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AC19-10

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Tableware: an outsourcing review Indian refractories Fuel costs: the great unknown Turkish tiles Plus news, views, analysis and much more!

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Contents: AC 19-10 News

Features

4 Inside Asia

28 The tile industry of Turkey

Large slab development in Iran.

6 Welcome

India hit by Gulf tariffs.

8 Across The Continent

Openings, closures and industry moves from across Asia.

18 International News Our eye on the international arena.

24 Material Matters

The ins-and-outs of ceramic raw materials.

26 Comment & Analysis LESS is more for sanitaryware.

Turkey has one of the most influential ceramic tile manufacturing bases globally, and its geographically advantageous position and emergence of newer markets on its doorstep, continue to drive its development. However, recent years have been more difficult than expected as Yogender Malik finds out...

38 Tableware outsourcing

The production of tableware goods overseas – followed by “backstamping” in-country, has been a practice that has been in place for many decades within the ceramic industry. Yogender Malik looks at how the changing trade climate however has started to challenge these long-held principles…

50 CICA: a meeting of minds

With exclusive access to the annual gathering of the leaders of South East Asia’s ceramic industries, AC provides an overview of how each country views the current situation and prospects for the coming 12 months…

54 Indian refractories

With tentative signs of recovery, has the sub-continent refractory sector perhaps turned a corner?

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Analysis

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

62 Insight

Analysis and insight into Turkey.

64 The Hunter And The Hunted

reflects on the year and wonders if capitalism is in a “death spiral”.

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News

Inside Asia SITI B&T GOES LARGE IN IRAN SITI B&T opens the large slab market in Iran. The Formigine group has installed a complete SuperaÂŽ line at the Rock Sanat ceramic company, one of the leading producers in the Middle Eastern country. Production at the Tehran plant started at the end of August. Thanks to complex research and development work carried out by SITI B&T technicians on the pilot line at the bt-LAB, the technological research and development centre located in Formigine, the newly installed line has a very high tolerance to the variability of raw materials. This latter feature makes it possible to use local raw materials, at zero km: an aspect that has a positive impact not only on an economic level by reducing direct production costs, but also on the industrial one, using traditional mixes for standard sizes. The SuperaÂŽ pressing system and the XXL kiln (with a 3850 mm opening and the possibility of firing two slabs side by side simultaneously) will allow the production of the largest porcelain stoneware slabs ever made in Iran, up to a size of 1600x3200 mm.

A technological revolution that also allows Rock Sanat a rapid size changeover, going from 1600x3200 mm to 1200x2400 mm. In light of this experience, SITI B&T has thus also developed a range of SuperaÂŽ models with lower tonnage for the production of more traditional ceramic sizes, maintaining a high productivity (six pieces 1220x1200 mm per minute) with the advantage of pressing on belt and not on mould: "Supera 18k" model. No wastage (max 1.5 mm per side), 2 tenths of a millimeter of thickness variation on the long side are other features that make the SuperaÂŽ line among the most cutting-edge production solutions in the ceramic field. A focus not just on the technical qualities but also on environmental impact. The Iranian manufacturer has indeed benefited from the know-how of SITI B&T to develop the energy saving concept thanks to technology such as the Start&Stop system, the innovative "power on demand" hydraulic control unit that reduces energy consumption by up to 30% and, by not heating the oil, saves additional kW for cooling.

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n what is seen as a provocative move, pushed by manufacturers across the wider Arabic region, Indian ceramic tile producers have received CI CA IN FOCU S one of the severest jolt in recent history. In a A M E ETI NG OF M I NDS move, that is going to have a very far reaching impact on Indian ceramic tile industry, the Gulf Cooperation Council (GCC) has confirmed that it FR E E IN SI D has passed an interim/provisional order to impose E IN FOCUS: antidumping duty ranging from 40% to 106% on Tableware: an outsourc ing review Indian refractories ceramic products imported from India. Fuel costs: the great unknown Turkish tiles However, the council which takes care of political Plus news, views, analy sis and much more! and economic interests of Arab nations such as Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Oman and Bahrain has kept duty at 23% duty on Chinese products. This move is expected to make Indian exports to GCC countries uncompetitive. Lower duties on Chinese imports into the GCC region will further add to the competition in export market for Indian producers. Of the total annual production of worth around INR 450 billion of ceramic tiles in the country, nearly INR120 billion are being exported to more than 170 countries from Morbi based units. Approximately 30 to 40% of the total exports ( nearly INR 45- 50 billion in value) is being exported to Gulf countries, especially to Saudi Arabia. Stakeholders from India’s biggest ceramic cluster have decided to make a representation before Gulf Cooperation Council (GCC) to bring anti-dumping duty on India’s ceramic products at par with their Chinese counterparts. The new tax regime is going to be implemented from 11th November, 2019, according to Nilesh Jetparia, president of Wall Tiles division of Morbi Ceramic Industry. “We have represented our case with Prime Minister’s Office and concerned officials in commerce ministry.” “If anti-dumping duty wouldn’t be brought on a par with the Chinese manufacturers, ceramic units in Morbi will have to bring at least 20% cut in production. It means there would be thousands of job cuts. About 400 odd ceramic units out are exporting to different countries across the globe. These units will have to dump their inventory in domestic market, which would intensify price-war in local market,” according to KG Kundaria, former president, Vitrified Tiles division, Morbi Ceramic Association. Domestic demand in India has been languishing for past two years. Domestic consumption has registered very low growth rates in these two years. With the GCC anti-dumping duty, Indian ceramic tile industry is expected to register one of its worst years in 2020, if duty by GCC countries is not reduced. Whether this is a definitive movement geared at providing China with a more welcome base in the region at a time when the latter is under huge pressure elsewhere, remains to be seen. One thing for sure is that India, so long a comfortable trading partner with the whole Arabian peninsula, has just seen its fortunes slashed by this punitive measure. YO UR

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Ceramic makers behind the magic of 9 • Sanitaryware sector “hardest hit” • Tableware industry seeks clay revival plants on the way • Brick makers told to look for exports • China Ceramics looks for market entry • Tile makers hi SACMI Continua+ line • Tile sector considers “bleak” outlook • Brickworks acquires Redland Brick Government p THAILAND

Ceramic makers behind the magic of 9 Nine producers and importers of construction materials and equipment have joined forces to build a marketing network and share a customer base exceeding 2,000 as they aim to achieve sales growth of 25-30% next year. Nantarat Tantiwatpanich, an assistant manager at tile maker Kenzai Ceramics Industry Co, said the company and eight other firms will share customer data with one another. "We can introduce and pass on our customers to each other through the network we create," she said. "Credibility is significant,

as construction materials and equipment have a high value." Kenzai Ceramics and the other construction materials and home equipment firms on Wednesday launched a networking group called Connext. Ms Nantarat said the nine members have combined sales of 3.5 billion baht a year and aim for sales growth of 25-30% in 2020. Prasit Nopparatnapalai, managing director of DP Ceramic Co, a maker of tiles, sanitaryware and home decor, said the construction materials

market remained strong this year. "Sales growth of the members will be 10-15% this year, as our group's products are in the middle- to high-end segment where purchasing power is strong," he said. Newin Chochaiyathip, a consultant for Zillion Innovation Co, an importer of insulation, greenery and waterproof systems, said the group's members can share information and notify each other if customers run into financial problems. "Most cases are payment

delays, sometimes as long as six months," said Hathairat Ratanasirivilai, business development director of Innovation Living Co, a subsidiary of Thai Metal Aluminium Co. The other five members are BFM Co, a distributor of decorative materials; Far East Mable & Granite Co, a stone importer; Mazuma Thailand Co, a water filter maker; Thamada Bangkok Co, a distributor of switches and sockets; and Wintech Manufacturing Co, a joint venture of Thai and Japanese firms making doors and hardware.

INDIA

Sanitaryware sector “hardest hit” Declining demand for sanitaryware category in India is also impacting several unorganised players based in Thangadh and Morbi regions of Gujarat. A significant decline in new construction activity has led to branded sanitaryware players resorting to aggressive pricing, an analysis by ICICI Securities shows.

The category remains the worst impacted in the building materials space as sanitaryware significantly derives a high percentage of growth from the new construction, it said. The limited opportunity in terms of replacement demand (driven by significant inconvenience) and shift from unorganised to

organised segment would restrict category growth in such a challenging macro environment and would thus find limited growth avenues for branded players in the near term, the brokerage said, adding that segment growth would thus be limited to market share gains driven by aggressive pricing. The declining demand for

sanitaryware category in India is also impacting several unorganised players based in Thangadh and Morbi regions of Gujarat, it found. Increasing under-utilisation, rising working capital requirements and improving compliance in the two regions are forcing several units to cut production or take a periodic shutdown, it stated.

SRI LANKA

Tableware industry seeks clay revival Sri Lankan ceramic tableware manufacturers are trying to revive kaolin or china clay mining to reduce reliance on imports, according to the head of a top Japanese tableware exporter with a factory in the island. Hidenori Tanaka, chairman and managing director of Noritake Lanka Porcelain (Pvt) Ltd., said that access to kaolin was

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one of the difficulties faced by tableware firms in the country which was known for having good quality raw materials. “One of the strengths of Sri Lanka is availability of good quality raw materials,” he said in a speech at the annual meeting of the Sri Lanka Ceramics and Glass Council which groups manufacturers

of ceramic tableware, tiles and sanitaryware, clay roof tiles and glass bottles. The island had good deposits of kaolin, feldspar, silica and quarts which were used by manufacturers. “But unfortunately mining and processing of kaolin has been stopped and all ceramic manufacturers are forced to

import kaolin from overseas,” Tanaka said. The ceramics and glass council was working with Lanka Ceramic, the main supplier of clay raw material to the industry, to resume kaolin processing so imports can be stopped. The main kaolin mines are in Meetiyagoda, in the southwestern coastal region.

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l • Tableware companies urge raw material advantage • Two hollow brick it by confirmation of US duty • Simpolo Ceramics inaugurates India's first plans to drive eco-brick manufacture... SRI LANKA

Tableware companies urge raw material advantage Sri Lanka has a rare raw material required for the manufacture of ceramic products, which is also in great demand in the global market. This should be exploited by the industry with niche products, enabling it to fetch high prices, Noritake Lanka Porcelain (Pvt) Ltd, Chairman/Managing Director Hidenori Tanaka told the 16th Annual General Meeting of the Sri Lanka Ceramics and Glass Council in Colombo in November. He said Sri Lankan ceramic products are in demand in Japan and Europe which Sri Lanka should make use of by manufacturing new products focusing on innovation. “Noritake has improved the manufacturing process by using new technology and focusing on innovation to drive business,” Tanaka said, adding that the company will continue to help the industry get over challenges. The ceramics industry in Sri Lanka takes pride in a history that dates back to several centuries where historical ruins bear testimony to the rich diversity of ancient craftsmanship

and skills of craftsman. The distinguished designs and exquisite elegance of the products manufactured for upmarket segments shows the influence of the rich heritage and traditional craftsmanship influence. The island is endowed with raw materials used in the industry such as kaolin, ball clay, feldspar, silica quartz and dolomite. The excellent quality of the material contribute immensely to the high standard of products manufactured for the local and global market. “There is enormous potential for Sri Lanka to export high quality ceramics products to the global market but it needs to overcome some of the challenges facing the industry,” Tanaka said. However, according to experts the industry is facing many challenges that make manufacturing and exports unsustainable due to the staggering amounts spent each month on the import of raw material such as kaolin. “The industry imports around 100 tons of kaolin each month which is a huge cost to

manufactures who are already saddled with the high cost of production,” SLCGC President Anura Warnakulasooriya said. Sri Lanka imports kaolin from Japan, China, Vietnam, Thailand and UK. The industry is the present predicament today due to the none extraction of kaolin from the Meetiyagoda deposit which provided quality kaolin for the manufacture of ceramic products and the long approval time to mine for raw material. However, the ceramics industry is a vital cog in the economy of the country since it is one of the few industries that use local raw material and adds value locally and exports to the global market. According to data value addition of the industry is over 300 percent on locally sourced raw material. Domestic value addition has been a key factor in exporting products using duty advantages offered under trading arrangements. Sri Lanka has established global reputation for ceramic products due to the quality and finish from the use of raw

materials with pigments and miscellaneous chemicals for preparation of glazes, decal, liquid gold and silver obtained from international sources. Sri Lankan products blend with advanced technology and indigenous craftsmanship has made its way to top department stores such as Macy’s, Crate & Barrel, Marks and Spencer, Hallmark and Pottery Barn in USA, El Corte Ingles in Spain, Debenhams, Susie Watson Designs, John Lewis and House of Frazerin UK, Sanrio and Isetan in Japan. Sri Lanka also manufactures for reputed licensors such as Walt Disney, Universal Studios, Lucas Arts and Warner Brothers. USA, Japan, UAE, Canada, Netherlands and Maldives are some of the major markets of Sri Lankan table and kitchenware. The highly skilled labour force, competitive labour cost and good factory level management, state of the art technology, research and development facilities and ethical standards are some of the industry strengths.

INDIA

Two hollow brick plants on the way Hollow bricks production, which are slowly getting popular in India, will see addition of two new plants in the year 2020. Varansi , UP based Prayag Clay Products Pvt Ltd, one of the leading bricks producers in the country is investing in a state of the art production plant for the production of hollow bricks. The company has expressed its inability to share the specification of the

plant due to contact clause with the supplier. However, the company management told, “ We are importing machinery for the production of hollow bricks from Germany and Belgium. The new plant will be functional by March 2020.” The second hollow bricks plant will be set up by Austrian heavy clay major Wienerberger India. The company already operates a hollow bricks/ block manufacturing plant

near Bangalore in the state of Karnataka. The company’s new plant will be set up at Cheyyar, in the state of Tamil Nadu. Wienerberger India’s application for a minor mineral mining license has been pending decision for more than two years. At Cheyyar, the company has acquired 70 acres of land, half for mining clay and the other half for the factory. There is a lot of demand for the company’s products in

Tamil Nadu and hence the plan for the new plant.

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News

SRI LANKA

Brick makers told to look for exports Sri Lankan ceramic exporters have been told the export market for bricks in industrialised countries is very promising with the island having the required clay resources to meet the demand. “It is very profitable for exporters to export bricks,” said Anand Damle, an expert in the heavy clay industry,

also known as red ceramics, from India. The island has thousands of small irrigation tanks which can supply the raw material to support a brick export industry, he told the annual meeting of the Sri Lanka Ceramics and Glass Council which groups manufacturers of ceramic tableware, tiles and

sanitaryware, clay roof tiles and glass bottles. The tanks need to be de-silted or excavated with the clay being used in making bricks and roof tiles, said Damle, Managing Director, De Boer Damle (India) Pvt. Ltd., a joint venture making machinery for the brick industry in Pune in India.

“There are an estimated 70,000 tanks awaiting desilting,” he said. “The clay is available for making bricks. You can excavate the material and export bricks,” said Damle. The market for bricks in the United Kingdom is booming with markets in parts of Europe also starting to pick up, he said.

MALAYSIA

China Ceramics looks for market entry China Ceramics Co., Ltd. a leading Chinese manufacturer of ceramic tiles used for exterior siding and for interior flooring and design in residential and commercial buildings, today announced that the Company has entered into a non-binding letter of intent with a Malaysian contractor for the Company's ceramic tiles including its new 'cooling' ceramic tiles that it introduced in August of 2019. The Malaysian contractor intends to use the Company's ceramic tile products for use in high rise apartment buildings in the third quarter of 2020. "This is an important step to increasing our exports to Southeast Asia due to the rapid rise in construction in the region and its climate conditions which make it an

ideal fit for many of our ceramic tile products. Provided that the market demand and related conditions are in place, we plan upon substantially increasing our exports to this region," said Ms. Meishuang Huang, Chief Executive Officer of China Ceramics. "China Ceramics continues to deploy innovation and competitive pricing to secure new business. We believe that our new products will help us to enter new markets and ultimately diversify our revenue stream while contributing to our future growth." The Company's anticipated entry into Malaysia is the first step of an expansion effort into Southeast Asia that is intended to capitalize upon the increased level of the region's new building construction which is due in part to China's Belt and

Road Initiative. The Company foresees this as an opportunity to utilize its currently unused production capacity as it enters a dynamic regional market with an estimated population of 660 million people. The Company's Chief Executive Officer, Ms. Huang Meishuang, will oversee the execution of this planned expansion. The Company plans to introduce specialized products into the Southeast Asia market that are suitable for the region due its generally warm climate, including the Company's recently announced new 'cooling' ceramic tiles. This building product is a new type of exterior ceramic tile designed to cool indoor temperatures of buildings. The new cooling ceramic tile series is designed as a stone pattern with a look

of natural décor and luxury with richer patterns than organic stone materials. The Company is in the final stages of testing the new product and receiving its certification. China Ceramics Co., Ltd. is a leading manufacturer of ceramic tiles in China. The Company's ceramic tiles are used for exterior siding, interior flooring, and design in residential and commercial buildings. China Ceramics' products, sold under the "Hengda" or "HD", "Hengdeli" or "HDL", the "TOERTO" and "WULIQIAO" brands, and the "Pottery Capital of Tang Dynasty" brands, are available in over 2,000 style, color and size combinations and are distributed through a network of exclusive distributors as well as directly to large property developers.

CHINA

Tile makers hit by confirmation of US duty The U.S. Commerce Department said on Nov. 7 it made a preliminary determination that Chinese exporters had dumped ceramic tile in the U.S. market at less than fair value. In a statement, the department said it imposed duties ranging from 114.49 percent to 356.02 percent. The department is scheduled to announce its final determination by March

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23, 2020. Imports of ceramic tile from China were valued at an estimated $481.3 million in 2018, it said. The Commerce Department said it would impose a preliminary anti-dumping duty of 114.49 percent on Belite Ceramics (Anyang) Co. Ltd.; 114.49 percent on Foshan Sanfi Import & Export Co. Ltd.; and 178.20 percent or 356.02 percent on other

AC 19-10

Chinese exporters. Glazed ceramic floor and wall tiles from China, which are popular items at major U.S. home-supply chains, including Home Depot, Lowe’s and Floor & Decor, are currently subject to a 25 percent tariff as part of the U.S. Trade Representative’s “Section 301” penalties on China. In September, the Commerce

Department found that imports of ceramic tile from China are unfairly subsidized and it imposed preliminary duties ranging from about 104 percent to 222 percent. The agency opened its antisubsidy and anti-dumping investigation of Chinese tile imports in May after receiving a petition from a coalition of eight U.S. tile producers claiming injury.

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News

INDIA

Simpolo Ceramics inaugurates India's first SACMI Continua+ line Simpolo, a leading Indian floor tile, wall tile and sanitaryware manufacturer, has a clear goal: to revitalise the medium and high-end market with new products and the best available technology. And to achieve that goal they have installed and started up a SACMI Continua+ line, the country's first. Ever since taking its first steps back in 1977, Simpolo has constantly invested in technological innovation to develop outstanding ceramic products via efficient, sustainable solutions that meet customer and market needs. It is hardly surprising, then, that the company has decided to go with SACMI technology to set up a new large slab line. Installed at the Morbi plant in record time, the line has been operational since September. Several factors played a role in the lead-up to the investment decision and its subsequent management. Firstly: the extraordinary potential of SACMI Continua+ in terms of slab size and thickness, the aesthetic quality of the finished product and the possibility of integration with digital decoration and glazing solutions. Secondly: the ability of the SACMI team

- present in India with its SACMI Engineering sales and manufacturing facility - to work alongside the customer every step of the way, from design to after-sales. Lastly: Continua+ does not just allow for the manufacture of ultra-high quality, greatlooking products. It also lowers operating expenses (OPEX), enhancing the competitiveness of a sector that, in India as in many parts of the world, is being hampered by geopolitical tensions, a sluggish world economy and the recent slowdown in the local ceramics industry. Installed in record time – contract signed in January, work begun in March, inauguration in September - this new line will let Simpolo manufacture up to 15,000 m2 of new products per day. Integrated with SACMI digital decoration machines, the new line also includes several upstream/downstream SACMI solutions, such as dryer and kiln, and will produce mega-slabs as large as 1600x3200 mm. Simpolo is determined to combine technological upgrades with a capacity to develop and promote an

NEWS IN BRIEF

Jitendra Aghara, Chief Managing Director, Simpolo

entire family of new products; hence, a dedicated event in Mumbai, which gave Sacmi the opportunity to meet the country's main dealers and sellers (no less than 800 contacts) and present some of the latest products in the range before the line was even operational. For SACMI, then, this investment confirms the soundness of a technology that is already the worldwide benchmark for large sizes: a technology that, in a market as fundamental as India, offers exciting strategic development prospects. It is also an investment that thanks to the resulting quantum leap that sets the future standards for technology and products - is already the talk of the town.

INDIA

Tile sector considers “bleak” outlook It is no secret that Indian ceramic tile industry is going through a prolonged slowdown. Domestic demand has remained muted for more than eighteen months. In fact, the current year has been one of the worst years for Indian ceramic tile producers based at Morbi. The liquidity crunch in the real estate market has deepened and the sector continues to be on edge amid tepid home sales. This has affected the tile industry, which too is feeling the pinch. While the realty market is facing difficult times, the retail sales of ceramic

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tiles have also been flat in last eighteen months. Though, ceramic tile producers are expecting that and new orders from the government will drive the demand in coming years, but most of the institutional demand is for low range products such as soluble salt series. The year 2019 also witnessed shutdown of coal gasifiers at Morbi ceramic cluster on an order from Gujarat state High Court. A number of ceramic tile producers had to face increased tax compliance on account of GST. This also led to cut in production in Morbi.

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After winning two consecutive awards as best supplier in Brazil, on 25 October the Vercelli-based company Inter Ser received yet another recognition from PT Arwana Citramulia Tbk, the largest ceramic tile producer in Indonesia and the 14th largest in the world. During the event held in Palembang for its technological partners, the Indonesian company named Inter Ser the beset supplier for the imported spare parts category. Purchased quantities, prices, service, delivery times, rapid response, problem solving and reliability were the aspects considered by the customer in assigning the award, which was collected by Ms Rondang Silalhai from PT Chandra Silamas (pictured), Inter Ser’s agent in Indonesia. “We are very proud of this recognition in the Indonesian market, which demonstrates that focusing on reliability, quality, professionalism and all-round dedication to the customer (including aspects of reactivity, problem solving and technical support) is the key to success in every corner of the planet,” said CEO Gian Luca Zanoni, head of Far East markets. Today Inter Ser supplies equipment to more than 160 ceramic companies in 65 countries, including 22 of the world’s top tile manufacturers.

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AUSTRALIA/USA

Brickworks acquires Redland Brick At a price of $48 million, the purchase covers four manufacturing sites across the US, one in Pennsylvania, and Virginia, and two in Maryland. Redland Brick encompasses brands such as Cushwa, KF, Harmar, and TruBrix, brands which will enable Brickworks to grow across North America, and in particular the north east of the US. Brickworks expects that the acquisition will delivery 3 per cent EPS accretion within 3 years, once synergies between the companies are realised. Final requirements of the sale will be completed in February 2020. Brickworks is Australia’s

largest brick manufacturer, and Redland Brick has the capacity to produce up to 250 million bricks a year, and has sales of roughly 80 million bricks a year. Brickworks managing director, Lindsay Partridge, highlighted how the acquisition fitted within Brickwork’s growth strategy. “We are pleased to welcome those Redland Brick staff joining the Brickworks Group, as we continue our expansion in the United States. With a suite of well-recognised brands, including the highly renowned Cushwa handmade and moulded bricks, the acquisition will further extend our industry-leading range and

premium product positioning,” he said. This latest acquisition comes after a series of purchases by Brickworks fo US brick manufacturers. In August 2019, Brickworks bought Sioux City Brick, based in Iowa, and acquired Glen-Gery in November 2018. “These acquisitions follow a thorough strategic review, where the North American brick industry was identified as a highly attractive longterm growth opportunity for Brickworks. This strategy is underpinned by the significant value creation opportunities available through consolidation and

rationalisation of under-utilised facilities across the industry,” said Partridge. Partridge highlighted that these expansions of the Australian manufacturer enable the company to grow the role of brick in construction activity. “As we have done in Australia, we will take an active role to lead the industry in the promotion of bricks. In light of the well-publicised structural failures and concerns over other sub-standard building materials being used around the world, we take pride in the timeless appeal and durability of our products,” said Partridge.

BANGLADESH

Government plans to drive eco-brick manufacture The government plans to use environment-friendly bricks in construction instead of traditional bricks manufactured by burning the topsoil of the agricultural lands, in the next five years to curb air pollution. “We’ve designed a workplan which will be implemented in phases by 2025,” said Mallick Anwar Hossain, additional director general of the Department of the Environment. The authorities aim for 10 percent in the current fiscal year and plans to reach the goal in five years, he said. The environment ministry or DoE issued an order following an inter-ministerial meeting to curb air pollution. Later, a notice was issued to create public awareness on the issue. During the dry season, 58 percent of the country’s air pollution is caused by the brick kilns, according to the DoE. The drive against air pollution is ongoing following a directive of the High Court. Moreover, the workplan to use environment-friendly bricks will be implemented as part of an effort to rein in air pollution. The workplan to gradually

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increase the use of block bricks instead of soil bricks in government construction, renovation and roadworks in villages have been made mandatory under the Brick Manufacturing and Brick Kiln Establishment (Control) Act, said the ministry. However, the directive will not be applicable to the construction, repair work of the base, sub-base of roads and highways. “There won’t be any more burnt bricks after five years. We’re moving towards the use of block bricks manufactured in an environment-friendly way. No fire or tree is needed for manufacturing the bricks. It is made with sand and a chemical using the compressor,” said Hossain. Some of the companies are manufacturing these bricks, he said. The traditional brick manufacturing method that burns coal causes ‘a lot of damage’ to the environment, according to DoE officials. It damages agricultural lands, especially the topsoil, and brings health hazards

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to people. The Brick Manufacturing and Brick Kiln Establishment (Control) (Amendment) Act -2019 was passed in parliament this year to promote the use of ‘blocks’ instead of traditional bricks. The department will monitor the brickfields if they are following the order. It has already begun a drive to evict illegal brickfields in five districts. The drive will be extended to other divisions. “A mobile court is being run regularly to control the pollution,” said the DoE additional director general. “We’ll ensure that the brickfields stop exuding environmental damaging materials,” said Environment Minister Md Shahab Uddin on Monday. The country currently has 8,033 brickfields in 64 districts. Only 5,225 of them received environment certificates. On the other hand, environment-friendly technology is used in 5,798 brickfields while environmentfriendly chimneys are used in 72 percent of the kilns.

NEWS IN BRIEF India’s largest ceramic tile producer, Kajaria Ceramics has expanded installed capacities of its tile and sanitary ware production units in the state of Andhra Pradesh and Gujarat. Kajaria has commenced production from its manufacturing facility of glazed vitrified tiles with a capacity of 5 million square meters per annum in the state of Andhra Pradesh. The plant has become operational in early October. The company which is also producing sanitary ware from a Morbi based plant in joint venture has increased its installed capacity by 150,000 pieces per annum. Earlier, the plant had an installed capacity of 600,000 pieces per annum. Post expansion in early October, this plant has an installed capacity of 750,000 pieces of sanitary ware per annum.

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BANGLADESH

Brickmakers evicted over pollution charges A mobile court has evicted five brickfields and fined the owners Tk 20 lakh at Baluchor Union of Sirajdikhan Upazila on charges of polluting the environment. Kazi Tanjid Ahmed, Executive Magistrate of the Department of Environment, conducted the drive. The brickfields accused of polluting the environment are – Mama Bhagina Bricks, Molla Bricks, Akash Bricks, KBC Bricks and Mayer Doa Bricks. The mobile court fined Molla Bricks Tk 8 lakh, Akash Bricks Tk 5 lakh, KBC Bricks Tk 2 lakh and Mayer Doa Bricks Tk 5 lakh. However, Mama Bhagina Bricks were not fined. Kazi Tanjid Ahmed, Executive Magistrate, informed that these brick kilns are manufacturing bricks through conventional

method causing severe environment pollution. Besides, he said, they are manufacturing bricks without any valid papers. “The brick field named ‘Mama Bhagina’ was dismantled using veku machine. The other brick kilns were demolished through spraying water and by dismantling all the raw materials,” he added. He also informed that as per the information of Department of Environment, there are a total of 78 brick kilns in the district. Of them, 69 brickfields are in Sirajdikhan upazila, 5 in Gozaria and 2 each in Sreenagar and Louhajang upazilas. Only thirty-two of the brickfields of Munshiganj district are legal while the others have no clearance certificate. The Environment Directorate

said that drive will be conducted in other brickfields in phases. Abdul Mannan, General Secretary of Sirajdikhan Brick Manufacturing Owners Association said that “there are 55 brickfields under our association. Out of these, the administration has announced 37 as illegal. However according to our survey, the number of illegal brick fields are 5 to 7.” He also said that zigzag chimney was used in 95 percent brickfields of the upazila which refines the harmful black smoke. However papers of some zigzag brickfields were not completed and so those were declared illegal, he added. Abdul Mannan, Sirajdikhan Brick Manufacturing Owners Association,also

TURKEY

Karaca adds Weimar to the stable Turkish porcelain group Karaca, which presides over various ranges of homeware products and services such as Karaca Home, Jumbo, Emsan and Cook Plus, has now added Weimar, one of the most established porcelain brands in Germany, to its portfolio after nearly one year of negotiations. The 229-year-old company, established in the namesake town of Weimar in central Germany, will now operate under the Karaca brand. Founded in 1973 in a small glass workshop by Arif Karaca, Karaca constantly grew in the field of glassware, later expanding into further fields with a focus on branding and design since Fatih Karaca's appointment as manager in 2006. Karaca aims to become one of the world's well-known brands. Having acquired Weimar, one of Germany's best-established companies, Karaca has also opened a store in Berlin. Speaking to reporters in Germany, CEO Fatih Karaca claimed the company aims to

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be the most recognized name in table and kitchenware. While Karaca's turnover in 2006 stood at TL 30 million, the company this year expects a total of TL1.8 billion. "We employ 2,250 people. Our brand has 33 stores in 12 countries, as well as 600 dealers and 2,500 sales points in Turkey," Karaca said. "We have 137 Karaca, 42 Jumbo, 9 Emsan, and 21 Karaca Home stores, and are aiming for a TL 2.4 billion in turnover in 2020." Karaca stated that the company continues to strengthen its image in terms of both product quality and design. "We made our strategic planning together with McKinsey. We aim to have 30 stores abroad in five years," he continued. "We established our European headquarters and logistics center in Cologne. Our retail operations and European e-commerce operations were launched simultaneously. With e-commerce, we will provide services from Germany to Europe. The new brand will provide us with an engine for

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growth in Germany." Karaca opened its first store in Akmerkez in 2001, raising its number of stores to four in a short period. "In the 2000s, a decision was made to grow in the retail sector, and 800 dealers and more than one thousand sales points were reached in 2006. In 2008, Karaca grew by 45% and acquired Emsan. Karaca Home was founded in 2012. In 2014, the Jumbo brand joined the Karaca family. Lastly, we then bought the German Weimar brand," the firm's CEO said. Weimar was founded in 1790. The town itself is famed for its porcelain products, mostly sold in antique shops, while the company is one of the oldest living porcelain brands in Germany. Despite changing hands many times, production has never ceased. Karaca bought the brand from its last owner, the Rosenthal Family. The factory, which employs 220 people, will continue to produce under its new owners.

said that “if the brickfields are suddenly closed down, then thousands of workers and owners would be forced on to the street. We demand that we should be given opportunity to operate at least with zigzag chimney. If after that we fail to make the brickfields legal then we will close down those. We would have to commit suicide if the government doesn’t consider our sufferings.”

NEWS IN BRIEF American Wonder Porcelain, the US ceramic tile company owned by Chinese giant Marco Polo, has adopted the innovative automatic lubrication system from BBM Industrial Maintenance. The solution will be installed on kilns and dryers on the new production line recently started up in the factory in Lebanon, Tennessee. This project was made possible thanks to fruitful collaboration between American Wonder and GMM USA, the GMM Group’s branch which has been operating in the USA since 2016. Earlier this year, FM, a Correggio, Italy-based company specialising in the production of injection moulded thermoplastic components, signed an agreement with the GMM Group for exclusive rights to distribute its ceramic sector products in the US market. The agreement builds on a partnership that was established several years ago and enables GMM Group to further strengthen its presence in the USA, where it has been operating since 2016 with the branch GMM USA based in Clarksville, Tennessee.

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International News Portmeirion warns on profits United Kingdom

eramics maker Portmeirion Group has warned that its profits for 2019 will be behind current market expectations. However, the listed company said it does expect "improved manufacturing efficiencies and sales growth" in 2020. The Stoke-on-Trentheadquartered business previously reported that it has experienced lower export sales, particularly for South Korea, in the early part of its current

financial year. At the start of August it also revealed that its revenue and pre-tax profits dropped during the first half. In a statement, the company said that sales into the South Korean market, specifically for the Portmeirion Botanic Garden ranges, "continues to be weaker than expected". Chief executive Mike Raybould said: "Since being appointed in September, I have reviewed all of our markets, and our teams

have invested a huge amount of resource to resolve the issues we have faced in South Korea which were more challenging than we had anticipated earlier in the year. "The group has a long and consistent track record of growth, leveraging our heritage portfolio of homeware brands around the world. "We believe that the recent actions we have taken will be successful in protecting our brands and export markets in the

long term. "The group continues to invest in its long term strategy. In the last three months there have been key senior level hires in marketing, digital and online and product development to accelerate our progress in these areas. "With the actions we have now taken, I am confident that we will be able to turnaround our South Korean business and grow strongly in a greater number of markets in the coming years."

Tile imports forecast to soar Nigeria

he importation of ceramic tiles into Nigeria, would by 2025 hit $2.1 billion, which amounts to over N761 billion. A Professor of Ceramics Engineering, Patrick Oaikhinan, gave the figure on the sideline of the launch of Oaikhinan Ceramics Foundation in Lagos. According to The Nation, Oaik-hinan lamented that despite Nigeria’s potential growth for ceramics, its import bill was huge. The professor, however,

made known that the huge import bill was as a result of the gradual destruction of ceramics manufacturing in Nigeria, which according to him, was witnessed in the 1950s and 1980s when five international ceramic manufacturing companies located in different parts of the country went moribund. Oaik-hinan added that the ceramics industry was further affected by focus on crude oil production. “Currently, there are nine operating ceramic companies in Nigeria, eight for tiles and one for

sanitary ware, and they operate under various capacities. Ceramics (ROYAL) is the oldest major manufacturer of ceramic tiles and is closely followed by PNT. “The average production capacity is 40,000-45,000 square meter per day for the eight manufacturing companies combined. I thank the Chinese for 100 per cent investment in six out of the eight ceramic tile companies, and the Indian with investment support for the remaining two tiles companies,” he added.

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New MD for Laufen Europe

ntonio Linares has been named as the new senior managing director for Laufen and the northern and central European Roca division. He succeeds Alberto Magrans who was recently promoted to the role of chief executive of the entire Roca Group. Linares has years of experience in the international sanitaryware market having

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joined the Roca Group in 2003. He held several positions in corporate business development and marketing before becoming managing director of Laufen in Russia – where he successfully grew the brand into the market leader in the premium bathroom segment. Speaking of his new appointment, Linares said: “I congratulate Alberto Magrans on his new position

and look forward to continuing his impressive 10-ear work of developing Laufen into the most innovative design brand in the bathroom business.” Laufen has been part of the family-owned is the premium global brand of the familyowned Roca Group since 1999. The Roca Group employs more than 24,000 people worldwide and has 82 production sites in 19 countries.

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Cepheus invests in Tabor Ceramics Ethiopia

epheus Growth Capital Partners (Cepheus Capital), the private equity which has injecting finance in promising sectors in Ethiopia for the past few year, invests in Tabor Ceramics Products Share Company. With this investment, Cepheus Capital will hold a significant minority ownership stake and provide strategic, managerial, and operational support to the company, according to the press statement from Cepheus Capital, which didn’t mention the amount of its investment. Based in Hawassa city of the new region of Ethiopia, Sidama, Tabor Ceramics is currently undertaking major expansion to increase all four of its main products. Ceramic products of the company includes tiles, sanitaryware, tableware and ceramic insulators used in electricity distribution lines.

The equity investment by Cepheus Capital will support the company’s planned expansion and also help launch the production of new higher quality and higher value product line being manufactured in Ethiopia for the first time. Teshome Belamo, whose family owns Tabor Ceramics, said: “We are excited to partner with Cepheus Capital as we are at the beginning of a major factory expansion and are also aiming to improve our management systems and internal operations to be in line with international standards. We have a very close alignment with the team at Cepheus Capital and look forward to working with them in the years ahead.” “We see Tabor Ceramics as a promising investment opportunity that is very much aligned with the growth trends and trajectory of the

Ethiopian economy—including urbanization, infrastructure expansion, and the rising numbers of middle-class consumers,” said Berhane Demissie, Cepheus Capital’s Managing Partner. “The company has seen growing demand for its products in recent years, and we anticipate this will continue over the coming years, reflecting large on-going housing developments as well as the expansion of the country’s electricity network. The mix of products manufactured by the company—covering retail, residential, commercial and industrial customers—also offers multiple growth and diversification opportunities,” she said. The deal was led by Helaway Tadesse, Director at Cepheus Capital, who commented: “Tabor Ceramics is a well-positioned import-substituting business that

can replace a range of ceramicmade products currently supplied almost exclusively via imports. Moreover, as the company’s raw material inputs can be readily secured from local sources, the scope for future expansion is substantial.” Cepheus Capital is a private equity firm that invests in Ethiopia’s most promising businesses and entrepreneurs. Besides providing capital, the firm also delivers management and operational expertise to its portfolio companies, and assists them in the adoption of strong environmental, social and governance standards. It is indicated that Cepheus Capital is finalizing the fund-raising for its first $100 million fund that will be deployed across the manufacturing, agro-processing and services sectors in Ethiopia.

P&W leads composite charge Delta proves the United States

ratt & Whitney, a global leader in commercial and military jet engines and a division of United Technologies Corp. has announced it will open a new ceramic matrix composites (CMCs) research & development (R&D) facility in Carlsbad, California. With the addition of this dedicated 60,000 square-foot R&D facility, Pratt & Whitney will add dozens of employees focused on the design, development and production of CMCs for aerospace applications. Compared to traditional materials in the hot section of a jet engine, CMCs are known to be lighter and have higher temperature capability, which can enable improved thermal efficiency for gas turbine engines. CMCs will enhance Pratt & Whitney's next-generation commercial and military engines to deliver benefits that include increased range, increased fuel efficiency and reduced emissions. "Pratt & Whitney views CMCs as an enabling technology," said Meggan Harris, senior director, CMCs, Pratt & Whitney.

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"This material will allow us to offer key capabilities for both our commercial and military customers, as their needs for ever-better fuel efficiency over longer flight times continue to evolve." "We're excited to establish a dedicated team of engineers and technicians working on the next generation of this potentially disruptive technology in a collaborative space," said Andy Lazur, general manager of the Pratt & Whitney Carlsbad facility. "This new facility is a testament to Pratt & Whitney's commitment to innovation. This novel material technology enables us to provide dependable engines with enhanced performance to our customers." Pratt & Whitney is a world leader in the design, manufacture and service of aircraft and helicopter engines, and auxiliary power units. United Technologies Corp., based in Farmington, Connecticut, provides hightechnology systems and services to the building and aerospace industries.

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difference for System Brazil

elta Group, Brazil’s largest porcelain tile manufacturer and one of the market leaders in Latin America, has chosen technology from System Ceramics for its factory in Rio Claro where four new production lines are currently under construction. The equipment to be supplied by System Ceramics includes 3 Creadigit XXL units for digital decoration of large sizes, each equipped with Creavision, and a series of state-of-theart automations for sorting, packaging and palletisation lines: 4 Multigecko sorting systems, 4 Multipack packaging machines with reduced cardboard consumption and 4 Griffon palletisers. The System Ceramics supply contract to the Delta Group, carried out in collaboration with the System Brasil branch, consolidates a partnership that began several years ago and is based on reliability and innovative technological content of the proposed solutions,

ideal for high-quality ceramic tile production. Creadigit, for example, is the benchmark printer in international markets. Coupled with the Creavision vision system, it guarantees one of the highest performance decoration processes in terms of both industrial sustainability and print quality and definition. Creavision is a powerful vision system equipped with latestgeneration video cameras that analyse and control the position and inclination of the tile or slab, ensuring perfectly centred graphic designs and prints and eliminating ink overflow onto the conveyor belt.

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Soitec to develop SiC substrates France

oitec, an industry leader in designing and manufacturing innovative semiconductor materials, announced a joint development program with Applied Materials on next-generation silicon carbide substrates. Demand for silicon carbide-based chips has been rising, particularly in electric vehicles, telecommunication and industrial applications; however, adoption has been limited due to challenges related to supply, yield and cost of silicon carbide substrates. Soitec will be working with Applied Materials to develop substrates that can overcome these challenges and bring increased value to the industry. The development program will combine Soitec’s leadership in engineered substrates with

that of Applied Materials, the leader in materials engineering solutions. Whilst Soitec will leverage its proprietary Smart CutTM technology - currently in use for the manufacture of Silicon-On-Insulator (SOI) products largely adopted by chip makers, Applied Materials will bring process technology and equipment expertise. Under the development program, the companies will install a silicon carbide engineered substrate pilot line at the Substrate Innovation Center located at CEA-Leti. The line is expected to be operational by the first half of 2020, with the goal of producing silicon carbide wafer samples using Soitec’s Smart CutTM technology in the second half of 2020.

“We are excited about forming this industry-unique strategic development program with Applied Materials,” said Thomas Piliszczuk, Executive VicePresident of Strategic Office at Soitec. “We are convinced that Soitec’s Smart CutTM technology and 30 years of experience, together with Applied Materials’ great leadership in materials engineering, can enable the development of a robust technology and boost the silicon carbide supply chain,” added Piliszczuk. “We look forward to working closely with Soitec to create materials engineering innovations for silicon carbide technology,” said Steve Ghanayem, Senior Vice-President of New Markets and Alliances at Applied Materials.

“With its broad portfolio and deep expertise, Applied Materials is best positioned to help the power electronics industry overcome the toughest technology challenges.” “Electric vehicles are a key focus for Audi. The future of mobility will be electric – based on technology innovations beginning at the semiconductor material and substrate level,” said Berthold Hellenthal, head of Competence Center Electronics and Semiconductors and the Semiconductor Strategy at AUDI AG. “Silicon carbide can enable higher power density and better efficiency semiconductors in electric vehicles. We are pleased to see Soitec and Applied Materials working together to advance this technology.”

Solar powered brick production United Kingdom

ightsource BP has confirmed it is to begin construction of a 4.9 MWp solar installation for leading brick manufacturer, Ibstock Brick, at the firm’s Leicestershire headquarters. The development is the first brick factory in the UK to be part-powered by a large-scale solar farm and is the result of a Power Purchase Agreement (PPA) which will see renewable electricity ‘hard-wired’ into Ibstock Brick’s private electricity network, providing 30 percent of the site’s annual electricity demand. Ibstock Brick will

purchase the electricity generated from the installation via a 25-year agreement at a fixed rate, delivering operational savings as well as sustainable benefits. Lightsource BP will operate the site over the full lifecycle of the project. The collaboration has resulted in the two businesses forging a strong relationship and both parties will continue to work together to potentially develop solar solutions across Ibstock Brick’s other manufacturing plants across the UK. “Our solar farms provide our customers with a reliable source

of renewable energy whilst reducing their carbon footprint and electricity bills” said Zosia Riesner, Head of Corporate PPA. “In our mission to drive the global energy transition landscape, our PPAs provide a risk-free, tailored solution that allows business to buy renewable energy competitively. As experts in the development, financing and operation of solar farms, we are the ideal business partner.” Continuous Improvement and Sustainability Director, Mark Brind, from Ibstock added that the company recognises the the importance of being a sustainable

business and that the agreement with Lightsource BP forms part of its multi-dimensional approach in our drive to reach its sustainability targets. What made the agreement particularly attractive was the biodiversity enhancement plan supporting the construction and the fact that the land could be used for both solar and agricultural use. The PPA follows Ibstock Brick’s commitment to implement more resource-efficient methods in its manufacturing process by making use of renewable energy to reduce its carbon footprint and reliance on the national grid.

Supplies commented: “We have found a like-minded company in Brooke Ceramics which places the customer at the heart of its business. "The team at Brooke Ceramics is highly skilled, has superb product knowledge and a great distribution network. We are confident this will be a great asset and look forward to the opportunities ahead.”

Geoff Brooke of Brooke Ceramics said: "MKM has an impressive reputation in the industry and is well-known for its commitment to the local building trade. "Our team is excited at the prospect of becoming part of MKM’s dynamic growth, while continuing to maintain the UK’s most extensive range of wall and floor tiles for our customers.”

MKM buys into Brooke United Kingdom

ull-based MKM Building Supplies has acquired Brooke Ceramics, it has been announced. MKM is now the owner of Hull-based Brooke Ceramics, the UK’s largest independent tile and bathroom store. The transaction, the value of which has not been disclosed, was completed in late November.

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A statement from both parties said it will be business as usual for staff and customers at the East Yorkshire store. Established by Ernest Brooke in 1925, Brooke Ceramics is a family run business. The location of the Brooke Ceramics showroom is just a stone’s throw from MKM’s flagship branch in Hull. David Kilburn, Executive Chairman, MKM Building

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Raw Material News Zircon in focus Controversy over supply and demand prospects and future applications for zirconia dominated discussions at the Zircon Industry Association conference in Dubai earlier in September. Here are some of the major takeaway points learned by industry commentators during the event:

Zircon supply will only get tighter…

Gavin Diener of consultancy TZMI warned that zircon production was falling due to depletion of ore at existing projects, and forecast an increasing shortfall despite stable demand. Miners tend to focus their efforts on the highest-grade part of the deposit, meaning that the rate of mineral sand production peaks early in the life of a mine. As time goes on, the rate of production falls. Diener said that because most operational mineral sand facilities were advanced in their lifespans, the overall rate of production was falling. TZMI estimated that there was a total of 1 million tonnes of new zircon supply in the planned mineral sand projects currently at project stage. But only "a small subset" of these mines will reach production in the next five years, due to technical, political and environmental factors. "History shows that new supply arrives later than expected by project developers," Diener said. As a result, total zircon production was expected to fall to below 1 million tonnes per year by 2024. In comparison, TZMI foresees demand at more than 1.2 million tonnes in 2020, although Diener admitted that the short-term demand outlook was "very uncertain." And Beth Xiang from mineral consultancy Ruidow reported that local Chinese zircon production plummeted in 2019, after mining almost halted in Hainan province, which previously was responsible for about 90% of China’s zircon production. Total Chinese zircon production in 2018 was estimated at 150,000 tonnes by the US Geological Survey. Hainan has been designated a future free-trade zone, to focus on trade, financial services, and service industries, and this will lead to mine closures. Xiang said that 2019 zircon production in Hainan was estimated to be less than 10,000 tonnes, and said that "Chinese domestic zircon sand will basically disappear in the future."

… But demand is sluggish or falling

Lincoln Ying, chief executive officer at Matrix, one of China’s largest producers of zircon opacifiers, painted a gloomy picture for demand. He forecast that demand would fall to 1 million tonnes in 2019 and to 850,000-900,000 tpy for the "next couple of years." That compared with peak demand of 1.6 million tonnes in 2011, he told conference attendees. "We do not expect an increase in demand over the next few years," Ying said, pinning the decline in demand on

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substitution of the material in the tile industry in China and elsewhere since 2011. The outlook from other speakers was slightly more sanguine, with Beth Xiang suggesting that demand from the housing sector meant that Chinese zircon demand would hit 640,000 tonnes in 2021. And Gavin Diener expected demand to move only slightly lower in 2019, to a little less than 1.2 million tonnes, but recovering to more than 1.2 million tonnes in 2020, the highest demand volume since at least 2016. "[This year] has been a very different year [compared with] 2018," Diener said, citing global uncertainty and lower demand for zircon since the third quarter of last year.

Water shortages could threaten zirconium supply

Alister MacDonald, general manager of marketing at miner and explorer Alkane Resources, warned of the danger to the zirconium industry posed by water shortages. China produces 200,000 tonnes of zirconium oxychloride per year, MacDonald said. This industry consumes 130,000 tonnes of zircon. But production results in waste outputs of uranium and thorium, and involves high consumption of water. And around two-thirds of Chinese production is concentrated in so called "dry provinces" which are particularly dependent on water from underground reserves, rather than surface water. These include Shandong, which alone produces 52% of the zirconium oxychloride. MacDonald noted that around one-third of the Chinese zirconium oxychloride industry was shut down by environmental controls in April 2017, when the government cracked down on pollution. MacDonald warned of a "high risk" of further plant closures, due to water shortages and pollution constraints. He believed that this pressure will drive further consolidation in the industry.

Producers hope new applications will drive fresh demand

Matrix’s Ying said that the development of new applications for zircon could be crucial to sustained demand in the years to come. Prospects for new applications are seen as centered on zirconia, the pure form of zirconium dioxide, and zirconium metal. TZMI’s Diener saw the zirconia and chemical sector as the fastest growing end-user of zircon between 2016 and 2020. Roberto Dante, CEO of the scientific consultancy 2D to 3D, saw potential markets for high-value zirconia chemicals being driven by the developing new-energy and carbon reduction sections. These markets included the use of zircon as a breeder for tritium in reactors, in the sequestration of carbon from the atmosphere, and in solid state lithium-ion batteries.

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But Dante noted that the scale of demand could be limited by the potential for recycling. And he added that some of these end-uses could be "antagonistic" - for example, the widespread adoption of nuclear power could limit demand for carbon capture. Simon Marshall, managing director of Independent Nuclear

Expertise, said that zirconium demand from the nuclear industry was likely to remain steady over a long period of time. This demand was driven by the need for reliable non-fossilfuel power, and the fact that existing nuclear infrastructure is ageing.

Stephan Schmidt unveils organisational change GERMANY // CERAMIC CLAYS For many decades, Stephan Schmidt Group, one of the world’s leading producers of special clays and mineral products, has been firmly rooted in the Westerwald region with its individual companies. As a globally successful company, Stephan Schmidt Group does not only provide approx. 200 secure jobs but has also become an inherent and committed part in and for this region. In order to secure this success for the future, the company time and again must identify opportunities how to better position itself for the increasing competition on the world market. Therefore, the management decided to make some organizational modifications and changes under company law within Stephan Schmidt Group. Internal processes and procedures can thus be streamlined and accelerated without

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any compromise on the usual high service quality towards our customers. As per 01 January 2020, Müllenbach & Thewald GmbH and Marx Bergbau GmbH & Co. KG - both already wholly-owned subsidiaries of Stephan Schmidt KG – will transfer their entire operations to Stephan Schmidt KG. Moreover, they shall be legally merged into Stephan Schmidt KG at a later date. These future-oriented and future-saving measures, however, will not entail any further organisational restructuring. In the context of this transfer of undertakings, the employees of Müllenbach & Thewald GmbH and of Marx Bergbau GmbH Co. KG will automatically become employees of Stephan Schmidt KG. Stephan Schmidt Group looks forward to continuously demonstrating reliability and continuity towards customers, business partners and employees.

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LESS is more for sanitaryware

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very day, more than 141 billion litres of water are used solely to flush toilets. With millions of global citizens experiencing water scarcity, what if that amount could be reduced by 50%? The possibility may exist through research conducted at Penn State, released during November in Nature Sustainability. “Our team has developed a robust bio-inspired, liquid, sludge- and bacteria-repellent coating that can essentially make a toilet selfcleaning,” said Tak-Sing Wong, Wormley Early Career Professor of Engineering and associate professor of mechanical engineering and biomedical engineering. Penn State researchers have developed a method that dramatically reduces the amount of water needed to flush a conventional toilet — a bio-inspired, liquid, sludge- and bacteria-repellent coating that can essentially make a toilet selfcleaning — described in a paper in Nature Sustainability. Wong Lab, Penn State In the Wong Laboratory for Nature Inspired Engineering, housed within the Department of Mechanical Engineering and the Materials Research Institute, researchers have developed a method that dramatically reduces the amount of water needed to flush a conventional toilet, which usually requires 6 liters. Co-developed by Jing Wang, a doctoral graduate from Wong’s lab, the liquid-entrenched smooth surface (LESS) coating is a twostep spray that, among other applications, can be applied to a ceramic toilet bowl. The first spray, created from molecularly grafted polymers, is the initial step in building an extremely smooth and liquid-repellent foundation. “When it dries, the first spray grows molecules that look like little hairs, with a diameter of about 1,000,000 times thinner than a human’s,” Wang said. While this first application creates an extremely smooth surface as is, the second spray infuses a thin layer of lubricant around those

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nanoscopic “hairs” to create a super-slippery surface. “When we put that coating on a toilet in the lab and dump synthetic fecal matter on it, it (the synthetic fecal matter) just completely slides down and nothing sticks to it (the toilet),” Wang said. With this novel slippery surface, the toilets can effectively clean residue from inside the bowl and dispose of the waste with only a fraction of the water previously needed. The researchers also predict the coating could last for about 500 flushes in a conventional toilet before a reapplication of the lubricant layer is needed. While other liquid-infused slippery surfaces can take hours to cure, the LESS two-step coating takes less than five minutes. The researcher’s experiments also found the surface effectively repelled bacteria, particularly ones that spread infectious diseases and unpleasant odors. If it were widely adopted in the United States, it could direct critical resources toward other important activities, to drought-stricken areas or to regions experiencing chronic water scarcity, said the researchers. Driven by these humanitarian solutions, the researchers also hope their work can make an impact in the developing world. The technology could be used within waterless toilets, which are used extensively around the world. However, if a waterless toilet or urinal used the LESS coating, the team predicts these types of fixtures would be more appealing and safer for widespread use. To address these issues in both the United States and around the world, Wong and his collaborators, Wang, Birgitt Boschitsch, and Nan Sun, all mechanical engineering alumni, began a start-up venture. With support from the Ben Franklin Technology Partners’ TechCelerator, the National Science Foundation, the Department of Energy, the Office of Naval Research, the Rice Business Plan Competition and Y-Combinator, their company, spotLESS Materials, is already bringing the LESS coating to market.

“Our goal is to bring impactful technology to the market so everyone can benefit,” Wong said. “To maximize the impact of our coating technology, we need to get it out of the lab.” Looking forward, the team hopes spotLESS Materials will play a role in sustaining the world’s water resources and continue expanding the reach of their technology. “As a researcher in an academic setting, my goal is to invent things that everyone can benefit from,” Wong said. “As a Penn Stater, I see this culture being amplified through entrepreneurship, and I’m excited to contribute.” Other co-authors of the paper from Penn State include Lin Wang of the Department of Materials Science and Engineering; Hui Li, doctoral graduate of the Department of Biomedical Engineering; Margo Corsetti, a mechanical engineering alumna; and Pak Kin Wong, professor of biomedical engineering. International collaborators of the work include Ross Tierney, doctoral graduate, and Professor Leon Williams from Centre for Competitive Creative Design of Cranfield University, UK. This work is supported by the National Science Foundation, the Wormley Family Early Career Professorship, and the Humanitarian Materials Initiative Award, which is funded by Covestro and the Materials Research Institute. It’s early days of course, and work is still ongoing. However, if the industry’s sanitaryware manufacturers could embrace this technology and make it an integral coating to finished goods, then there could be some excellent strategic advantages to be had and the possibility of offering ever more water-saving products to a global market already showing real signs of a shift towards lower H2O consumption. Research costs money, however, and doubtless there will be those that consider such tie-ups as wasteful. However, if one major supplier could patent and invest in such a coating then the possibilities for moving forwards with a globally sustainable product could become an absolute reality at last.

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Analysis: Turkey

Building trends in the Turkish tile sector

ver last two decades, Turkey has emerged one of the most dynamic ceramic tile producing countries on the global scale. In addition to huge capacity additions, Turkish ceramic tile producers have been offering some of the best products available in ceramic tile industry on account of huge investment in the state of the art technology and trend setting designs. Catered by more than three dozen large, mid and small scale producers, Turkish ceramic tile industry has an installed capacity of about 455 million square meters of ceramic tiles per annum. Current installed capacity is far more than total domestic tile demand, so a large part of total production goes to export markets. Most of the investments in recent years were focused on modernising plants to improve production quality and manufacturing efficiency. After steady growth rates of many years, country’s ceramic tile industry is witnessing one of the toughest years in recent history as demand slowdown has hit the industry. Year 2018 was not one of the best years for Turkish ceramic tile industry as low economic growth in the country had an adverse impact on ceramic tile consumption in the domestic market. Turkish economic growth slowed sharply from 7.4 per cent in 2017 to 2.6 per cent in 2018. The economy entered a recession in the second half of 2018 amid tighter monetary policy and private sector deleveraging. Though, as the lira depreciated, exports of ceramic tiles have made a stronger contribution to growth of Turkish ceramic sector.

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Economic woes

Low economic growth in the current year is resulting in weak demand of ceramic tiles in the domestic market. Country’s economy is expected to contract in 2019 for the first time in a decade and is expected to see only modest growth in the following two years, according to a recent Reuters poll. This poll of more than 40 economists showed the Turkish economy will shrink by 1.5% this year. Hit by a currency crisis that triggered a more than-35% lira slide (The currency has fallen almost 10 percent this year, after dropping 28 percent in 2018) against the dollar, the Turkish economy contracted 2.6% in the first three months of the year after shrinking 3.0% in the fourth quarter of last year. Turkey’s economy last contracted on an annual basis in 2009, by 4.7%. From 2010 to 2017, its compound growth rate was 6.6% thanks to a construction boom driven by cheap capital following the global financial crisis. In fact, this was the time, when Turkish ceramic tile producers went for one of the most massive capacity expansion in the region. Currency slide has also put a huge pressure on economic activity and inflation. Interest rates have surged and imports have become more expensive. Since, Turkey imports more than 80 % of its fuel demand, this has had a very negative impact on cost of ceramic tile production. On the other hand, exports have become lucrative for Turkish ceramic tile producers. Though, Turkish government is seeking to revive economic activity in the country by boosting access to credit and pressuring the central bank to lower interest rates. However, ceramic tile industry margins have been squeezed by a currency crisis. Along with the revenues, it has curbed new investment in ceramic tile sector. Turkish

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Analysis: Turkey

bridges Major ceramic tile producers in Turkey banks have also become more cautious about lending in last twelve months, because non-performing loans (NPLs) have increased and requests by companies to restructure their loans have grown. However, despite the negative sentiments in the domestic economy, some of the ceramic tile producers are optimistic about the future of ceramic industry. For example, Erkan Gural of Kutahya Ceramics says, “The government has relieved the negative effects of the inflation rising due to exchange rate pressure and relieved the markets. The government's support of 100% domestic capital played a leading role in this. We have been able to increase our exports to countries, especially Italy, Spain and People's Republic of China, known as ceramic powerhouses in the world.”

Construction drops

There is no doubt that Turkish ceramic tile industry is struggling to get traction from the domestic market due to the construction slowdown. Presidential decree announced in October 2018, declaring that new projects would not be tendered by government, except for those of the highest priority, has had a very negative impact on ceramic tile industry. As a result, civil engineering companies have seen a decline in workload, leaving the country’s construction industry searching for a way out of the crunch. The industry is greatly affected by the number of sales and price of housing. Around three quarters of building permits approved in Turkey are for house building. On average, the annual change in the Housing Price Index accounted for 3.60% in January 2019, and 1.57% in May 2019, implying that real annual changes in housing prices in these months were -13.9% and -14.4%, respectively.

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Company Kale Seramik

Location

Installed Capacity

Can

66 million sqm

Bilecik

41 million sqm

NG Kutahya Seramik

Kuthaya

28 million sqm

Toprak Seramik

Bozuyuk

28 million sqm

Sogutsen Seramik

Pera Seramik

Canakkale

3.1 million sqm

Bien Seramik

Bilecik & Bozuyuk

24 million sqm

Ege Seramik

Kemalpasa, Izmir

24.3 million sqm

Akhisar

23 million sqm

Multi Location

21 million sqm

Usak Industrial Zone

20 million sqm

Usak City

12 million sqm

Graniser Seramik VitrA Hitit Seramik Seranova Seramik Serapool Porselan

Pendik

4 million sqm

Turgutlu

28 million sqm

Tamsa Seramik

Aegean region

21 million sqm

Termal Seramik

Bilecik

18 million sqm

Toprak Seramik

Seramiksan

Eskisehir

28.5 million sqm

Usak Seramik

Usak

3.2 million sqm

Yuksel Seramik

Aydin Soke

12.5 million sqm

Yurtbay Seramik

Eskisehir

20 million sqm

Altin Cini

Kuthaya

1.6 million sqm

Usak

12 million sqm

Umpas Seramik

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Analysis: Turkey

Furthermore, decreasing house sales (down 21.7%) in the first 6 months of 2019 and down 48.6% in June 2019, compared with the same periods of 2018, are creating additional strains on the domestic tile market.

A major exporter

Huge capacity additions by domestic producers in recent years and a stagnant domestic market ( particularly in last two years) has forced Turkish ceramic tile producers to look for export markets in last few years. These has been a quantum jump in ceramic tile exports from the country in each of the last five successive years. In 2018, Turkey ranked third in ceramics tile production throughout all of Europe and ninth in all the world. Last year, Turkey exported USD 597 million (an increase of 8.15 % from the exports figure of USD 552 million in the year 2017) worth of ceramic tiles. Turkish ceramic producers have been able to become a major force in export markets on the back of high quality products. Huge investments by a number of ceramic tile producers in recent years have enabled the industry to achieve economies of scale and high quality products. Though, production cost of ceramic tiles in Turkey is higher as compared to a number of countries, due to higher fuel cost. A number of low cost producing countries- some from the region and China & India- have posed a challenge to Turkish ceramic tile exporters in some of the key markets on the basis of their low cost, but higher quality of products and proximity to key European markets has enabled the Turkish producers to maintain their hold in these markets. Another factor, which has worked in favour of Turkish ceramic tile producers is their association with some of the best names in global tile designing industry. Turkish producers have worked closely with some of the worldâ&#x20AC;&#x2122;s best known and talented designers in order to create exciting new products that are both beautiful and functional.

Product innovation

The Turkish ceramic tile industry has made very steady progress in recent years. In addition to catering the demand of domestic market, Turkish ceramic tile producers export to over 140 countries. Competitiveness of Turkish ceramics in world markets has increased significantly in last one decade on account of its ever-growing production capacity, investments in modern technology and its high quality of the products. Much of the production stems from the Anatolian region, known to be the motherland of Turkey's ceramic sector, with a history that extends thousands of years. Today, the region has modern units and manufactures highly competitive products with high competitiveness, which meet international standards of quality. The country boasts some of the largest integrated ceramic tile manufacturing plants under one roof. Kale Seramik â&#x20AC;&#x201C; with an installed capacity of 66 million square meters per annum â&#x20AC;&#x201C; is one of the largest facility under one roof in the world dedicated to the manufacture of ceramic tiles. In addition to Kale Seramik, at least half a dozen leading producers have installed capacity in excess of 20 million square meters per annum. The average installed capacity of Turkish ceramic tile manufacturers are way above the ceramic tile manufacturers in most of the other countries. The success of the Turkish ceramic sector can be attributed to the continuous investment in technology by the tile producers and

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TURKISH ECONOMIC GROWTH SLOWED SHARPLY FROM 7.4 PER CENT IN 2017 TO 2.6 PER CENT IN 2018

Kale Group

CMY

Location: Can Installed Capacity: 66 million square metres per annum Markets: Domestic and export markets Other: Largest ceramic tile producer in Turkey, Kale Seramik produces ceramic products from 50 production lines in Can, which are established on a total area of 1,250,000 square metres. These factories have a yearly production capacity of 27.5 million squares of wall tiles, 32 million square metres of floor tiles and 6.5 million square metres of granite ceramics. The company also has a capacity to produce 15,000 tons of insulators and 40,000 tons frit. Kale Seramik produces 1900 varieties of floor tiles in 50 different dimensions and 2200 varieties of wall tiles in 60 different dimensions and it offers approximately 200 new products to its consumers every year. Kale Group is Europe's 3rd and the world's 12th largest ceramics manufacturer. Kale Group is currently comprised of 17 companies, and is regarded as one of the most important industrial enterprises of Turkey with over 5,000 employees, spanning across several locations in Turkey, Italy and Russia.

Sogutsen Seramik Location: Bilecik Installed Capacity: 41 million square metres per annum Markets: Domestic and export markets Others: With an installed capacity of 41 million square metres from its six production units in Bilecik, Sogutsen Seramik is second largest producer of ceramic tiles in Turkey. Located over an area of 500 acres, the company is one of the most prominent names in Turkish ceramic tile industry. Sogutsen also operates a frit production plant and raw material processing plant at its premises for captive use.

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Analysis: Turkey Seranit Porcelain

configurations in compliance with latest innovations. As 60 per cent of total capacity of the ceramic tile sector was installed after 2005 and as most firms, which started operations prior to 2005, have renewed their technological investments within the last 14 years – Turkish ceramics firms are in a much superior position compared to their competitors technologically. Turkish tile producers – which since their early days have allocated a certain percentage of their turnovers to research development activities – had sought to build a sound future then. This foresight has made the Turkish ceramic tile producers as one of the frontrunners in research and development. Leading ceramic tile producers carry out comprehensive research on general business trends and projections of customer tastes. Several parameters including the present status of the sector, developments in the home and international market, projections of the changes may be expected in the future and the general global business trends and their implications on the sector, are carefully analysed. Another important part of the research work is the product development activity. Product development activities – based on domestic and overseas market data – encompass all product design, colours and pricing to be carried out in line with market trends which are well-researched by marketing units of these companies.

Kale Group

Often credited with the formation of ceramics industry in Turkey with the establishment of Canakkale Ceramic Factories Corporation in 1957, Kale Group is one of the most recognized ceramic tile producers in Turkey. The company has grown over the course of time with investments in machinery and equipment manufacturing, defense, chemistry, electrical appliances, energy, IT, transportation, tourism and food industries. Kale Group’s first venture in ceramic tile, Canakkale Ceramic Factories Inc., was established in 1957, followed by Kalebodur Ceramic Inc. in 1972. While Canakkale Ceramic became synonymous with quality in wall tiles, Kalebodur gave the product its name. Canakkale Ceramic Factories Inc. and Kalebodur Ceramic Industries Inc. merged in 2000 under the name "Kaleseramik Canakkale Kalebodur Ceramic Industries Inc. The company provides its products to consumers in over 100 countries via more than 400 sales points. With an overall installed capacity of 66 million square meters of ceramic tile per year, the company markets its products under Çanakkale Seramik, Kalebodur and Kale brand names. According to the company, its product Kalesinterflex is one of the world's largest, most flexible and thinnest porcelain ceramic tile product. It brings freedom to architecture with its sizes of 120x360 and 100x300 cm as well as thickness of only 3 and 5 mm. Kalesinterflex’s structured surface creates a difference with a more natural appearance. According to Gunfer Haklı, Deputy General Manager, International Markets, Kaleseramik,” We have been continuing to set trends with the products manufactured by using the most upto-date technologies. Our Kale branded products are being sold in more than 100 countries from Europe to America and from Middle East to Africa. Manufactured at world class, our products take place in all sales points, making a difference not only in terms of design but also in spaces of usage.”

VitrA Tiles

Known for its prowess in sanitary ware manufacturing, VitrA,

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Location: Eskisehir and Bilecik Installed Capacity: 18.5 million square metres per annum Markets: Domestic and export markets Others: Seranit Group entered the ceramic tile production in 1992. Currently, the company has an installed capacity to produce 18.5 million square metres of wall , floor and porcelain tiles from its two factories located in Eskisehir and Bilecik. The company claims to offer better aesthetics and solutions to customers with its unique and large dimensions, high quality, better designs and textures to its domestic and export customers. The group, which became the first Turkish industrial company to be named among the "Global Growth Companies" in the World Economic Forum last year, also received the first "Double Star" certificate of its field from the Turkish Standards Institution. Last year, Seranit Group certified all its porcelain and ceramic products with the Type III EPD Environmental Label.

Seramiksan Location: Turgutlu/Manisa Installed Capacity: 28 million square metres per annum Markets: Domestic and export markets Others: Founded in 1994 in Turgutlu / Manisa, which is 45 km away from Izmir port, Seramiksan Seramik is one of the top five ceramic tile producers in the country. The company started its production with an annual production capacity of 1.5 million square metres. Currently, the company’s annual capacity is about 28 million sqm consisting of various sizes and designs of wall and floor ceramic tiles, unglazed porcelain and "soluble:salt" tiles, glazed porcelain tiles with natural finish.

NG Kutahya Seramik Location: Kutahya Installed Capacity: 33 million square metres per annum Markets: Domestic and export markets Others: Located in world famous Kutahya region, NG Kutahya Seramik is known for its ceramic tableware brand. However, the company is also a major producer and exporter of ceramic tiles from Turkey. NG Kutahya Seramik has an installed capacity to produce 33 million square metres of ceramic tiles from its world class production facilities, which are housed with best of the class technologies from leading technology suppliers.

Graniser Seramik Location: Akhisar Installed Capacity: 23 million square metres per annum Markets: Domestic and export markets Others: Established in 1999, Graniser Seramik is a leading manufacturer of ceramic and porcelain tiles in Turkey. The company has its head office in Izmir and has an installed capacity to produce about 23 million square metres of wall and floor tiles from its Akhisar based plant in Aegean Region. Besides domestic market, the company exports ceramic tile products to more than 60 countries.

VitrA Location: Multi location Installed Capacity: 21 million square metres of ceramic tiles per annum Markets: Domestic and export markets Others: A part of Eczacibasi Group, one of the largest business conglomerates in Turkey, VitrA has an installed capacity of about 21 million square metres of ceramic tiles. The company is also one of the largest ceramic sanitary ware producers in the country. VitrA’s parent company, was founded in 1942. It is a prominent Turkish industrial group with 48 companies with a combined net turnover of TL 9.6 billion in 2016. Eczacıbası's core sectors are building products, consumer products and healthcare. Additionally, the Group is active in finance, information technology, welding technology, mining and mineral processing, property development, and facility management. In addition to ceramic tiles, VitrA has an installed capacity to produce 5 million pieces of ceramic sanitary ware, 3 million faucets and 2.5 million pieces of bathroom accessories.

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Analysis: Turkey Table 1

Eczacıbası’s building products division is also one of the largest ceramic tile producers in the country. Globally, VitrA operates a total 13 production facilities, including 5 in Turkey and 8 in Germany, Russia and France. Each year it produces a total of 30 million square meters of ceramic tiles, 5 million ceramic sanitary ware pieces, 400,000 bathroom furnishing units, 3 million taps and 350,000 bathtubs. A globally renowned manufacturer, Eczacıbaşı Building Products exports to more than 75 countries worldwide through its extensive distribution network. Along with VitrA, the division has three international brands: Burgbad for premium bathroom furnishings and Villeroy & Boch and Engers for ceramic tiles. VitrA, is gaining prominence in global design markets while maintaining its longstanding leadership in Turkey’s ceramic tile markets. VitrA Tile manufactures some 4000 varieties of ceramic, porcelain tiles for building interiors and exteriors, terracing and swimming pools. Most of these tiles are produced at its plant at the Building Product Division’s production compound at Bozüyük, which has an annual tile capacity of 23 million square meters. According to Ebru Peksoy, Design Manager - VitrA Tiles, “ All VitrA brand tiles are designed by our in-house team of designers, who contribute to the design process their expertise in a variety of fields as well as 20 years’ experience designing ceramic tiles. Our goal, as a team, is to continually design innovative, high quality products that reinforce our brands’ reputation as trendsetters of modern living in international markets. The designs we create must be aligned with contemporary architectural trends, our brands’ languages, and our markets. To ensure we succeed in achieving these goals, we begin our design process with a careful consideration of global lifestyle and design trends. We attend international industry fairs not just in the field of ceramics but also of trend-setting fields like textiles, furniture and industrial design. We consult with companies that are renowned for trend research, and we monitor hundreds of social media accounts and print publications that look at design trends. We try to understand not just the seasonal shifts in tiling and interior architectural styles but also the macro developments that are likely to shape design and lifestyles over the next four to five years.”

2012 2013 2014 2015 2016 2017 2018

281 327 322 329 318 334 328

Overall (le produc(on (m. sq metres)

Table 1 2012 2013 2014 2015 2016 2017 2018

189 228 223 236 243 229 221

Domes(c (le consump(on (m. sq metres)

Table 1 2012 2013 2014 2015 2016 2017 2018

91.7 87.8 84.7 77.2 81.8 92 102

NG Kutahya Seramik

Named after Kutahya province of the country, NG Kutahya Seramik has emerged as one of the five leading ceramic tile producers in Turkey. With an installed capacity of 28 million square meters of ceramic tiles per annum, the company has supplied its products to many of the prestigious constructions in the country. The company claims that its efforts to position the brand in the highest end of the market have paid off. NG Kutahaya’s products are mostly used in the for large-scale commercial projects Company is also paying greater attention to export its products to a large number of countries as domestic market is unable to absorb the large capacity expansions in the country in recent years. According to Erkan Gural, “We export about 30% of our total output. We aim to increase this to at least 40%. Although our main export markets are currently Europe and the Middle East, we are also aiming to achieve rapid growth in Far East Asia, particularly China, Malaysia, Singapore and Japan, a region that is expected to become our largest market in next few years. We are the first and currently the only Turkish ceramic company to export to China.”

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Domes(c (le consump(on (m. sq metres)

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Analysis: Turkey

Ege Seramik

Founded in 1972, Ege Seramik is among the top five largest producers of ceramic tiles in Turkey. The company started production of ceramic tiles in 1975 from its manufacturing facilities located in Izmir. Ege Seramik has an installed capacity Table 1 of 24.3 million square meters of ceramic tiles at its production Germany Israel plant at Kemalpasa, which is UK 26 kms away from Izmir Port. Canada USA The company has recently Iraq launched its latest collection. Azerbaijan France Named as , the Michigan Collection, Romania the new launch offers the durability Georgia and versatility of porcelain tile while adding the luxurious look of natural stone. The fully polished, rectified tiles are available in four colors (Ivory, Brown, Grey and Anthracite) and three sizes (18 x 18, 24 x 24 and 24 x48 inches. According to the company, “the larger format tiles are

1.9 1.5 1.5 1.4 1.4 1.4 1.4 1.4 1.2 1.1

known for making a real statement nowadays. Couple that large format with MICHIGAN’S unique textured decorative tiles (Oriental or Vesta) and you have a unique blend of quality, innovative design and longlasting nature.”

Yuksel Seramik

12.8 11.4 8.9 8.2 6.3 4.7 3.8 3.7 2.9 2.3

Yuksel Seramik was established in February 1997 by Mutluhan Holding to meet the ceramic tile demand in domestic market . The company started with an annual production capacity of 3 million square meters. Realizing the scope of demand from booming domestic and exports markets, the company decided to increase its production capacity with a major investment in 2008. Today, the plant consists of five units and 5 different production lines for wall tiles, floor tiles with a total installed capacity of 16 million square meters.

Leading export des(na(ons -2 (m. sq metres)

Leading export des(na(ons (m. sq metres)

Table 1 Finland Greece Russia Sweden Libya Turkmenistan Netherlands Belgium Northern Cyprus Saudi Arabia

69.1 60.3 62.3 49.9 44.8 36.8 27.1 26.2 16.5 15

Leading export des(na(ons (US$m.)

13.3 8.3 12 10.1 10.9 11.6 12.2 10.8 7.3 7.6

Leading export des(na(ons -2 (US$m.)

1 36

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Analysis: Tableware

Who’s serv

an outsourcing review for tableware

hree different major sub-segments of ceramic industry- tiles, sanitary ware and tableware- witnessed a sea change in terms of output, technology and geographical shift in production during last twenty years. While, in case of ceramic tiles and sanitary ware production, some of the Asian countries such as China, India, Iran, Vietnam and Indonesia have replaced the production drop of ceramic tiles and sanitary ware witnessed in Europe and America. These Asian countries become significant exporters of these two product categories to a number of European, American and African countries. However, ceramic tableware sub-segment adopted a different approach. As brand and designs played a very important role (particularly in European and American markets), leading ceramic tableware producers based in Europe and America started outsourcing a significant part of total production to low cost producing Asian countries. In some case, these producers started producing ceramic table wares by setting up a manufacturing subsidiary, entering in JV’s with local producers or investing in midscale and small tableware producers to meet the ceramic tableware demand in their domestic markets. Lower wages ( both skilled and unskilled workers) in most of the Asian countries was one of the most important reasons behind the initial outsourcing decision by large European and American producers and retailers in the closing years of last century. As ceramic tableware production is most labour intensive among the three major sub-segments of the ceramic industry, outsourcing proved to be a very cost effective measure for European and American companies.

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China: the beneficiary

In the initial years, most of the outsourcing by European ceramic tableware producers and big retailers was awarded to China based ( Gunagdong played a major role in the outsourcing model in early years ) ceramic tableware producers. However, in later years, European and American companies also started to focus on South East Asian countries. Led by Indonesia, South East Asia emerged as one of the most important centres of ceramic tableware production in early 2000’s. Other South East Asian countries- Thailand, Malaysia and Vietnam- too started to give some competition to Chinese producers by the start of current decade. In addition to these South East Asian countries, Bangladesh also emerged as one of the leading outsourcing destinations, as a number of existing and new ceramic tableware producers in the country have modernised their production process and started to produce international quality ceramic tableware products. Anti-dumping duties on Chinese ceramic tableware producers by a number of countries, including the largest market EU (more on this later in the article) pushed a significant part of outsourcing to these South East Asian and South Asian producers.

Sanction pressure

Economic sanctions by USA on Chinese imports and anti-dumping duty imposed by European Union in 2013 ( provisional anti-dumping duty was imposed in November 2012) on Chinese tableware imports have put some brakes on outsourced volumes to Chinese ceramic tableware producers by European and American ceramic tableware producers and retailers. A large part of total outsourced volume to Chinese producers have

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Analysis: Tableware

ving who? started to shift to South East Asian and South Asian producers during last four years. China exported ceramic tableware products worth USD 1.05 billion to USA in the year 2018. Though, in case of outsourcing by American companies to Chinese producers, it will take almost a year for the results to mainefest as sanctions have been announced very recently. But in case of EU, the results are very much evident. In addition to European Union, anti-dumping and/or safeguard measures have been imposed on Chinese ceramic table ware imports by Argentina, Armenia, Brazil, Colombia, Egypt, India, Indonesia, Russia, Turkey and the Ukraine.

Dominance loses grip?

Continued anti-dumping duties on Chinese ceramic tableware in European Union has resulted in decline of exports of ceramic tableware from China to European countries. In July 2019, European Union re-imposed the anti-dumping duties on imports of ceramic tableware from China for a period of five years. Earlier in May 2013, European Union imposed a definitive anti-dumping duty on imports of ceramic tableware and kitchenware originating in the People's Republic of China. The individual antidumping duties ranged from 13.1 % to 26.1 %.All non-sampled cooperating exporting producers received a duty of 17.9 % and all other companies are subject to the residual duty of 36.1 %. A recent report by German Chamber of Commerce in early November has revealed that Chinese manufacturing advantage is fast declining. This report mentions that nearly a quarter of German companies ( not in ceramic tableware ) operating in China are planning to relocate all or part of their business out of the country, with many blaming rising costs.

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The German Chamber of Commerce’s annual survey of 526 member firms in China found that 23% have either already decided to withdraw production capacity in the country or are considering it. One-third of those companies have planned to leave China entirely. The rest will transfer part of their business and production overseas, largely to lower-cost countries like India or in Southeast Asia. Operating costs in China have been rising as the country seeks to rebalance its economy from an export and investment-led model to one driven by consumer spending. Of the 104 companies that have decided to leave or are considering to, 71% cite the rise in production costs – particularly for labor. A third blamed an unfavourable public policy environment and one in four said the China-US trade war is having an impact. “Business expectations have dropped to their lowest level in years,” the study warned, with only a quarter of companies surveyed expecting to meet or exceed their goals this year. And more than a third said Beijing’s efforts to “level the playing field” for foreign companies are “insufficient.”

A terminal decline?

UK ceramic tableware capital Stoke-in-Trent had to bear most of the burnt due to tableware production outsourcing. Back in the 19th century, the local industry employed more than 100,000 people. Even in 1979 around 52,700 people still worked in the ceramics factories which dominated the city’s industrial landscape. Since then, the UK industry experienced a long decline as recession and globalisation took their toll. Several high-profile factories closed in Stoke, and, in the 1990s some manufacturers outsourced production to South-East Asia as firms sought to take advantage of lower labour costs.

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Analysis: Tableware

South East Asia

South East Asia region has emerged as one of the most important region for tableware outsourcing by European and American ceramic tableware producers and retailers in recent years. Anti-dumping duties on imports of Chinese ceramic tableware by EU and trade war between USA and China is further expected to shift a major proportion of outsourcing from China to these countries in coming years. Led by Indonesia, other important ceramic tableware producing nations in the region- Thailand, Vietnam and Malaysia- are expected to play a major role in terms of outsourced production in coming years.

Indonesia

Indonesia has emerged one of the largest producers of ceramic tableware in Asia. Trailing behind China, the country has several renowned and popular ceramic tableware brands and producers. Domestic as well as international producers have scaled up their operations in the country in recent years, in order to serve the domestic and export markets. Many of the producers are OEM suppliers to top global tableware brands. Currently 21 medium and large scale producers and about a dozen small scale tableware producers in Indonesia has an installed capacity to produce 1.4 billion ( porcelain, bone china and stoneware all included) pieces of tableware products. West Java is home to maximum number of tableware producers and accounts for more than 40 % wares produced in the country. Second highest numbers of tableware producers are located in East Java, while Central Java has three producers. A total of seven producers are located in Bali, Pontianak (West Kalimantan), and Jakarta. A number of ceramic tableware producers in the country have gained international repute in last two decades. For example, PT Hankook Indonesia, a subsidiary of Korean Hankook Chinaware Co., Ltd. Based at Tangerang, PT. Hankook Indonesia has emerged one of the prestigious producers of high quality ceramic tableware. With its three production facilities, the company has an installed capacity to produce 1 million pieces of tableware a month. Operating since 1991 in Indoanesia, PT Hankook has been producing for many prestigious brands, such as Lenox and Mikasa (USA), Villeroy & Boch (Germany), ARC International (France), Iittala (Finland), Narumi (Japan), Marks & Spencer (UK) and ZEN (Korea) . Its own brand, St. James is counted among the most popular chinaware among high society homes and first class hotels and restaurants in its domestic market. Supported by three production facilities, 1 setter factory, 1 decal printing factory, R&D Center, Hankook claims that it was one of the first companies in the industry in the region, which established a highly automated production system, which includes the computer-operated tunnel kilns, fully automated forming plants, and automatic glaze spraying machines. According to Ian Suryadi, President Director of the Indonesian ceramic tableware producer Semesta Keramika Raya, â&#x20AC;&#x153; Our aim is to be able to surpass the Chinese-owned ceramic tableware manufacturers who have long dominated the global ceramic tableware market through their porcelain and stoneware products made available at extremely low prices. It has been a challenge for us, as a local enterprise, to

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23% OF GERMAN FIRMS HAVE DECIDED TO WITHDRAW CAPACITY FROM CHINA Leading Asian country tableware exports (US$â&#x20AC;&#x2122;000) Country China

Year 2014

Year 2015

Year 2016

Year 2017

Year 2018

4,610,915 6,649,467 5,022,973 5,431,350 5,844,579

Thailand

93,440

91,493

83,340

84,502

79,553

Indonesia

108,946

91,331

92,485

81,681

74,654

Japan

47,440

52,458

60,619

61,827

68,251

Bangladesh

31,219

33,326

45,975

54,922

54,953

Malaysia

50,378

27,552

31,053

23,155

39,144

140,593

120,777

115,057

107,928

35,563

Sri Lanka

27,623

23,061

21,755

21,419

22,119

Singapore

9,215

11,721

7,367

14,299

17,872

India

14,322

15,593

14,342

15,463

17,066

Hong Kong, China

13,460

15,015

10,748

7,985

10,405

South Korea

16,475

13,981

13,423

15,767

9,577

Taipaei

4,814

6,780

6,933

5,832

Vietnam

6,097

6,454

7,265

6,430

5,121

Pakistan

1,099

977

1,094

1,048

1,263

12,491

9,369

10,454

12,386

697

United Arab Emirates

Iran

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Analysis: Tableware

be able to contend with the presence of such cheaply priced ceramics in our market given that our product costs price is rendered unviable by the market selling price. However, recent government regulation implemented to protect local ceramic producers by imposing higher taxes and tariffs on Chinese tableware products has raised our competitors’ selling price, and has allowed us to gain a stronger grip on the local market. In the future, we hope that our company is able to further develop to the point where we can compete both in terms of product price and quality with our counterparts in China.” Founded in 1976, Semesta Keramika Raya specialises in stoneware tablewares. The company has had considerable success in capturing the local market and reaching international consumers over the years.

Southern Asia: a new hub?

South Asia, led by Bangladesh is emerging an important outsourcing destination for ceramic tableware manufacturing. Bangladesh has emerged as one of the important destinations for ceramic tableware outsourcing for a number of European and American companies in last ten years. Currently, the country has 20 ceramic tableware producers. However, top 5 producers account for most of the outsourced production. Leading ceramic tableware producers from the country such as Shinepukur, Farr Ceramics, Paragon Ceramics, Monno Ceramics, and Protik Ceramics have made a name for themselves in some of the most discerning ceramic tableware markets of Europe and Americas on account of high quality production and investments in best of the class production technology. In domestic market, Shinepukur Ceramics holds the highest 18% share, Monno Ceramics 15%, Farr Ceramics14%, Paragon Ceramics 12% and Protik Ceramics has 8% share in the local market. In international market, Bangladeshis ceramics companies have competitive places as Shinepukur and Farr ceramics both hold the first position with 24% export market sharing. Paragon holds the second position with 18% share, Monno 10% and Artisan has 8% share in the export market. Mohammed Humayun Kabir FCA, chief executive officer (CEO) of Shinepukur Ceramics Limited, “ Traditionally, the tableware industry is labour-intensive. Focusing towards export market, this industry started flourishing in Bangladesh in the late1990’s based on un-interrupted gas supply and low labour costs. But the situation has changed now. Gas pressure has become erratic, supply of Bangladesh’s own gas has become uncertain. The price hike of gas and electricity makes the process more costly. It is assumed that this trend of increased cost in gas and electricity will continue in coming years as well. Increased gas price and labour costs have eroded the comparative advantages of Bangladesh for producing ceramic tableware to a great extent.” He further says, “ The negative impact of economic slowdown in advanced economies and GSP withdrawal by the USA has further impeded the growth in export of ceramics tableware from Bangladesh. Therefore, exports of tableware from Bangladesh in the coming years, in face of the rising gas prices and wages will be more challenging.” According to the data from Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), ceramic industry exported products worth USD 68.97 million in the fiscal 2018-19, an increase of 17.36 % from the export figures of USD

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Clay Craft India Location: Jaipur, Rajasthan Installed Capacity: 60 million pieces per annum Year of Inception: 1988 Markets: Domestic and Export markets Others: Clay Craft is among the three prominent Jaipur based ceramic tableware producers. Acquisition of Jaipur Ceramics Private Limited by the company in 2014 has made it one of the five largest ceramic tableware producers. Clay Craft India offers products in the areas of ceramic dinner and tea sets, bone china dinnerware, promotional coffee mugs, bone china mugs, gifts and promotionnal items, and other tableware products. The company serves household and hospitality sectors, including homes, restaurants, hotels, and resorts through distributors and retail outlets in India, as well as through online retailers. Clay Craft partners with major retailers like Big Bazaar, Home Center, Lifestyle, Spencer, HomeShop18, Jabong.com, among others. Its corporate clientele portfolio includes Maruti Suzuki, Westside, Lifestyle, Nestle, Airtel, Vodafone, Taj Group, Hyatt Hotels, Pepsi, Wipro, Tapri Tea House, etc. The firm also exports its products to the UK, Egypt, Saudi Arabia and the UAE.

Bharat Potteries Location: Jaipur Installed Capacity: 70 million pieces per annum Year of Inception: 1978 Markets: Domestic and Export markets Others: Jaipur based Bharat Potteries is among the oldest and largest ceramic tableware producers in India. The company is a specilised bone china tableware producer. It is a flagship company of the Bharat Potteries Group. The company is equipped with modern plant and machinery, imported raw materials, an excellent in:house design studio and transfer decal printing units. Two years back Bharat potteries entered into an association with Preciosa of the Czech Republic – one of the world’s foremost crystal companies to offer glass and crystal products. Bharat Pottery’s manufacturing facilities are spread over half:a:million square feet and employ more than 1600 people. Between them, they manufacture more than 70 million individual pieces of exquisitely designed bone china ware, giving Bharat Potteries the status of one of India’s largest producer of ceramic tableware.

Ceramic Tableware India Location: Jaipur, Rajasthan Installed Capacity: 40 million pieces per year Year of Inception: 1992 Markets: Domestic and Export markets Others: Ceramic Tableware Pvt. Ltd. was established in the year 1985 in Jaipur to produce bone china tableware. Today it is among Asia’s leading manufacturers of fine bone china tableware. With an installed capacity of 40 million pieces of bone china tableware per annum, the company meets the tableware demand of a number of prestigious customers in Indian and abroad. Some of its customers include Air India, HUL Britannia, ITC Hotels, Nestle, Bharti Airtel, TAJ Group of Hotels, Hyatt Hotels, Pepsi, Adani Power, Torrent pharma, Intas pharma, Cadilla, Corona, Zydus, SunPharma, Ranbaxy, Alembic, Ajanta, D.R. Jones, Nutrica and Troikka.

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Analysis: Tableware

51.94 million registered by the industry in the fiscal 2017-18. According to Irfan Uddin, general secretary of Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), “Ceramic tableware accounts for more than 90 percent of Bangladesh’s ceramics export. Product diversification with competitive prices has helped the sector boost its exports.” Irfan Uddin, who is also managing director of one of the leading ceramic tableware producer, Farr Ceramics, says, “Ceramic tableware industry in the country has got government support in many ways but still inadequate supply of natural gas was one of the major challenges for its growth. Natural gas is not only the key energy source for the industry but also crucial for maintaining quality of the products. Heavy dependence on imported raw materials as another challenge for the producers in Bangladesh. If the government reduces supplementary duty as well as advance income tax on import of these raw materials, this sector will reach its expected goal.” In addition to Bangladesh, Sri Lanka too has been a leading destination in South Asia for outsourcing of ceramic tableware producer. Dankotuwa Porcelain is a household name in Sri Lanka, has been supplying tableware to some of the leading international brands such as Macy’s, Debenhams, Portmerion, Oneida, House of Fraser, John Lewis, Jashanmal, Jumbo

Tata Ceramics

Major Indonesian tableware makers Company

Location

Installed Capacity

PT Sango Ceramics

West Java

55 million pieces/ annum

PT Narumi Indonesia

Bekasi

6 million pieces/ annum

PT Hankook Indonesia Tangerang

40 million pieces/ annum

PT Lucky Indah Keramika

20 million pieces / annum

PT Kuang Lin Ceramics Industry

Jawa

PT Sri Intan Toki Industry

Bogor ( West Java)

35 million pieces/ annum

PT Jeengala Keramik

Bali

30 million pieces/ annum

Ceramic Paolo PT

East Java

9 million pieces/ annum

PT Kaibon

West Java

6 million pieces/ annum

PT Sumbertaman Keramika Industry

Suabaya

8 million pieces / annum

PT sari keramindo international

Gunung Putri

8 million pieces/ annum

Rosy Ceramic Industries PT

Banten

10 million pieces/ annum

PT Kedaung Industrial Jakarta

20 million pieces/ annum

PT Bali Keramik

Bali

12 million pieces/ annum

Tanteri Ceramics

Bali

8 million pieces/ annum

Celedona Keramik

Jakarta

Joshua Kahaya Sentosa PT

Jakarta

Tiarra Hejo

Jawa

Kerakik Kraft

Sumatra Utara

PT Doulton

Tangerang

12 million pieces/ year

PT Indo Porcelain

Tangerang

15 million pieces/ year

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AC 19-10

Retail, Joules, Crate & Barrel, Country Road, Laduree, Tchibo, Notneutral, XXX Lutz, Lenox, Porsgrund, Fischer, Ritzenhoff, Migross, Ripley, Thun, Narumi, El Corte Ingles, Berghoff, Yalco, Weissestal and Galeria Kaufhof. According to the company’s management, “ We continues to gain momentum within the international market space and our long-term business strategy is to establish our own brand. Efforts of this nature are being made in the Middle East, India and other parts of South Asia. Our goal is to introduce our own brand to the major markets in which we already operate as an OEM supplier.” The company operates two state of the art ceramic tableware production facilities in Sri Lanka. Company’s main production facility is located at Dankotuwa, while the Royal Fernwood factory is located at Kosgama, in close proximity to the main port of Colombo. The factory which was upgraded in 2004, comprises of an area of over 15,000 sq. meters. Equipped with high-end machinery to support world class standards, the factory boosts the ability to produce pure white and colored ranges of porcelain tableware, porcelain figurines, and hotel ware. While the Company’s range of finishes which range from in-glaze, on-glaze, under-glaze, hand painted, etching designs and microwave-safe designs including gold and platinum.

Location: Cochin Special economic Zone, Kochi Installed Capacity: 10 million pieces Year of Inception: 1991 Markets: Primarily export markets (Germany & UK) Others: Set up in 1991, Tata Ceramics is a subsidiary company of one of the largest business conglomerates in the country, Tata Group. With its state of the art manufacturing facility located at Kochi in the Southern most state of Kerala, Tata Ceramics is known for its high quality of ceramic tableware products. The company has an installed capacity of 10 million pieces of bone China per annum. Earlier, the company’s main focus was on export markets of Europe and Americas, but for past few years, Tata Ceramics have started paying attention on domestic market. The company has opened dedicated tableware stores in major cities across India. Besides these retail outlets, Tat Ceramics sells its products to select institutions and the hospitality sector in India.

Umberto Ceramics Location: Sabarkantha, Gujarat Installed Capacity: 10 million pieces per annum. Year of Inception: 2014 Markets: Domestic and export markets. Export accounts for 60 % of output. Others: Ariane Fine Porcelain is the latest large scale entrant in the Indian ceramic tableware industry. In a span of less than 6 years, the company has been able to corner a healthy share of fine porcelain in the country’s hospitality sector. Spread over an area of 35,000 square meters at Prantji in Sabarkantha district of state of Gujarat, Ariane’s plant is one of the most technologically advanced ceramic tableware production plant in Asia. Coming up with an investment of USD 30 million, the plant houses a fully automatic cup production plant and high pressure casting machine, which can produce almost all the shapes and profiles. According to the company, the plant is designed in such a way that its output can be scaled to 40: 45 million pieces annually by adding a few new pieces of machinery, which would be followed in a gradual manner in next few years.

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Analysis: Tableware

An indirect approach

Some Asian tableware exporters with excess capacity are trying to expand business by trying to increase indirect exports, such as through orders from gift or food and beverage exporters like tea sets and porcelain jars or ornamentalware. Manufacturers are also wary of OEM work as they need to see consistency of orders for a stable business, such as signing up for long periods of say, 2-3 years. Some of the big porcelain tableware exporters from Asia like Sri Lanka, Bangladesh, Indonesia and Thailand established their reputations by manufacturing and exporting for top Japanese brands. Japan’s Noritake now has its main porcelain tableware plant in Sri Lanka while Narumi also from Japan exports most of its bone china from its Indonesian plant. South Korea’s Hankook has set up PT Hankook Ceramic Indonesia. While these companies supply the market mostly through their parent firms, other regional companies do OEM work, apart from selling in local markets. Sango Ceramics in Central Java in Indonesia is a family owned company that make and exports fine china, porcelain, stoneware and bone china. Products are distributed to Europe, and North America as well as across Indonesia and regional markets like Hong Kong, Taiwan, Singapore and Malaysia, and South Africa and Australia. Its in-house services include testing of lead and cadmium releases to comply with standards set by the US Food and Drugs Administration (FDA). In Thailand, Patra Porcelain is big manufacturer of high-quality porcelain and bone china tableware whose strategic partners for which it does contract work include Royal Copenhagen and Nikko. It also exports under the Patra brand. Crown Ceramics Company Limited exports most of its range of stoneware, vitreous china and terra cotta wares under prestige customers’ brands in North America, Western Europe and Asia, as well as supplies under its own brand. It has supplied to the likes of Disney, Table 1

2014 2015 2016 2017 2018

726,110 1,306,766 759,951 866,023 1,056,418

2014 2015 2016 2017 2018

193,224 252,862 177,433 184,740 193,405

Table 1

2014 2015 2016 2017 2018

206,075 310,974 212,701 234,908 239,888

Table 1

Table 1 2014 2015 2016 2017 2018

68,684 507,535 468,556 452,325 319,916

Starbucks, Lenox, and Mark & Spencer. Noritake Lanka Porcelain (Pvt) Ltd., in Sri Lanka is the biggest tableware manufacture in Japan’s Noritake Co. Ltd., operating under its tableware top business segment. Its manufacturing plan is in Matale, in the central hills, close to clay deposits, and it has showrooms in the capital Colombo. Noritake’s high-end tableware products, with their exclusive image, are not exported through independent traders or middlemen, said Noritake Lanka Porcelain (Pvt) Ltd. executive consultant and director/ General Manager Nimal Perera. The buyers, from the upper end segment, are particular about how the product is made, especially with regard to use of chemicals. All exports by Noritake Lanka comply with international standards, such as the US FDA, Japanese Industrial Standards and European and Australian standards. “We comply with all international standards. We can export to any country in the world,” said Perera. “All colours and pigments 100% lead and cadmium free. We use best quality raw material and pigments, our products are superior.” Jude Fernando, consultant and Board member of Noritake Lanka Porcelain (Pvt) Ltd. explained that Noritake Lanka Porcelain receives all export orders from the head office in Japan and ships over half its products back to the Japanese market, its main market, and the rest to other markets in developed countries or like India and the Maldives. Overseas marketing is done by Noritake Japan. Noritake has its own showrooms in many markets like Japan, Australia and Sri Lanka and authorised agents as in South Africa. “We sell only high-end items and make three types of bodies – bone china, fine china and white porcelain,” explained Fernando. The firm also makes a high white porcelain known as LX13. What’s made in Sri Lanka are packing styles such as gift packing, which depend on client requirements.

2014 2015 2016 2017 2018

181,214 225,968 121,198 141,304 178,462

186,348 259,808 188,051 161,951 169,230

1 1

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AC 19-10

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Analysis: Tableware

EU investigation

which accounted for most of national export volume, fell down substantially. Guangdong Hosen Two Eight Industrial Co, like many other large manufacturers of ceramic tablewares, believes that continuous improvement of their production efficiency and development of quality to compete in the export markets will help beat the protected products worldwide. With 4 kilns burning lots of porcelain and bone china dinnerwares, the output of highquality catering ceramics produced by Hosen Two Eight can reach 80 million pieces a year. Its large output, high quality, complete varieties and unique craftsmanship are its traits, not the lower prices, said the company. Last year, India has imposed antidumping duty on import of ceramic tablewares and kitchenwares from China in a bid to protect domestic producers. Ceramic tableware and kitchenware shipped into India from China attracted an anti-dumping duty of US$1.04 per kg, making the imports expensive. All India Pottery Manufacturers Association (AIPMA) approached the Directorate General of Anti-Dumping and Allied Duties (DGAD) for imposition of the levy on the items. AIPMA had alleged that the goods were being dumped into India and consequently causing injury to the domestic industry. After a probe, the DGAD recommended imposition of definitive anti-dumping duty on the imports. Based on the recommendations, the revenue department in the finance ministry has slapped the duty. Earlier, a provisional anti-dumping duty was imposed in June 2017 for six months. The final duty has been imposed for five years starting June 2017.

Chinaâ&#x20AC;&#x2122;s one of the leading porcelain and bone china tableware manufacturers-exporters, Guangdong Hosen Two Eight Industrial Co Ltd, based in Chaozhou City of Guangdong province, apprehend that the EU markets will continue to block the Chinese tablewares to protect the manufacturers in the EU countries. A news content in its website noted that the European Commission plans to impose a tariff of 17.6 percent to 58.8 percent on Chinese ceramic tableware and kitchenware manufacturers. Huo Jianguo, a former chief of the CAITEC was quoted in the news as saying that ceramic products are China's most competitive export strengths. The ceramics are levied on the grounds of protecting domestic industries and maintaining employment. Temporary tariffs are deliberate acts of suppression that weaken Chinaâ&#x20AC;&#x2122;s export competitiveness. There is a certain degree of excessive competition in China's ceramic industry, and it is necessary to coordinate the export order. In the context of the general economic downturn in European countries, Chinaâ&#x20AC;&#x2122;s exports have put a lot of pressure on EU companies. In response to the EU's trade protection measures and to ease the situation in EU and China both, it needs to consider how to optimize the scale and structure of exports, said Jin Bosong, another fellow Chinese researcher on international trade cooperation under the Ministry of Commerce. Frequent anti-dumping investigations have had a huge impact on China's ceramic products exports. Industry sources in China unofficially estimate, since the EU introduced anti-dumping duty this decade, the export volume of Foshan ceramic products, Table 1

Table 1

2014 2015 2016 2017 2018

87,594 175,135 188,051 161,951 132,323

Table 1 2014 2015 2016 2017 2018

Table 1 4,610,915 6,649,467 5,022,973 5,431,350 5,844,579

2014 2015 2016 2017 2018

asian ceramics

167,742 165,348 108,010 132,119 129,425

162,362 171,740 111,778 124,987 134,560

AC 19-10

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Analysis: ASEAN

The CICA files ASEAN’s 2020 Vision

ith a theme of “CICA towards harmonized standard,” the 26th annual council meeting of the Ceramic Industry Club of Asean (CICA), was held in Manila on November 26. A harmonized standard in the ASEAN countries is sought after since long. Now it is the vision for the new year. The Undersecretary Ruth Castelo of the Philippines’ Department of Trade and Industry for Consumer Protection addressed the council, emphasizing the need for harmonized standards among all nations and stressed the importance of setting standards to protect the consumers and facilitate trade among member nations. Since past several years, CICA is trying to formulate a harmonized standard among the members, but it is taking time for implementation following differences in socioeconomic conditions in the member countries. Delegates from all five member chapters, Indonesian ceramic industry association Asosiasi Aneka Industri Keramik Indonesia (ASAKI), Ceramic Industry Club of Thailand (CICT), Ceramic Tile Manufacturers’ Association (CTMA) Philippines, Federation of Malaysian Manufacturers – Malaysian Ceramic Industry Group (FMM-MCIG) and Vietnam Building Ceramic Association (VIBCA) attended the meeting, while hosted by CTMA. The meeting was chaired by

asian ceramics

AC 19-10

the CICA Chairman, Ms Ang Pek Lay, chief of Malaysia chapter, FMM MCIG. In the meeting, the next two years’ chairmanship of CICA was handed over ceremonially from Malaysia to Thailand. Dr Priyantip Sainamthip, Chairman of CICT took over the newly elected captainship of CICA. Earlier, the delegates were welcomed by CICA chief Ms Ang Pek Lay and the host chapter CTMA chief Ms Emilie Maramag. The next annual council meeting of CICA will be held in Bali, Indonesia, on July 15, 2020, as expected.

Continuing challenges

The Manila meeting discussed issues on high production costs, upgrading of facilities, training of human resources, sustainable environment for future generations and intense competition in the domestic and world markets. For the last few years, ASEAN countries’ ceramic manufacturing has been badly suffering from cost increases following increasing cost of energy, raw materials, transportation and labour. The prices of natural gas per mmBtu is ranges currently between lowest US$7.75 in Malaysia to highest US$7.96 (East Java)-US$10.43 (North Sumatra) in Indonesia. While presenting CICA country reports, all the member countries highlighted the increase of energy costs in production of ceramics. Also, other costs

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Analysis: ASEAN Table 1 2017 2018 2019

Capacity

510 510 537

Production

307 308 352

Capacity

RISING INPUT COSTS CONTINUE TO PUT PRESSURE ON INDUSTRY

Production

Table 1 2015 2016 2017 2018

Capacity

19.55 20.6 23.25 24.75

Output

15.8 16.4 18.5 19.8

Capacity

Output

are continuously rising making ceramic production less competitive for catering domestically or exporting to the world market. Imported Chinese tiles, sanitarywares, tablewares, insulators and others are sold in the ASEAN market at much lower prices. As a result, all the sectors in traditional ceramics are currently going through a stagnating situation.

Vietnam

VIBCA presentation stated some of the challenges ahead. Vietnam currently has an oversupply of ceramic tiles and 1 sanitarywares, causing hard competition among manufacturing enterprises, while many large companies continue to invest for expanding capacity, even to set up new facilities. There is no raw material industry or intensive processing for ceramics production in Vietnam. VIBCA said the Chinese Indonesia: other ceramic production (m. pieces) ceramic industry is facing difficulties in the international 2017 2018 2019 markets (trade war, imposing anti-dumping duties, Tableware 290 290 300 etc.) and the country itself has tightened many strict Sanitaryware 5.2 5.6 5.4 manufacturing and environmental policies, that will lead to shift the Chinese factories to produce in neighboring Rooftile 75 75 72 countries, especially Vietnam. Vietnam: tile consumption by type (m. sq metres) In that situation, the pressure from Chinese product imports will sharply increase. Besides, the wave of 2015 2016 2017 2018 2019 imported goods from India has been increasing with Ceramic tile 262.6 306 365 398 411 many product types and quality, from high-end to low1 108 Porcelain tile 79.9 85 122 139 end, making local production harder economically, However, VIBCA showed some positive developments. Cotto tile 15.8 20.4 23 22 24 It is expected that the output of ceramic tiles will Malaysia: ceramic industry performance increase by 5-8 percent in 2019-2020 (equivalent to about 50 million sq metres), and sanitaryware will Type Production Import Export Units increase by 7-10 percent (about 2 million pieces). Tile 89 32 18 m. sq metres Domestic consumption will increase by 7-8 percent, reaching about 580-600 million sq metres. Sanitaryware 3.2 1.3 3.1 m. sq metres Export value will increase by about 20 percent, reaching Tableware 4 16 35 m. sq metres about US$550-600 million (including tiles, sanitaryware

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AC 19-10

asian ceramics

Analysis: ASEAN Table 1

and raw materials). Import value will increase by about 5 percent, reaching about US$450-500 million. VIBCA presentation suggested, as China's production and export of ceramic tiles and sanitarywares are increasingly in difficulties due to trade war with the US and tariff policies issued by other countries in the world, outsourcing and production cooperation will appear. Chinese manufacturers will try to exploit Vietnam’s cooperation raising production of ceramics in Vietnam with their participation.

2015 2016 2017 2018 2019

Capacity

22 31 31 31 31

Output

18.7 24 27 24.8 22

Capacity

Output

Thailand

CICT presentation said the overall sanitaryware production in Thailand has increased in 2019 to 9.3 million pieces from 8.6 million pieces of 2016. However, domestic market continues to remain stagnant with sales of 4.5 million pieces in 2019. Thailand sells the surplus output to the export markets, mainly to Europe and North America, as a major exporter of sanitarywares. Thailand exports about US$200 million, plus-minus, worth of sanitarywares a year, while its import is limited within around US$40 million. Thailand’s tile production has reduced to an estimated 120 million sq metres in 2019, from 180 million sq metres in 2016. However, the domestic tile markets have expanded to an estimated 173 million sq metres in 2019 from 162 million sq metres of 2016. Thailand imports about US$200 million worth of tiles per year to meet the domestic demand. However, Thailand exports about US$70 to US$100 million worth of tiles annually. CICT said, Thai tableware production has declined to 176 million pieces in 2019 from 235 million pieces of 2016. It said the Thai domestic markets of local products have squeezed to 69 million pieces from 96 million pieces of 2016, while imports from China have been rising.

Table 1 2015 2016 2017 2018 2019

358.4 411.4 496 542 577

Philippines

The CTMA presentation showed Philippines’ tile industry has increased production by 8.5 percent to 86.2 million sq metres in nine months, during January-September, 2019. The full year’s production is expected to rise to around 120 million sq metres. CTMA had earlier reported that a major investment in tile sector is expected to be made to double the Philippines’ ceramic tile production shortly.

Table 1 2015 2016 2017 2018 2019

13.4 14 15.87 17.8 17.3

Malaysia

In Malaysia, the growth of traditional ceramic production continues to remain stagnant since past several years. However, the existing production units of tiles, sanitarywares and tablewares are operating with high segment products. The industry is now being forced to switch to automation. MCIG presentation showed tiles and sanitarywares are still doing business, in spite of limitation following higher production cost. The increasing cost of labour, natural gas and rawmaterial in tile, sanitaryware and tableware sectors have reduced the sectors’ economic viability. MCIG noted resistance to invest in the new technology lead to low productivity, and rising cost of doing business-especially on compliance cost remains challenging on the back of a prolonged weak property market and excess capacity slow demand in the local market. This leads to decline of production volume, capacity utilisation and capital investment. People experienced in ceramic manufacturing and trade are now more interested in importing ceramic products in bulk from other producing countries, such as, China, and then re-ship to the third countries, as well as to distribute locally.

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2017 2018 2019

Table 1

381 398 427

2015 2016 2017 2018 2019

Capacity

452 463 537 533 540

Output

309 360 456 442 461

Analysis: ASEAN

Capacity

Table 1

Table 1 2017 2018 2019

Output

2015 2016 2017 2018 2019

1.49 1.54 1.57

Capacity

73.5 166.5 169.5 169.5 173

Output

94 100 127 135.3 140

Capacity

Output

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SPECIAL REPORT

Indian refractories a brighter future beckons

With tentative signs of recovery, has the sub-continent refractory sector has perhaps turned a corner?

ndian refractories output rebounded in the last 12 months, after three successive years of decline. Volume growth in refractories production in India was in positive figures for the first time in three years in the financial year ending March 31, 2019, with output rising to 1.2 million tonnes, a 9% increase on the previous year, making it one of the sector’s strongest years on record. The data showed a welcome rebound for an industry that had been struggling against tough foreign competition and wider market pressures. Buoyed by the turnaround, major domestic and international refractory producers operating in the country were optimistic about demand growth in the years ahead, led by an expected expansion in steelmaking and other refractory-consuming sectors. Dipankar Banerjee, marketing and technology director at Vesuvius India, said that although India has seen growth in non-ferrous, nonmetallic and niche applications for refractories over the past decade, ferrous metal production continued to underpin India’s consumption of refractory materials. "The iron and steel industry is our biggest market in India, but a few years ago we made a move into the country’s cement sector," he said, adding that the company was "trying to enhance our presence in these markets, with a specific focus on new and stateof-the-art technologies." Market participants reported improvements in capacity utilization last year, albeit only by a few percentage points, which helped to raise profitability after several years of flat-to-weak utilization rates, which dragged margins down. India’s refractory industry is served by around a dozen largescale, 30 medium-sized and about 200 small-scale producers, so it continues to be crowded and competitive. Despite India’s large and generally healthy steel market, which is the main consumer of refractories, the pricing power of Indian refractory producers is limited by the industry’s fragmented structure. This is compounded by surplus capacity and competition from imported refractories, which offer an easy and often cost-effective option for many refractory consumers, due partly to the low import duties imposed by India’s government. Refractories manufacturers also complain of persistent problems with the availability of domestic raw materials, with relatively few refractory minerals produced in significant volumes in India. This is one factor which, if it were addressed, many in the industry believe could revolutionize India’s refractories sector. Major construction and infrastructure modernization activity is driving steel and cement demand in India.

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Turning up demand

A revival in Indian steel production was the main driver of stronger refractories consumption in the country in 2018. India replaced Japan as the world’s second-largest steel producer in 2018, registering crude steel output of 106.5 million tonnes, up by nearly 5% from the 101.5 million tonnes it produced in 2017, data from the World Steel Association (Worldsteel) showed. In contrast, Japan produced 104.3 million tonnes in 2018, down by 0.3% from the year before. After steel, India’s second-largest consumer of refractories is the cement sector, and it also grew strongly last year, by almost 70%, to 502 million tonnes in 2018-19 from 297.6 million tonnes in 2017-18. This new volume ranked India as the second-largest cement producer globally after China, with capacity expected to hit 550 million tonnes per year in 2020.

Competition from imports

India’s refractories imports in 2017-18 jumped by 40% to 25.3 billion rupees ($351 million*) from 18 billion rupees the year before. Hakim Uddin Ali, a former chairman of Indian Refractory Makers Association (IRMA), said that the lack of domestic raw materials for Indian refractories companies was one of the main reasons for rising import volumes. "Domestic refractory producers have to import raw materials," he said. "Even finished refractory products are being imported because, at times, importing is cheaper than manufacturing in India." Indian refractory producers were highly dependent on imports of key raw materials such as high-grade alumina, bauxite, magnesite and silicon carbide, with the majority coming from China. Kamal Sarda is chief executive officer of Kolkata-based IFGL Refractories, which has manufacturing facilities in Odisha state and various locations globally, including the UK, China, the United States and Germany. He said that his company imports close to 40% of its raw material needs from China. "Raw material availability is not currently a challenge, but price fluctuations can be," he said. "Prices have more or less stabilized, bar a couple of raw materials which have gone up and a few which have come down, so things are more or less the same.

Industry expansion

Responding to the gap in India’s refractory raw materials supply chain, some companies have moved in to capitalize on the opportunity. In 2018, Germany’s Almatis, a world leader in alumina-based products, started constructing a new tabular alumina facility in Falta,

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SPECIAL REPORT West Bengal, to serve the Indian refractories market. The company is betting on rising demand for tabular alumina in India because companies are increasingly opting for longer-life products, which use premium alumina. Even more companies have moved in to take advantage of downstream opportunities, and the past two years have witnessed the largest ever expansion in Indian refractories capacity. In May 2019, Dalmia Seven, a joint venture between the Dalmia Bharat Group and Slovenia-based Seven Refractories, began commercial production on a monolithics production line at its facility in Madhya Pradesh. According to Dalmia Seven, the plant is the first of its kind in India, with a high level of automation, which enables precision dosing of raw materials for efficient high-grade refractory production. The plant takes Dalmia Seven’s refractories capacity in India to 45,000 tpy, making it a significant local market participant. Sameer Nagpal, CEO of Dalmia Bharat’s refractory business, said that investing in state-of-the-art technology was an important statement for the company while it seeks to capture an increasing share of India’s refractories market. "Our approach addresses the increasing demand for clean steel production in India," he said, pointing to government aspirations to reduce emissions from Indian industry, while simultaneously ramping up infrastructure development. In January 2019, Dalmia Bharat Group acquired the refractory business of Germany’s GSB Group, a speciality refractory manufacturer, for €15 million ($16.7 million). Mark Runge, managing director of GSB, said that becoming part of an Indian company would enable it to bring German production standards to a receptive and growing market. "We built the GSB Group with a vision to service its customers with world-class efficiencies and best-in-class talent. I am confident that, with the experience and legacy of Dalmia, we can take this vision to the next level," he said. Local companies were also investing in organic capacity growth. IFGL was in the process of setting up a new greenfield manufacturing facility in Visakhapatnam in the eastern coastal state of Andhra Pradesh, and expanding a manufacturing facility at the Kandla Special Economic Zone in the northwestern state of Gujarat. Another major local market participant, Orient Refractories, expanded its installed capacity of isostatic pressed products at its facility in Bhiwadi, Rajasthan, by 2,400 tpy last year, to 11,700 tpy.

country behind Turkey, the world’s leading scrap consumer and EAF operator. Indian scrap imports surged by 35% on-year to 3.9 million tonnes between January and the end of June 2019, sourced mainly from the UAE, the UK and the US, while the country’s crude steel production for the period rose by 5% to 56.96 million tonnes, Worldsteel data showed. Indian steel output was expected to increase by 7.1% year-onyear in 2019 and by a similar amount next year, supported by higher government spending on infrastructure, robust manufacturing and rapid urbanization. The country’s National Steel Policy, published in May 2017, has a target for domestic installed steel capacity of 300 million tpy by 2030, with EAF capacity expected to make up the majority of this, although the exact proportion was under discussion. EAFs are favored by the Indian government because they are cheaper to build and considered to be more efficient and less polluting than BOFs, although some still favor the quality of steel which can be produced using traditional methods as opposed to recycling scrap. In June this year, India published its draft Steel Scrap Policy intended to promote scrap processing, to supply the projected shift toward EAF- and IF-based steelmaking, amid predictions of a widening shortage of domestic scrap supply.

Capacity growth

Positive impacts

“VOLUME GROWTH WAS IN POSITIVE FIGURES FOR THE FIRST TIME IN THREE YEARS”

India’s steel industry consumes around 75% of the country’s domestic The drive toward increased EAF capacity has implications for India’s refractories output – 10% higher than the global average, illustrating refractories industry. the dominance of steel as a market for Indian refractories companies. According to Anirbandip Dasgupta, executive secretary at IRMA, the In the past five years, India has surpassed other large steelmaking increase in EAF numbers will not significantly alter overall demand for countries such as the US, Russia and South Korea in terms of capacity refractories in the Indian steel industry, but the nature of the products and output. This growth has been partly facilitated by the expanding required will change. use of scrap-fed electric-arc furnaces (EAFs) in place of traditional "The refractory needs for EAFs are slightly different from blast basic oxygen furnaces (BOFs) which produce steel from iron ore and furnaces, but the overall the dynamics of the market should not coking coal and other raw mineral inputs. change significantly," he said. Around 60% of India’s installed steelmaking capacity is electrical – RK Pradhan, senior manager at the refractory unit (IFICO) of meaning, EAF- or induction furnace (IF)-based, although output from Indian state-run steel producer Steel Authority of India Ltd (Sail), these mills only makes up around 35-40% of the Refractory production in India by type (tonnes) country’s total steel production due to utilization problems and shortages of scrap steel. Fireclay bricks High alumina Silica Basic Monlithics Globally, EAFs account for around 25% steel 2014-15 265335 218710 49595 198715 318187 output and induction furnaces about 28%, 2015-16 235801 216917 45900 191875 329933 according to Worldsteel figures. India overtook South Korea as the world’s 2016-17 229194 224115 45860 190020 324651 second-largest ferrous scrap importer in the 224937 215444 45990 189689 317419 first half of 2019, trade data showed, placing the 2017-18

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SPECIAL REPORT Table 1

believes that increased EAF capacity will drive greater consumption of refractory products. "Both refractory production and consumption in India will see a further boost, as a result of these smaller units," he said. IFICO is one of Sail’s four integrated refractory-producing units. Located at Ramgarh, in the state of Jharkhand, IFICO has an installed capacity of 42,000 tpy, producing alumino-silicate refractories and various other special products. "EAF utilization in India’s steel industry is expected to rise to nearly 40% by 2030," Arjun Jain, executive director of the Delhi-based Steel Furnace Industry Association of India, said. "This will probably result in higher overall consumption of refractories by the domestic steel industry. Consumption of high value-added products in EAFs is far higher compared with conventional BOF-route steel production," he added. Jain said that changes in refractory demand would be driven more by the kind of steel Indian consumers want to use, rather than the methods employed to produce it. The increasing preference for high-grade steels was generating more demand for better-quality refractory products, although this was being balanced to an extent by more efficient furnace designs which require fewer refractories for a given volume of steel. "Total average consumption of refractories, in furnaces and secondary metallurgy vessels, depends significantly on the type of steel produced. Our experience is that, for carbon steels, approximately 12kg of refractory is needed for per tonne of steel produced," Jain said. "For high-grade steels, such as alloyed and stainless steels, refractory consumption is in the range of 22-32kg per tonne. Average refractory consumption in the furnace itself amounts to 8kg per tonne of this," he added. According to Sudipta Patra, senior executive with Jindal Stainless, a unit of India-based multinational Jindal Steel & Power, the development and use of high-performance EAFs in India will force shifts in the composition of refractory products required by steelmakers. "There is a high degree of correlation between EAF life and the life of the furnace roof," Patra says. "With the rapid expansion of EAF steelmaking in India, larger capacities and the increase of unit power, the working conditions of the furnace roof become more demanding, which has resulted in a drastic change in the kinds of refractories used in EAFs." Patra explained that the roofs of EAFs typically use high-alumina bricks with aluminium oxide (Al2O3) content ranging between 75% and 85%. "Compared with silica refractory bricks, alumina bricks have high refractoriness, better slag resistance, thermal shock resistance and high compressive strength. Also, the life of high-alumina bricks is two to three times that of silica bricks," he added. Given the lack of domestically produced refractory minerals supply in India, industry observers warned that this shift in demand was likely to drive an even greater reliance on imports, particularly for high-grade alumina from China, unless India’s government decided to link its steel policy to a more focused raw materials policy over the next decade. In March this year, the Indian government published its updated National Mineral Policy, pledging greater support for exploration and development of domestic mineral resources with the aim of reducing the need for imports, while at the same time proposing stricter regulation of India’s mining industry. "Minerals are a major resource for the core sectors of the economy. There is a huge demand for minerals in view of the

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2014-15 2015-16 2016-17 2017-18 2018-19

10.7 10.6 10.9 11.9 15.9

Table 1 4.6 4.9 5.6 6.4 7.5

2014-15 2015-16 2016-17 2017-18 2018-19

Table 1 2014-15 2015-16 2016-17 2017-18 2018-19

2 2.1 1.8 1.8 2

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SPECIAL REPORT

Table 1

rapid urbanization and the projected growth in the manufacturing sector," the policy stated. "With the thrust on the Make in India initiative, the demand for minerals is likely to grow at a rapid pace. Extraction and management of minerals has to be guided by long-term national goals and perspectives, and integrated into the overall strategy of the country’s economic development," it continued. Some have expressed dismay about the general terms of the policy, and particularly its failure to highlight plans for specific mineral segments. None of the core refractory minerals, such as alumina, magnesite or clays, were mentioned specifically, raising doubts that mining for these products will be made a priority in the foreseeable future.

6.6 7.1 8.3 9.5 9.3

2014-15 2015-16 2016-17 2017-18 2018-19

TRL Krosaki Refractories

A subsidiary of Japan’s Krosaki Harima Corp (KHC), TRL Krosaki is the largest refractories producer in India. It was established as Tata Refractories in 1958 as a joint venture between India’s largest steel producer, Tata Steel, and Germany’s Didier Werke, but the German partner exited in the 1960s. In May 2011, Tata sold two-thirds (51%) of its majority stake in the company to KHC, followed by its remaining 27% share in 2018, giving KHC control of the business in India to add to its existing refractories operation in China, which mainly produces magnesite bricks. TRL Krosaki has five manufacturing plants in India, at Belpahar (Orissa), Salem (Tamil Nadu), Jamshedpur (Jharkhand), Maya Pradesh and a site in Gujarat. Total installed capacity at the five plants is nearly 400,000 tonnes per year. Besides producing refractory products for the steel, copper, cement, aluminium, glass, petrochemicals and other non-ferrous industries, TRL Krosaki offers refractory management and engineering services, is one of the largest manufacturers of dolomite refractories in the world, and is the leading global supplier of silica refractories for coke ovens and glass industries.

Table 1 2014-15 2015-16 2016-17 2017-18 2018-19

3.5 4.7 3.9 4.5 4.8

Orient Refractories

Established as Orient Abrasives in 1974, in 2010 this company underwent a demerger to spin out its refractories division into a separate business as Orient Refractories. The leading global refractories manufacturer, Austria’s RHI, holds a 69.6% stake in Orient Refractories. Orient’s manufacturing facility is located in Bhiwadi, south of Delhi, in Rajasthan, and is divided into three independent sub-divisions – one each for the production of slide gate plates, continuous casting refractories, and castables and pre-cast shapes. The company has installed monthly capacity to produce 70,000 pieces of slide gate plate, 30,000 pieces of continuous casting refractories, and more than 2,000 tonnes of castables and mortars. It also has an allied plant in Salem, Tamil Nadu, which produces monolithics.

Vesuvius India

Table 1 2014-15 2015-16 2016-17 2017-18

1.2 1.14 1.14 1.11

A subsidiary of UK-based Vesuvius plc, Vesuvius India currently operates four production facilities: at Kolkata in West Bengal, producing continuous casting refractories; Mehsana in Gujarat, making crucibles for the non-ferrous industry; and two at Visakhapatnam in Andhra Pradesh producing monolithics, along with a monolithics assembly facility at Salem. The company is also contemplating further expansion in India to serve the country’s growing needs, and is evaluating the feasibility of a new manufacturing unit at Visakhapatnam.

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Talking Shop

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

Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA)’s second exhibition CERAMIC EXPO BANGLADESH-2019 marked a grand success with record level of achievements. Held on December 5-7 at Dhaka International Convention City Bashundhara (ICCB), Dhaka, Bangladesh, the biennial show attracted more local and foreign visitors, exhibitors and importers-buyers from Asia, Europe and North and South Americas, then earlier expected. The maiden show was held in 2017 successfully prompting an expanded event with fourfold larger space for the exhibitors in 2019. The organizer BCMEA’s General Secretary Irfan Uddin, also Managing Director of FARR Ceramics Ltd, of one of the leading export manufacturers of ceramic tablewares, told Asian Ceramics that the exhibition exceeded all expectations and brought more exhibitors, visitors and foreign buyers with firm orders for export shipments. He said the expo will continue as a regular biennial exhibition, and from the next time it will have a larger space, to be convenient to the visitors and exhibitors of machinery and raw materials, under one roof in a new venue to be set up professionally by a Chinese exhibition construction firm. The latest event was held on a space of 15,000 square metres in 4 halls of Bangladesh’s largest exhibition centre, ICCB. Irfan said the current year’s show exceeded the targeted participants of 150 exhibitors, arrival of 500 delegates and 200 brands from a total 20 countries, as well as 6,000 potential visitors. As Dhaka has emerged as a new hub in Asia, the next expo in 2021 is expected to be double in size following rise in export ceramics, tablewares, tiles and sanitarywares. More exhibitors will arrive following expansion of all sectors of export oriented ceramic industries and for more plants in pipeline to cater domestic and foreign demands. The show is significantly open to local retail and wholesale buyers too. Bangladesh ceramic industry has emerged as a major sector in South Asia region with a rapid annual expansion of the Bangladesh economy by 7-8 percent in recent years. According to BCMEA, Bangladesh currently has 66 ceramic manufacturers, including

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20 tableware factories, 28 tile factories and 18 sanitarware plants with total category-wise production capacity of 260 million pieces of porcelain, bone china and stoneware tablewares, about 200 million square metres of normal ceramic, vitrified and porcelain tiles and 8.5 million pieces of ceramic, vitreous china and porcelain sanitarywares, respectively.

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CHINA

IACE CHINA 2020

The 13th Shanghai International Advanced Ceramics Exhibition & Conference

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

The Leading Trade Fair for Advanced Ceramics Industry

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

+86 4000 778 909 iacechina@unirischina.com

Talking Shop

Bangladesh’s export buyers are located mostly in European Union, USA and Canada and the premier export items, tablewares, are shipped to more than 60 countries, stretching up to farthest and southern most region of South America. In financial year 2018-19, ended last June, export of ceramic products fetched some US$69 million. View from the frontline More than 150 global suppliers of machineries, raw materials, service organisations, consultants, educational institutions and manufacturers of ceramic products participated and socialized in the show and seminars of the event. Among the exhibitors, the Chinese rawmaterial suppliers were most dominant. Bangladeshi ceramic manufacturers also showcased their products successfully for export deals. In conversation with Asian Ceramics, some of the Chinese raw Material exhibitors and Bangladeshi ceramic manufacturers expressed their views on the event: Ms Suncely Yang, Deputy General Manager, Dayu Glaze Co Ltd, Foshan, Guangdong, China: I have pleasure to express my satisfaction on the outcome of CERAMIC EXPO BANGLADES-2019 held in Dhaka this year. This exhibition helped us reach almost all ceramic manufacturers who import frit, composed glaze, body stain, glaze pigment and various other glazes and raw materials, particularly, from China. We already have customers in Bangladesh since 1995, but this exhibition has opened up greater opportunity to meet directly with almost all the manufacturers to promote our products. Fortunately, some new customers showed interest to buy our products. Our company is expecting to participate in the future exhibition, third edition in 2021, to show our products as more new factories are coming up almost every year. Our company is reputed in maintaining consistency in supplying glaze materials to the Bangladeshi ceramic manufacturers and our prices and lead time for shipment is most reliable to them.

THERE HAS BEEN AN EXPANSION OF 7-8% IN THE INDUSTRY up of new ceramic factories in almost every year on average. Mr M. Mamunur Rashid, CEO, Artisan Ceramics Ltd, Gazipur, Greater Dhaka, Bangladesh: This ceramic expo is showing a tremendous success in making Dhaka as a potential hub for showcasing and export deals. We are an export-manufacturers of quality porcelain tablewares. Foreign buyers are showing more interest in our products for which we need expansion of capacity. This year’s exhibition will have a good impact among the tableware importers of the world market who are sourcing from Asia for which a large number of foreign buyers are expected to come to the future exhibitions of BCMEA. However, as the exhibition is open to the domestic wholesale and retail buyers, the local branding efforts will get a boost in the domestic markets.

Mr Jack Lee, Sales Manager, Dowkiwi (HK) Limited, Sha Tsu, Hong Kong: We are expecting more customers to add to our portfolio as several ceramic manufacturers have showed interest in our quality products, which are rawmaterials, mostly, kaolin, ball clay, bone ash, feldspar, talc and others, used in manufacturing tablewares, tiles and sanitarywares. Our supplies to Bangladesh are sourced from China. Leading tableware manufacturers in Bangladesh are our buyers since last five years. They include, Shinepukur, Protik, Bengal, etc. This exhibition is helping us get more customers. Our products are of very high quality and sourced from the leading mines. We also supply chemicals to the ceramic factories. The samples we have showcased here are most suitable to the Bangladeshi tableware manufacturers. The demand for clay in Bangladesh is increasing every year. Many new ceramic manufacturers met us here and have showed interests in our clays and expecting to buy at most competitive prices. Ms Jane Zhang, Sales Manager, Wong’s Ceramic Minerals Co Ltd, Huizhou, Guangdong, China: It is a great opportunity to us to meet the Bangladeshi ceramic manufacturers directly here in this exhibition and offer our refined ball clay, kaolin, wollastonite, calcined kaolin and other rawmaterials for ceramic manufacturing. We are new in the Bangladesh market and have been supplying our products to three customers since last one year. Our products are various chemicals and clays, including kaolin and ball clay. As we are expecting, this exhibition will have a very good impact on our marketing and sales efforts to grab a good slice of Bangladesh market, which is expanding greatly because of expansion of ceramic manufacturing capacity and also for setting

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Talking Shop

What is more significant in this yearâ&#x20AC;&#x2122;s exhibition is participation of suppliers in large scale. A huge number of raw materials suppliers from the Asian countries, particularly, from China, have been exhibiting and successfully selling their products as the Bangladeshi ceramic manufacturers are dependent on imported raw materials. This will help the Bangladeshi manufacturers secure right products at reasonable prices and shipment terms. Besides, machinery and equipment suppliers are taking a good advantage of this exhibition in concluding deals with the manufacturers for expansion and setting up of new plants. Many of the major machinery manufacturers of Europe, particularly, Italy, and China have participated in the exhibition.

markets worldwide as Dhaka will be a potential hub for sourcing of ceramic tiles too, because of planned large-scale expansion of capacity in the tile sector of Bangladesh.

Mr Mahin Mazher, Managing Director, X Ceramics Ltd, Sreepur, Gazipur, Greater Dhaka: X Ceramics is a major tile manufacturer in Bangladesh. It has consolidated its position strongly in the domestic markets with a wide range of tiles produced and marketed in Bangladesh under joint venture with Italian tilemaker Majorca Spa. BCMEAâ&#x20AC;&#x2122;s ceramic expo is helping X Ceramics in improving production efficiently at ease through negotiations with its suppliers of machinery and rawmaterials when they arrive in the exhibition. On the other hand, the exhibition is expected to bring many buyers from the importing countries providing lots of opportunities to export tiles to the world markets. This year both the suppliersexporters and buyers-importers have spectacular presence in the fair enabling X Ceramics look at future growth. In the coming years, the future BCMEA exhibition will greatly help in exploring export

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Insight

TURKEY Table 1 2015 2016 2017 2018

Table 1 7,403,295 8,109,479 89,512,785 95,783,335

2015 2016 2017 2018

Total unglazed tile exports (sq metres)

1,882,488 1,407,936 1,256,097 825,633

Total unglazed tile imports (sq metres)

Table 1 Germany Israel USA UK France Canada Romania Netherlands Finland Greece

11,635,512 13,270,659 10,772,713 9,514,339 4,545,904 5,683,509 3,885,992 2,189,937 1,905,636 2,108,714

Table 1

Leading unglazed tile export destinations (sq metres)

Spain Italy China Germany India USA

169,458 177,489 171,219 57,509 144,503 64,900

Leading unglazed tile export destinations (sq metres)

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Table 1

Table 1 2015 2016 2017 2018

2015 2016 2017 2018

6,958,165

9,305,392

12,194,616

11,436,589

Total sanitaryware exports (no pieces)

Table 1

132,979

Total sanitaryware exports (no pieces)

Germany Russian Federation China Italy India Norway Other Asia, nes Romania

Leading sanitaryware export destinations (no. pieces)

Table 1 2015 2016 2017 2018

171,135

163,745

Table 1 1482327.16 1668406.04 993023.806 955586.045 396572.836 413924.851 269674.552 417608.806 228958.433 229999.328

Germany France UK Italy USA Israel Spain Jordan Sweden Poland

190,664

25,471 21,375 13,954 11,735 4,266 3,350 2,778

Leading sanitaryware export destinations (no. pieces)

Table 1 2015 2016 2017 2018

13,564,821 12,526,148 15,577,263 15,642,530

Leading sanitaryware export destinations (no. pieces)

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26,753

1 10,143,587 4,705,485 2,445,581 1,689,671

Total roof tile imports (Kg)

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asian ceramics

Hunter and the hunted

Are We in a Death Spiral? Dear Diary,

‘death spiral’ when referring to a company’s I did not realise that accountants actually used the term accountants more credit: give (lack of) performance but they sure do – I really should Death Spiral definition ponding decrease in overhead costs. As The repeated elimination of products without a corres of product increases. If selling prices are unit each to ted alloca a result, the amount of overhead units might be sold. With fewer unit fewer increased to cover the higher per unit allocated costs, ts will be assigned greater per unit produc ing remain the costs, ad overhe in sales and no reduction higher unit costs, there could be a still these cover to sed overhead costs. If selling prices are increa further decline in sales. ss I was working for, A Multinational The first time I heard or talked about a death spiral in a busine n it seemed, was habitually divisio ss Company With a Significant Logo (AMCWASL), our busine joined them – oh, I’ve never I after less or more from it about g thinkin – struggling and in distress trades AND a Master of Several all of Jack a much very thought about it that way! Our company was titors were envious. compe ; ments and had a very effective marketing and development depart ition. It had an unusual acquis via and c organi both been had growth Production was Europe based and at the local level. attitude owned familyvery culture of being part of a major multinational but with a terms and conditions but e averag were s salarie – for work to ny compa ive Frankly, it was a very attract the problem as I & others saw it was that generous. But we had a problem and the simple cause of could produce volume products much we faced increasing competition. Some competitors in Asia We made less than we needed to for base. tion produc our d cheaper than we could so they attacke ve but high capital cost production intensi peak efficiency and there was a big need to find less labour competitive high-value products very in lising specia nies compa r smalle solutions. On the other hand, g technologies. We t-leadin marke sed suppo our meant we couldn’t bring in high revenues from various markets and we had an the in leads our keep to h enoug fast ts produc new p couldn’t develo to purchase which simply clogged up our increasing tail of older products some customers still wanted al and national players could respond region manufacturing sites. Finally adding insult to our injuries which mocked our supposed reputation ts marke ing emerg the in could we far faster and cheaply than companies cooperated with regional local l severa further as a world leader. Complicating things even looked decidedly run of the mill. What was players which meant that even our great market coverage ed us in only a few short years even damag tition compe of storm probably most alarming was that this d back far enough to see the big steppe had e if the causes of our predicament were obvious if anyon of head office to hit monthly d deman erm short-t the was us d disable picture. Because what really sales were made to customers where n situatio us budget targets and sales figures. It got to a ridiculo from one department or Sales’ al ‘Intern with unreliable payment records – that became bad debts. nies made money compa s logistic that meant simply which sales location were counted as external d. This also made neede wasn’t it when even whilst we shovelled product from one place to another around the globe moving just were they reality in whilst sful succes very be some products appear to earning nothing. Ignorance is bliss r staff appointments or dismissals Some mistakes were due to ignorance or favouritism whethe agents and distributors. This led to d inherite ny compa the tions accusa or when for instance during to keep or fire an agent often lacked r whethe about ns duplications in certain countries yet the decisio invariably went all out to find new suppliers logic or consideration for future needs. Agents that lost out lost. were sales for their customers. Inevitably more problems of increasing competition. Product There were however some serious attempts to solve the were told that at best they would have to who ers custom loyal upset often ranges were cut back which

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

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voted with their feet and went to find other pay more money for the same thing – needless to say, many service levels fell across the board meant which d reduce were rs numbe suppliers. To cut costs staff reporting on progress. So, we had and data ing analys yet managers were asked to spend more time about their jobs and so they spent a lot Analysis Paralysis to add to our woes. People became worried ns and departments – which of positio their rt suppo to ents argum of time carefully crafting convincing course is a natural reaction. e they were being asked to embrace Nervous staff were told to ‘embrace change’ when the chang n’s education. People are nervous childre their pay or ge was maybe not being able to pay their mortga n not acting with confidence to positio a defend about change – it worries them, people react by trying to s and fight amongst itself inward face to staff its turning was ely address problems. The company effectiv for budget allocations. Increasing competition further reduced – the only way to stand a All the while the competition was increasing so sales were rs too used to flying business class, directo and ers manag senior us chance to hit targets set by ambitio ers who were happy to be taken custom le amiab sipping on whiskey in five star hotels and meeting nice ch and development teams in resear the and staff line front the from costs cut out for nice meals was to coddling. and rts comfo on money its the rear. The company was now frittering away tants were brought in at great consul lised Specia res. measu rate despe for called Desperate times lie in managing a ceramics company or whose expense – usually, talented people whose talents did not from Europe and the USA. By now the Asia experience was outside of business rapidly moving into e protected species whilst investments becam sses busine and sites certain siege mentality meant that on the wall as the traditional customer was writing The d. in emerging markets were dismissed or ignore slowly to reposition itself and since there was a base was evaporating and the company had moved too made were jealously guarded or dismissed ents investm any ration distinct lack of inter-business coope depending which business claimed ownership. wrong areas, expensive senior staff or Sales were going down, costs were being cut from all the a line about how changes they could see fed were ers traditional locations were indulged and custom fool all your customers all of the time – mostly were very negative were ‘to serve you better…’ you can’t you can’t fool them at all. cutting products and services; we were That’s how I came to understand a Death Spiral; we were ing political operators with cake and reward were we and staff’ action ‘the cutting the…let us call them ent manufacturing and sales, we ineffici about es ourselv beverages. As we cut products, as we kidded dynamic company we had once the nothing like looked increasingly slow, expensive and bureaucratic – been. recover some money it started to sell off It was not all bad news though as the company looked to more determined and eager to succeed far were sses busine those of bits of the business and some and sensibly rationalised. Nevertheless, easily more be and were generally the smaller units that could . In other cases, ambitious ex-staff went many have ended up being purchased by other multinationals sly dismissed agents or distributors. previou with es allianc form on to set up their own companies and advantage in the long term though they Did anyone ‘win’? It is arguable if customers gained any lost customer service and product they le, examp for ts produc e got cheaper prices from Chines ts and raise prices as there as less produc cut to able innovation. The successful multinationals were as technologies diverged and developed in equal competition. Some ceramic industries hardly noticed lessons were learned – the thing is with a stern some and jobs new ways. But a lot of people lost their no one else’s. Some companies notice and company in a death spiral – it’s that companies death spiral lise, cut costs in all the wrong areas rationa others whilst time in out pull they are getting into one and of advice – learn the symptoms word a o rich. S get and flounder helplessly whilst helping consultants before it’s too late. Until next year, Your humble servant William Hunter

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

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Bangladesh v India: a sanitaryware conundrum North African tile markets Pakistan: a new brick beginning Sri Lanka: a tableware advantage? Fine Focus: ASEAN in the Spotlight State Profile: Gujarat EVENTS: Ambiente, Cevisama, Unicera 2020, Stone & Surface Saudi

Kiln furniture demand cycles Kaolin supply dynamics: established Trading places: Vietnam as a new hub Firing and fuels for the heavy clay sector State Profile: Rajasthan Tech Focus: Whiteware kiln developments EVENTS: Vietnam Ceramics, Cersaie, CICA Annual Meeting

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Sanitaryware design and consumer trends Iranian tiles: the ups and downs Automation in Asian brick ASEAN tablewware makers and markets State Profile: West Bengal Tech Focus: Raw material beneficiation EVENTS: Indian Ceramics; IACE, Keramika, GSW Sanitaryware, Mosbuild ■ ■ ■ ■ ■ ■

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Bangladesh as a heavy clay centre Swach Bharat: the after effect Glaze markets and makers in ASEAN China: the mid-year review Fine Focus: MLCC supply demand dynamics State Profile: Uttar Pradesh EVENTS: Ceramics China, ISH China, Cerambath, Ceram Japan, Cerafair Iran ■ ■ ■ ■ ■ ■

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Egypt: a sanitaryware centre When thin, wins: porcelain tile options Indonesia: a country in focus Roof tile markets in the Middle East State Profile: Maharashtra Fine Focus: Aerospace and Automotive in Asia EVENTS: Ceramic Expo Bangladesh, Tecnargilla, Middle East Stone, Ceramix India ■ ■ ■ ■ ■ ■

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A meeting of minds: CICA in focus Heavy clay markets for the Sub-continent Changing China: tableware export issues Bangladesh v India: a sanitaryware conundrum State Profile: Andhra Pradesh Tech Focus: Inkjet printing EVENTS: Ambiente 2021 ■ ■ ■ ■ ■ ■

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