district) based Ideal Sanitaire is largest sanitary ware producer in Tunisia. Overall, the company is third largest producer of sanitary ware in terms of installed capacity among the four countries, we evaluated in this article. Ideal Sanitaire belongs to the ceramic-making Les Orangers Group, which operates together with Tunisie Porcelain, a specialised tableware maker. The Tunisian firm has continuously invested in state of the art technology making it one of North Africa’s best ceramic producers.

Ideal Sanitaire

Company: Sanimed Location: Sfax Market: Domestic and export markets. Others- Established in 1998, Sanimed is second largest sanitary ware producing company in Tunisia. With a current installed capacity of 630,000 pieces of sanitary wares, the company is in process of coming with an IPO ( Initial Public Offer) through Tunisian stock exchange. The IPO proceeds will enable the company to go for expansion exercise in coming years.

Spread over an area of 5 hectares, Ideal Sanitaire is one of the older production units in Tunisia. Operating with an installed capacity of 1 million pieces at Naassen Ben Arous, just outside of Tunis , Ideal Sanitaire has created a niche for itself in the mid range sanitary ware products in Tunisian and other North African markets.

Duravit Tunisia

German sanitary ware producer, Duravit AG entered in Tunisia by acquiring a 51% stake in an existing sanitary ware producer, MTC (Manufacture Tunisienne des Ceramiques) in 2008. MTC was founded in 1965 and has a production facility in Bizerte, northwest of Tunis, where it started making sanitary wares in 1967. The company was privatised and

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Ceramics sanitary ware producers in Tunisia Installed Capacity (in Tons)

Installed Capacity ( in pieces)

% of total capacity

Location

Operational Since

Ideal Sanitary

21,000

1,000,000

37.5 %

Naassen Ben Arous

1996

Sanimed

14,000

630,000

23.6 %

Sfax

1990

Somosan

10,500

500,000

18.7 %

Duravit Tunisia

8,400

400,000

15.1 %

Bizerte

1967

Tunis Sinks

1,100

52,000

2.0 %

Tunis

2007

Carthage Ceramics

830

40,000

1.5 %

Carthage

2004

Others (El Baraka, SGS etc.)

900

43,000

1.6 %

Multiple locations

Company

Total

AC 17-2

56,730

2,665,000

100.0 %

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Analysis: Sanitaryware

GSI" for technical know-how. The company claims, “Our products are designed around the basic concept of comfort design and functionality, while ensuring the quality, a key factor essential to compete in the global market. We generate 35% of our export sales to countries in Europe, the Middle East, the Gulf and the Maghreb region.” The company is planning for a massive expansion in next two years. Though, it has not disclosed the details of the proposed expansion, but, the company is coming out with an IPO ( Initial Public offer) to meet the expenses for the expansion. In 2015, Sanimed exported 23 % of its total production to neighbouring North African markets. The company is planning to increase the exports to about 40 % of its total production by 2020.

Libya

Smallest of the lot, Libyan sanitary ware industry has suffered immensely in last few years due to ongoing political uncertainty in the country. Demand of sanitary wares has come to almost a standstill with almost flat growth rates. Manufacturing in the country has been badly affected and making Libya totally dependent on imports from regional countries and China. While, regional country’s share in total sanitary ware imports is almost as high as 90 %. Rest is held by imports from Asia and Europe. In fact, the Libyan market held the lion’s share of Egypt’s ceramics exports in Africa ( Africa accounted for USD183mn of ceramic exports for Egypt in 2014 or 42% of total ceramics exports from Egypt which amounted to USD431mn) . Tiles and sanitary ware imports from Egypt alone accounted for USD108mn and USD27mn, respectively. Libya represented 80% and 61% of total exports to Africa by Egyptian producers in tiles and sanitary ware categories, respectively.

Imports of Sanitary wares in North African Markets Though, all the three major consuming countries except Libya

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Egyptian consumers suffer from currency woes The Egyptian economy continues to suffer from the harsh consequences of the government’s reform programme. The liberalisation of the Egyptian pound has taken its toll on the prices of goods and a subdued demand as a result of skyrocketing inflation levels. Yet Egypt’s eagerness to comply with the International Monetary Fund’s (IMF) three-year plan has prompted a hasty return of many foreign investors to the country, according to Focus Economics’ February “Consensus Forecast Middle East & North Africa” report. Moreover, as a result of the restored trust in the currency, inflows worth billions of US dollars have made their way to local banks, which in turn has bolstered the Central Bank’s international reserves, leading them to reach $26.363bn in January, marking the highest level witnessed since August 2011. The report states that, despite the fact that the Emirates NDB Egypt Purchasing Managers’ Index (PMI) for the non-oil sector has slightly risen to 43.3 in January from 42.8 in December, the PMI index still lies below the 50 threshold that marks the difference between contraction and expansion of the non-oil private sector. One of the main factors leading to the decline is the soaring price of raw materials, which prompted firms to increase their average selling prices at the highest rate recorded so far. Consequently, clients’ demand for non crucial goods has deteriorated, leading to the reduction of both output and input orders, forcing many companies to reduce their staff once again. Additionally, there has been a decrease in new non domestic orders as a result of rising security concerns in the region. Focus Economics panelists forecast a GDP growth of 3.4% for the fiscal year (FY) 2016/17, which is 1.8% lower than the government’s target of 5.4% GDP growth. In regards to Egypt’s monetary sector, inflation reached a record high of 23.3% in December, the highest reading since August 2008, due to the build up in inflationary pressure as a result of the government’s decision to float the currency and to reduce fuel subsidies in November. Meanwhile, the annual average inflation has reached 13.8% in December, which is the highest level in seven years. Focus Economics forecasts an average inflation of 20.1%, and 13.6% for the calendar years of 2017 and 2018 respectively. have surplus production capacities in their sanitary ware industries, yet about 17 % ( Libya excluded) of total sanitary ware demand is imported in these countries. A large part of these imports orginate from Egypt and the Middle East countries. Chinese exports, which once formed a large part of the total imports have come down drastically with the capacity additions by domestic and regional producers ( largely Egypt). Most of the imports take place in middle and economy segments due to price competition. Egypt, which is one of the least cost production base of sanitary ware ( Though for last one and half years production cost of sanitary wares in Egypt is on the rise) has gained a large part of total imports in the region followed by Turkey and UAE. A small proportion of total imports take place in the premium segments from Europe and UAE.

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• Tools and infographics – how to rectify common casting faults, conversion charts, useful formulae and more • The very latest industry insights in our TechTalk blog New on the blog this month: “Why productivity and increasing yield are the keys to improving profit margins. A case study in ceramics manufacturing efficiency. “Remaining competitive is a challenge facing all ceramics manufacturers, but when costs are stripped back to the point that product quality is placed at risk, what’s the next step?...” Keep up to date on issues like this and the latest thinking from our ceramics experts at www.sibelcotechtalk.com we’ll be in touch.

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Wall

Analysis: Pigments

pigment pressures as industry shifts AC talks to some of Chinaâ&#x20AC;&#x2122;s leading pigment producers about how the sea-change in decoration across the whole ceramic industry is having an impact on the sector.

actors in recent years such as reduction of production lines of polished tiles, the increasing popularity of inkjet printing application as well as the much stricter policies for environment protection etc. have directly or indirectly led to a serious shrinkage of the pigment market to such an extent that some pigment production enterprises have chosen to leave the market. While at the same time, many enterprises are seeking for ways out for survival and development in the severe competition by means of creation for change, research for new products, application of new technology and quality upgrading. Then what is the actual current situation of the pigment market and what effective self-helping solutions does the pigment industry have to face the obstacles of the declining profit, the increasing hot competition, the flying prices of raw materials and the lasting payment delay by the ceramic production enterprises?

Sales decline

It is reported that pigment for ceramic production can be sorted out and used separately for body, glaze and rubber roller pigments and, among these, body pigment is mostly used for polished tile on the production line and, consequently, account for a large proportion of the pigment market. According to the production capacity survey, out of the 3,200 production lines

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in China, 1,025 are polished tile production lines, which had a prevailing total annual capacity of 3.91 billion m2 and a proportion of 35% in terms of the capacity to rank the first in China and, meanwhile, the grand scale of polished tile production lines greatly pushed a flourishing pigment market. However, with the emerging of various new products in ceramic tiles, polished tile production was severely challenged to encounter a continued shrinkage of market proportion. The latest survey data show that up to July 2016 the number of polished tile production lines in Guangdong, Jiangxi, Henan, Sichuan and Shandong provinces was reduced by 200 and subsequently the production capacity declined dramatically to a proportion of 27.9%, which, as a result, led to a clear drop of the sales of body pigment. Furthermore, a leading member of pigment production enterprises told the reporter that the aesthetic idea of customers also changed from favoring bright-colored body to plainly elegant ones, which, in turn, changed the production of many enterprises, from the previous colored body of polished tile to a plain body, and reduced the production for colored body tile of red, yellow and blue. Besides, with the growing popularity of the ink-jet printing technology for ceramic production in the domestic market, the conventional technique of screen fabric and rubber roller printing used in ceramic production is gradually out of use, and it had a

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Analysis: Pigments

big effect on the usage of pigment for glazing and rubber roller printing, and especially the currently popular interior wall tile of man-made stone material that is gradually reducing the demand for pigment of brown-yellow series. Among the conventional pigment, the pigment material of brown series is the easiest one to meet requirement for ink-jet printing both in terms of marketing and technology. The products of brown series and black series currently popular in market are subject to simple production technique and technical formula that any ceramic pigment enterprise in Foshan area can produce and that, with the growing of ink popularity for jet printing, is bound to be replaced gradually, while the subsequent reduction of its market share in turn will result in a more severe price competition for pigment. Thus, some enterprises without production output advantages are not able to stand the price competition in terms of raw material cost and other expenditure.

Ink issues

It is the opinion of the above mentioned pigment production enterprises that the declining pigment market in recent years mostly attributes to ink, there having appeared a new kind of stain bleeding ink to have replace the pigment used in polished tile production. More and one factors have caused the sales decline of some pigment production enterprises by more than 50%. According to Huang Zhanqiang, general manager of Jiangxi Yanxin Ceramic Color & Glaze Co., Ltd. the sales of pigment in Gaoan area declined by about 30%, while the price level declined by 10-15%. Production of thin plate and exterior wall tile is using ink-jet printing technology, most of the production of interior wall tile and fully polished tile is not using pigment any more, and only production of archaized tile is using certain amount of pigment in screen printing for differentiate pattern. While production of polished tile is still the largest consumption of pigment, the stain bleeding ink technology in Jiangxi production area has not been popular yet and neither is polished tile production there. Nowadays the domestic pigment enterprises, while working to ensure product quality and upgrade product property, are seeking for solutions to increasing profit. Although the new emerging of entire marble tile is bringing dry-mixed pigment into the market, it has not been applied in large scale in Jiangxi region. It is mostly used in Guangdong production area. According to analysis by Mr. Xu Dejun, general manager of Zibo Taozheng Ceramic Pigment Co., Ltd., compared to pigment, utilization of ink in ceramic industry has come up to a proportion of 60-70%, substantially the top level. Utilization of pigment in some ceramic enterprises begin to rise slowly due to the reason that decoration by ink looks monotonous while the conventional screen fiber printing and rubber roller printing can give more three-dimension impression. And some deep color products also need pigment. The pigment production enterprises have to further their efforts for excellence of conventional pigment, not only in terms of color saturation, but also grinded particle size distribution as well as

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MOST OF THE DOMESTIC PIGMENT ENTERPRISES ARE FOCUSING ON PRODUCTS OF MEDIUMLOW GRADE stability of coloration. In addition, further efforts should be made in search for new kind of jet printing pigment against the market demand for ink-jet painting pigment, and also in terms of stricter control of the workmanship to upgrade the conventional technique of pigment materials preparation as well as speed up color modulation comparison.

Technology upgrades

The domestic pigment enterprises have come to a considerable level in terms of production workmanship and technology, with further effort needed for stability of product quality. In spite of the fact that many enterprises are currently focusing on pigment product of medium-low-end, the industry as a whole never gives up the search for advanced technology, never gives up research for new product development, and some have made good achievement on aspect of new products, and meanwhile, some substitution materials are under active development for purpose of pollution control. But on the other hand, the achievement mentioned above is not big enough compared with the advanced level of the world, and there is still a long way for the ceramic pigment industry to go in terms of upgrading the products and increasing innovation ability. It is Huang Zhanqiangâ&#x20AC;&#x2122;s analysis that currently the domestic pigment production is moving ahead in a specialization status, especially in Guangdong, Shandong and East China regions, where many domestic leading pigment enterprises concentrated. Foshan shows big advantages in technology, and as an important center for ceramic products collecting and distribution, it possesses not only a large number of ceramic production enterprises but also a broad market where the latest products can be utilized immediately and the market information feedback is quick. In the conventional ceramic pigment field, the product variety as well as structure and construction is in line with the international trend, but for some products there is still room for improvement in terms of high temperature stability and homogeneity of coloration. In research and development of new ceramic pigment,

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Analysis: Pigments

some new products have been brought into being by Chinese enterprises to be used for production of archaized tile and polished crystal tile, including some new material for ceramic decoration, such as pigment of man-made metal element. And for decoration pattern and workmanship, many means and techniques have been taken in, such as decoration details for daily ceramic products and art ceramic products, printing arts and freehand coloring, in-glaze decoration, under-glaze coloring, screen fiber printing, rubber roller printing, and ink-jet printing to be narrowing the gap between our overall level and that of the world. Furthermore, utilization of dry-mixing pigment is restudied to catch the attention of pigment production enterprises once again. For dry mixing coloration workmanship with dry-mixing pigment, micro powder or standard spray dry powder can be used to facilitate utilization of pigment powder for production of any kind ceramic tile, such as glazed product, non-glazed product or polished tile. Dry-mixing powder is suitable for both first time cloth and second time cloth workmanship, and dry-mixing system used in correct way can produce ceramic tile of excellent surface expression and help to greatly reduce production cost. Peng Xianghui, general manager of Foshan Vanda Glaze Co., Ltd. says that dry-mixing pigment is in fact an old product that has been used for over 10 years by ceramic exterior wall tile products of some well-known brands such as Aihe Ceramic and White Rabbit, and it is only that production of floor tile didn’t use this technology and product until recent time. Vanda Glaze is one of the earliest factories in China to produce dry-mixing pigment. Early in 2002 It began to be an agent of drymixing pigment for a Japanese company and sell it to interior and exterior wall tile production enterprises both home and abroad. By 2006 however Vanda had developed mature to produce drymixing pigment itself and, at the same time, it found out that compared with floor tile the market demand for exterior wall tile was very small, and not all exterior wall tile production needed drymixing pigment, and the pigment amount used by production of exterior wall tile in China only amounted to a proportion of 10-20%. Also at the same time it realized the large production capacity and market demand for floor tile, and some come factories were trying to use dry-mixing pigment for floor tile production. But at that time the popular product in market was micro powder tiles and the feature of that rendered it almost impossible to use the dry-mixing pigment workmanship well.

Body pigment sales

Hu Lili, marketing manager of Zibo Jiatong Ceramic Pigment Co., Ltd. says that body pigment sales well in Zibo production area and it attributes to the emerging of entre marble tile. Currently many ceramic enterprises in Zibo area are trying sale of entire marble tile and if there is an optimistic market demand, the production of entire marble tile will increase considerably. Domestic ceramic production enterprises have been using imported dry-mixing pigment because previously the dry-mixing pigment produced in China was not good enough in terms of technology. Now, however, , more and more domestic pigment enterprises have achieved good progress in research of dry-mixing pigment, and a couple of the enterprises have started production, and in spite of a limited amount of production, they really have a good beginning. Dry-mixing method has more advantages and, while using this method in ball grinding mill or spraying tower, only white powder is needed with in-situ mixing, having less waste and little cleaning.

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But the problem is the large difference of particle size between the powder and pigment, the particle size of the former is over 100 times bigger than that of the latter, which renders it very difficult to reach homogeneous mixing and, therefore, products with drying method is generally not as good as that by wet-mixing method. Nowadays there are a couple of domestic mechanisms for drymixing colors, but all are very rough, showing a big distance in effect from wet-mixing method. Against this problem, Guangdong Boffin Mechanical & Electrical Co., Ltd. had cooperation with Italian LB Company and imported some mechanism and device for easy dry-mixing coloration at the end of 2015 and proposed solutions to entire marble tile production on this aspect, which reduced the comprehensive production cost by 15% over production with the conventional wetmixing method and is applied nowadays in Dongpeng, Lihua and Osman. And it is estimated that with the increasing sale of entire marble tile, dry-mixing workmanship is likely to grow more popular.

High grade shortage

Peng Xianghui indicates that our domestic ceramic pigment industry has moved into a period of steady development since 2016, having sufficient resources advantages and cost advantages as well as mature workmanship and stable property for conventional pigment production. But on the other hand, the domestic pigment production is mainly for medium-low grade products, with seriously insufficient high grade products that now actually depend on importation. An estimate shows that currently the medium-high grade ceramic pigment produced domestically only has proportion of 20%, and the competition among ceramic pigment production is mostly in the field of medium-low grade products, by means of price reduction that in turn resulted in a lower profit and delayed development of the enterprises. And in the field of high grade pigment there are problems such as poor ability, insufficient investment for research, low brand recognition, limited innovation ability and so on. And urgent solutions to these problems should include industry level upgrading, more research for high grade products, the industry structure adjustment and an orderly development of the industry as a whole. Nowadays our domestic pigment enterprises have to face the challenge of brand product from abroad, and only by creating excellent brand products, can we have a good competence to win in domestic market and international market. It is Mr. Xu Dejun’s view that the development process of China’s pigment industry shows an unsuitability of the lagged technical research and China’s status as a large country of pigment production. Currently the domestic pigment production depends mostly on private enterprises of medium and small scales that are fond of projects of quick starting, short cycle and fast profit, and most of the production is based on imitation or method of using entrusted brand for production, with their production lacking of research effort for sustainable development. The pigment industry must get rid of the current backward status of “production only, no research for development”, must move into the world market to have technical communication and cooperation with the top pigment production company of the world, seek for development of new pigment products, and have more efforts for better and wider application of pigment in downstream ceramic production and, by the time when the conditions are available, move into countries of flourish ceramic production such as Italian and Spain to purchase and register our companies. And by means of “borrowing hens to lay eggs for ourselves” in foreign countries,

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Analysis: Pigments

namely using entrusted good brand to facilitate the sales of our own brand products, so as to strengthen design for pigment application and, through these efforts, set up well-known brand of ourselves in the world, with an idea to get rid of the lasting status of “no any domestic pigment product has an international brand” as well as the unfavorable situation of declining profit possibility resulted from the trade operation of “export-oriented products sold at home market”.

Less companies, more reform

The ceramic pigment industry is a conventional industry of high investment, high energy consumption, high pollution but low output, and due to the effect of the increasing cost for domestic raw materials, energy, environment protection, man power and transportation in recent years, its operation cost keeps going high and it has been facing more and more difficulties. While the enterprise scale is growing bigger and bigger, its profit level is declining dramatically, and many enterprises are in great difficulties. Ms Hu Lili indicates that currently all pigment enterprises throughout China, big and small, are located in ceramic production areas or nearby for convenient purchase and transportation. The pigment market is about to be subject to further shrinkage not long after, and some pigment workshops of small scale will also stop operation and change to means of entrusted processing service for customers. The number of pigment enterprises is reducing but not dramatically, and nowadays many of them are using their best ability to keep cooperation by means of stable product quality in order to survive the competition. Small market with fierce competition is of, by nature, a process of elimination and it is a tendency that some large pigment enterprises will come up to take in the small ones by means of acquisition and there will be a couple of huge pigment enterprises emerging in the pigment industry. It is commonly recognized by industry observers, that most of the domestic pigment enterprises are focusing on products of medium-low grade, showing a great number of enterprises of small scale and low grade products, there is hardly any enterprise to have an annual sales over one billion Yuan RMB, meanwhile, there is few well-known brand products, showing poor effort for brand creation. The lagged progress in quality and grade of the products is due to insufficient regard of pigment by the ceramic production. Quite a few ceramic enterprises used to and are having a low level demand for pigment, and they prefer a short-term profit to sustainable development. Besides, payment delay now and then also greatly frustrates production of the pigment enterprises. It is disclosed by Mr. Xu Dejun that the number of pigment enterprises in Shandong have reduced from about 100 in the peak period to only a dozen nowadays. Environment protection policy doesn’t have a big direct effect on the pigment enterprises. Some pigment productions of large scale were built close to the new park area and don’t need to move out. The reorganization carried out previous was mostly against the glaze material productions of serious pollution problem, while the environment control of pigment enterprises was proved to meet the requirement. Glaze material, especially the clinker production has emission of nitrogen dioxide to cause great harm to the environment. But it is the government order to shut down half of the ceramic production lines in Zibo that resulted in ceramic tile production decline by 50% and in turn indirectly affected the

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MORE DOMESTIC PIGMENT ENTERPRISES HAVE ACHIEVED GOOD PROGRESS IN DRYMIXING PIGMENT

sales of pigment, for instance, the sales of Taozheng Company declined by 20-30%. Mr. Huang Zhanqiang mentioned that a current trading practice in the ceramic industry is delayed payment, and normally many ceramic production enterprises will postpone three months to make payment due for supply of raw materials such as pigment and other chemical material. Whoever doesn’t accept this can hardly find customers and the pigment enterprises have no other option but to raise their product piece. It seems that the ceramic enterprises occupied the fund of the upstream raw materials suppliers to increase their working capital, but actually they paid a higher cost. And if the ceramic enterprise were to make payment on time, the quotation of the pigment enterprises would decline by 10% with ensured quality. Another point to notice is the fact that the pigment enterprises are not working on a same level. Large enterprises have more standard operation including taxation payment, employee’s vacations and welfare, insurance, product brand maintenance, after-sale service, technical research and so on, their production scale is large but the cost is not necessarily low. While the small enterprises tend to control all their expenditures to the minimum, even by means of tax evasion, hence they have better competitiveness in the market, which however severely are disordering the market and render a fair competition impossible. Under this circumstance, the ceramic pigment enterprises are not waiting to see, but instead, we are determined to take effective measures, including the industry structure reform, product upgrading, brand promotion, and intensified core competitiveness, to facilitate development and progress of China’s ceramic industry.

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Talking Shop

Talking Shop Pakistan: building bricks for the future? AC looks at the myriad issues affecting the profitability and long-term viability of Pakistanâ&#x20AC;&#x2122;s brick industry, and discusses possible remedies to the current malaise. The sub-continental Brick kiln industry is notorious for bonded labour issue. Much has been written and legislated about it. Here, we take a more comprehensive look into this sector in terms of following three issues: (i) bonded labour; (ii) pollution; and (iii) land degradation. The combined impact of these issues is nothing less than a curse. There are estimated 12,000 kilns, mostly in Punjab and Sindh employing 2.3 million workers (almost all of them under bonded labour and 50% of them not having any NICs) and contributing 3% to GDP .The sector consumes 3 million tonnes of coal, both imported and local, under highly energy inefficient conditions and creating extreme pollution in terms of black smoke, particulate emission and CO2.Its coal consumption is second only to the cement sector which consumes 4.7 million tonnes per annum under probably much better environmental conditions. In addition to creating pollution, brick kilns use the fertile top soil up to one meter deep causing land degradation and loss of biodiversity. Bonded labour has been declared illegal since 1997. All indebtedness of bonded labour has been brought to nil. But bonded labour persists due to lack of enforcement and apathy of successive governments. Bonded labour is not limited to brick kilns only but is certainly the largest employer of the bonded labour. If one had the power and choice , this sector is perfectly suitable to be shut down. But we need bricks to build houses and after all more than 2 million people are employed, albeit in some of the worst conditions. Industrial sectors normally improve themselves in terms of technology, productivity, working conditions and wages, etc. If they don't, workers stop joining them and such industries become extinct. What has happened in the brick kiln sector is that it has not changed itself at all but has managed to survive, due to the following two factors: Firstly, unemployment and poverty have persisted which force labour to join such deplorable sector; secondly, this sector has adopted the deplorable institution of bonded labour to coerce the workers to remain in life time employment with underpayments and perpetual indebtedness.

Legal shortcomings

The threat of the law has not been enough to stop bonded labour in this sector, although if enough political pressure is put on governments by the civil society to implement and enforce the law, quite some improvement can be brought about. However, assuming that governments may not be impelled to do so for a variety of reasons such as feudalism and power and influence of employers, some carrot instruments may have to be explored. A certification scheme could be introduced which certifies individual

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producers in terms of several objectives and performance factors as the following: 1. The producer does not indulge in bonded labour practices or joins programmes for improvement of the situation under a targeted programme. 2. The producer employs decent working conditions or joins programmes for improvement in working conditions under a targeted programmes 3. The producer gradually improves its technology to improve its environmental performance in terms of energy efficiency, emissions levels and top soil preservation All these improvements cost money and may be capital intensive. Such certification schemes have to be accompanied by technology demonstration and assistance programmes and cheap and easy credit. Also market may have to be created for the bricks that are produced under responsible conditions, and may be somewhat expensive. The government and businesses may undertake to buy only from certified producers at a price premium. Contract production under piece rate system in the sector may have to be replaced by monthly salary under the minimum wage law. Economics of the sector may have to be studied and a floor (minimum) price of the bricks may have to be introduced, although some experts believe that it is quite a profitable sector with a payback period of less than two years. A proper and objective study has to establish the economics and profitability so as to be able to introduce price support as mentioned earlier. Perhaps many steps and initiatives may have to be explored; encouraging mergers and acquisitions and forming of larger companies that are able to invest in capital-intensive modernization; product diversity and competition; fly ash based blocks that do not require baking. With the advent of coal-fired power plants, ash will be produced and will create disposal problems. Brick making from ash would solve this problem. Consideration may be given to install brick making plants adjacent to or in the premises of coal power plants. It is not very clear if some sort of licensing or permission is required for locating a brick-kiln. Strict rules should be introduced in this respect so as to have a handle on this industry. Except for one or two smaller studies, no significant intervention or assistance has been provided to the sector, either by government or by others. The UNDP or/and other multilateral institutions and NGOs may be able to initiate a sector improvement programme for the improvement of the brick kiln sector in collaboration with appropriate government agencies and other stakeholders. Brick Kiln sector is relevant to the following UN SDG coals:

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Talking Shop

• • • • • • •

Decent work and economic growth (Goal 8) End poverty (Goal 1) Clean water and sanitation (Goal 6) Affordable and clean energy (Goal 7) Climate action (Goal 13) Life on land (Goal 15) Peace, justice and strong institutions (Goal 16)

A similar UNDP programme is already operational in India where this sector suffers from the same issues as in Pakistan, although the Indian programme is focused around energy efficiency as being conceived before SDG initiative. Being late in Pakistan can have its advantage of launching a more comprehensive programme as has been proposed here. In passing, may I also include a few lines on the need of bringing construction workers into some kind of social safety cover? I have seen erstwhile construction workers being pushed by circumstances to beggary. Disability and early retirement due to hard working conditions push them out of any earning source. Construction industry is also derelict in fulfilling its responsibility towards safety and social cover. Construction workers are not covered under any social safety net programme like EOBI. Construction industry is quite complicated and fragmented. Except for a limited number of large and registered companies, bulk of the employers are in thousands. It also includes owner-builders who build their houses. Construction

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WORKERS TYPICALLY WORK ON DAILY WAGES DEVOID OF ANY SOCIAL COVER workers typically work on daily wages devoid of any social cover. What is common among all construction workers is that in their work cement is used. Cement is produced by large companies. It would be relatively easy to recover any excess that is applied to collect some kind of social charge, equivalent to EOBI. A 1-2% social excess on the ex-factory sales value of cement may generate enough money to cover construction workers. Construction workers may have to register themselves under the proposed social cess programme in order to be eligible to benefit from this programme. I also have some good ideas for bringing household workers like masis and chowkidars and khansamas under a social safety net. The government, political parties and civil society should take interests on these issues. After the demise of the Soviet Union, the international pressures on improvement of working conditions have gone down substantially .Present government is business friendly. However, parties like PPP should have taken more interest in this, as they still claim that they are a party of workers and the poor. It would be good politics of all political parties to prioritize this into their agenda and election manifestoes.

AC 17-2

asian ceramics

Insight

JAPAN Leading unglazed tile export destinations (sq metres)

Total unglazed tile imports (sq metres)

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Total unglazed tile exports (sq metres)

Leading unglazed tile import sources (sq metres)

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Leading glazed tile export destinations (sq metres)

Total glazzed tile exports (sq metres)

Leading glazed tile import sources (sq metres)

Total glazed tile imports (sq metres)

Total sanitaryware exports (no. pieces)

Total sanitaryware imports (no. pieces)

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Hunter and the hunted

The Trump Effect. Dear Diary,

Well, well, well…. outrageous piece of news comes of of the It hardly seems now like a day goes by without some out such as that restricting the travel of sent is White House, or some hard-line 'Executive Order' no more consideration than a managers people from seven predominately Muslim countries with Smoke in the Toilets' – the impact and Staff memo to his staff 'Under No Circumstances Should In fact it has gotten to the point that for. d planne or ed prepar more potential outcome being no I'm not ready for the latest craziness g. I've chosen to avoid the news when I get up in the mornin onto Discovery Channel or read flick I d Instea . 7.30am at S' from the oddity that is now 'POTU es of Donald John Trump – the missiv the sports news. I need more than a coffee to be ready for ca. Ameri of States unlikely 45th President of the United spoiled man-child should not be sitting in It shouldn't have been like this of course. A bellicose that we would be looking at the first was line plot the the most powerful position on the planet, quite predictable reasons. female US President. But it wasn't to be for in hindsight ential election go on for far too Presid the mind The American election, the Primaries never wasteful. When The Donald and s tediou are they as cal theatri and long and are as expensive it was received with ation nomin lican announced his intention to run for the GOP / Repub ued to run, insulting contin he As was. it only If joke. a be to had incredulity and amusement. It & publicity stunt ns relatio public mere every other potential candidate, it was thought to be a his own media create to g anglin was he maybe Or show. to get more views for his Apprentice the disabled and rs, soldie dead of s familie channel? But as he insulted women, immigrants, the with the populist up keep to ng unwilli or e Unabl side. so on the other candidates fell by the way Clinton Donald Hillary t agains g ly runnin outrage and impotent to stop it. When it came to actual her, suggesting on impris to ning threate ate, candid crat simply doubled down – insulting the Demo ty detail and securi her for shot were it not with just enough deniable inference that she would be room talk. locker mere as abuse and ion predat l then managing to pass off bragging about sexua h votes to win acted enoug garner ate candid a such could way no that The Democrats, believing endorsements rather than facing the threat complacently, turning to a comfort bubble of celebrity directly. – so skillfully used by Obama before was The election also was the first where the social media candidates and bias voters. It's all a bit of age dispar to 'news' hijacked by fake or at best spurious a mess. recognize early enough, indeed maybe But like Brexit there is a simple truth. The losers did not , underclass, working class, middle not even now that there is a significant minority of people ted that feel left behind, let down, educa poorly class, elderly, unemployed, underemployed, ral college vote (through cleverly electo the won Trump That for. d ignored, unheard and uncare base) but lost by about 3 million en forgott concentrating on swing states and appealing to this ed to convince 63 million manag still he lation; conso or rt comfo votes the popular vote is little let that happen. they Party people to vote for him. It's a disgrace on the Democratic can or even living in Ameri r neithe I'm though even 'we' But now we have him, and I mean policies of his advisers the and s policie America. What are we to make of him and what will his interest in every crass an take or sand the in heads our mean for us? Because whether we bury shows t inmen and enterta Tweet he posts when he's watched the television news ng us effecti is y alread and will USA the late at night for sure what he does inside outside the USA. on travel from seven On a recent trip to Bangladesh, just after Trumps 'ban'

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

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Hunter and the hunted

s t h g t h ou

n ito tile a r g t e g r a t l l i w e h t a h t ct e "I h a rdly exp s et s" a e t n o r a w e r a l c e d l l i w r i m po rt s o

and though I mainly spoke to middle class countries I wondered what Muslims thought of Trump much unanimous and similar to the pretty was n reactio the people and well educated business Disbelief, bewilderment, a sense press. reaction from anyone else I'd spoken to or read in the anxiousness over what the least at or worry ly certain and of 'How could they have done it?' the economy. and ty securi isolationist policies Trump intends to deliver will effect s to act on the promises he intend he is Trump about say can Because for sure the one thing we an duly elected would politici a we've wished made during the election. This must be the first time fail to follow up on his word. back to the USA. OK, he was more than Putting things very simply Trump intends to bring jobs it suited him. He has forgotten that when ts produc happy to outsource from Mexico or China his s he promised to share, there is return tax his Like now. him to matter 't already because it doesn he acts anyway and is widely way The nothing for him to gain from showing them so he won't. the Presidency of the USA as g runnin is he s obviou is it , wasn't it if analyzed and reported even â&#x20AC;&#x201C; sit back and it'll be taken memo a out though it was any old company he had set up â&#x20AC;&#x201C; send building, expenses scams and empire own their on ntrate conce care of. Whilst his line managers don't know if he really is just we and hilt pet projects. We don't know if he is rich or in debt to the far he will try through duty, so on rely can we ce eviden a Russian puppet. So, sticking to to the US. Not necessarily with any the g back tho taxes or threats try to bring industry and manufacturin promised to do that and hes se becau simply but regard to the environment or to workers rights quences will be. As conse matter what the hes also promised to cut out regulations and costs no richer from it of e becom can he as long As ed. I said - that doesn't effect him so he isn't bother course. s or will declare war on tea sets (though Now I hardly expect that he will target granito tile import his bullying and threats may well mean of t impac the but n't) would thinking about it I'm not sure he as; self regulation to avoid too overse than the retail industry could look to purchase more locally who do so much business s trader Kong Hong the Fung & much atention if you will. I notice Li s. Now no way can the month last three with America's share price is trending down over the product for the USA from & ware of es volum sary home producers in America supply the neces The retail chains from the US have resulted just the USA but certainly there will be some impact. rs, vendors and factories dedicated to audito an a complex supply chain of testing laboratories, move to home sourcing would result in supplying the USA's needs. Even a small percentage d. effecte closures and redundancies so ceramics would be he and his administration will do what of ainty uncert the be will t But probably of more impac of security. Investment in such times lack a next. The situation has created instability and a fear of has been trending up. If he price gold that see can we tends to go to safe havens and again e to take China to task over promis his on decides (as I'm sure he will) that he has to make good t rate changes then?) or interes Fed's the are what t it....bu its currency manipulation (as he sees therefore its impact and on situati mic worse the situation in the South China sea then the econo on all of us could be fare more severe. he leads (?) his administration results I'm left hoping that the amateurish and reactionary way ent gives me much hope but a Presid Vice the in him being impeached and replaced. Not that d to steer the US and thus the neede is brain erate consid & le sensib steadier hand and a more nies within Asia look at home compa ic ceram world economy. Not for the first time I suggest that export customer. ain uncert and volatile a on relying and regional markets rather than Until next time, in hopeâ&#x20AC;Ś. 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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