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AC19-9

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Contents: AC 19-9 News

Features

4 Inside Asia

30 Vietnamese tiles

System goes superfast.

6 Welcome

An environmental win for Punjab.

8 Across The Continent

Openings, closures and industry moves from across Asia.

18 International News Our eye on the international arena.

20 Material Matters

The ins-and-outs of ceramic raw materials.

28 Comment & Analysis Vietnam feels the strain.

44 Brick evolution in India

Coming just behind China in terms of volume, and arguably outstripping it in terms of pollution, the Indian brick industry remains under constant pressure to modernise. Yogender Malik looks at the state of play on the sub-continent…

54 The Africa-China debate

Africa’s ceramic industry potential is huge. Massive in fact. And yet, it is only China that appears to be capitalizing on the opportunities as Europe and other Asian countries seem reluctant – or unable – to push in. AC looks at how this 21st century battleground is playing out…

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Jahir Ahmed looks at how Vietnam’s tile industry has emerged from being an also-ran in regional terms to a capacity leader and innovator. However, as the factories keep getting expanded, can the country keep pace with the supply?

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Analysis

64 Talking Shop As the focus draws onto the potential of the Bangladesh ceramic industry, AC listens in on an interview with Mohammed Humayun Kabir, CEO Shinepukur, over the potential for the country as economic pressures mount…

66 Insight

Analysis and insight into USA.

70 The Hunter And The Hunted

William Hunter looks at the vagaries of language and the interchanging of words in the ceramic universe…

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Inside Asia SYSTEM GOES SUPERFAST Superfast by System Ceramics is the first press in the world without a mold which is able to produce, in a simple, flexible and rapid manner, all formats in porcelain stoneware starting from the 60, 80 and 90 cm module with thickness from 3 to 30 mm. Superfast guarantees a nominal productivity of more than 16,000 sq.m. per day. Thanks to the absence of a mold, the press ensures maximum flexibility in the change of format, which occurs completely digitally via software without any mechanical intervention and without having to change the belt; itâ&#x20AC;&#x2122;s achieved, instead, with a simple operation resetting a number of parameters, making the format change an extremely rapid operation. This particular aspect puts this pressing technology at the cutting-edge and makes it unique in the world: thanks to the absence of a mold, there is the possibility of producing all formats on a single belt, thereby significantly reducing production costs. From the point of view of industrial sustainability, Superfast has made a fundamental contribution in the recovery of ceramic material coming from the pressing and cutting phase. The recovered material is dry ground directly at the side of the press, and is then suitably mixed and dosed in order to be introduced directly into the dosers of atomized coating material, and reused in production without having to pass to the atomizer.

This recycling process is made possible by an unfired cutting system, which allows for the slab to be cut after pressing and before introduction into the oven. This operation is managed by a software that makes it possible to dose appropriate percentages of the recovered material and new atomized material coming from other silos. In this way itâ&#x20AC;&#x2122;s possible to always reuse (and in real time) the entire recovered component, mixing it into the lower layer, contributing in a significant way to the creation of the overall thickness of the ceramic product. This innovative process for the recovery of scraps makes it possible to reduce the quantity of material for ceramic production, with a view to making a significant saving in the use of raw materials. The environmental sustainability of the process is also guaranteed by very low energy consumption in the pressing phase, equal to around 70% less compared to the traditional presses used in the ceramics industry. With the Superfast moldless press, System Ceramics is a pioneer in industrial development focused on sustainability, which has the objective of offering the global market technologies with increasingly flexible high level performances, able to satisfy a manufacturing sector that requires lean and rapid processes, capable of reducing production costs, and in favor of a production oriented towards customization and a just-in-time approach.

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fter grappling for decades with its 2,800odd polluting brick kilns, Punjab (India) has got most of them to switch to new SEE US AT: technology, thereby cutting emissions BAN G LAD E S H by an estimated 70 per cent. CE RAM ICS After a few initial hiccups, officials of the state DHAKA pollution control board say they have been able to convince the owners of at least 1,800 kilns to IN FOCUS: opt for the newer ‘induced draft’ kilns with zigzag Indian brick productio n brick settings. Vietnamese tiles Afric a-China trade Officials say kilns in Punjab produce around Plus news, views, analy sis and much more! 15-20 billion bricks per annum, making up about 8 per cent of the total production in the country, and employ about 5 lakh workers. Following orders from the National Green Tribunal (NGT) and guidelines from the Central Pollution Control Board (CPCB), the Punjab government had directed traditional kilns to stop operating by March 31. But less than 500 converted, forcing the government to extend the deadline to September 30. Since then, officials say, over 1,200 kilns have converted. Recently, the Punjab and Haryana High Court refused to grant any relief to kiln owners who had appealed against the government’s orders. “Punjab’s air turns toxic during this time of the year due to paddy stubble burning. The traditional kilns have been adding to the problem. But now, we are not only trying our best to stop paddy stubble burning but also preventing polluting kilns from functioning. The Ambient Air Quality (AQI) is less than 200 this time,” said an official of the state pollution board. “It is a far better technology. I wish they had asked us to do this earlier,” said Sarbjit Singh, a kiln owner in Ludhiana and former office bearer of the Punjab Brick Kiln Owners’ Association. While districts such as Barnala and Sangrur have seen 100 per cent conversion to the new technology, of about 270 kilns in Ludhiana, about 100-125 are still to convert. Conversion costs around Rs 12-14 lakh. But we can spend that much as also save fuel in the process,” he said. The Department of Science and Technology, through the Punjab State Council for Science and Technology, is providing technical assistance for the conversion. The results have been encouraging, said Pritpal Singh, senior scientist at the Council. “With this technology, not only have emissions been cut by 70-80 per cent, kiln owners save fuel too. The brick quality is also much better,” said Singh. “Only 800-900 kilns are yet to convert to the new technology. About 400-500 of them are in the southern belt and use the byproduct of cotton crop as fuel. They have sought an exemption as the NGT has allowed kilns in Rajasthan to operate using this fuel. If their plea is turning down, we will ensure complete adherence to the new technology,” said Satwinder Singh Marwaha, Chairman, Punjab Pollution Control Board. AC COVERS.indd 2

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

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We will take you to the next level

We have created the first ever moldless press in the world. We are reshaping the manufacturing of ceramics for a flexible,

high-performing and sustainable industry. Our brand new technology is:

• Superfast in the production cycle with over 16,000 sqm per day with energy saving up to 70%. • Superfast in the sizechange via software starting from modules of 60, 80 and 90 cm. • Superfast in the thickness change from 3 to 30 mm.

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Vitra unveils recent expansion • AGL extends sanitaryware offerings • Rajasthan under pressure as economy stall remain • Investors caution over White Horse hopes • Industry 4.0 and the Bat Trang revolution • Two hollow bric ceramics sourcing? • Dankotuwa scoops export award... TURKEY

Vitra unveils recent expansion Bathroom ceramics and sanitaryware specialist Vitra, which is owned by the Turkish Eczacibaşi Group, has invested TL250 million (£35m) to expand its Bozüyük plant in Turkey. The investment has seen Vitra add another production line to the factory, increasing its capacity by 1.1m to 5.6m units a year. The expansion has added 40,000sq m of space and created around 500 new jobs. Robotic systems feature extensively in the new manufacturing space and Vitra aims to increase its exports by €40m (£35m). The company said that its existing output already accounts for more than

half of ceramic sanitaryware exports from Turkey. In a speech at the opening ceremony, Eczacibaşi group chairman Bülent Eczacibaşi said: “We’ve created a whole new production infrastructure at the new facility that blends technology and human labour. Vitra’s growth in international markets contributed to our decision to make this investment. Vitra is one of the leaders in Europe’s ceramics industry, with expertise acquired from over 60 years in the business. We’re very proud of our powerful position and the fact that Vitra contributes to more than half of Turkey’s ceramic sanitaryware exports.” Levent Giray, Vitra UK MD

Vitra UK managing director Levent Giray (pictured) added: “This is a significant investment for the business that demonstrates our commitment to growth throughout Europe. Vitra is enjoying huge success here in the UK thanks to the development of products that are created specifically for the UK market.” Also attending the opening ceremony was group vicepresident Aköz Eczacibaşi, who commented: “As always, one of our top priorities in this investment was occupational health and safety, in line with our principle of ‘people first’. The robotic systems we’re using here increase both our productivity and enhance

the working conditions for our employees. Robotics has allowed us to increase the number of women working on our production lines – a priority for us – and one that reflects the Eczacibaşi Group’s commitment to providing equal opportunities for women.” Vitra said that it was the first company to set up a modern ceramics factory and bathroom R&D centre in Turkey. The Eczacibaşi Building Products Division incorporates six brands – Vitra, Artema, Intema Yaşam, Villeroy and Boch, Burgbad and Engers. It has 13 production plants – five in Turkey and eight in Germany, France and Russia.

INDIA

AGL extends sanitaryware offerings Strengthening presence in bathware segment, India's leading tiles and home decor brand, Asian Granito India Ltd, is entering faucets, showers, and bath accessories to provide 'Complete Bathroom Solutions' to leverage its vast distribution reach and brand equity. Company to commence commercial operations by December 2019 with around 1215 series and expand gradually including launching premium range in the coming time. Company has invested around Rs. 8-10 crores for the expansion in the Sanitaryware recently and investing another Rs. 6-8 crore in expansion for faucets and showers. The company aims AGL Bathware to become Rs. 150-200 crore brand in the next 4-5 years. Speaking on this occasion,

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Mr. Shaunak Patel and Mr. Pankaj Patel, Profit Centre Heads - AGL Bahware, said "Expansion of faucets, showers and bath accessories will complement our recently launched sanitaryware range to provide complete bathroom solutions under 'Brand AGL' along with our wide range of tiles, engineered marble and Quartz. Company is launching faucets range in the mid and mid-premium segment and will look to launch an ultra-premium range in the coming time. To begin with, the company to source high-quality products domestically & internationally and commence manufacturing once the desired volume is achieved. We are confident that our strong tiles distribution network will be a key to gaining market traction in the faucets

and sanitaryware." The concept of a bathroom has evolved from its primitive utility to becoming a lifestyle solution in recent years. Today, bathrooms are increasingly being equipped with a range of solutions, including bathware range and high-tech shower systems to enhance its appearance and comfort level of people. Asian Granito India Ltd has over 6,500 touch points with dealer & sub-dealer network; 300+ exclusive AGL Tiles showrooms and 13 Companyowned Display Centres across India. Bathware division will build a network of 500 plus dealer touch-points with over 50 distributors for the faucets and sanitaryware over the next 12-18 months. Mr. Kamlesh Patel, Chairman and Managing Director and

Mr. Mukesh Patel, Managing Director, Asian Granito India Ltd said, "This diversification is in line with our vision to create beautiful surroundings for people around the World. Company is committed on its growth strategy to focus on Asset light and Capital light business model, becoming a strong retail brand in the domestic as well as exports market and achieve a leadership position in key business segments. In line with our strategy, we are investing Rs. 6-8 crore in faucets expansion; Along with sanitaryware we expect the AGL Bathware to become Rs. 150-200 crore brand in the next 4-5 years". Faucets, showers, and bath accessories market is estimated at around Rs. 9,000 crores and growing at around 13-15% annually.

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ls • Saudi hits Morbi with registration woes • Industry improves but problems ck plants on the way • China Ceramics targets ASEAN • IKEA to “overlook” INDIA

Rajasthan under pressure as economy stalls Amit Kumar Jha has been a production manager with Claycraft India Private Limited for the past 10 years but he has never had this bad. Being a part of the ceramic industry since 1995, Amit believes he is currently witnessing the worst phase for the ceramic industry. "I have been in the bone china industry since 1995. I have been in Claycraft for 10 years. It was going very well. The situation but right now is not so good," production manager Amit Kumar Jha told local media. The ceramic industry in Rajasthan is in a bad shape. It has been reeling under the weight of overall economic slowdown with no respite in sight in the near future. If the government does not take enough remedial measures to boost the industry and get rid

of negative sentiment prevailing widely, the ceramic industry can go further down the spiral sooner rather than later. "The modern tableware industry is also a part of the recession and ours is not a necessary product. Today, we are standing in the middle of the season and having a alltime high stock. Usually, we are fighting with more of the stocks for the market. Right now, we need to push a lot for our stocks out. If the situation is not reversed in the next 15 days, it will be a very bad time for the industry. I am even speculating that 25 per cent to 35 per cent of industry players will shut down if this the situation continues to be the same," Bharat Aggawrwal, director, Claycraft India Private Limited, Jaipur, added. Industry experts fear that if

economic slowdown continues, then the ceramic industry in Rajasthan can be in for a long phase of uncertainty. "We are passing through a very bad phase. Not only ceramic but everywhere it's bad except life saving drugs and food," Swapan Guha, chairman, Hopewell Ceramics Private Limited said. Even as Diwali is around the corner, inventory had been piling up in various ceramic factories in Jaipur's Vishwakarma Industrial Area. The stocks in the ceramic industry has been at an alltime high in the last decade. The reason behind that has been a severe fall in demand which has had its ripple effect resulting in fall in production, loss of jobs and reduction in production hours. Experts believe that if enough

remedial measures are not taken by the government then the ceramic industry can start looking down the barrel soon. The reasons cited by the industry experts for the state of ceramic industry in Rajasthan currently includes demonetisation, poor implementation of Goods and Services Tax (GST) during initial phase and the negative sentiment prevailing in the economy which led to reduced buying and lower purchasing power amongst large sections of people who would earlier indulge in buying ceramic products. Experts also believe that the ceramic industry needs boost from the government for the revival of the ceramic sector so as to renew demand and prevent job losses.

INDIA

Saudi hits Morbi with registration woes The ceramic tile manufacturing hub in Morbi, Gujarat, the country’s largest with a turnover of around Rs 42,000 crore, could see its revenue suffer, after the Saudi Arabian government changed its technical requirements for the suppliers of ceramic tiles, sending the units in India scrambling to apply for certification. But, only two manufacturers have bagged such a certification so far. This has led the others to consider shutting shop as they are heavily dependent on the region for revenue. Earlier this year, the National Green Tribunal (NGT) ordered these units to move from fossil fuel-based manufacturing process to carbon-friendly fuel, impacting

their working capital amid a sluggish economy. This double whammy of certification and green norms has led the manufacturing and export hub worrying about revenue. The ceramic tile industry’s turnover is estimated at Rs 50,000 crore, with Morbi forming 85-90 per cent of it. According to Nilesh Jetpariya, president of Morbi Ceramics Association, earlier ceramic tiles and sanitaryware manufacturers were free to export to the West Asia region. Now, the Saudi Arabian Standards Organization has mandated registration for all exporters. “The registration not only costs about Rs 18 lakh but the process

takes around 1-1.5 months to be completed. Roughly half of the 800-odd units export to Saudi Arabia but only two have bagged the certification so far. If the registration takes time or the other units don’t get the certification then it could severely affect exports,” said Jetpariya. Of Morbi’s Rs 42,000-crore turnover, around 25-30 per cent comes from exports. This figure was 40 per cent a couple of years ago. This is where Saudi Arabia is important as it forms the largest export share at 20-25 per cent, followed by Europe and the US. Other exporting destinations include Brazil, Africa and South Asia. The capacity utilisation

at the ceramic tiles and sanitaryware manufacturing hub is already strained. According to industry sources, capacity utilisation at the ceramic tiles and sanitaryware manufacturing hub is down by 25-30 per cent in the past one year owing to a sluggish domestic and international economy.

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PAKISTAN

Industry improves but problems remain Sales of local ceramics and tiles have improved after the imposition of anti-dumping duty on Chinese substitutes, but smuggling and high cost of energy and transportation are marring the fair competition and government’s revenue collection, an industry’s top official has said. “The sector has a huge untapped potential to create jobs and contribute to GDP, tax revenues and exports, if it is given due support,” Masood Jaffery, chief executive officer of Shabbir Tiles said. Jaffery, talking to the media, said tax rebates and incentives announced for new manufacturers in the proposed industrial zones under the China-Pakistan Economic Corridor framework would disturb the balance in the industry. Existing manufacturers have invested significant capital mainly in machinery and development of human resource, he added. “Over the last two years, we

have invested Rs2 billion in our plants expansion and in balancing, modernization and replacement of the units,” Jaffery said. “We want to drive the sector forward. We will launch four new products soon that would have wide acceptance and demand due to its top quality and innovation.” In 2016, the local tiles industry had lodged a complaint to the National Tariff Commission (NTC) against u n d e r- i n v o i c i n g /d u m p i n g of Chinese tiles in Pakistan. After a proper audit, the commission found numerous Chinese tiles manufacturers exporting tiles to the country at rates well below their cost. In October 2018, the NTC slapped anti-dumping duties ranging from 9.35 percent to 36.35 percent on 14 Chinese tile manufacturers. Importers obtained a stay order against the NTC decision from Lahore High Court, but recently the stay order was vacated.

Jaffery said after the imposition of anti-dumping duty on Chinese tiles the company’s market share and profits increased compared to losses three years back. “The major market share has been grabbed by tiles being imported or smuggled in the country from China, Iran and the UAE,” he added. “Tiles are being smuggled from Iran. Since they are inferior in quality and cheap, if imported through proper channel the duties and sales tax on duty-paid value would make them uncompetitive and help boost local industry and earn revenue for national kitty.” Jaffery said transportation charges increased after the National Highways Authority imposed new restrictions on weight-carrying capacity of trucks on highways and motorways. “One-third of our manufacturing cost is of gas, while transportation cost is also high.” Since July 2019, he said gas tariff has been

increased by 31 percent, which is in addition to 30 percent increase in the last financial year, putting pressure on cost of production. “The government recent decision of axle load restrictions in absence of a proper road infrastructure master plan and a transportation regulatory body has significantly raised costs of transportation for raw materials and finished goods.” On a question that why are not they using railway for transportation, the company’s head said Pakistan Railways is not giving end-to-end service, “so it is not feasible for use this mode of transportation”. Shabbir Tiles head said tiles and ceramic industry could create more jobs, mostly unskilled labor if given due importance by the government, including subsidised gas and tax cuts. “The government’s support would also enable the sector to compete with the regional players and increase exports.”

MALAYSIA

Investors caution over White Horse hopes White Horse Bhd’s challenging outlook is expected to be drawn out over the medium to long term given a lack of construction and property job awards ahead, coupled with supressed tile average selling prices. “In our view, risk-reward remains negative with no expectation of near-term earnings recovery” said one leading investment house. White Horse depends heavily on sales volumes from Malaysia’s property and construction sectors as they are drivers of both tile demand and selling price growth with White Horse’s domestic sales accounting for about 72% of overall group revenue. “We believe that job flows from the property sector will continue to be weak as property

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developers focus on reducing existing inventories, while construction job awards will also stage a slow pickup” the investor added. Malaysia’s total ceramic tile production volume has been on a downtrend since 2013 and many consider this will continue in 2019. White Horse is the market leader with total production capacity of 40.7 million square metres (sq m) (Malaysia: 28 million sq m; Vietnam: 12.7 million sq m). However, it is though that its utilisation rate has fallen to only 60% and 40% in Malaysia and Vietnam respectively. Further, stiff price competition among peers has also caused the year-to-date tile rates to fall 5% year-on-year (y-o-y).

“Our model has imputed for a 15% y-o-y decline in White Horse’s tile demand in Malaysia and a 6% y-o-y decline in White Horse’s blended ASP in the financial year ending Dec 31, 2019” the investor added. “We believe that the tile industry faces a challenging environment going forward as operational headwinds hinder significant earnings recovery. Uncertain turnarounds of its revenue-dependent sectors — property and construction — also add to our negative view on White Horse.” “There are several risk factors for our earnings estimates, price target and rating for White Horse. Slower tile demand growth from the subdued property (residential/commercial) and

construction sectors could adversely impact earnings. Price competition among industry peers could also drive ASPs down. A stronger US dollar against the ringgit may also raise its raw material costs” they concluded.

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VIETNAM

Industry 4.0 and the Bat Trang revolution In the era of international integration and the fourth Industrial Revolution (also known as Industry 4.0), the handshake between craft villagers, businesses and technological experts has helped to improve product quality and expand the market for Bat Trang pottery products. Artisan Vuong The Cuong said that over the past four years, for the occasion of Tet (lunar New Year) festival, he and other craftsmen in Bat Trang gathered together for the production of pottery products in shape of the zodiac sign of the New Year. It might take them several months to complete the production as every step must be carried out carefully from sketching design, making mould, to choose proper material and glaze. Not to mention the detailed and strict requirements from customers when they made the order, Cuong said. Cuong admitted that the most challenging obstacle for Bat Trang and other craft villages in general is how to find the market for their business ideas. It is a result of the lack of proper investments in exploring customers’ liking and diversifying product’s designs, making Vietnamese craft products less attractive than those made with the support of modern technologies in other countries in the region. Therefore, it is difficult for Vietnamese products to get

access to potential markets such as Europe and the US. Sharing the same view, Pham Dat, who was born in a family with three consecutive generations making pottery in Bat Trang, said that in the past, the design and making of new products were slow in pace because of the lack of market information and huge challenges from counterfeit and fake goods. Thus, the villagers used to focus their operations on following customers’ orders rather than fostering innovations in production. According to Chairman of the Vietnam Association of Craft Villages, Luu Duy Dan, the above obstacles have remained not only in Bat Trang but also many other traditional craft villages across the country. Most of production facilities and households in such villages are not yet well-organised in their operation and have not made full attention to updating customers’ demand and market trends. In the era of international integration and Industry 4.0, it is crucial for Vietnamese craft villages to stimulate innovations in production technology and products’ designs at competitive prices, while fostering ecommerce in order to expand their markets and win the interest of customers at home and abroad. It is also necessary to establish a strict scheme on

controlling and registering the trademark and product designs to protect the artisan copyrights. To address such challenges, the Project 1102 was launched as an initiative of the Hanoi Cultural Fund with an aim to provide support for Bat Trang craftsmen in getting access to the market and the designs and pricing of their products. The project helps to develop a system of marketing, branding and sales solutions based on communication and e-commerce networks in order to introduce and promote high-end Bat Trang pottery products to the community. By getting involved in the project, artisans and production facilities receive parts of or full access to digital marketing solutions, have opportunity to speak directly with customers and investors, showcase their products at an online museum, and seek trade deals, announced Nguyen Trung Thanh, Chairman cum general director of Group 1102. An assessment council, consisting of veteran artisans and experts, was set up to select high-end and exclusive Bat Trang pottery items before placing them online on the project’s ecommerce platform. The selected items should be produced by traditional methods while conveying authentic Vietnamese cultural and spiritual values. A centre for market research, customer taste analysis,

and sample designs was also established to help producers keep up with the changing market trends and customer preferences. In addition, the 1102 group have worked with functional agencies to boost the use of technology in the prevention and control of counterfeiting, fake and untraceable goods, thus protecting the brand of Bat Trang pottery. By digitalising Bat Trang products on the internet, the project targets 10% the country’s handicrafts market, which is estimated at around US$500 million). Most recently, the Bat Trang Family Mart was inaugurated in the centre of Bat Trang village, marking it the first one in the chain of 300 stores to be launched nationwide to bring authentic Bat Trang pottery products to customers and facilitate the export of Bat Trang products to the world market. As scheduled, the chain will increase online sales on the world's leading e-commerce websites, such as Amazon or Alibaba. It can be said that by embracing a range of drastic IT-based measures and a sound marketing campaign, the project has contributed to lifting the quality and promoting the brand of Bat Trang products, spreading the fame of Bat Trang to domestic and international markets while tightening the linkage among businesses, artisans and craft villages.

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

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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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CHINA

China Ceramics targets ASEAN 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 its plans to enter the ceramic tile market in Southeast Asia. While this effort is in its early stages, the Company is already negotiating with customers in its first target market of Malaysia. The Company plans to capitalize upon the increased level of building construction in Southeast Asia which is due in part to China's Belt and Road Initiative. The Company's Chief Executive Officer, Ms. Huang Meishuang, will oversee the execution of this expansion. "We plan upon substantially

increasing our currently modest level of exports to the Southeast Asia market due to the rapid rise in construction in the region and its climate conditions which make it an ideal fit for certain of our ceramic tile products," said Ms. Meishuang Huang, Chief Executive Officer of China Ceramics. "Our proximity to the region, relatively low transportation costs and familiarity with the region are intended to expand our footprint outside of China and are expected to diversify our customer base and add to our growth." The Company plans to introduce specialized products into the Southeast Asia market that are suitable for the region, including its recently

announced new 'cooling' ceramic tile product. The Company also plans to slightly modify certain products that it currently sells into the southern region of China due its similarity with the hot and humid climate of Southeast Asia. The Company anticipates that there will be modest capital expenditures associated with this expansion strategy with most of the capital outlays directed towards bolstering its marketing team and securing additional distributors and agents. The Company foresees this as an opportunity to utilize its currently unused production capacity as it enters a market with an estimated population of approximately 660 million people. The Company

anticipates that it will deploy this strategy in the first half of 2020. 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.

SRI LANKA

IKEA to “overlook” ceramics sourcing? Swedish-founded global home furnishings and appliances giant IKEA is in the process of evaluating further business opportunities in Sri Lanka to commence trading in the coming months. Following IKEA’s purchasing team visiting the island nation in September, the firm has identified potential suppliers to seek possible business opportunities with the consolidation of locally available raw materials such as coir, rattan, sea grass, palmyra and water hyacinth. In the past, Sri Lanka has been

an important sourcing location for various IKEA products and after a break of a few years, it resumed sourcing from the country in June, with the supply of wooden furniture established this year. The purpose of the IKEA purchasing team’s visit to Sri Lanka from September to October this year was to further evaluate business opportunities within the country. The Export Development Board of Sri Lanka (EDB) took the necessary steps to organise and facilitate one on one meetings with over 70

companies producing plastics, green plants, toys, brushes, furniture, ceramics, rubber mats, packaging and other handicraft products. Handicrafts are unspecified at this stage, but one notable absentee from the “wish list” appears to be ceramics – despite there being interest from local firms in recommencing supplies to the home furnishings giant. The IKEA purchasing team revealed that a favourable business environment existed for green plants, plastics and rubber latex-based manufacturing as well as

potential for the consolidation of locally available raw materials such as coir, rattan, sea grass, palmyra and water hyacinth. The IKEA Group has been sourcing from South Asia for over 35 years. Today, IKEA does business worth around ¤ 500 million in South Asia. It hopes to further grow this business. During the past 35 years, IKEA has brought in many processes and best practices that have improved the way it works with its suppliers and has helped to continuously grow sourcing from the region.

SRI LANKA

Dankotuwa scoops export award Dankotuwa Porcelain PLC, was adjudged as Best Exporter in the Porcelain and Ceramic Category at the recently concluded Presidential Awards 2018/19. Globally recognised for its luxurious and elegant porcelain tableware – one with remarkable whiteness that radiates a sense of pristine beauty, Dankotuwa Porcelain continues to win the hearts

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of millions. “It is with great pleasure that I accept this award on behalf of the management and team of Dankotuwa Porcelain PLC” stated Director/Chief Operating Officer Millennium IT ESP and Chief Investments and Process Officer, Ambeon Holdings PLC, the holding company of Dankotuwa Porcelain PLC, Dr. Sajeeva Narangoda said.

Chief Executive Officer of Dankotuwa Porcelain, Channa Gunawardana added, “The last financial year has been a game changer for Dankotuwa. While we welcomed new customers and renewed relationships with old partners, the Company reaffirmed its partnership as a co-branded entity with a partner within the Middle Eastern region. This was indeed an essential

first step in establishing the Dankotuwa brand overseas. Group Managing Director and Chief Executive Officer of Ambeon Capital PLC and Ambeon Holdings PLC Murali Prakash said, “As one of Sri Lanka’s top suppliers of Porcelainware for exports, Dankotuwa Porcelain is a vital and valuable part of the Ambeon Group.”

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INDIA

Wienerberger in water saving drive As part of its strategic focus on developing sustainable and innovative processes in building construction, Wienerberger India has come up with a simple yet innovative solution through its Porotherm Dryfix. System that can help radically reduce water consumption during the construction phase of a building. The solution also enables enhanced speed of construction resulting in faster delivery of building projects. The unique properties of Porotherm Dryfix. System eliminates the need of wet mortar and drastically reduces requirement of water for any type of wall construction including infill masonry or partition walls, as well as external walls. It comes along with Porotherm Grinded clay hollow bricks or Smart Bricks as

a total solution. The bricks are a hallmark in precision technology, resulting in exceptional dimensional uniformity that can also reduce plaster thickness leading to huge plaster mortar savings for the builder. The ever-increasing population in cities like Bangalore and Chennai has understandably resulted in rapid urban growth and restructuring. According to a recent study by Down To Earth, a publication of the Centre for Science and Environment (CSE)*, the number of water bodies in Bengaluru has contracted by 79% in the past four decades. The study attributes the reason behind the fall in the number of water bodies due to unplanned urbanization and encroachment. In addition, findings by

Wienerberger India shows that construction activities consume an average of 350 litres of water for every single meter of wall construction. As a consequence, government regulations have started restricting usage of natural resources mainly water and sand in greater urban areas. Monnanda Appaiah, MD, Wienerberger India, adds, “Urban planners are already looking at reformulating their strategies to manage urban sprawl and growth on a more sustainable basis. Wienerberger is empowering these efforts through continuous innovation and development of smart and future-ready solutions for the building and construction industry. Our product Porotherm Dryfix. System, a dry mortar system, can entirely replace

the conventional mortar and help build walls without the need for curing. Thus, saving precious natural resources like water and sand. The product is mason friendly, hugely timesaving through faster speed of construction and enhances thermal protection. It is a revolutionary world class system to build the perfect wall for your house.” Porotherm Dryfix. System is a new-age innovative masonry system that caters to the requirements of environmentally conscious builders, architects and responsible citizens. It is a technologically advanced wall building system that improves productivity, saves cost, ensures faster construction of walls through minimum resource utilization and zero wastage, while maintaining a cleaner and healthier working environment.

INDIA

“Smog season” to close brick kilns Ahead of the upcoming November-January smog season, the Punjab government has ordered the province-wide closure of all old technology brick kilns from November 1 to December 20. Brick kilns manufacture bricks used in the construction of domestic and commercial buildings and most of the at least 5,000 kilns operating in Punjab – like those in the rest of the country – are the Fixed Chimney Bull’s Trench Kiln (FCBTK) type which not only

uses more energy but also harms the environment and human health through its smog-causing emissions. Only the safer zigzag technology kilns will be allowed to operate in the province during the above-mentioned period. The Punjab government is certainly on the right track in imposing the ban and in urging kiln owners to switch to zig zag technology which, besides reducing emissions considerably, also uses 40% less coal and offers 90% top

quality bricks compared with just 70% obtained through FCBTK. But it is also important for our planners to consider other effective modern technologies that may offer better brick production and environmental protection. Perhaps foremost among them is the Vertical Shaft Brick Kiln (VSBK) which is more environment-friendly, requires less space and fuel, has a shorter production cycle and operates year-round. Another option is the Tunnel Kiln which is also more

UNITED KINGDOM

Churchill completes the final Furlong Furlong Mills is a ceramic S t o k e - o n -Tr e n t - b a s e d materials manufacturer, Churchill China has taken full providing processed clay body ownership of another ceramics and glazes to Churchill and to maker in the city after snapping other manufacturers. Furlong up the remaining 44.4 per cent Mills' products are a key part of from counterpart Portmeirion Churchill's supply chain. Group for £3.26m. In a statement, Churchill said: Prior to the acquisition, "We expect that full ownership of Churchill owned a total of 55.6 Furlong Mills, with its substantial per cent of the issued share intellectual property, will facilitate capital of Furlong Mills, reflecting further material, process and shares held for many years as product innovation in the well as the shares purchased from Dudson Holdings in medium and long term and will contribute to the continued February 2019.

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development of the company." The acquisition is to be funded from the company's existing cash resources. Portmeirion will continue to source its raw materials from Furlong Mills under a long term supply agreement. For the 12 months to 31 December 2018, Furlong Mills reported revenue of £9.6m, which included £3.2m of sales to Churchill China and statutory profit before tax of £500,000. Adjusted EBITDA for the same

environment-friendly, has the least manpower requirements, operates year-round and can produce bricks of varying sizes. Additionally, certain measures need to be taken to improve brick manufacturing in the country. One is to recognise brick making, currently an unregulated and undocumented industry, as a formal production sector and draft legislation to improve it. The other, say experts, is to train a core group of engineers and technicians as master trainers to train kiln workers and disseminate good practices among them. period was £1.1m. Net assets at 31 December 2018 were £4.8m. Portmeirion non-executive chairman Dick Steele added: "Our focus remains on growth, profitability, dividends and return on capital employed. "We have a long term relationship with Furlong Mills and will continue to work closely with them. "Following our recent acquisition of Nambé and the opportunities we see within the group, we believe this capital can be better employed to fuel the future growth and performance of our business."

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No-deal Brexit may have gone…but concerns remain United Kingdom

urious ceramic industry leaders have accused the Government of ‘riding roughshod’ over manufacturers with its plan for zero tariffs on imports. The British Ceramic Confederation says ministers are failing to heed their warnings that a flood of cheap imports could hit pottery jobs in Stoke-on-Trent and elsewhere, if tariffs are slashed in the event of Brexit. Manufacturers fear that no-deal could mean a ‘double whammy’ of Chinese dumping in their home market and higher tariffs on exports to Europe. In March the Government announced that anti-dumping tariffs would continue for wall and floor tiles and some tableware, but that zero tariffs would apply for all other ceramic imports. Ministers have now revealed changes to the tariffs regime, affecting HGVs, bioethanol and clothing – but no further support

for the ceramic industry. The BCC say the Government has failed to properly engage with the industry ahead of this ‘devastating decision’. While the proposed tariffs regime could be amended after a year, manufacturers say that the damage would already be done. BCC chief executive Laura Cohen said: “Zero tariffs could destroy many manufacturing sectors in Britain. “Government says ‘they’ll see how it goes for a year’ and will run a consultation. In a no-deal Brexit there are going to be delays in monitoring import levels and the damage from a flood of imports could be done before we can prove an import surge. That just isn’t good enough! “We need Government to put in place now for after Brexit a really fast track route to reinstate current tariffs where there is any hint that British manufacturing jobs are being hit. Government is

closing the stable door after the horse has bolted. “Our successful businesses have already tied up much cash in Brexit preparations, in stocks or raw materials and finished goods, in paying overtime to deal with a spike in export orders, with resulting sparse order books later this year. “If they have a flood of imports on top of this, it’s going to be really challenging. At the same time, in a no deal Brexit our British manufacturers’ products would suddenly be more expensive in Europe and in places like Japan and Canada where we will have lost our preferential access. It’s a double whammy.” The BCC is particularly concerned for manufacturers of tableware, giftware and bathroom products, which would face the highest tariffs on their exports. The Government says the temporary tariffs regime would provide a ‘balanced approach’ for

both consumers and producers, with lower prices in shops for some products. This system would apply for up to 12 months, and a full consultation on a permanent approach to tariffs would be launched in January. Trade Policy Minister Conor Burns said: “The UK will be leaving the EU on October 31 and we are working with businesses to ensure the UK is ready to trade from day one. “Our temporary tariff regime will support the UK economy as a whole, helping British businesses to trade and opening up opportunities for business to import the best goods from around the world at the best prices for British consumers. “The UK is a free trading nation and British business is in a strong position to compete in an open, free-trading environment.” The BCC opposed Brexit ahead of the 2016 referendum, but later called on MPs to back Theresa May's withdrawal agreement

Cold sintering to save energy? United Kingdom

new techno-economic analysis, by a team led by a researcher from WMG at the University of Warwick, shows that the energy intensive ceramic industry would gain both financial and environmental benefits if it moved to free the cold sintering process from languishing in labs to actual use in manufacturing everything from high tech to domestic ceramics. The new research has just been published in the Journal of the European Ceramic Society in a paper entitled "Decarbonising ceramic manufacturing: A techno-economic analysis of energy efficient sintering technologies in the functional materials sector." The cold sintering process (CSP) combines heat, pressure and the use of water to significantly reduce energy use as it lowers the temperatures required to produce ceramics to around 300 degrees centigrade.

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This is far less than other process such as: Conventional sintering, Laser sintering, Fastfiring sintering, Liquid-phase sintering, and Flash sintering which require far more energy and need to reach temperatures ranging from 1400 to 3000 degrees centigrade depending on the process and materials under consideration. However the small scale of laboratory-based CSP (typically creating 5 grams of ceramic at a time under lab conditions) has meant that manufacturers have chosen to continue to rely on other significantly higher temperature methods that can either already produce larger amounts or can rapidly manufacture a series of small scale high tech ceramics. The University of Warwick led team believed that manufacturers had not developed anything like a full understanding of the potential financial and environmental benefits of using CSP in

manufacturing -- particularly as the start-up costs of CSP are much lower than other processes. The researchers looked at scenarios for the processing of 3 separate functional oxides used to produce ceramics: ZnO, PZT and BaTiO3. They compared cold sintering (CSP) with a range of other sintering techniques and looked at its return on investment. They found that in all three cases, even after 15 years of use, the low set up costs of CSP made it the most economically attractive sintering option, with lower capital costs and best return on investment as well as considerable energy and emission savings. The researchers do recognise that the transition from laboratory to industry of CSP will require hugely different facilities and instrumentation as well as relevant property/ performance validation to realise its full potential but the potential benefits of doing so

are significant . Lead researcher on the paper Dr Taofeeq Ibn-Mohammed from WMG at the University of Warwick said: "The rising cost of energy and concerns about the environmental impact of manufacturing processes have necessitated the need for more efficient and sustainable manufacturing. The ceramic industry is an energy intensive industrial sector and consequently the potential to improve energy efficiency is huge" "Our research is the first comprehensive technoeconomic analysis of a number of sintering techniques, comparing them with the recently developed cold sintering process (CSP). We find that there are clear financial and environmental benefits if the ceramics industry was to take the cold sintering process out of labs and into commercial manufacturing."

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Raw Material News Iluka to extend into Coorong?

AUSTRALIA // ZIRCON

Mining company Iluka Resources will begin exploring the Coorong district later this year, searching for mineral sand deposits that could someday be extracted. Company representatives last month briefed district councillors on their plans, which a spokesman said were at a very early stage. The company aims to collect samples in November and December. If an analysis of those samples proved to be encouraging, the spokesman said, Iluka could consider whether further exploration or a feasibility study might be worthwhile. The company had spent a significant sum exploring South Australia over the past decade, he said. Iluka (Eucla Basin) Pty Ltd currently holds mineral exploration exploration licences over two parts of the Coorong district,

centred on Peake and Ashville, according to state government records. The rights to explore much of the rest of the Coorong district are owned by Kanmantoo copper mine operator Hillgrove Resources. Iluka owns the world's largest zircon mine at Yellabinna, north of Ceduna, as well as operations in Western Australia and the west African nation of Sierra Leone. It is also developing assets in Victoria, New South Wales and Sri Lanka. Mineral sands were also the target of the former Murray Zircon mine at Mindarie, which wound down its operations in 2015 due to low commodity prices. Zircon is primarily used to make ceramic objects - including tiles, sinks and crockery - as well as in manufacturing.

Ban on private companies for sand mining INDIA // ZIRCON

The government has prohibited mining of atomic minerals by private entities and will grant operating rights to only state-run companies to “safeguard” strategic interest of the country,. Minerals such as zirconium, monazite and thorium are found in abundance along several beaches of the country. Zirconium, hafnium and thorium are very important strategic elements, and since monazite and zircon occur in beach sand minerals, any loss or pilferage of these minerals at any stage of mineral handling or processing “shall affect the larger national interest”, the notification said. “In offshore areas and their strategic importance, it is imperative that the mineral concessions in offshore areas be brought at par with the onshore areas in their treatment and therefore, in order to safeguard the strategic interest of the

nation, it is expedient in larger national interest to prohibit the grant of operating rights in terms of any reconnaissance permit, exploration license or production lease of atomic minerals” in any offshore areas to anyone, except a government owned or controlled company, it stated. “The central government hereby prohibits grant of operating rights in respect of atomic minerals in any offshore areas in the country...to any person, except the government or a government company or a corporation owned or controlled by the government, under the Offshore Areas Mineral (Development and Regulation) Act, 2002,” it said. The government also “rescinded” any action taken by it earlier in this regard.

QUT to convert kaolin for alumina AUSTRALIA // KAOLIN/ALUMINA

Sapphire mining company, Lava Blue, has joined with the Queensland University of Technology (QUT) and the Innovative Manufacturing Cooperative Research Centre (IMCRC) to turn kaolin clay into high-purity alumina (HPA). HPA can be used to make LEDs and lithium ion batteries. If successful, this method would avoid having to use high-purity aluminium to make HPA, as managing director of Lava Blue, Michael McCann said. “A cheaper path to production of HPA from kaolin has been demonstrated in the laboratory but has not previously been scaled up to an economic industrial scale,” said McCann. The project aims to demonstrate that the method of extracting HPA from kaolin is economically and environmentally better than current production routes. “The Lava Blue HPA project will erode the technical risks of scaling up HPA production from kaolin, while developing advanced controls that will deliver the critical quality control required for this high purity, specialised product,” said McCann. Flexibility will be built into the production facility by ensuring that the pilot plant can produce different HPA products depending upon the commercial requirement. In lithium ion batteries, HPA is used to produce ceramic-coated

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separators which separate the anode and the cathode, as project leader Dr Sara Couperthwaite said. “The Lava Blue process is very versatile and we can utilise machine learning and artificial intelligence to make tailored HPA products from the same processing plant with slight adjustments in the process chemistry,” said Couperthwaite. The $4.45 million project will include $645,000 of matched funding from the IMCRC for Lava Blue to advance their smart technologies in mineral processing plants. “This research grant enables us to develop a manufacturing process and pilot plant that is capable of collecting large quantities of real-time data that can be data mined and used to enhance the performance of the process,” said Couperthwaite. Currently, kaolin clay has no other commercial value, and the potential for this project to find a value stream for the product, could be transformative, said IMCRC CEO and managing director, David Chuter. “Now is the time to capitalise on this competitive advantage by using industry-led research collaborations to explore emerging technologies that allow Australian businesses such as Lava Blue to diversify into new manufacturing opportunities and value chains,” said Chuter.

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Kerala government to raise the bar? INDIA // MINERAL SANDS/ZIRCON

The Kerala government has vowed time and again that it will not stop mining the rich mineral deposits along the coastal areas of the state extending from Chavara in Kollam district to Aarattupuzha in Alappuzha district. It is a fact that the rich mineral deposit is a treasure trove that can change the destiny of the state, which has been fighting continued high levels of fiscal and revenue deficits, mounting debt liabilities and high interest payment burden. However, local resistance and opposition from environmentalists have been hampering the project envisaged to establish a titanium complex in the state. Government officials and politicians are reluctant to speak about the issue fearing a backlash. “Titanium is a sunrise sector in the chemical industry. There is a demand for eight lakh tonnes of titanium pigment in the country and we are producing only 40,000 tonnes. The country imports around 7.6 lakh tonnes of titanium pigment a year from China. If Kerala can tap the growing market for titanium mill products and other value-added products from the beach sand minerals to take advantage of the growing demand in the aerospace, aircraft repair, power generation, shipping and biomedical applications sectors, it can power the state economy and create more employment opportunities,” said M P Sukumaran Nair, former chairman of Kerala Minerals and Metals Ltd (KMML). A detailed survey conducted by Atomic Minerals Directorate had found that the mineral sand deposit between Neendakara and Kayamkulam Bar over a length of 22 km with a width of 225 m was one of the best in the world because of high titanium dioxide content in the mineral ilmenite. The reserve of total heavy mineral in the Chavara barrier beach is 127 million tonnes, while in the northern segment, which extends up to Thottappally in Alappuzha district, the reserve of total heavy mineral sand is 17 million tonnes. According to Confederation of Indian Industry (CII), Indian Air Force (IAF) will be spending around $150 billion on aircraft and aero engine in the next 15 years. In India, most of the titanium processing is in manufacturing pigment-grade titanium dioxide. Kerala government entities, Kerala Minerals and Metals Ltd produces 40,000 tonnes per annum (TPA) rutile-grade titanium, while the Travancore Titanium Products produces 15,000 tonnes of anatase-grade titanium pigment per annum. Two other small capacity plants are also processing titanium in the private sector. The Kerala government in 2018 commissioned a feasibility study to put up a plant to produce titanium mill products and other value-added products from the beach sand minerals, said Sukumaran Nair.

The government had formulated an ambitious plan to increase the production of titanium dioxide to 60,000 tonnes and further increase the capacity of Chavara KMML plant to one lakh tonnes per annum. A committee appointed by the government had recommended to increase the capacity of the titanium sponge plant at KMML and start producing titanium metal alloy. The government’s proposed mineral-based titanium complex and its downstream projects will be the biggest industrial development initiative so far undertaken by the state. The performance of Travancore Titanium Products and KMML is illustrative of the profitability of the titanium-based mineral industry. “If we opt not to mine it will result in a massive loss to the state’s economy. We may have to learn lessons from activities of this kind taking place in other fragile zones around the world and work out a coastline environment management plan,” he said. Regarding the local resistance, Sukumaran Nair said the present method of beach sand mining was not environmentfriendly. Sea erosion in Chavara area is very high and the authorities should retain the sea barrier through backfilling. Use of heavy equipment for excavating soil should be discouraged. Local people should be employed as permanent workers and provided a handsome salary. The workforce should be integrated with the industry. The mineral sand that gets deposited every day through sea washing can be collected by employing Kudumbasree self-help groups. The state government has taken a policy decision to discourage export of raw mineral sand and promote export of value-added products. Ilmenite, rutile, zircon and monazite are the major heavy minerals extracted from beach mineral sand. Ilmenite is an important ore from which titanium dioxide pigment, titanium sponge, titanium chloride and titanium metal are made. However, the technology for processing ilmenite is a closed one. India has to source the technology from foreign countries and start processing the mineral sand. The project needs an investment to the tune of around `3,500 crore and the government should explore the possibility of a joint venture to realise the project. Sukumaran Nair said while the public sector utilities were unable to extract mineral sand due to protests, some mineral sand processing units outside the state are sourcing mineral sand from the state through smuggling. Certain local people are employed by the smugglers to extract mineral sand and ferry it to the barges that reach outer sea. These smuggling lobbies are fuelling the local protest, he said. Industry insiders alleged that many political leaders were hand in glove with the mineral sand smugglers.

Red Mountain moves on new deposit AUSTRALIA // KAOLIN

Red Mountain Mining is now grabbing a piece of the kaolin pie with its binding agreement to acquire the historic 84sqkm Mt Kokeby project, about 99km southeast of Perth. Red Mountain says old drilling hit high-grade kaolin with more than 30 per cent alumina content, making the project a potential candidate for a low capex, direct shipping ore (DSO) operation for early cashflow. This is supported by the project’s close proximity to rail and all-weather roads that provide access to container handling at Fremantle port and bulk handling at Kwinana. Mt Kokeby also has exploration upside, Red Mountain says, as significant areas of the Murray deposit remain untested. The company has also restructured its agreement to

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acquire the Mt Mansbridge heavy rare earths project, just 40km from Northern Minerals’ advanced Browns Range project. Red Mountain now has an exclusive 28-day due diligence period following which it can earn 100 per cent of both the Mt Kokeby and Mt Mansbridge projects for $500,000 in cash and 310 million shares. “The introduction of two high-quality specialty metal Western Australian projects is an exciting development for the company,” Red Mountain director Jeremy King said. “Our view is that both the HPA and rare earths markets are attractive places for a producer to be, and with each project at different stages they complement each other well.”

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Bangladesh lines up second major Expo Emerging South Asian ceramic hub Bangladeshâ&#x20AC;&#x2122;s major event, CERAMIC EXPO B A N G L A D E S H - 2 0 19 is scheduled to be held during December 5-7, 2019, at Dhaka International Convention City Bashundhara (ICCB), Dhaka, Bangladesh, as a regular annual/biannual exhibition, after its successful launching in 2017. Its organizer, Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA), and event manager, WEM Bangladesh Limited, told Asian Ceramics the upcoming second edition of the event will be held on a much bigger scale on a space of 15,000 square metres in 4 halls. BCMEA said 150 exhibitors will participate, while 6,000 visitors, 500 delegates and 200 brands from a total 20 countries are due to arrive. The exhibitors and buyers are showing increasing interests as Dhaka has become a potential hub, said Nasimur Rahman, Director, Marketing, WEM Bangladesh. 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. The country with a big population of about 170 million with per capita 2019 nominal GDP of around US$2,000, has a massive one quarter, numbering over 40 million, potential middle class consumers whose purchasing power is dramatically rising since last decade, boosting up the demand for Product

ceramic products, most particularly, the building ceramics, such as, tiles and sanitarywares. However, since over three decades, Bangladesh is already an established exporter of ceramic porcelain and bone china tablewares, shipped to more than 50 countries all over the world earning about US$50 million per year. Most of the buyers are located in European Union, USA and Canada. BCMEA said, in last 20 years more than a billion US dollars have been invested in the ceramic sector and the domestically manufactured ceramic products substitute more than US$500 million worth of imports a year. The production expanded by some 200 percent in last 10 years. The direct and indirect manpower involved in the industry is about 500,000. About 40 percent of the employed regular workers in the ceramic factories are females. The value addition in the sector is estimated to be about 65 percent, according to BCMEA. Most of the raw materials consumed are imported from China, India and European and other Asia Pacific sources. Machinery and technology suppliers are mainly European Union, China and Japan. A brief summary of the Bangladesh ceramic sector, as of financial year (July-June) 2017-2018 (US$1=approximately Bangladesh Taka 80, based on estimated exchange rate of 2017-2018):

Number of Investment/ Yearly Direct Import Export Local Sale Local Market Market Share % Industries Project Value Production Employee Million Million BD of domestic Consumption Local Foreign in Million BD Capacity BD Taka Taka ceramics in Million BD Taka Million BD Taka Taka

Table wares

22,000 (US$275 million)

254.5 Million Pcs

18,900

367 (US$4.59 million)

3,782.7 (US$47.3 million)

4,779.8 (US$59.75 million

5,146.8 (US$64.34 million)

92.87

7.13

Tiles

28 (More factories in pipeline)

49,750 (US$621.87 million)

195.30 Million Sq Metres

19,845

9,827.60 (US$123 million)

18.50 (US$0.23 million)

31,434 (US$393 million)

41,261.6 (US$515.8 million)

76.18

23.82

Sanitary wares

14,410 (US$180.125 million)

8.35 Million Pcs

8,353

00.20 947.2 (US$11.8 (US$0.0025 mn) million

7,163.5 (US$89.54 million)

8,110.7 (US$101.4 million)

88.32

11.68

Total

86,160

47,098

11,141.8

43,377.3

54,519.1

3,801.4

Source: BCMEA

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Vietnam: feeling the strain as a China substitute

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S importers of household goods have ramped up ordering from Vietnam to avoid Chinese tariffs, but landside and ocean capacity strains are already showing. Imports of household goods from Asia, a bellwether cargo in the eastbound trans-Pacific, increased only 0.6 percent year-to-date through August as the United States-China trade war dragged on, demonstrating that a large increase in imports from Vietnam was unable to offset declining imports from China. Furthermore, because manufacturing in Vietnam is approaching capacity, and vessels leaving ports there are fully subscribed, further growth in exports of household goods will be constrained, a non-vessel operating common carrier (NVO) said. “Vietnam is at capacity,” said David Bennett, president of the Americas at the forwarder Globe Express Services. “If you’re not there, it’s too late.” Household goods include tableware and accounted for 22.5 percent of total US imports from Asia through August. Total US imports from Asia yearto-date are up only 1.6 percent. That compares with full-year 2018, when containerized imports from Asia increased 7.1 percent over 2017, analysts have said. Household goods imports this year reflect a slowing national economy, declining imports from China — by far the largest source of those goods — and the inability of growing imports from Vietnam to replace what has been lost from China due to the tariffs. China still had a dominant share — 69.1 percent — of US household goods imports from Asia in JanuaryAugust. But imports of household goods from China alone fell 7.7 percent compared with the same period last year. Vietnam was next with a market share of 17.3 percent, driven by a 34.2 percent gain in exports to the US. Imports from Vietnam have increased by double digits in each of the past five

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years as the country established the manufacturing capability and infrastructure needed to grow household goods exports. Malaysia, Taiwan, South Korea, Indonesia, Thailand, Hong Kong, Japan, and Singapore rounded out the top 10 source countries in Asia. Each of those had a market share of 3 percent or less, as they have lagged in developing the necessary manufacturing capabilities.

VIETNAM IS AT CAPACITY Despite its rapid growth in producing household goods, or maybe because of its success, Vietnam is nearing a plateau in expanding its exports most products, not just household goods, another NVO said. In addition to the time it takes to ramp up production, Vietnam has been growing so rapidly that the growth is taxing its ability to supply sufficient skilled labor. Based on the China model, it takes years to develop the infrastructure and manufacturing capabilities needed to launch large-scale production of the household goods that are a mainstay of the US import trade from Asia. Manufacturers of those products require access to raw materials, parts and components, and a sufficient skilled labor pool. Also, China has shown that in addition to manufacturing capability, a sophisticated supply chain is required to bring the materials and components to production facilities, and the finished products to ports for export. Given the timeline required to bring everything together, the ability of other Asian countries to

scale production up to the standards established by China is not expected to develop for years to come. “Scalability is the key,” Bennett said. An importer of hardware and related home-improvement products said he has not seen a material shift in production of those goods from China despite the trade war. “Perhaps we will see this transpire over time, but simply put, we cannot react that quickly,” the source said. In addition to limitations on production capacity in other Asian countries, importers of household goods say ocean services in the trans-Pacific are designed mostly for the North Asia and China markets. Carriers added four strings for a total of 18 weekly services from Southeast Asia to North America this past year, according to Sea-Intelligence Maritime Consulting, but ships leaving Vietnam are mostly full. “There are certainly capacity issues out of Vietnam. We’re rolled sometimes,” Bennett said. On the other hand, the overall downward pressure on freight rates in the eastbound trans-Pacific has prevented spot rates from Vietnam from increasing, he said. Spot rates from Vietnam move up or down with the larger trans-Pacific market, and the trend this fall has been mostly downward, he said. “We’re seeing some capacityrelated issues from Vietnam with certain carriers,” the hardware importer stated. “We can get the cargo moving, just not always on our desired carrier.” Participants in the household goods trade with China expect that in the years ahead some sourcing will gradually shift to countries outside of China regardless of what direction the trade war takes, primarily because of increasing labor costs in China. However, with Vietnam reaching its production capacity in household goods, and other countries in Southeast Asia still at the early stages of development, China will continue to dominate that sector. “Yes, there is a shift under way, but China is China,” Bennett said.

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CMY

Analysis: Vietnam

All aboard the Vietnam’s tiles rise to the challenge

fter a decade of steady growth in tile production and consumption Vietnam has clearly emerged as the most dynamic tile centre of Pacific Asia with plenty of opportunities to offer in sourcing. In the midst of global stagnating situation of ceramic tiles in production, consumption and trade, the country has continued to increase its production capacity and consumption as well as the foreign trade in the sector. At the moment, Vietnam's economy is enjoying the advantage of the US led trade wars. However, as the US restrictive tariffs have led the Chinese tiles into troubles and forcing many of its tile factories to suspend or reduce production, Vietnam is in the risk of massive influx of cross-border illegal imports of tiles from China. Driving on the higher economic expansion supported with rising foreign direct investment in export industries, import substitute manufacturing and infrastructures, and resultant massive consumption of building materials in private and public housing sectors, real estates and building industries, in both new projects and remodelling-renovations, Vietnam has been making a great stride to uplift the people’s living to a reasonable standard from the century old less-developed rural and unorganised migrant-urban settings, and weaker urbanised dwellings in cities and towns. This development has created a vast domestic market for ceramic floor and wall tiles since late last decade. By this time the tile consumption

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has increased by 150 percent to some 550 million square metres in 2018 from 220 million sq metres of 2008.

A new boom beckons?

Now, it is providing a stimulating message to the tile manufacturers that Vietnam is heading towards another building boom with a spectacular economic expansion as the experts from the Vietnam Institute for Economic and Policy Research (VEPR) have forecast that the country’s economic growth will reach 7.26 percent for the fourth quarter and 7.05 percent for 2019, compared to 6.6-6.8 percent as assigned by the legislative body, Vietnam National Assembly, the highest organ of the country’s state power. VEPR reviewed the second-quarter macro-economic performance and quoted data from the government statistical department, General Statistics Office (GSO), as saying that the Vietnamese economy grew by 7.31 percent in the third quarter of 2019. Most significantly, the combined consumption of ceramic, porcelain, granite and heavy clay cotto tiles has more than doubled in five years since 2013 when the domestic production capacity boomed steadily providing plenty of acceptable-quality local tiles for the Vietnamese consumers at affordable price in a situation of rising income level of middle class and average households and the increase of government’s revenue income to help public housing get a boost.

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Analysis: Vietnam

Tiger Express Prime Group JSC

The steady urbanisation with huge construction of houses, apartment buildings, office and store blocks, public establishments and tourism facilities have raised the demand for tiles to a historic level of consumption. In 2018, Vietnam remained the largest pro ducer and consumer of ceramic tiles in the Asia Pacific region outside China and India. During the year Vietnam manufactured more than 600 million sq metres of tiles and consumed about 550 million sq metres of domestic and imported tiles. Some of the established manufacturers consider that the domestic market is over supplied, but this suggestion could not stop the entry of the new plants or put a curb on continued expansions.

Capacity growth

While analysing the impact of the trend of increasing capacity, the officials in the Prime Group, the largest manufacturer of ceramic tiles in Vietnam, are mainly concerned about the impact of the competition of the local manufacturers following larger supply than the domestic market demand. As the cost of production inputs is rising, the Prime Group’s General Director Cherdsak Niyomsilpa said he is expecting a strategic cooperation among the manufacturers to protect the industry from unhealthy competition by unfavourable price cutting. The officials in Prime and other major tile manufacturer Viglacera Corporation suggest for competition in efficiency in managing production, improving quality and developing innovative products to ensure the safety of the industry and to provide better benefits, including after sale services, to the consumers at reasonable prices and helping exports win an unprecedented rise with exportable surplus tiles of around 200 million sq metres a year in the coming years if the trend of capacity rise goes on.

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Established in 1999. Production capacity: 90 million sq metres of ceramic tiles per year. Location: Binh Xuyen, Vinh Phuc Province, Vietnam. Products: Glazed porcelain and ceramic floor and wall tiles of various types, designs, sizes, colours and price ranges, specially, for the mass markets. Production operations include extraction and processing of raw materials for the ceramics industry, roofing tiles and cotto tiles (heavy clay) as well as ceramic floor and wall tiles. Markets: Domestic and export markets. Importing countries include South Korea, Taiwan, Pakistan, Cuba, Yemen, Sri Lanka, India, and Iraq. Brand: PRIME. Others: The largest ceramic tile producer in Vietnam, and one of the world’s major tile manufacturers with 8 factories in Vinh Phuc, Thai Nguyen and Da Nang. The Prime Group is a conglomerate of building products manufacturers and others, and owned by the Thailand-based Asian tile, sanitaryware and cement major Siam Cement Group (SCG Group). SCG’s acquisition with an annual production capacity of 75 million sq metres of porcelain and ceramic floor and wall tiles became the world’s largest producer of ceramic tiles with a combined manufacturing capacity of some 225 million sq metres per year.

Viglacera Corporation Established in 1974 for manufacturing ceramics and glass. Location: Hanoi, Vietnam. Products: Ceramic, porcelain and granite tiles. Production capacity: Total of all group companies combined, 20 million sq metres per year. Breakdown of group capacity with factory location: Viglacera Thang Long, 8.5 million sq metres per year; Viglacera Hanoi, Bac Ninh Province, 5.5 million sq metres per year; and Viglacera Tien Son, 6.0 million sq metres a year. Some estimates suggest that including granite tile, the total production capacity of Viglacera plants under the three companies is at least 23 million sq metres of ceramic, porcelain and granite tiles for both domestic markets and exports. Markets: Domestic and export markets. Tiles, sanitarywares and heavy clays products have established markets all over Asia and other continents. Trademark/brand: As a trade mark or brand, Viglacera is known worldwide as a major ceramic tile and sanitaryware producer of Asia. Others: Viglacera with its all tile companies are former state owned companies, and now stock market listed.

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Analysis: Vietnam

Since the past couple of years, Vietnam is the world’s 4th largest tile manufacturer, after China, India and Brazil, leaving behind Spain, Italy, Indonesia and Iran, four well known tile manufacturing countries. Also, Vietnam, with the current population of about 95 million strong, is the 4th largest tile consuming country in the world since past several years after China, India and Brazil, moving far ahead of 5th and 6th largest tile consumers, Indonesia and USA. The current trend of rise in capacity expansion, real production and domestic consumption has been leading Vietnam’s ceramic tiles to a new height. In 2019, the production capacity for the year is expected to rise to an estimated 800 million sq metres, with usual utilization rate of 80-85 percent and consumption of 80-85 percent of the output domestically, where prices are favourable compared to the export markets. Vietnam Building Ceramic Association (VIBCA) and other industry sources indicate, the country’s tile capacity is estimated to have increased to about 760 million sq metres in 2018 from about 700 million sq metres in the previous year. As VIBCA confirmed, some of the major and new manufacturers, such as, Vitto Group, TASA Ceramic JSC, Thang Cuong Co Ltd, A My JSC, and others, are moving ahead to shift the country’s challenges to the rise of new generation tiles by utilising latest technologies supplied by the reputed European machinery manufacturers, especially, SACMI, one of the main partners of the Vietnamese growth. In Vietnam, the major ceramic tile makers are Prime, Viglacera, Vitto, TASA, Dong Tam, FiCO, Catalan, Royal, Thach Ban, TTC, Taicera, White Horse, Y MY, Hoan My, CMC, Mikado, Thang Cuong, A My, etc, which have annual production capacity of more than 10 million sq metres, going up to 100 million sq metres a year. Not necessarily, the large companies are reputed as the manufacturers of the best quality tiles. Many small manufacturers, even with production capacity of much less than 10 million sq metres a year are well known for manufacturing high quality tiles and they have good market both at home and abroad. New plants and expansions of existing plants are investing on advanced technologies for manufacturing globally-standard quality tiles. VIBCA said in 2018 there were several companies expanding production. Some of new plants had initial annual production capacity of 5 million sq meters a year, while larger ones invested heavily with production capacity of more than 10 million sq metres a year in new plants or expansions.

HOAN MY HAS PRIORITISED FOCUSES ON EXPORTS TO THE ASEAN MARKETS Viglacera Hanoi Joint Stock Company (Under Viglacera Group). Established in 1994. Locations: Four factories in Bac Ninh and Hai Duong, Vietnam. Products: Ceramic tiles. Product trademark/brand: Viglacera Markets: Domestic and export markets. Others: Viglacera Hanoi JSC tiles are exported to many countries, mainly to Korea, Pakistan, Bangladesh, Thailand, Mauritius, Cuba, Panama, USA, Canada and Australia. Its floor tiles are of various sizes, colours, and pattern of glossy, matt finish, with main product dimensions of 40x40, 45x45 and 50x50 cm.

Viglacera Thang Long JSC (A unit of Viglacera Corporation). Location: Phuc Thang, Phuc Yen, Vinh Phuc, Vietnam. Products: Ceramic, porcelain and granite floor and wall tiles. Markets: Domestic and export markets. Others: Viglacera Thang Long is a major manufacturer of ceramic floor and wall tiles of diverse designs, colours and sizes ranging from 25x25, 30x30, 40x40, 60x60 for floor tiles, and 20x25, 25x40, 30x45 cm for wall tiles both matt and gloss finish, also many style, borders, decors are available. High technology used in production line makes the product surface resistant against all natural effects, the company claims. Its floor, wall and decorative tiles are exported to many countries worldwide.

Tien Son Viglacera JS Company Location: Tien Son Industrial Zone, Bac Ninh, Vietnam. Products: Ceramic and porcelain tiles. Markets: Domestic and export markets. Others: Tien Son Viglacera JSC is a production unit of Viglacera Corp. It manufactures high-end segment ceramic tiles with large-sizes, such as, 60x90cm, 60x120cm and new brand EUROTILE products for domestic and export markets.

Viglacera Ha Long Joint Stock Company

New generation

In the current vibrant tile market many of the manufacturers who witnessed temporary ups and downs in the past following slump in the local market and rise of unsold inventory during the slowdown in

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Location: Ha Khau Ward, Ha Long City, Quang Ninh Province, Vietnam. Products: Ceramic tiles, cotto tiles, roofing tiles and bricks. Markets: Domestic and export markets. Others: Viglacera Ha Long JSC is a production unit of Viglacera Corp. It is best known for its high quality cotto ceramic tiles and bricks, manufactured using Vietnam’s best clay from Gieng Day quarry founded by the French over a century ago.

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Analysis: Vietnam

FiCO JSC (No.1 Building Materials Corporation-CTCP JSC) Location: Ho Chi Minh City (factories of subsidiaries in different places), Vietnam. Products: Ceramic and porcelain tiles, heavy clay and roofing tiles, pavers, refractory bricks, bricks and others, including sanitary wares. Markets: Domestic and expirt markets. FiCO products are exported to many countries, including, USA, France, Russia, Australia, Korea, Singapore, Taiwan and Japan. Others: FiCO is a state-owned company, belonging to the Ministry of Construction, and owner of many ceramic manufacturers, including, Vitaly (ceramic tiles), Thanh Thanh (ceramic and porcelain tiles), Thien Thanh (sanitary wares), Donai (bricks and roofing tiles).

VITALY Joint Stock Company the global economy, especially, in the export markets, are sceptical about the present boom. They are a little critical about the increase of capacity and production which is going to leave a good quantity as surplus. However, the new generation manufacturers are giving more importance to the current growth of domestic consumption and exploration of markets abroad for which they are investing on latest technology to produce tiles suitable to meet the global demand. When the domestic tile market is experiencing over supply, rivalry, fierce sales, and the rising imports of Chinese and Indian tiles, the new investors are giving priority to cost effective production by applying automation, robotic equipment, high pressure presses and selection of advanced technology. They prefer SACMI technology from the beginning taking the right production investment strategy. The new generation tile factories are changing the face of the Vietnamese tile industry this decade. Such factories are less concerned about over supply since the growth of consumption and domestic market prices are positive. Nguyen Anh Tuan, Sales Director of Hoan My Vinh Phuc Company and some others were saying earlier that when the current supply exceeds demand unfavourably, a number of new investment projects of companies, such as, TASA, Vitto, Thang Cuong, and others, are making the tiles market more difficult. Now the companies like Hoan My are bravely more positive to the challenges. Hoan My said the domestic competition is extremely fierce, but it can be managed with right answer. In addition to improving quality and increasing competitiveness in the domestic market, Hoan My has prioritised focuses on exports to the ASEAN markets and also to European countries including UK. The 12 million sq metres a year capacity company’s exports currently account for about 12 percent of the total output. In 2018 Hoan My has set a goal of boosting exports to 20 percent of the output. Keeping up with the world trend, Hoan My now runs large product lines of 50x86cm, 60x60cm, 80x80cm, 60x120cm, in addition to 30x45cm, 30x60cm, 30x72cm and 40x80cm, and strategic designs, updated with modern production technology and high automation that reduced workforce. It uses 100 percent SACMI presses, digital printers of European suppliers to create outstanding aesthetic quality and designs and diverse product models for high-end consumers of its polished and granite tiles, exported mainly to Europe, East Asia, Middle East and North American markets. Any new capacity or expansion by others still make many of the existing manufacturers worried about over capacity, but, the Vietnamese economy is tremendously providing a hope for huge

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Locations: Two plants in Tan Binh District, HCM City, and in Binh Duong, Vietnam. Production capacity: Total eight million sq metres of tiles in two plants per year. Products: Ceramic tiles using synchronous production line with a high level of automation. Markets: Domestic and export markets. Others: A state owned manufacturing unit under FiCO since four decades. Foreign buyers including Thailand, Sri Lanka, Australia and USA.

Thanh Thanh Joint Stock Company Location: Bien Hoa 1 Industrial Zone, Dong Nai Province, Vietnam. Products: Ceramic and porcelain floor and wall tiles and artificial granite tiles. Production capacity: About 6 million sq metres of high-quality and art tiles per year. Markets: Domestic and export markets Others: Thanh Thanh is a state owned FiCO unit and its products aim to meet the customers’ requirements at domestic and foreign advanced markets. Its tiles are exported to many countries worldwide, including, major destinations of USA, Canada, Australia, Russia, Thailand, Korea, Cambodia, Sri Lanka, Pakistan and Yemen.

TASA Ceramic Tiles Joint Stock Company Location: Thuy Van Industrial Park, Viet Tri City, Phu Tho Province, Vietnam. Products: Ceramic and porcelain tiles. Markets: Domestic and export markets. Others: TASA produces glazed ceramic floor and wall tiles, glazed polished porcelain floor tiles, and decorative tiles. Currently, the company has 8 production lines with a total capacity of 24 million sq metres a year. Construction of its second plant, adjacent to first plant, with a production capacity of about 30 million sq metres per year is expected to be completed by 2020 to raise the annual capacity to about 54 million sq metres.

Vitto-VP Co Ltd Location: Tam Duong II Industrial Zone, Kim Long Ward, Tam Duong, Vinh Phuc, Vietnam. Production capacity: 36 million sq metres a year, including Vitto Phu Loc plant in Thua Thien Hue. Products: Ceramic and porcelain floor and wall times Markets: Domestic and export markets Others: Vitto is undergoing an expansion to increase its tile production capacity by 12 million sq metres to a total 48 million sq metres per year.

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Analysis: Vietnam

housing developments of its large population of some 95 million, while the saturation in demand for building materials like tiles is far way. Significantly, the old and established manufacturers who are efficient in handling capacity control and the market demand are less worried.

Viglacera: a standard?

Vietnam’s previously state-owned and currently stock market listed company Viglacera, which has a production capacity of about 23 million sq metres a year of a diverse range of ceramic, porcelain and granite tiles manufactured in its three factories could be a benchmark. Nguyen Minh Tuan, Deputy General Director of Viglacera said, in 2018, total revenue of ceramic tiles reached more than VND 2,800 billion, an increase of 24 percent compared to the same period of 2017. In which, the revenue in the Northern market was over VND 1,300 billion, up 26 percent. Revenue in the Central market reached 425 billion, an increase of 34 percent compared to the same period in 2017, exceeding 9 percent of the plan assigned. In particular, the revenue in the Southern market reached VND 570 billion, an increase of nearly 50 percent compared to the same period in 2017. Viglacera considers that the current trend is not short lived. To take this advantage it has been offloading a huge number of shares to the private investors. An analysis by the Japanese investment bank Nomura has reportedly estimated that the economy of Vietnam has been boosted by almost 8 percent because of the shift in production resulting from the US-China trade war. Vietnamese investors in tile manufacturing are taking global financial analysis confidently. This year, in first three quarters, Vietnam’s industrial production index was up by 9.6 percent, a record four year high. Retail sales of goods and services registered a growth of 11.6 percent over the same period of 2018. General Statistics Office (GSO) of Vietnam said the foreign investors poured a hugely increased US$26.16 billion into Vietnam in the first nine months, up 3.1 percent. GSO noted, about 22.7 percent of construction firms said they performed better in quarter 3 while 40.9 percent said their business remained stable. In the first nine months, the GDP growth was estimated to be about 6.98 percent, compared with the same period of 2018, that beaten the target of 6.8 percent. The GDP expansion was the highest nine-month growth over the past nine years, said General Director of the GSO Nguyen Bich Lam.

Updated technology

VIBCA said many of the Vietnamese tile manufacturers have undergone expansion of capacity and increased the upgraded production. In almost all major tile production clusters, such as, Vinh Phuc, Phu Tho, Bac Ninh, Viet Tri, Da Nang, Dong Nai and Ho Chi Minh City, capacity and production increases remain continued. The principal tile production centre, Vinh Phuc, in the northwest of Hanoi, has experienced a massive increase in output, by about 24 percent over the preceding year, to about 100 million sq metres during January-August eight months of the current year, according to the industry sources. Vinh Phuc province is location to some of the leading tiles manufacturers of Vietnam, such as, Prime, Viglacera, Vitto and TTC. The new tile factories and latest expansions in Vietnam are

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Royal Ceramic Tiles Co Location: 2 factories, in Nhon Trach, Dong Nai, and in Ba Ria, Vung Tau, Vietnam. Products: Ceramic, porcelain and granite floor and wall tiles. Production capacity: 30 million sq metres of tiles a year. Markets: Domestic and export markets. Others: Products include polished and rustic tiles. Export destinations include Cambodia, Laos, Korea, Malaysia, Indonesia, Thailand, Saudi Arabia, UAE and USA.

Dong Tam Group Location: Factories in Long An, Da Nang and Hai Duong, Vietnam. Products: Ceramic tiles Production capacity: 20 million sq metres of tiles per year. Markets: Domestic and export markets. Others: Diversified products with ceramic, granite, cement floor tiles, etc.

Thach Ban JSC Established in 1959. Location: Longbien, Hanoi, Vietnam. Products: Porcelain and granite tiles. Production capacity: 16 million sq metres a year.. Markets: Domestic and export markets. Others: Thach Ban’s products include polished, rustic, rocked, and glazed tiles with the dimension of 300x300, 400x400, 300x600, 500x500, 600x600, and 600,900mm. Export destinations include Australia, Japan, South Korea, Taiwan, Norway, UK and Canada, and others.

Catalan Ceramics (Catalan Joint Stock Company) Location: Bac Ninh Province, Vietnam. Products: Ceramic tiles Production capacity: 23 million sq metres of tiles per year. Markets: Domestic and export markets Others: Invested heavily in advanced technology to produce high-end tiles of large sizes and increasing capacity.

Y MY Ceramic Tiles Corporation. Location: Tam Phuoc Industrial Park, Phuoc Commune, Bien Hoa City, Dong Nai, Vietnam. Products: Ceramic tiles. Production capacity: 18 million sq metres of tiles per year Markets: Domestic and export markets. Others: Y MY provides solutions for ceramic, porcelain and granite tiles, especially, in civil constructions: houses, villas, buildings, apartments, offices, showrooms, etc, at domestic and export markets.

CMC Joint Stock Company Location: Phu Tho Province, Vietnam. Products: Ceramic floor, wall and decorative tiles Production capacity: Over 17 million sq metres of tiles per year. Markets: Domestic and export markets Others: Former state owned company, listed in stock market. Expanded capacity and added granite tiles in 2018. Its main tile dimensions are 20x20cm, 30x30cm, 40x40cm, 50x50cm, 60x60cm, 80x80cm, 25x40cm, 30x60cm, 30x75cm, 40x80cm, and 50x86cm. Its decorative tile dimensions range from 6x24cm and 10x20cm to 25x50cm and 30x60cm.

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Analysis: Vietnam

technologically improved providing innovations in production systems. New plant, Thang Cuong Co Ltd, is producing large size tiles. Set up in Bach Hac industrial cluster, Viet Tri city, Phu Tho province, it came on stream last year with initial first phase production capacity of 12 million sq metres a year and has picked up earning revenue this year. Most of its machinery and equipment were procured from European sources, including SACMI. The first phase produces tiles with dimensions of 35x40cm, 60x60cm and 80x80cm. The 12 million sq metre capacity second phase tiles with dimensions of 100x100cm and 120cmx120cm are due to hit the domestic and export markets shortly. TASA Ceramic Joint Stock Company, located in Thuy Van Industrial Park, Viet Tri City, Phu Tho Province, is expecting to bring its next phase of expansion of production capacity into stream in 2020. The expansion is designed to more than double the total annual production capacity to about 54 million sq metres from the current 24 million sq metres a year, according to a spokesperson of the company, Ms Celine Phung. With coming into production of its first phase with four production lines in 2015 and second phase with another four lines the following year, the company has created a substantial demand for its tiles at the domestic and export markets in Asia and Europe, said the company. This year it has introduced large size, 100×100cm and 200×100cm porcelain tiles, along with ceramic and porcelain tile sizes in cm 30x30, 40x40, 60x60, 80x80, 100x100, 15x60, 15x80, 20x80, 20x100 30x60, and 40x80, suitable for the modern environment of residential houses, and commercial and public areas. “TASA Ceramic is running full capacity since its beginning and it has short supply to meet the market demand because of its quality standard,” Celine told Asian Ceramics. “All of our products are verified to comply with ISO 13006 and are certified by TIS (Thailand), CIDB (Malaysia) and SNI (Indonesia),” she added. Large capacity and large type tile manufacturer Vitto is raising its production capacity to a total 48 million sq metres a year from the annual 36 million sq metres at present. Vitto, located in Tam Duong II-Vinh Phuc Industrial Park in Vinh Phuc province, was established and put into operation in 2015, with its first plant Vitto Vinh Phuc Co Ltd, known as Vitto-VP Co. Vitto-VP has two factories in operation with a total capacity of 24 million sq metres per year. It manufactures high quality ceramic and porcelain glazed and polished tiles with various designs and sizes, such as, 100x100cm, 80x80cm, 60x60cm, 50x50cm, 30x60cm, 15x80cm and 20x89cm. Vitto’s Thua Thien Hue province based Vitto Phu Loc

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A My Joint Stock Company Location: Lap Thach district, Vinh Phuc province, Vietnam Products: Ceramic tiles Production capacity: 12 million sq metres of ceramic tiles per year. Markets: Domestic and export markets Others: Newly established tile manufacturer A My JSC has planned to double the production capacity to 24 million sq metres a year from the current annual capacity of 12 million sq metres. Its tiles’ dimensions include 30x60cm, 25x75cm, 60x60cm, 80x80cm, 45x90cm, 60x120cm, 80x120cm, and 120x240cm.

Thang Cuong Co Ltd Location: Bach Hac industrial cluster, Viet Tri city, Phu Tho province, Vietnam. Products: Ceramic tiles Production capacity: 12 million sq metres of ceramic tiles a year. Markets: Domestic and export markets Others: This new tile plant Thang Cuong’s annual production capacity will be doubled to 24 million sq metres of tiles from the current12 million sq metres a year. Its tiles’ dimensions are 35x40cm, 60x60cm, and 80x80cm. Its phase 2 production line will manufacture large sized products such as 100x100cm and120x120cm. It manufactures quality tiles for domestic and export markets.

TOKO Vietnam Co Ltd Established in 2003. Location: Tan Quang, Van Lam, Hung Yen, Vietnam. Products: Glazed ceramic floor tiles Markets: Domestic and export markets. Others: TOKO products are with dimensions of 40x40 and 50x50 cm sizes, with a polish, matt, rustic, pattern, wooden or marble surface amongst others.

TTC JSC (Cong Ty Co Phan TTC Ceramics) Established In 2014. Production capacity: 12 million sq metres of tiles per year. Location: Phuc Yen industrial zone, Vinh Phuc province, Vietnam. Products: Ceramic and porcelain floor and wall tiles. Markets: Domestic and export markets. Others: Listed with stock market. TTC's products are ceramic, porcelain, Nano and granite, with 3D digital printing, plentiful in design, and various sizes, including 30x60cm, 60x86cm, 60x120cm, etc.

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Analysis: Vietnam

plant has a production capacity of 12 million sq metres a year. While implementing expansion plan, Nguyen Viet Ha, General Director of Vitto-VP, believes that his company always needs to have scale and has to update technology and designs of the products. One newly established company, A My Joint Stock Company that entered in the market in 2015 and manufacturing ceramic tiles with a production capacity of 12 million sq metres a year, is undergoing expansion of annual capacity to 24 million sq metres. Its Deputy General Director Tran Tuan Dai said his company is investing in technological innovation to reduce production cost by improving technology. A My tiles with current size dimensions of 30x60cm, 25x75cm, 60x60cm, 80x80cm, 45x90cm, 60x120cm, 80x120cm and 120x240cm provide different surface types from polishing and processing. Tran Tuan Dai said A My is exploring export markets where China is losing market shares.

Hoan My Company Ltd Location: Khai Quang Industrial Park, Vinh Yen City, Vinh Phuc Province, Vietnam. Products: Ceramic tiles. Production capacity: 12 million sq metres per year. Markets: Domestic and export markets. Others: Hoan My’s product sizes: 30x45cm, 30x60cm, 30x72cm, 40x80cm, 50x86cm, 60x60cm, 80x80cm, 60x120cm and other sizes of tiles, including porcelain polished tiles and high-end products line of granite tiles. Exported mainly to Europe, East Asia, Middle East and North America.

My Duc Ceramics Limited Company Established in 1996. Location: My Xuan A IP, My Xuan Ward, Tan Thanh, Ba Ria Vung, Vietnam. Production capacity: 5 million sq meters of glazed ceramic tiles per year. Products: Ceramic tiles, having production lines for monoporosa, monocottura, and special decorative tiles, to meet domestic and export demands for quality flooring systems. Its tile sizes range from 25x25 to 60x60cm. Markets: Domestic and export markets. Brands/others: My Duc’s Eurotile brand meets the European and other equivalent standards of quality for high-end segment, claims the manufacturers.

Taicera Tiles

High-end growth

To raise the market share of high-end tiles, Catalan Joint Stock Company, set up in 2007, with a production capacity of 23 million sq metres a year, is investing heavily in advanced technology, said its General Director Cao Viet Xung. Catalan’s factory is currently expanding on a large scale and has in recent years added two new lines with high pressure SACMI presses, PH6500 and PH7500, first in Vietnam. Now it has 8 upgraded lines to serve domestic customers and boost exports. Its current major export markets include UK, Germany, Australia, Taiwan, UAE and the Middle East. Catalan pays more attention to exports, although exports currently do not bring much profit compared to domestic sales, but the export orientation is still a sustainable business solution, ensuring stability on longer term, said the company’s General Director. To become better compliant and to preserve and protect environment, TTC JSC has pioneered in the application of echo green technology, saving energy, reducing carbon emissions, and meeting environmental standards in accordance. To protect the health of the customers, each TTC floor tile is manufactured on the eco green technology, completely eliminating heavy metal impurities to ensure health of consumers. TTC floor tiles are suitable for all interior and exterior spaces, easy to clean, non-discoloured, anti-slip, anti-scratch and friendly to the environment, said the company’s senior officials while showing the production of such tiles in its factory to the visiting Asian Ceramics.

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(Taicera Ceramics Industry Joint Stock Company) Established in 1994. Location: Go Dau, Phuoc Thai, Long Thanh, Dong Nai, Vietnam. Production capacity: 11 million sq metres of tiles per year. Products: Ceramic tiles, such as, polish, rustic, glaze porcelain, and soft polish, floor and wall glazed tiles, border tiles, decoration tiles, supplying for large buildings, Villa, etc. Taicera also produces Spain based Keraben brand tiles for global markets under Taicera Keraben partnership. Markets: Domestic and export markets. Others: Former foreign owned company, listed in stock market. Products include ceramic and granite tiles. Some 55 percent of income is generated from export sales.

White Horse Ceramic Company Status: Foreign investment (Taiwan). Location: My Xuan A Industrial Park, Tan Thanh, Ba Ria Vung Tau, Vietnam. Production capacity: 10 million sq metres of ceramic tiles per year. Products: Ceramic and porcelain floor and wall tiles. Markets: Domestic and export markets. Others: 100 percent Malaysian owned company. Produces include ceramic and granite tiles.

Mikado Group Location: Vung Tau Province, Vietnam Products: Ceramic tiles. Production capacity: 10 million sq metres of tiles per year. Markets: Domestic and export markets. Others: 100 percent Malaysian owned company. Produces include ceramic and granite tiles.

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Analysis: Vietnam

Located in Phuc Yen Industrial Park of Vinh Phuc province, TTC has four production lines equipped with machineries from Italy’s SACMI Group. It has an annual production capacity of 12 million sq metres of ceramic, semi polished porcelain and granite tiles. Sizes of its tiles range from 30x60cm to 80x80cm to 60x120cm. Its introduction of large size digital printing tiles to domestic customers and export markets of Europe, East Asia, Middle East and North American markets pays dividend.

Foreign outlets

About 80-85 percent of the tiles produced in Vietnam are consumed domestically, while 15-20 percent are exported. Vietnamese tiles’ main export markets are ASEAN and East Asian countries and the Latin American country of Cuba. VIBCA said of the total exports of worth US$203.039 million shipped in 2017, about 65 percent of the shipments, in terms of value, were made to nine countries, Thailand, Taiwan, Cuba, Korea, Malaysia, Philippines, Cambodia, Indonesia and Laos. In 2017, out of total imports of over US$100 million, 56.3 percent was spent for ceramic tiles, while 43.7 percent was for granite tiles. China, Spain, Malaysia, India, Italy, Indonesia and Thailand shipped nearly all of the imports, of which China’s share was more that 62 percent. Vietnamese tile manufacturers and VIBCA often complain against illegal imports from China. VIBCA said, according to the official data from Vietnam Customs, the import value of ceramic tiles from China into Vietnam in 2017 was only US$62.3 million, while the data from Customs of China showed nearly US$300 million. Illegal and fraudulent imports from China is very big and hard to control, VIBCA added. Meanwhile, Vietnam has alleged that Chinese companies imported tiles from China into Vietnam and relabelled as Vietnamese reputed brand items and then shipped them on to another country. Vietnamese customs officials claimed that such products have been identified as fraud and taken under drastic action. According to the statistics of Geneva based International Trade Centre (ITC), the export value of unglazed tiles shipped from Vietnam have jumped to US$131.550 million in 2018 from US$ 49.499 million of the previous year, because of massive increase in imports by Thailand, South Korea, Philippines, Taiwan, Cambodia, Indonesia, Malaysia and Laos. During the year, Vietnam’s imports value of unglazed tiles also more than doubled to UDS$99.221 million from US$43.681 million of 2017. Imports from main suppliers, China, Malaysia, India, Spain, Italy, Indonesia and Thailand were increased by large quantities. Vietnam’s export and import data of glazed tiles for 2018 are yet to be available. Industry sources expect that the figures would be much higher than that of the previous year 2017, when exports and imports were of worth US$105.467 million and US$56.233 million, respectively.

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Guocera Tile Industries (Vietnam) Co Ltd Location: Dong Nai, Vietnam. Products: Porcelain tiles. Markets: Domestic and export markets. Others: A joint venture between Guocera Holdings Sdn Bhd under Hong Leong Industries Bhd of Malaysia and Vietnam’s Infrastructure Development and Construction Corp.

NorcoTiles (Vietnam) Co Ltd

Location: Near Ho Chi Minh City, Vietnam. Status: Australian investment. Products: Ceramic tiles. Markets: Domestic and export markets. Others: Norco products include unglazed, residential, commercial, and industrial, natural clay tiles, for niche floor, paving and wall tile markets worldwide.

Cosevco Ceramic Tiles JSC Operates since 1996. Location: Lien Chieu, Danang City, Vietnam. Products: Ceramic tiles. Production capacity: 4.5 million sq metres of ceramic tiles per year. Markets: Domestic and export markets. Others: Export destinations include Japan and Thailand, among others.

Chang Yih Ceramic Joint Stock Company Established in 2000. Location: Nhon Trach, Dong Nai Province, Vietnam. Production capacity: 7 million sq meters of ceramic tiles per year. Products: Ceramic tiles. Markets: Domestic and export markets Others: Uses Italian SACMI and SITI pressing machines and kilns and Roto Colour System Printing. Export markets include Korea, Taiwan, Japan, Singapore and Australia. Manufactures quality fake-wood ceramic floor and wall tiles.

Red Star Tiles (Truc Thon JSC) Location: Truc Thon, Cong Hoa Ward, Chi Linh Town, Hai Duong, Vietnam. Products: Ceramic tiles Production capacity: 4 million sq metres of tiles per year. Markets: Domestic and export markets. Others: Main export markets are Taiwan, Thailand, Japan and Panama. Also, distributes tiles imported from Italy, Spain, Germany and China.

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Analysis: Vietnam Dong Nai Brick and Tile Corporation Location: Four factories in Dien Bien Phu Street-District 1, Ho Chi Minh City; Bien Hoa City (two factories), Dong Nai; and TanUyen District, Binh Duong, Vietnam. Annual production capacity: 115 million pieces of ceramic and heavy clay products. Products: Ceramic floor and wall tiles, heavy clay bricks, terracotta floor and wall tiles, decorated wall tiles, glazed and unglazed roof tiles, pavers, and refractory bricks. Markets: Domestic and export markets. Others: Dong Nai Brick and Tile Corp also produces 14,000 tons of refractory bricks.

Vietnamese Ceramic JSC

Location: Trangan, Dongtrieu, Quangninh, Vietnam. Products: Ceramic tiles. Markets: Domestic and export markets. Export destinations include Southeast Asian countries, China, Middle East, Australia NZ, among others. Others: Vietnamese Ceramic manufactures ceramic tiles and standard quality terracotta tiles, such as, terracotta floor tiles, terracotta wall tiles, terracotta step-nose tiles, ‘terracade’ façade and panel tiles and terracotta roof tiles. Statistics of Vietnamese tile consumption and trade

Hue Restoration Pottery Enterprise

Vietnam’s ceramic tiles (ceramic, granite and cotto tiles) domestic consumption, exports and imports Year

Consumption in million sq metres

Exports in million US$

Location: Hue City, Hue, Vietnam. Products: Ceramic specialty tiles. Markets: Domestic and export markets Others: Reputed for application in the restoration of ancient buildings by providing special kind of tiles like Luu Ly tiles.

Imports in million US$

2017

460

203

100.03

2016

438

181.5

93.18

2015

410

211.4

71.5

2014

360

270

2013

250.5

219

Pancera International Stock Company Location: Go Dau Industrial Park, Phuc Thai Commune, Long Thanh, Dong Nai, Vietnam. Products: Ceramic and porcelain polished tiles. Markets: Domestic and export markets. Others: Pancera International Stock Company in Vietnam is a subsidiary of Taiwan based tile manufacturer Dreamtek International Corporation. Pancera’s manufactured polished and other porcelain tiles available in sizes of 60x60cm, 30x60cm, 40x80cm and 80x80cm.

Source: VIBCA Asian Ceramics Note: Vietnam’s consumption of tiles in 2018 was estimated to be about 550 million sq metres, according to the industry sources.

Ceramic tiles in Vietnam: Installed production capacity in million sq metres Year

2017-2018

2016-2017

2014-2015

2013

2012

Ceramic and porcelain tiles

502.0

475

452.0

Granite tiles

169.5

125

73.5

Cotto (heavy clay) tiles

35.0

22.0

706.5

630

547.5

436

Total tiles

418

2011

408.2

2010

2009

404

377

270

425.2

487

445

327

Source: VIBCA Asian Ceramics Note: Vietnam’s production capacity in 2018 and 2017 was estimated to be about 760 million sq metres and 700 million sq metres, respectively, according to industry sources.

Ceramic tiles in Vietnam: Real production in million sq metres Year

2017-2018

Ceramic and porcelain tiles

2016-2017

2014-2015

2013

2012

430

395

361

Granite tiles

110

Cotto (heavy clay) tiles

550

535

440

320

Total tiles

302

2011 285.6

2010

2009

340

360

250

302.6

407

422

302

Source: VIBCA Asian Ceramics Note: Vietnam’s production of tiles in 2018 was estimated to be more than 600 million sq metres, according to the industry sources.

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AC 19-9

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Exciting times ahead: our 2020 Vision De a r Co lle a gu e ,

ustry. For more than 22 years lve to match the needs of the ind evo to es tinu con ics am Cer n Asia , beginning of next year As always vision and innovation, and from the pro tion rma info of t fron fore the advertisers. we have been at for the benefit of our readers and nge cha al ent dam fun r the ano king we are going to be ma gazine, as opposed to amics will become a bi-monthly ma Cer n Asia , 0-1 AC2 h wit g rtin sta more consistent As of next year, cy in this way, we will be able to be uen freq our ng ngi cha By r. yea the current 10 issues per rmation throughout the year. ensuring a constant stream of info , ling edu sch and es tim y ver deli in our our organisation as offices and journalists – those in rse ove our in est inv to e tinu con It will also enable us to tions within each issue, which, e, and also to include some new sec tlin fron the on tion rma info ing than you receive currently gather be an even bigger, better magazine will lt resu The do. to ble una are presently, we events). (by mail, electronically and also at with a more effective distribution ine: new regular features to the magaz We will also be introducing some to be a thought leader! • Bi-issue Tech focus: your chance y ular section to this expanding industr • Fine Ceramics in Focus: a new reg analysis on a sector basis than before • The Trade Matrix: More statistical region in-depth at more than hlighting a specific manufacturing hig e issu h eac : ion Nat the of te • Sta “country” level , obtaining a high profile eficial. With six issues to choose from ben ely hug is ve mo the s ser erti y would this apply to For adv than in the current format. Not onl pler sim lot a be will r yea OLE WH throughout the on the website. the printed issue, but also online and ely than before are is communicated even more effectiv e ssag me UR YO g urin ens for es a far greater The opportuniti l and advertising pages will give you oria edit ing mix by file pro e rais to obvious, and the chance .our reader! information across to the customer... r you get you how in s ion opt of range ensure that you get: • Your marketing spend will now ine and in-print coverage • Year-round internet, in-App, onl and editorials Y way you choose, mixing adverts AN in es pag r you use to nce cha • The high profile issue, increasing your options for an in e pag one n tha re mo on • The chance to appear ch more! double pages, 4-page inserts and mu h you! ard to sharing the next evolution wit forw k loo We ay. tod us tact con If you have any questions, Yours faithfully

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■ ■ ■ ■

Household ceramic production in China Trends in Turkey's tile sector Brick production for India, part 1 Vietnam's tiles rise to the challenge SEE US AT; BANGLADESH CERAMICS; VIBRANT GUJARAT

FINAL

AC 19-10

ISSUE

OF 201 9 !!

■ ■ ■ ■

The CICA files: ASEAN's 2020 vision Tableware: an outsourcing review Decorating China: the inkjet revolution Fuel costs: the great unknown

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AC 20-1

AC 20-4

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 ■ ■ ■ ■ ■ ■

AC 20-3

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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AC 20-5

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 ■ ■ ■ ■ ■ ■

AC 20-6

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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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Analysis: Heavy Clay

Something Brick production for India Coming just behind China in terms of volume, and arguably outstripping it in terms of pollution, the Indian brick industry remains under constant pressure to modernise. Yogender Malik looks at the state of play on the sub-continent…

s the second largest brick producing nation globally, India produces an estimated 250-260 billion bricks (word estimated and large range is due to the fact that a substantial part of total production goes unreported) from more than 140,000 small, medium and a few large scale

brick kilns. Brick production and consumption in the country in the last few years has retained steady growth rates on account of construction sector in urban and rural areas. In fact, rural area has been a major contributor of brick demand in last few years. Considering the fact that a large part of rural India is migrating towards brick houses, this segment will be one of the most important factors towards driving the demand of bricks in the country. Major new initiatives by the Government of India, like “Housing for All” and “Smart Cities” are also expected to increase the demand of bricks in the country by significant volume in the short and medium term. If the present rate of economic growth is maintained over next few decades, it is projected that India’s building stock will increase by around 3.5 times between 2018 and 2047. Under this scenario, the annual demand for bricks is also expected to increase by around 3 times and reach a peak during 2032-37. Despite the mammoth size of Indian brick industry, brick production has remained very primitive. More than 90 % of the total bricks produced in the country comes from unorganised, small scale brick plants, which are still using age old technology to produce solid bricks. Many stakeholders in Indian heavy clay industry have expressed their concerns about the state of Indian brick industry. Chandra Bhushan, Deputy director general, Centre for Science and Environment, a New Delhi based Advocacy group says, “ Bricks are an age-old industry and the backbone of the construction sector. The continuing use of inefficient and polluting technologies as well as inadequate push for innovative building materials has kept the brick sector stuck in the 20th century. It is

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AC 19-9

time it moved to the 21st century. For this, we need National and State Brick Missions (and many laws) that can transform the brick sector by facilitating large-scale adoption of cleaner technologies and by bringing innovation in the building material sector. It is clear that maximising fly ash utilisation and reducing the environmental impacts of fired clay bricks require much more than just a simple law that bans fired clay bricks. It requires a holistic view of the brick sector, from sourcing of raw materials and production of bricks and building materials to sales and promotion of alternative building materials. It requires a vision on how we will meet the material requirements of the building sector in a climate-constrained world.”

Ageing tech

The use of outdated technology and production of solid bricks continue to dominate Indian brick sector. Indian brick production sector is also one of the main causes of environmental pollution due to high usage of coal and degradation of top soil. If we compare coal consumption by the brick sector in the two largest brick producing countries globally, we will see glaring gap in the efficiency of India’s brick production sector. China’s advanced 80,000 kilns manufacture around 1 trillion bricks annually using only 50 million tonnes of coal. On the other hand, almost 140,000 kilns in India burn 60 million tonnes of coal to produce 250 billion bricks. On the labour usage aspect, China scores very heavily against India. In China, around 4.9 million people staff the country’s kilns, while nearly nine million are needed for producing about a quarter of China’s brick production in India.

Current usage

Indian brick industry is notorious for excess usage of age old technology and excessive labour. The Fixed Chimney Kiln (FCK) accounts for more than 80 percent of brick kilns in India. The low capital investment in setting up a brick kiln using this technology is the prime reason behind the FCK’s dominance in the brick sector in the country.

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Analysis: Heavy Clay

in the air… These kilns have low initial capital investment costs, but are very energy inefficient. They use low level of mechanization for clay preparation and brick forming processes. In addition to being costinefficient, FCK is also one of the most contaminating techniques for brick production, resulting in a host of social and environmental impacts including air pollution, climate change, cardio-respiratory diseases, land use impacts and deforestation. High usage of top soil in Indian brick industry has resulted in large scale depletion of the agriculture soil, estimated at 350 million tonnes of top soil every year. Though, in last two years, large number of brick kilns ( most notably in and around National Capital Region, Delhi. This region comprises of 24 districts in three neighbouring states of Haryana, Rajasthan and Uttar Pradesh) have started to move towards zig-zag technology, but it will take a few more years for this initiative to gain momentum on panIndia basis. To a large extent, brick production in the country is still a seasonal activity. It is confined to five to nine dry months of the year, staring immediately after monsoon season and ending in the months of April- June, depending upon the region. Due to seasonal nature of operations and employment, brick making has not classified been as an industry in the country. On an average, brick sector in the country is characterised by low labor productivity, almost non-existent capitalisation, mostly operation on equity capital and informal management. Most of the brick manufactures face extreme difficulty with

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working capital and that push them to count on informal banking channels such as family, friend and money lenders to finance their activities.

Authority involvement

Intervention by authorities is bringing good results for Indian brick sector. In May 2017, the Environment Pollution (Prevention and Control) Authority for the National Capital Region, a Central government-constituted committee, ordered that all kilns in the Delhi-National Capital Region (NCR) must shift to the zig-zag technology before the next season in 2018 (kilns shut down during the monsoon and usually start operation during the winters). In another judicial intervention in 2018, National Green Tribunal issued notices to Union environment ministry and the governments of the states of Uttar Pradesh, Haryana, Rajasthan and Delhi over illegal operation of brick kilns in these four states. State pollution control board of each of the four states have been directed to inspect the brickfields and examine if they are complying with the environmental norms. As s result of these directions, nearly 75 % of the brick kilns operating in the Delhi NCR region have shifted to zig-zag technology as of June 2019. “It is a far better technology. I wish they had asked us to do this earlier. With this technology, not only have emissions been cut by 70-80 per cent, kiln owners save fuel too. The brick quality is also much better,” said Sarbjit Singh, a brick kiln owner in Ludhiana and former office bearer of the Punjab Brick Kiln Owners’ Association told AC in a conversation.

AC 19-9

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Analysis: Heavy Clay

FCK ACCOUNTS FOR MORE THAN 80% OF BRICK KILNS IN INDIA

“Zigzag design for brick kilns has been used since the 1970s and is a well-tested technology. In West Bengal, for instance, 2,500-3,000 brick kiln owners have been using it for years without waiting for any government order,” according to Sameer Maithel, director of Green-tech Knowledge Solutions, a clean energy research and advisory firm based in Delhi. “For example state of Bihar too has been trying to make its kilns shift to zigzag technology since 2016. As per the last order passed by the state government on August 30, 2018, all kilns must shift to the cleaner technology by August 31, 2019. “Of about 6,500 brick kilns in the state, 450-500 have converted to zigzag technology so far. But despite the cost and labour issues, most kiln owners are keen to shift to zigzag. According to our survey conducted around Patna, about 65 per cent of those who has made the transition found that the zigzag technology was more fuel efficient and produced better bricks,” according to Maithel. Vice-president of the All-India Brick and Tile Manufacturers Federation and president of the brick manufacturers’ federation in West Bengal, Ashok Kumar Tewari told AC, “Brick kilns in West Bengal started shifting to high draft zig zag model more than two decades ago. There are nearly 7,000 brick kilns in West Bengal. We got 90% good quality bricks. This also helped us get better price since the proportion of higher quality bricks in a batch is higher as compared to other parts of the country.” The conversion of FCBTK to ZigZag technology not only expects to reduce the emission from the kilns but also focuses on the conservation of natural resources by reducing wastage. However, the expected results can only be achieved if the conversion is carried out with proper design and most importantly, if the kiln owners adopt the recommended operational practices. A recent survey by New Delhi based Centre for Science and Environment found out that some of the brick kiln owners have adopted to new technology; however, there were a significant number of entrepreneurs who were looking out for the ways to bypass the law. The construction quality of key kiln components such as outer wall and kiln floor, and operating procedure such as fuel feeding, wicket gate closing mechanism and type of fuel being used was found to be poor. Majorly the environmental benefit that was associated with the conversion of kilns were overlooked and hence not achieved. It is also pertinent to mention that a few progressive entrepreneurs have completed the conversion process effectively in order to get the desired results.

Table 1 Fuel Opera+on Raw materials Losses Admin/legal

45 28 15 6 15

Average production cost breakdown (%)

Fuel

Operation

Raw materials

Losses

Admin/legal

Market for substitutes

Substitutes of bricks such as concrete blocks have started to make their presence felt in the country. Though, usage of these substitutes has been observed in some niche segments in the A comparison of different types of brick production technologies Different Brick kilns technology

Coal consumption/ 100,000 bricks

Fixed Chimney Kiln (FCK)

20.22

Zig zag kilns

Particulate Matter mg/ cm3 > 1000

Co2 emission ton/100,000 bricks

Annual production (million)

47-52

3.5-4 1

16-18

600-900

38-43

5.4

Hybrid Hoffman kiln

12-14

20.3

28-33

Tunnel kiln

18-22

24-48

Improved zig zag

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AC 19-9

3.6

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Analysis: Heavy Clay

Table 1 Projected increase in building area in India Year 1990 2005 2020 2030

major metro cities of the country. But, speedier and quality construction with the assistance of these blocks is expected to pose stiff competition to brick usage over wider geography in coming years. Bricks and blocks made of fly ash has also emerged as major substitutes, particularly in flooring applications. In particular government and private institutional users have emerged significant users of these products for flooring in last two years. Manoj Kumar Pillai, Managing Director – Forest Press Machineries Limited says, "There is a considerable market for fly ash bricks in India primarily because of the fact that fly-ash is the cheapest construction material and is available in enormous quantities in the country on account of 200 thermal power plants. In a market like India there is space for everything, whether it's a product or machinery. But the word sustainability means a lot for different divisions of the society. Definitely the quality and price play a vital role. To sustain, we need to offer best quality products with affordable prices and to achieve the quality we need good technology."

Regulatory flip-flops

Government and regulatory authorities flip-flops are one of the major reason that Indian brick sector has remained a laggard in technology adoption. For example, recently, the Ministry of Environment, Forest & Climate Change (MoEF&CC) came out with a draft notification that mandates that, “No new red clay brick kiln shall be installed and operated within 300 km from a coal or lignite based thermal power plant and the existing red clay brick kilns located within 300 km shall be converted into fly ash based bricks or blocks or tiles manufacturing within one year from the date of publication of this notification.” However, when Asian Ceramics decoded the notification and went in detail, we found out that India has about 250 coal- and lignite-based thermal power plants (TPP). If one draws a radius of 300 km from each TPP on the map of India, it covers almost the entire country except some parts of the Northeast and the Himalayan states. The notification, therefore, practically bans the manufacture of red clay bricks and substitutes it with fly ash bricks. So it is doubtful that this notification will be implemented at all.

Challenges for Indian brick industry

Indian brick industry is facing a number of challenges. Recent interventions by authorities and judiciary has only added to the list of challenges. In order to become competitive, Indian brick producers need to address these challenges in a speedy manner. Labour Shortage: The fast growing economy, particularly the construction industry, is sucking cheap labour from rural areas and on the other hand government sponsored rural employment guarantee scheme is providing new employment opportunities for the poor in the rural areas. The combined effect has been that the flow of labour to the brick industry has lessened, and for the first time the industry is seriously exploring options to reduce its dependence

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AC 19-9

Projected increase in building area in India Billion sq metres 4 8 22 41

Projected increase in building area in India

on manual labour through selective mechanisation. Scarcity of clay/ raw materials- Usage of top soil in brick making remains a serious issue in India. About 2.2 billion cubic metre of clay/silt is utilized every year for brick making i.e. top soil of 2200 sq. km of surface land is scooped out up to a depth of 1 metre every year, leaving it infertile for future use. Given the huge population of the country and depleting agricultural yield, it would be almost impossible to source clay from agricultural fields in coming years. Though, brick producers are aware about the difficulties in coming days in sourcing the clay, but unfortunately, a lot of them have still not invested in the modern technologies, which can reduce the usage of clay significantly. Changing of construction practices: With less availability 1 space due to increasing population and demand, majority of the construction in tier I and II cities is taking place in the form of multistorey buildings in RCC (Reinforced Concrete Cement) columns. With this change towards RCC column based structure, bricks are increasingly being used as filler material to fill the space between columns and not as the load bearing material as it used to be. Therefore solid bricks can be easily replaced with perforated/ hollow bricks. Also, better insulation properties of these flat surfaces of the filler walls can play an important role in the indoor climate control.

Hollow bricks

It has been ten years since Austrian heavy clay major Wienerberger AG set up its Indian subsidiary Wienerberger India in 2009 at Kunigal ( 70 Kms away from state capital Bangalore) in the state of Karnataka. The Kunigal plant produces 70,000 large, hollow bricks a day, each as big as nine regular bricks, laid out in a 3x3 matrix. The factory was built with an investment of INR 250 crore (approximately USD 35 million) and is fully automated. With a capacity of over 150 million brick units per annum, it is one of the biggest units of its kind in Asia. The production is environmentally

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Analysis: Heavy Clay

friendly, and runs 365 days a year irrespective of weather conditions. The company claims that it has grown in a range of 30- 40 % year on year. However, popularity of hollow bricks in the country has not grown as observed in some of the other Asian countries. Currently, solid bricks form nearly 98 % of the total production of the Indian brick output. Though, a number of brick producers in the country admit that in next few years, the product composition of Indian brick industry is expected to shift significantly, in favour of hollow & perforated bricks on account of a number of favourable factors for the production of these bricks. Wienerberger India is planning to set up a new hollow bricks production unit at Cheyyar, in the neighbouring state Tamil Nadu. Its application for a minor mineral mining licence 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. Prayag Clay Products Pvt Ltd, one of the leading bricks producers based in Varansi, UP is investing in a state of the art production plant for the production of hollow bricks. According to O.P Badlani, CEO of Prayag Bricks, “In order to increase our efficiency and production throughout the season, the company is importing machinery from Germany and Belgium which will be functional by March 2020.” The company already produces hollow/perforated bricks at its plant. Company’s CEO, Mr. Badlani has successfully

adopted technologies like biomass gasification for power generation at his production plant. He has played a pioneering role in the development of natural draught zigzag technology and has provided this knowhow to several brick makers. He also runs a training academy called NeBriTA (Next Gen Brick Training Academy) at Varanasi, which provides vocational and technical training to the brick industry stakeholders. Leading European and Chinese heavy clay technology suppliers have intensified their efforts of tragetting Indian heavy clay producers. For example, leading heavy clay technology producer from Spain, Verdes started fabricating extruders in India in early 2013 at their Indian manufacturing base in Hosur in the state of Karnataka in South India. During last few years, the company has supplied a number of equipments to Indian brick makers, who have improved and modernized their brick plants. During 2016 , 2017 and 2018, the number of the company’s customers has trebled, as compared to the years 2013, 2014 and 2015.Company’s customers are spread between Gujarat and Haryana in the north and Kerala, Tamil Nadu and Karnataka in the south. Verdes has had to adapt to the local needs by manufacturing a wide range of small machines. Indian branch of the company offers different models of extruders, grinding, mixing and dosing machines. These equipment’s are used to manufacture a variety of extruded products and standard-sized perforated bricks. Company’s customers in South India have acquired state of the art technology to produce floor tiles, hollow blocks and ceiling blocks.

The Bio-brick revolution? Traditional brick kilns dotting countryside are a source of air pollution, though they are essential for supplying bricks to the country’s growing construction industry. Another source of pollution is burning of crop stubbles or agro-waste. A new type of brick — made from bio-waste — promises to address both the problems. Researchers from Indian Institute of Technology Hyderabad and KIIT School of Architecture, Bhubaneshwar, have developed bricks from agricultural waste products. They have developed a process to use dry waste like paddy straws, wheat straws and sugarcane bagasse to make bricks. It involves chopping the waste to desired size and adding it to lime-based slurry to make homogenous mixture. The mixture is poured into moulds and rammed with a wooden block to make a compact brick. These moulds are left to dry for a day or two, after which the sides of the moulds are removed, and the brick is allowed to dry for fifteen to twenty days. It takes almost month for the bricks to attain working strength by air drying. However, researchers said, bio-bricks are not as strong

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as burnt clay bricks and cannot be used directly to build loadbearing structures, but they can find use in low-cost housing in combination with wooden or metal structural framework. In addition, these bricks can bricks provide insulation against heat and sound and help in maintaining humidity of the buildings. “This material can also be used for making panel boards or insulation boards. We hope designers could explore such applications for this sustainable material,” researchers Priyabrata Rautray and Avik Roy observed in their study presented recently at the International Conference on Engineering Design. The researchers said the new material is eco-friendly and sustainable. The team used 900 grams of sugarcane bagasse to make a single block. Burning this amount of the waste bagasse instead of repurposing it, would have released 639 grams of carbon dioxide. Not only can such much carbon be prevented from getting released in the environment, lime used in each brick absorbs 322.2 grams carbon dioxide from the air during curing, which makes it a carbon-negative or environmentally sustainable.

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Analysis: Heavy Clay

Rajasthan in focus

The brick kilns in Rajasthan are located in three major districts i.e. Jaipur, Hanumangarh and Sri Ganganagar. Interestingly, ambient air quality monitoring takes place only at Jaipur out of three key brick producing districts in the state. Reports suggest that Sri Ganganagar has the highest share of brick kilns in the state. There are violations of particulate matter (PM) 10 concentrations at most of the monitoring stations in the districts. Based on the estimates of the global burden of disease methodology, Rajasthan recorded more than 65000 deaths due to exposure to PM 2.5. Further, an estimated around 801 deaths have been attributed due to brick kilns in the state. There are variations in the average yearly concentration across these stations. For example, VKIA has the highest concentration, (>250 microgram/m3), while Jhalana Doongari has the least mean concentration of 125 microgram/m3 among all the locations where ambient air quality monitoring takes place and as recorded during the 9 months of a year when brick manufacturing takes place The economic and social benefit-cost assessment undertaken in this study looks at two options of cleaner kiln technologies in the state of Rajasthan. The two options involve improvement of existing Clamp Kilns and (and FCBTK technology) to the Zig-Zag Kilns, and Vertical Shaft Brick Kilns (VSBK) technology.

Solutions Interventions

BCR

Total benefit Total cost (INR crores) (INR crores)

Improved Zig-Zag Kiln Vertical Shaft Brick Kiln Technologies (VSBK)

7.9

12,378

1,560

7.3

17,493

2,400

Improved Zig-Zag Kiln The Problem

Coal is the main source of energy for brick kilns. The use of large quantities of coal and petcoke in brick kilns contributes significantly to emissions of carbon dioxide (CO2), and particulate matter (PM). It is estimated that, around 35 million tonnes of coal is consumed in the sector and is eventually the third largest consumer of coal in the economy after thermal power, iron and steel. Emissions largely arise from inefficient combustion of large quantities of coal, petcoke and agri-residues that are used in brick kilns which has serious health and mortality implications.

The Solution

Clamp kilns and/or FCKs can be converted to Improved Zig-Zag Kilns at low costs in the lowlands at the same site. This can be accomplished in less than half a year. The production capacity is the same or higher compared to the Clamp kilns and/or FCBTKs. The brick quality is as good as or better than FCBTKs, and with energy savings and PM emission reductions.

Costs

Using the estimated average production per kiln, and the capital cost per kiln, the total capital cost of intervention has been estimated at Rs. 1,560 crores.

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Benefits

The financial benefits for Zig-Zag technology has been estimated for a period of 12 years (till 2030). It has been found that the production of class 1 bricks can increase from 50 percent to 80 percent in case of Zig-Zag technology. Zig-Zag brick manufacturing leads to 22 percent lower CO2 emissions. The savings of carbon emission per year are 1.27 million tonnes CO2. The average number of lives to be saved per year is 362 in case of Zig-Zag technology. Financial benefits dues to this intervention is estimated at Rs. 8,911 crores. The social benefits of cleaner brick kilns assessed in this study are health benefits (Rs. 2,723 crores) of reduced PM 10 emissions and global benefits of carbon dioxide (CO2) emission reduction (Rs. 743 crores) due to higher energy efficiency of ZigZag technology.

Vertical Shaft Brick Kiln Technologies (VSBK) The Problem

Brick Klin technology that is largely predominant is Fixed Chimney Bull’s Trench Kiln (FCBTK), which are less efficient in terms of energy consumption and quality brick production, than other technologies.

The Solution

The VSBK technology uses hot exhaust gases for the gradual preheating of the unfired bricks in a continuous process, thus reducing energy consumption and CO2 emissions compared to the more commonly used clamp kilns/FCBTK. VSBK technology is one of the most energy efficient and cost-effective brick firing processes in the world, with the added benefit of providing a better working environment for staff members. The VSBK makes clay brick an even more sustainable building option by reducing the embodied energy of an average clay brick, at least by half. It is important to note that VSBK brick manufacturing leads to 53 percent lower CO2 emission than existing brick manufacturing process.

Costs

The total capital cost of intervention has been estimated at Rs. 2,400 crores.

Benefits

With VSBK technology, the production of class 1 bricks can be as high as 90 percent. Further, VSBK technology can lead to an incremental financial benefit of Rs 11,760 crores at 5% discount rates. The social benefits of cleaner brick kilns assessed in this study are health benefits of reduced PM10 emissions and global benefits of carbon dioxide (CO2) emission reduction from improved energy efficiency. A retrofitting with a VSBK technology is estimated to reduce CO2 by 2.72 million tonnes. The avoided CO2 costs have been estimated to be Rs 1,589 crores at 5% discount rates. In the presence of VSBK technology, an estimated 6611 deaths can be avoided, thereby improving quality of life between 2019 and 2030. This is equivalent to 551 deaths saved per annum. The incremental health benefits are estimated at Rs. 4,143 crores. The total benefits due to conversion to VSBK technology is Rs. 17,493 crores at 5% discount rates.

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Analysis: Africa-China

The rush for A China pulls clear as rivals flounder

frica has become the next frontier for infrastructure development. As rural migrants flow into cities at a clip that now exceeds every other region in the world, the continent’s need for new railways, highways, airports, power plants, and even entirely new cities is now greater than ever before. In this fray, many African governments have looked to external sources for funding and engineering capacity, and China has jumped in head first, using the experience they’ve gained from their own domestic building boom and applying it to the African context. However, this doesn’t mean that China is able to do in Africa what they did at home: the Chinese development model simply doesn’t work there. China became Africa's largest trading partner in 2009, and African-China trade has been growing at a robust 20% year-on-year clip since 2000, topping $200 billion annually. Over 10,000 Chineseowned firms are currently operating in Africa, boosting the value of Chinese enterprises on the continent to over $2 trillion. China’s foreign direct investment in Africa has likewise been growing at an incredible 40% annual rate, and McKinsey found that this investment is actually 15% larger when including nontraditional streams. Almost needless to say, China has become the biggest international player in Africa’s infrastructure building and construction sector as well as Africa’s biggest supplier of construction financing–even having a larger presence there than it has in other Asian countries. Topping this off is a recently announced $1 billion Belt and Road Africa infrastructure development fund and a $60 billion African aid package, of which a large portion is slated to go towards infrastructure development. And this involvement makes complete sense if we look at what China has accomplished in their own

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country over the past few decades: “It is not lost on many African leaders that hardly 30 years ago China was in a similar place that they are now—a backwater country whose economy made up hardly 2% of global GDP. But over the past few decades China shocked the world in the way that it used infrastructure to propel economic growth, creating a highspeed rail network that now tops 29,000 kilometers, paving over 100,000 kilometers of new expressways, constructing over 100 new airports, and building no less than 3,500 new urban areas—which include 500 economic development zones and 1,000 city-level developments. Over this period of time, China’s GDP has grown more than 10-fold, ranking No. 2 in the world today.”

Infrastructure soaring

Chinese engineering and construction companies have also leapt onto the world stage, going from being relatively insignificant and somewhat mysterious state-owned entities with acronym-driven names that generally start with the letter C to some of the most sophisticated and powerful such firms in the world. Ten years ago, there was hardly any Chinese companies on the ENR lists of the world’s top design and construction firms, but today China dominates these rankings. In many ways, China’s interests are very much aligned with Africa’s when it comes to urbanization and infrastructure development. China’s multi-trillion-dollar Belt and Road Initiative is mainly focused on setting up a proper physical and digital infrastructure grid across Eurasia and Africa, and this means building the new rail lines, highways, power plants, airports, and IT systems that African countries desperately need and want. However,

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Analysis: Africa-China

Africa

that doesn’t mean that the Chinese development can simply be copied and pasted upon Africa. It’s an understatement to say that the Chinese government model is unique: a single party system rooted in Maoist thought but still a major player in the capitalistic churning of the global economy. While the lack of democratic processes means that the general public has little voice in the developmental endeavors which directly impact them, it also means that the government is able to unilaterally plan, construct, and vitalize large numbers of megaprojects at a pace that has never been witnessed before in history. As Bill Gates once famously pointed out: China used more (nearly 50% more!) concrete from 2011 to 2013 than the United States used in the entire 20th century. We’re not just talking about the building of the world’s most extensive high-speed rail network in a mere decade, or most of the world’s longest sea bridges, or even six of the planet’s ten tallest skyscrapers here, but a complete top to bottom infrastructure revolution which not only required the mobilization of trillions of dollars of capital but hundreds of millions of people as well. For example, to build the Three Gorges Dam alone, 1.3 million people needed to be relocated from their homes; according to a study by Tsinghua University, more than 64 million families across China had their homes demolished and/or land requisitioned since the beginning of the economic boom period; according to Tianjin University, China wiped more than a million villages off the map between 2000 and 2010 to clear the way for urban development. To speak generally, African governments tend not to have the same degree of latitude in their decision making. They can’t just go out and clear a million or two people off the land to build

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new cities, special economic zones or dams. In some African countries, government institutions may actually lack the authority and finances necessary to seamlessly master plan even minor infrastructure projects. While in China, infrastructure mega-projects can be planned in a top-down manner, in Africa, such planning generally isn’t possible given the sheer number and complexity of the stakeholders involved. Traditional community structures are still powerful political and economic forces in many African nations, and their interests and that of the government are oftentimes misaligned.

Urban development

“The challenge is that none of this [African urban development] is planned,” began Zhengli Huang, a research associate at the University of Sheffield who has carried out extensive case studies on urbanization in Nairobi. “The problem is the land is permanently owned, it's a freehold system, private ownership. So it's very hard for any local government to intrude into these kinds of developments by planning. Even if there is planning, it's almost impossible to enforce the planning regulations. So you see a lot of development, but it's unplanned.”

Land rights

Land ownership policies in Africa also tend to be very different than in China. In China, land ownership is generally a simple affair. As the long-time China analyst Anne Stevenson-Yang once candidly pointed out: “All the land belongs to the government. The government has the right to clear the land. Take it over, and then to either build stuff on it themselves, sell it to a developer or use it as collateral for loans.”

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asian ceramics

Analysis: Africa-China

If a municipal, provincial, or the national government in China wishes to stake out massive swaths of land to build special economic zones, airports, or, say, 285 eco-cities, there is little in their way to stop them from doing so. This isn’t the case in Africa. “Given the colonial history and the structure of the tribes that many African countries have, many African countries are not so much based on the organization of the state and the provinces and the cities but on land ownership divided between different families and different tribes. This dictates how you push urban development forward, because you have to talk to land owners,” explained Daan Roggeveen, the founder of China-based MORE Architecture and urbanization researcher. “In China, the land ownership situation is very simple: the state owns the land, particularly in the cities, so if you want to move urban development forward you do so in an environment where the government is the final decision maker and also the land owner. It's a recipe for fast development.”

Public sentiment

“I think that Chinese companies have a lot to offer African countries but they have to be aware that they operate in a very different political and economic system, where engagement and communication with local stakeholders is critical,” Roggeveen pointed out another key difference between development in China and Africa. Public outreach, dealing with a critical, independent media, and politicized citizens’ movements are things that China doesn’t need to worry much about domestically. While there are certainly a large amount of public demonstrations in China, they tend to be calls for the authorities to follow their own rules rather than challenges to the system itself. As such, broad, national-level demonstrations— such as we’re now witnessing in Hong Kong—rarely ever happen on the mainland, where public assembly, the media, and opposition political groups are highly regulated. As Max Fisher once explained on The Atlantic: “Popular movements here seem to express relatively narrow complaints, want to work within the system rather than topple it, and treat the Communist Party as legitimate. Protests appear to be part of the system, not a challenge to it—a sort of release valve for popular anger that, if anything, could have actually strengthened the Party by giving them a way to address that anger while maintaining autocratic rule.” But in Africa, the story is very different, and negative public perception of a Chinese-backed project can sometimes be enough to derail it–or even get the government officials who support it booted from office. As Richard Aidoo wrote on Sixth Tone: “In democratic African states like South Africa, Zambia, and Kenya, Chinese labor and capital often encounter frustrated unemployed or underemployed masses with the lawful right to protest, petition, and vote against ‘all things Chinese’ that often compete with ‘all things local.’” In some African countries, the public fear of a Chinese debt trap, Chinese workers taking jobs that could otherwise go to locals, and China pillaging Africa’s natural resources are real, and the fires of which are sometimes stoked by opposition politicians, citizen groups, and local media sources to the point that it oftentimes has a major impact on what transpires on the ground—whether justified or not. Like in Sri Lanka, an opposition presidential candidate in Zambia recently rode a wave of anti-Chinese public sentiment to get voted into office. Infrastructure development is inherently a high-risk venture. It’s expensive and major projects tend to take years—if not decades— between conception and vitalization. In single party, relatively

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IT IS NOT LOST ON MANY AFRICAN LEADERS THAT HARDLY 30 YEARS AGO CHINA WAS IN A SIMILAR PLACE THAT THEY ARE NOW” stable countries like China, such projects can be engaged in with confidence that the parties involved will be on board until the end. In democratic countries, however, the ground is a little more shaky, as all it often takes for a major project to be derailed is a popular election. As Chinese developers move beyond their borders the new terrain they enter isn’t just physical, but political and social as well, and maintaining positive public support is a key ingredient to a successful project in many African countries. That said, research shows that most African countries are still very high on China. A survey by Afrobarometer shows that 63% of African’s view China’s developmental endeavors in their countries positively, with countries like Mali, Niger, and Liberia posting positive marks of 92%, 84%, and 81%, respectively.

Uganda pushes back?

However, China’s assertive, large-scale investments in Africa are starting to find pushback in Uganda, where some critics worry the East African nation is using oil it hasn’t even begun to produce to borrow hundreds of millions of dollars for infrastructure projects. Longtime President Yoweri Museveni recently caused an outcry by interfering in a bidding process for one major project and naming the Chinese firm he wanted, raising questions about Beijing’s growing influence. And while Chinese projects in Africa are promoted as coming with no political demands, Uganda recently issued a surprising statement against the protests in Hong Kong, where people have revolted for months against the mainland’s interference in their affairs. Museveni has praised China, the world’s second largest economy, as the ideal partner to take on the sort of muscular projects he could only dream of when he took power over three decades ago. He has spoken hopefully of shattering “bottlenecks” to prosperity with projects such as power plants that produce more electricity than Uganda currently needs. But resistance among some Ugandans to Chinese funding is growing as they see other countries balloon their debts to worrying levels. Some opposition figures allege that the funding can fuel corruption.

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Analysis: Africa-China

Even Uganda’s finance minister appears to be concerned that growing debt to China could have consequences for his country’s sovereignty. “Given what is happening in our peer countries as regards to China debt, we strongly believe we should protect our assets from possible takeover,” Finance Minister Matia Kasaija wrote in a confidential letter to Museveni in 2018 that was leaked to the local media. The letter noted the requirement to deposit money as collateral in escrow accounts in China, as well as the alleged failure of Chineserun projects to hire Ugandans and use locally sourced materials such as cement. In recent years countries including Nepal, Thailand and Sri Lanka have scrapped or scaled back Chinese-funded projects due to cost concerns or complaints that not enough work goes to local companies. Malaysia canceled Chinese-backed projects worth more than $20 billion last year, saying they would create an unsustainable debt burden. Uganda’s national debt stood at over $10 billion in 2018, nearly a third of it owed to China, according to official figures. The loans are usually approved with little opposition as the ruling party enjoys an overwhelming majority in the national assembly. Speaking at a recent event marking China’s ruling Communist Party’s 70 years in power, Museveni praised Beijing for supporting Uganda’s economic development while Chinese Ambassador Zheng Zhuqian said his country “firmly supports the Ugandan exploration for a development path with Ugandan characteristics.” Ugandans are going to find themselves entangled in Chinese debt, said Dickens Kamugisha, a lawyer who runs the local think tank Africa Institute for Energy Governance. “Our leaders, who are very naive, think that China is just giving us money without strings attached,” he said. Resistance has been seen in other African countries. Anger in Zambia peaked last year with street protests and an online campaign to “say no to China.” A Chinese-backed fish meal plant in Gambia drew protests this year over alleged pollution and overfishing. In Uganda, authorities in recent years have approved massive loans to finance the construction of a $580 million expressway linking the capital, Kampala, to an international airport, as well as hydropower dams that currently are surplus to the country’s needs. The projects were financed mostly with loans from the Export-Import Bank of China. In certain cases China’s Belt and Road projects are helping to reduce income inequality between regions in the countries where they are built, according to a report last year by the AidData research lab at the College of William & Mary in Virginia. But the report said it focused on only one aspect of Chinese financing — economic impact based on changes in nighttime use of electric lights across cities and rural areas — and noted that other researchers had uncovered corruption linked to some Chinese projects. Ugandan authorities have signaled more Chinese-backed projects are planned.

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Museveni last month interrupted the bidding process for a contact to resurface the highway linking Kampala to the trade gateway town of Jinja in the east. In a letter to the public works minister, the president said he had identified the appropriate investor, China Railway 17th Bureau Group Company. The intervention raised fresh concerns over accountability in a country plagued by corruption. In an unrelated case, a Hong Kong businessman was convicted in New York in December of bribing Museveni, his foreign minister and the leader of Chad in efforts to secure oil rights for a Chinese energy conglomerate. Museveni insists he has never accepted a bribe. “We are fighting to become a colony of China,” said Ugandan opposition lawmaker Ssemujju Ibrahim Nganda. “And Museveni is entrapped. The things he wants to do, he thinks he can only do them with China.” This month Ugandan authorities announced that the Export-Import Bank of China had agreed to provide over $450 million to upgrade roads in a region where oil exploration is taking place. Critics alleged that the government is on a spending binge in expectation of oil revenues that are still far in the future — Uganda is not expected to produce oil before 2022 — and the governor of the central bank warned that borrowing against oil resources pushes the country toward a so-called oil curse. Museveni is pushing back, saying spending on projects such as roads in the oilproducing region is necessary to enable oil pumping, to the economy’s benefit. “They are borrowing from China on the basis that we have oil. That is a violation of the law,” said Kamugisha of the local think tank. “I think it is very dangerous for Africa, very dangerous for Uganda. We will have no capacity even to breathe.”

…but ceramics keeps growing

In and around the Ugandan capital Kampala, there are a lot of buildings painted with advertisements of Goodwill -- a Chinese ceramics tile company that relocated from China to Africa in an internationalization move. Goodwill opened shop in Uganda in 2017 after it had established factories in Tanzania and Ghana in 2015 and in 2010 in Nigeria. With the factories in East and West Africa, Goodwill hopes to revolutionize the ceramic tile making industry in Africa, according to Jiang Ke, deputy managing director of Goodwill Uganda. "In African market, we have four factories producing about 25-30 percent of the whole continental production capacity, which means we are the biggest ceramic tile factory in Africa," Jiang told Xinhua in a recent interview. Most of the ceramic tiles in Africa are imported from Europe and Asia, although there are a few factories in Egypt and South Africa. By setting up in Africa, Goodwill is targeting to explore the growing

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Analysis: Africa-China

market and also save African countries from spending their foreign exchange, said Jiang, adding that Goodwill is also bringing many local jobs and government tax revenue. He said in China, Goodwill now do not have a factory apart from their headquarters and a procurement center. For many Chinese firms that are seeking overseas expansion, Africa is one of the desired destinations due to the increased cooperation between the continent and China. Over the last four years, China has announced over 120 billion U.S. dollars to boost is cooperation with Africa through the Forum on China-Africa Cooperation (FOCAC). The first announcement of 60 billion dollars was in 2015 during the FOCAC summit in Johannesburg, South Africa. The second batch was annouced last year in September during the Beijing summit on the FOCAC. This cooperation has paved way for massive construction of transport and energy infrastructure projects across the continent. In Uganda, China financed the already commissioned 183 Megawatt Isimba Hydro Power Plant. The Asian country is also financing the construction of the 600 Megawatt Karuma Hydro Power Plant. This is in addition to other projects like financing road construction and expansion of the country's Entebbe International Airport. All these efforts, according to the Ugandan government, are unlocking the country's economic potential. Jiang said these enabling factors and also a good business environment provided by the Ugandan government, helped Goodwill to quicken its decision to invest in Uganda. Goodwill set up its 35 million-dollar factory at Liaoshen, a Chinese industrial park located in Nakaseke district about 70km north of the Kampala. According to the company, it now commands a share of over 70 percent of Uganda's tile market. Most of the tiles were imported from China and India. The factory produces about 28,000-34,000 square meters of tiles per day, some of which are exported to neighboring Lwanda, Kenya, and South Sudan, among others. While commissioning the factory last year in September, Ugandan President Yoweri Museveni said the factory would save the country 35 million dollars per year through import substitution and also export tiles worth 15 million dollars. Jiang said the factory employs about 800 local people. He said that although the company faces some challenges like the high transportation costs, they are determined to stay in Africa. He said in Uganda, only about 40-50 percent of what the factory produce is consumed. Jiang said they are now looking at more investment opportunities like dealing in construction materials.

Zimbabwe happy for now…

A Zimbabwean government minister has commended the longstanding relations between China and Zimbabwe, saying that China has contributed a lot to the development of the country. "China has contributed a lot to the development of Zimbabwe, including the construction of the National Sports Stadium, Kariba South Power Station, the Victoria Falls International Airport and expansion of Hwange 7 and 8, and even our new Parliament building," said Minister of Information, Publicity and Broadcasting Services Monica Mutsvangwa during a recent tour of a Chinese tile manufacturing plant. The minister commended work being done by the Norton-based Chinese tile manufacturer which has already started exporting most of its products.

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The firm, Sunny Yi Feng, started making tiles on May 12 and is producing between 30,000 and 35,000 square meters of tiles per day, 70 percent of which are exported to several countries in the Southern Africa Development Community region. The company, which began putting up structures at its Norton premises toward the end of 2018, now operates three factories that make tiles, print cardboard boxes for packaging the tiles and logistical support, covering up to 75 percent of its capacity and expected to reach full production soon. "In three months (they started manufacturing), they have started producing for export and it's just wonderful to see products going to South Africa, to Zambia and that product is coming from Zimbabwe," said Mutsvangwa. "That is a good response to our president's call that 'Zimbabwe is Open for Business.'" she said. "This is the kind of investment that we need that has downstream benefits for our people." "I am also happy that we have seen our young women, our young mothers being employed and I am happy that they can now look after their children and after their families," Mutsvangwa said.

Beating belt and road?

To counter China’s belt and road strategy, Japan has launched the Asia-Africa Growth Corridor project, an economic cooperation deal, with India and African countries. Tokyo meanwhile pledged about US$30 billion in public-private development assistance to Africa over three years at the 2016 TICAD, in Nairobi. But China offered to double that amount last year, during its Forum on China-Africa Cooperation in Beijing. Still, Japan continues to push forward infrastructure projects on the continent. It is building the Mombasa Port on the Kenyan coast, while Ngong Road, a major artery in Nairobi, is being converted into a dual carriageway with a grant from Tokyo. Japan is also funding the construction of the Kampala Metropolitan transmission line, which draws power from Karuma dam in Uganda. In Tanzania, it provided funding for the Tanzania-Zambia Railway Authority (Tazara) flyover. And through the Japan International Cooperation Agency, Tokyo also helps African countries improve their rice yields using Japanese technology. There are nearly 1,000 Japanese companies – including carmakers like Nissan and Toyota – operating in Africa, but that is just one-tenth the number of Chinese businesses on the continent. Olander said Japan’s construction companies were among the best in the world, albeit not necessarily the cheapest, and that Tokyo was pushing its message about “high-quality” construction. XN Iraki, an associate professor at the University of Nairobi School of Business, said Japan wanted to change its approach to Africa on trade, which had long been dominated by cars and electronics. “[It has] no big deals like China’s Standard Gauge Railway. But after China’s entry with a bang – including teaching Mandarin through Confucius Institutes – Japan has realised its market was under threat and hence the importance of the TICAD, which should remind us that Japan is also there.”

Europe: dragging heels?

The European Union is being urged to copy China’s Belt and Road Initiative to better channel the billions of euros in aid it sends to Africa each year. The proposal for a single institution to deal with all aid to the continent is part of a report on the bloc’s external lending strategy circulated to EU diplomats and is due to be presented to the bloc’s finance ministers later this week. It includes the establishment

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IN COLLABORATION WITH

WITH THE SUPPORT OF

Analysis: Africa-China

of a “European Climate and Sustainable Development Bank” to consolidate the bloc’s development funding activities. The report highlights that explosive population growth in Africa will be a source “of intense and and disorderly migratory pressures” toward Europe in the years ahead, which will be further exacerbated by climate catastrophe and “natural resource degradation.” The EU should therefore “urgently” engage more in Africa, or risk its “global standing.”

An Aid Superpower

According to the so-called group of “wise persons,” led by Thomas Wieser, a former senior EU official and crisis veteran, Europe should revamp its tools to deploy its development financing more effectively outside its borders and better equip itself for the challenges brought on by climate change. The proposals come as the EU faces multiple challenges in its external borders, which could become further amplified by climate change. Other major powers such as China have already been investing much more aggressively in Africa. Crucially, the report calls for boosting awareness of EU development policy and actions globally by creating an “overall branding and narrative” for the EU’s global development strategy and all related development financing similar to China’s Belt and Rod Initiative.

Development Bank

The report warns that there are “overlaps, gaps and inefficiencies, sectoral and geographical, especially in terms of presence and experience in Africa, of the main European multilateral finance institutions.” The institutions in question are the European Investment Bank, the EU’s internal lender, and the European Bank for Reconstruction and Development, its development bank arm that had for years helped development in Eastern Europe. “While the system collectively has a comprehensive range of development financial instruments available, there is a not a single EU strategy to define how these should be used in synergy to tackle the top-priority global challenges,” it said. • The report laid out three options to address the problem: • Transferring the EIB’s extra-EU activities to the EBRD; • Tasking the EIB with creating a subsidiary for its extra-EU activities Creating a mixed-ownership bank with both institutions as well as EU governments and the European Commission as shareholders None of these would be easy, it said, as they would need backing at the highest political level and create additional capital needs. “It is a matter of political urgency for Europe to be able to ensure that external financial instruments are used strategically, that they contribute to our wider political aims, enhance Europe’s leadership and reinforce its influence in the world.”

Africa: a US trade war winner

Vietnam seems to be the consensus pick for winner of the U.S.-China trade war, as Chinese and other manufacturers shift production to the cheaper Southeast Asian nation. If there’s a loser, at least in terms of missed opportunities, it may be the countries of South Asia. To understand why, remember that the trade war has only accelerated an important trend a decade in the making. Faced with rising costs, Chinese manufacturers must decide whether to invest in labor-saving automation technologiesor to relocate. Those choosing the latter present an enormous opportunity for

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AC 19-9

less-developed countries, as Chinese companies can help spark industrialization and much-needed economic transformation in their new homes. There may not be another such chance this generation. The only proven pathway to long-lasting, broad-based prosperity has been to build a manufacturing sector linked to global value chains, which raises productivity levels and creates knock-on jobs across the whole economy. This was how most rich nations, not to mention China itself, lifted themselves out of poverty. Yet the evidence suggests that South Asian countries are lagging behind in attracting manufacturing investment. It’s not just Vietnam that’s racing ahead. African countries, too, are making manufacturing a top priority. Ethiopia alone has opened nearly a dozen industrial parks in recent years and set up a world-class government agency to attract foreign investment. The World Bank has lauded sub-Saharan Africa as the region with the highest number of reforms each year since 2012. By contrast, in terms of foreign direct investment as a percentage of GDP, South Asia lags both the global average for leastdeveloped countries and sub-Saharan Africa. While South Asia’s total GDP is more than 70% greater than Africa’s, the continent received three-and-a-half times the investment from China that South Asia received in 2012, the most recent year for which the United Nations has published bilateral FDI statistics. In the last five years, the American Enterprise Institute’s China Global Investment Tracker has recorded 13 large Chinese investment deals in Africa and only nine in South Asia. Bangladesh is a striking illustration of the problem. The country needs to create 2 million jobs per year at home just to keep up with its growing population. Yet, despite a world-class garments manufacturing sector, it seems unable to cut red tape and enact the reforms needed to attract investment to diversify beyond apparel. In the past few years, Bangladesh has fallen to 176 out of 190 countries in the global Ease of Doing Business country rankings. DBL Group, a Bangladeshi company, is investing in a new apparel manufacturing facility that will generate 4,000 jobs -- in Ethiopia. The fantasy, most common in India, that a country might somehow “leapfrog” from a rural, agriculture-heavy economy straight to a services-based economy is just that: a fantasy. South Asia can’t afford to lose this chance to grow its manufacturing sector. Attracting manufacturing investments will require, first and foremost, that governments in the region acknowledge the competition is passing them by. India, for example, must abandon its overconfidence that investors will come simply for its large population. Pakistan needs to stop relying on its government-to-government friendship with China. Chinese state financing of infrastructure won’t automatically lead to manufacturing investment, most of which is dominated by private Chinese companies motivated by competitive forces, not government diktats. Secondly, South Asian countries need to undertake a concerted, whole-of-government push to boost investment levels. Specifically, they need to create the conditions manufacturers need to thrive, from steady power supplies to efficient port operations and customs clearance. Moreover, they need to understand the specifics of these businesses. Factories have unique requirements depending on what they make. For example, cloth and clothing factories, despite their seeming similarities, have extremely different requirements:

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Analysis: Africa-China

The former is capital-intensive, with huge amounts of powerhungry machinery churning out bolts of cloth, whereas the latter is labor-intensive and features rows of workers cutting and sewing. Countries need to analyze which manufacturing sub-sectors they are best positioned for, meet the requirements those manufacturers have in order to set up shop, and target the regions of China (and elsewhere in the world) where those types of

Japan v China

The long rivalry between China and Japan is again playing out in Africa, with Tokyo planning to pour more aid into the continent and invest in infrastructure projects there. Beijing – which has for decades funnelled money into the continent – will be watching as the leaders of 54 African countries and international organisations descend on Yokohama later this month for the seventh Tokyo International Conference on African Development (TICAD). Japan reportedly plans to pledge more than 300 billion yen (US$2.83 billion) in aid to Africa during the conference. While that might not be enough to alarm China – which in recent years has been on a spending spree in the continent – it will be paying close attention. Japan has in the past used the meetings to criticise Chinese lending practices in Africa, saying it was worried about the “unrealistic” level of debt incurred by African countries – concerns that China has dismissed. This year, analysts expect Tokyo will use the conference to articulate how its approach to African development is substantively different from that of the Chinese. “So, look for the words ‘quality’, ‘transparency’ and ‘sustainability’ to be used a lot throughout the event,” said Eric Olander, managing editor of the non-partisan China Africa Project. Olander said Japan often sought to position its aid and development programmes as an alternative to China’s by emphasising more transparency in loan deals, higher-quality infrastructure projects and avoiding saddling countries with too much debt. “In some ways, the Japanese position is very similar to that of the US where they express many of the same criticisms of China’s engagement strategy in Africa,” Olander said. But the rivalry between China and Japan had little to do with Africa, according to Seifudein Adem, a professor at Doshisha University in Kyoto, Japan. “It is a spillover effect of their contest for supremacy in East Asia,” said Adem, who is from Ethiopia. “Japan’s trade with Africa, compared to China’s trade with Africa, is not only relatively small but it is even shrinking. It is a result of the acceleration of China’s engagement with Africa.” Japan launched the TICAD in 1993, to revive interest in the continent and find raw materials for its industries and markets for products. About a decade later, China began holding a rival event, the Forum on China-Africa Cooperation. It is at heart an ideological rivalry unfolding on the continent,

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manufacturers are to be found. The good news is that all of these measures are eminently feasible. And in many cases, the first steps are already being taken, such as with the construction of Bangladesh’s first deep sea port at Matarbari. The bad news is that unless South Asia moves faster, others may have already seized the opportunity to industrialize.

according to Martin Rupiya, head of innovation and training at the African Centre for the Constructive Resolution of Disputes in Durban, South Africa. “China cast Japan as its former colonial interloper – and not necessarily master – until about 1949. Thereafter, China’s Mao [Zedong] developed close relations, mostly liberation linkages with several African nationalist movements,” Rupiya said. Beijing had continued to invoke those traditional and historical ties, which Japan did not have, he said. “Furthermore, Japan does not command the type of resources – call it largesse – that China has and occasionally makes available to Africa,” Rupiya said. Although both Asian giants have made inroads in Africa, the scale is vastly different. While Japan turned inward as it sought to rebuild its struggling economy amid a slowdown, China was ramping up trade with African countries at a time of rapid growth on the continent. That saw trade between China and Africa growing twentyfold in the last two decades. The value of their trade reached US$204.2 billion last year, up 20 per cent from 2017, according to Chinese customs data. Exports from Africa to China stood at US$99 billion last year, the highest level since the 1990s. Meanwhile, through its Belt and Road Initiative that aims to revive the Silk Road to connect Asia with Europe and Africa, China is funding and building Kenya’s Standard Gauge Railway and the Addis AbabaDjibouti Railway. Beijing is also building major infrastructure projects in Zambia, Angola and Nigeria. Japan’s trade with Africa is just a small fraction of Africa’s trade with China. In 2017, Japan’s exports to the continent totalled US$7.8 billion, while imports were US$8.7 billion, according to trade data compiled by the Massachusetts Institute of Technology. But Japan now appears eager to get back in the game and expand its presence in Africa, and analysts say this year’s TICAD will be critical – both in terms of the amount of money Tokyo commits to African development and how it positions itself as an alternative to the Chinese model. Ryo Hinata-Yamaguchi, a visiting professor at Pusan National University in South Korea, said the continent was “economically vital to Japan, both in trade and investments”. “Moreover, Japan has established some strong links with African states through foreign aid,” Hinata-Yamaguchi said. “Japan’s move is driven by both economic and political interests. Economically, Japan needs to secure and maintain its presence in, and linkages with, the African states while opening new markets and opportunities,” he said.

AC 19-9

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Talking Shop

Bangladesh:

a chance for growth? As the focus draws onto the potential of the Bangladesh ceramic industry, AC listens in on an interview with Mohammed Humayun Kabir, CEO Shinepukur, over the potential for the country as economic pressures mount… Despite the obvious potential, at present increased gas price and labour costs have eroded the comparative advantages of Bangladesh for producing ceramic tableware to some degree. Mohammed Humayun Kabir FCA, chief executive officer (CEO) of Shinepukur Ceramics Limited (SCL) - a sister concern of BEXIMCO group, in an exclusive interview with local news outlet, the Dhaka tribune, discussed the present situation of the Bangladesh ceramic industry and existing challenges of the local and international market. Mohammed Humayun Kabir has more than 38 years of working experiences in various financial institutions and industries of the country. As the country's leading ceramic manufacturer and largest ceramic exporter company, Shinepukur Ceramics Limited received the National Export Gold Trophy for the sixth time for highest export in ceramics. Recently your company has received the National Export Gold Trophy 2016-17 for the highest export in ceramics products. How are your exported products being received on the international market? Shinepukur Ceramics Ltd (SCL) is the leading bone china and porcelain dinnerware manufacturer and exporter of Bangladesh. SCL has been a successful brand because of its state-of-the-art manufacturing facilities, cutting-edge technology and about 2,871 highly skilled and motivated workers. From its inception in 1999, it has been able to make substantial progress and seize commendable market share from its competitors both in porcelain and in bone china. It has more than 250 dealers to sell and retail SCL products in Bangladesh Market. Owing to its premium quality tableware products and timely delivery to export countries, it has gained huge demand in the international market, especially in the USA, Canada, the UK, Germany, France, Italy, Japan, Sweden, Norway, Denmark, Australia, India, Russia and many other countries. What is your company’s position in domestic and international market?

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AC 19-9

There are 20 tableware manufacturing companies in the country with a total investment of Tk2,200 crore. Among them, nine ceramic companies export their products, in which SCL has the highest share, 30% or $12 million. The total share of Shinepukur in the local market is 18%, production capacity is 50,000 pieces per day and yearly turnover is about Tk150 crores. What are your views on the global outlook for the tableware sector? Since the financial meltdown in USA in 2008, the economies in the West are yet to get back the expected growth. The recent USA– China trade disputes have worsened the recovery prospects of global business. As you know tableware is used by people of a higher income level. These are durable household products. The state of employment and economic growth has a direct link to the demand of tableware. Cultural shifts also have a bearing on this. In the developed economies, late or no marriage (lessening the number of families) and increased consumption of junk foods has caused a decline in the use of tableware. This trend will probably continue in coming years. Another important scenario in the international market is currency devaluation and duty imposition in the importing countries which have a direct impact on the price of the tableware at consumer end in the importing countries. For example, the value of the Turkish lira plunging down from below 3 to almost 6 against the US dollar within a year, and imposition of duties by the Turkish government to protect their local industry, has made imported tableware costlier and obviously caused down trend in the demand there. What are some of the challenges being faced? Traditionally, the tableware industry is labour-intensive. Focusing towards export market, this industry started flourishing in Bangladesh in the late1990’s based on uninterrupted gas supply and low labour costs. But the situation has changed now. Gas pressure has become erratic, and the supply of Bangladesh’s own gas has become uncertain.

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Talking Shop

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. 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. What sort of government policy support do you need? As SCL is contributing a lot to the foreign exchanges as well as revenue earnings, the government should take some measures for further development of this sector. According to the annual report of FY2017-18, SCL has paid over Tk140.717 million in the form of VAT & Income tax. But this sector is yet to get much facilities in terms of import duty and export subsidy. It really is a great initiative to provide incentives of 10% export subsidy to the company. But, despite the government announcement, none of the banks have released export subsidies in the last 14 months. The government should take action on releasing the export subsidies and decrease custom duties on the imports of raw materials. As a listed company since 2008, how much dividend do you give to your share holders? Right now SCL cannot facilitate any dividend to its shareholders due to inadequate profit earnings. The company has adjusted the losses with current year’s profit to replenish previous year’s cumulative loss of Tk186.18 million, but still the retained earnings balance stood at negative Tk124.635 million as of June 30, 2018. Putting it in context… In 2017-18 fiscal year Bangladesh exported ceramic products worth Tk380 crore Of all locally produced ceramic products, tableware has gained an impressive position in both domestic and international market, earning millions of dollars through export. According to Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), in 2017-18 fiscal year Bangladesh exported ceramic products worth Tk380 crore, with Tk378 crore from tableware. There are twenty tableware manufacturing companies in the country with total investment worth Tk2,200 crore. The yearly production is 255 million pieces while 19,000 people are directly involved in this sector. Manufacturers produce different types of tableware products including dinner set, tea set, coffee set, desert set, cake set, sweet set to open stocks like plate, oval dish and bowl, cup with saucer, hollow-ware, mugs, flower vase and hotel wares. The market consumption of the tableware products is worth Tk515 crore while yearly local sales are worth Tk478 crore and local market share is 93%. Industry insiders have said that because of low labour cost, high quality clean natural gas and good reputation around the world, Bangladeshi tableware products have secured a place in the global market. According to BCMEA data, nine ceramic companies export their

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IT IS A GREAT INITIATIVE TO PROVIDE EXPORT INCENTIVES OF 10% AS A SUBSIDY products where Shinepukur and Farr Ceramics both have 24% share, Paragon Ceramics 18% and Monno Ceramics 10% share in the export market. Visiting different ceramic markets in the city, Dhaka Tribune has found that in terms of sales Shinepukur Ceramics lead the local market. The total share of Shinepukur in the local market is 18%, Monno ceramic 15%, Farr 14% and Paragon 12%. Talking to Dhaka Tribune, Tanvirul Islam, head of marketing of Shinepukur Ceramics Ltd, said after its establishment in 1997 it started commercial production in 1999 and from the beginning of commercial production, they exported their products. “Now we are exporting our products to more than twenty countries and our main focus is the USA and the Scandinavian countries. Our yearly exports are worth 18-22 million US dollar and our yearly production is 220 lakh pieces," he said. “Our products have a huge demand in international market because of their quality and timely delivery," he added. Irfan Uddin, general manager of BCMEA, also director of Farr Ceramics, said they started commercial production in March 2007 with a capacity of producing 32,000 pieces per day. “Now our annual production is 230 lakh pieces and yearly turnover is close to Tk100 crore," he said. “Actually our company products are export-oriented and we are exporting our products since the beginning. We export the products of FARR Euro Fine Porcelain brand, FARR Fine Ivory brand and FARR High Alumina Porcelain brand and our global network is now in more than 35 countries," he added. He further said that Farr Ceramic Ltd was continuously looking for new markets and the company's exports accounted for 80% of its products. In 1985, for the first time Monno Ceramics started producing ceramic products in the country. Now the annual production of Monno is 250 lakh pieces. Since then, many entrepreneurs have come to invest in this potential sector. Now, many other Bangladeshi ceramic brands such as Star Porcelain Ceramics, Protik Ceramics, Peoples Ceramics, Tajma Ceramics, Jubok Ceramics, Standard Ceramics, Artisan Ceramics are operating with reputation at home and abroad in terms of tableware production.

AC 19-9

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Insight

USA

Table 1 Table 1 2014 2015 2016 2017 2018

Canada Mexico Anguilla United Kingdom Japan Cayman Isds Bahamas Rep. of Korea Saudi Arabia

1,289,914 955,547 1,224,030 3,348,783 3,593,216

Total unglazed tile exports (sq metres)

2,887,877 188,112 12,096 18,255 28,702 40,313 22,220 27,532 15,760

Leading unglazed tile export destinations (sq metres)

Table 1 Italy China Spain Mexico Turkey Brazil Peru Portugal India Colombia

Table 1 2014 2015 2016 2017 2018

22,609,468 15,533,435 14,768,679 196,013,070 204,844,370

Total unglazed tile imports (sq metres)

33,229,428 65,357,404 28,957,761 35,132,989 11,937,830 14,698,016 5,369,105 1,053,658 1,597,590 1,494,418

Leading unglazed tile import sources (sq metres)

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SAVE THE DATE 3-7/Feb/2020 ValĂ¨ncia (Spain) #cevisama20 www.cevisama.com cevisama@feriavalencia.com

Insight

Table 1

Table 1 2014 2015 2016 2017 2018

23,681,634 44,638,666 40,349,186 37,131,759 42,665,826

Total sanitaryware imports (no. items)

Table 1 2014 2015 2016 2017 2018

Leading sanitaryware import sources (no. items)

2014 2015 2016 2017 2018

10,770,257 18,426,557 17,226,909 18,479,853 20,804,712

Table 1 3,224,784 3,496,507 3,034,607 61,439,969 65,357,404

Sanitaryware imports from Mexico (no. items)

2014 2015 2016 2017 2018

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9,336,633 22,652,856 19,145,988 13,898,158 16,624,743

Table 1

Unglazed tile imports from China (sq metres)

20,804,712 16,624,743 1,410,228 972,838 389,282 252,219 396,228 214,775 233,718 327,579

Table 1

Sanitaryware imports from China (no. items)

2014 2015 2016 2017 2018

China Mexico Thailand India Brazil Turkey Viet Nam Indonesia Dominican Rep. Colombia

AC 19-9

389,398 373,213 382,324 36,926,750 16,624,743

Unglazed tile imports from Mexico (sq metres)

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Hunter and the hunted

s t h g u tho

l a z e ’ a re g n o ‘ d n a ’ e r i f d r 3 ‘ s d or w e h t a ble p retty m u ch i nt e rch a n g e

Lexicon? Hey Siri,

What is the Definition of lexicon: words in a language and their 1: a book containing an alphabetical arrangement of the n lexico French a definitions: DICTIONARY or group of speakers, or a subject, computer 2a: the vocabulary of a language, an individual speaker terms that have been added to the lexicon b: the total stock of morphemes in a language ngs, which can easily lead to confusion The word lexicon has a number of closely-related meani exicon can refer to a general dictionary way. L rd awkwa an in used be to and may cause the word also to a narrower printed and ge") langua w of a language (as in "a lexicon of the Hebre n" or "a lexicon of the German lexico al medic "a in (as sphere some within words compilation of in Finnegans Wake"). It can be confusing knowing what words Thank you to Merriam Webster for clarifying that for me. ge or with several speakers each langua d secon a in ing speak are we mean. Even more so when using their second or third languages. t with four different nationalities and five Recently I had the pleasure of working on a complex projec h, Italian and Spanish. Most of the Englis nese), (Canto Kong languages; Chinese (Mandarin), Hong ge though we were fortunate to have langua on discussion where possible was in English as the comm e. Chines and h Englis ting people proficient in transla by language – either choosing the wrong But we did find that there were some problems created words or simply being vague and not specific. Given most of the people involved in the The first issue was as much interesting as a hindrance. you would think we would have clear years project have been ‘in ceramics’ for over twenty or thirty to technical terms. We weren’t. It regard with c specifi and e concis very terminology and would be different terms to those in the tile use y industr are tablew soon became obvious that people from the not mean the same. I’ll give an example. industry – whilst the words might be the same, they might e’ are pretty much interchangeable. We ‘onglaz and fire’ ‘3rd To a tableware ceramicist, the words be the onglaze decoration fire, even if would assume that everyone would know that the 3rd firing t away there is a possibility there for straigh So firing. metal us precio a be sometimes it isn’t; it might ’t necessarily mean that it is onglaze doesn fire 3rd the y, misunderstanding. But also, in the tile industr and likely a decoration fire. This simple that is being fired – just that it’s the third firing of the tile the project was talking about onglaze colours in party one while a difference in terminology meant for inglaze and a different firing temperature and and the available gamut whilst the other assumed it was the project would have been handicapped then d spotte been hadn’t this If thus the range of colours. wrong types of inks for the customer. the on g workin from the very beginning with colour suppliers make assumptions about what decoration This was resolved though now after many years I don’t about. material or what firing we are talking areas in multilingual and multiWhich brings me around to other potentially confusing ly over the past score or more years ndous treme grown have which discipline communication who is communicating and how they as also but as the industry has migrated around the globe communicate has changed. dedicated to tutoring improved There are countless books, blogs, web sites and pages er we are being too wordy or not wordy wheth communication by email so I won’t even begin to cover opening greeting – you don’t?? It an or ) course (of Line t Subjec a include enough if we are should years old one of the first training 18 at g workin started I all seems obvious. Then I remember when one Properly’ which was amusing since it courses, we were sent on was ‘How to Answer the Teleph all this advice is aimed at native English Now fame. Python Monty was presented by John Cleese of but when we are communicating with ers speakers communicating with other native English speak fast. icated compl e becom things ers’ non-native English speak

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

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AC 19-9

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with their staff too – after one meeting Our company had a Dutch factory so we had meeting ‘We will wait for the minutes to be went, g meetin the t though he how ue I asked a Dutch colleag nt always to the minutes – you differe is speak you issued because what we think you mean when w.’ Consider me admonished. English can change a meaning just if you raise an eyebro ers that would mix two or three custom and h Singlis to used Later working in Asia I had to get not as much confusion as though – ions languages into one sentence which led to further confus ny offered a product compa our nt adama was who er custom n Korea a I had trying to understand erson to translate salesp sian Indone our asked I factory ‘Lilik Lux’ – given we were at an Indonesian s of increasingly minute thirty about a. After – but he was equally adamant that lilik lux wasn’t Bahas . happy home went all We flux’. ‘relief meant he d frustrating discussion, we realise often cause big problems and even conflict Whilst occasionally amusing communication difficulties across multiple languages multiplies the ing unicat Comm ss. busine and – destroying relationships is intended; I get irritated by an email none where problem, even the wrong tone can create friction to find out why it was being used: ending used in India ‘Do the needful’ so much so I had in African countries, and was once heard used only comm is ‘Do the needful originated in India, an period, its usage in the West died out, frequently in the United Kingdom as well. After the Victori catching the ear of English speakers started it India, from and to rcing outsou but with the increase in in the West again.’ g with bureaucracy and imposed on India So, it was a Victorian phrase originally used when dealin as it sounds cold and demanding to dislike I which phrase a it’s by colonialists and now ironically, my delicate senses. is vitally important as nowadays it isn’t Notwithstanding the occasional humour communication customers or suppliers. Now everyone in staff senior just senior staff who communicate with other – the opportunity for misunderstanding or in an organization is on email or some messaging service it is a lost order or an irate client. about know may you indiscretion is great and the first thing ing by mail – or by messenger for unicat So, here are my observations and rules for comm that matter. It’s too easy to CC everyone and end up 1) Only speak to the people who need to be spoken too. ions. with multiple, worthless observations, comments or object ion is about. And then don’t go off on a 2) Be very clear in your Subject Line what the communicat use another email for another subject to, need tangent to other subjects in the message body. If you blunt. Avoid vagueness – keep it being of point the to t almos direct be 3) In the message, body clear. Is the email even necessary? is no harm in saying ‘Is this correct or 4) Ask direct questions and give direct answers. There s equally rude to non-native speakers sound option an giving not not?’ it sounds rude in English but of English 5) Avoid emotion – don’t type angry. be – give a date not ASAP or such. 6) Be clear what the follow up is to be and when it is to 7) Keep it short. 8) Read it before you send it – does it make sense? are familiar with you can be more creative, Okay, if you are talking to an old friend or someone you mixed crowd – avoid anything that can a to is it if but – wish you if ining informal and even enterta cause confusion or offence. – it’s still better when you can to talk There is one more strange thing I’ve found over the years are baffled by a raised eyebrow at an you if even face; to face to someone on the phone or better inappropriate time. Until next time Your humble servant William Hunter

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

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