WORLD CERAMIC TILES FORUM
21stplenary meeting
The WESTIN Bund Center
88 Henan Central Road – 200002 Shanghai
Minutes
Thursday 13 November(Day 1)
List of participants:
Australia: Australian Tile Council
Mr. Richard BOWMAN / Australian Tile Council, Honorary Principal Technical ConsultantBrazil: Brazilian Association of Ceramic Tile Manufacturers (Anfacer)
Mr. Esdon GAIDZINSKI JUNIOR / Anfacer, PresidentMr. Antonio Carlos KIELING / Anfacer, CEO
China: China Building Ceramics & Sanitaryware Association
Mr. Leadeal BAI / Guangdong KITO Ceramics Co. Ltd,General Manager – International Trade CenterMr. Andy CHEN / China Building Ceramic & Sanitaryware Association, Senior Advisor
Mr. Simon CHUNG / Hangzhou NABEL Group Co. Ltd,R&D Vice President
Mr. David GONG / China Building Ceramic & Sanitaryware Association, Deputy Secretary General
Mr. Yingming HUANG / Zhuhai Doumen Xuri Ceramics Co. Ltd, President
Mr. Bin MIAO / China Building Ceramic & Sanitaryware Association, Vice President and Secretary General
Mr. Jiarui OU / Guangdong Hongyu Ceramics Co. Ltd,Group Deputy Director
Mr. Jiguo WEI / Guangdong BODE Fine Building Material Co. Ltd, Sales Director
Mr. Jianfeng WU / Guangdong Hongyu Ceramics Co. Ltd,General Manager - Export Division
Mr. Gaosheng XIA / China Building Ceramic & Sanitaryware Association, Deputy Secretary General
Mr. Xiwu XU / China Building Ceramic & Sanitaryware Association, Deputy Secretary General
Mr. Xiangyang YE / China Building Ceramic & Sanitaryware Association, President
Germany: German Tiles Producer Association
Mr. Alain DELCOURT / Agrob Buchtal GmbH, General ManagerMr. Jens FELLHAUER / Industrieverband Keramische Fliesen und Platten e.V., Director
Mr. Peter-Michael WESTER / Agrob Buchtal GmbH, General Manager
India: ICCTAS
Mr. Harjivan GHODASARA / Spectrum Johnson Tiles PVT. Ltd, Director
Mr. Prem Narayan TRIVEDI / H & R Johnson
Indonesia: Indonesian Ceramic Industry Association (ASAKI)
Mr. Rajendran RAJARAM / ASAKI, Head of International Relations
Ms. Yoesidha ERMINTATI / ASAKI, Treasurer
Mr. Edy SUYANTO / ASAKI, Vice Chairman
Ms. Erlin TANOYO / ASAKI, Secretary General
Italy: Confindustria Ceramica
Mr. Loriano BOCINI / Confindustria Ceramica, Member of the Board of Directors
Mr. Vittorio BORELLI / Confindustria Ceramica, President
Mr. Armando CAFIERO / Confindustria Ceramica, Director General
Mr. Luciano GALASSINI / Confindustria Ceramica, Deputy Managing Director
Mr. Alfonso PANZANI / Confindustria Ceramica, Member of the Board of Directors, Vice-President of Cerame-Unie
Japan: Japan Ceramic Tile Manufactures Association
Mr. Shoji MIYAGAWA / Japan Ceramic Tile Manufactures Association
Mr. Kentaro MIYAGAWA / Japan Ceramic Tile Manufactures Association, President
Ms. Sana SHIBATA / Japan Ceramic Tile Manufacturers Association
Malaysia: FMM Malaysian Ceramic Industry Group (MCIG)
Ms. Hasliana ABD RAHMAN / FMM MCIG, Secretariat
Ms. Maimon ARIF PATAIL / FMM MCIG, Chairwoman
Spain: Association of Ceramic Tile Manufacturers of Spain (ASCER)
Mr. José CASTELLANO / ASCER, Vice President
Mr. José Luis LANUZA / ASCER, Member of the Board, Chair of the World Ceramic Tiles Forum
Mr. Pedro RIAZA / ASCER, Secretary General
Turkey: Turkish Ceramics Federation
Mr. Atalay GUMRAH / Eczacibasi Building Products
Mr. Huseyin Alper OZKOK / Kaleseramik
Mr. Germiyan SAATCIOGLU / Turkish Ceramics Federation, Secretary General
Ms. Sule SAHIN ZENGIN / Kaleseramik, Strategic planning, Business and Process Improvement Manager
Mr. Ahmet Tahsin YAMANER / Turkish Ceramics Federation, Chairman
Ukraine: Ukrainian Association of Ceramics
Ms. Nataliia GUBAR / Ukrainian Association of Ceramics, Vice President
Mr. Volodymyr REVA / Ukrainian Association of Ceramics, President
Secretariat:
Mr. Renaud BATIER / Secretary General
Chair of the meeting:
Mr. José Luis LANUZA / ASCER, Member of the Board, Chair of the World Ceramic Tiles Forum
1)Opening of the World Ceramic Tiles Forum 2014
Mr Bin Miao (Vice President and Secretary General of CBCSA)welcomes the members of the WCTF to Shanghai. He appreciates the opportunity to discuss global developments which affect the industry and to exchange experiences. The ceramic industry needs to adapt to a changing economic environment. The CBCSA hopes to contribute to this process by working with the other members of the WCTF.
Chair of the WCTF Mr José Luis Lanuza thanks Mr Miao for his words and moves to the next point on the agenda.
2)Approval of the agenda and the minutes
The agenda and the minutes of the WCTF meeting held on 6 to 8 November in Rio de Janeiro are approved.
3)General presentation on construction, ceramic tiles and regulatory trends in China – CBCSA
Mr. Andy Chen(CBCSA) gives insight into construction, ceramic tiles and regulatory trends in China.
-Ceramic tile industry infrastructure was almost completed in the late 1990s
-State-owned enterprises decreased and private-owned enterprises increased
-Market-oriented reform was carried out to the whole industry
-More than thirty industry zones spread all over the country
-Significant progress has been made in product quality, economic production, level of management, design as well as technology.
-Complete supporting service system for the whole industrial chain has been formed by and large.
-Local production meets the demand of the domestic market.
-There were about 3,100 ceramic tile production lines in China
-The annual capacity exceeded 11,5 billion m²
-The average service life of production line was only 8-10 years
-The average capacity is 3 million to 5 million sqm/line/year
-While only few of them with capacity of 2million to 15 million sqm/line/year
Energy & Labor
-Main energy sources is coal gas with 90% share while natural gas only shared 10%
-Over 50 million tons of coal were consumed each year;
-Over 200 billion tons of raw mineral materials were applied per year
-Total industry employees were over one million
General state of the Chinese Ceramic Tiles Industry in 2013
-Both production and marketing was better than the expected recovery situation.
-Improvement of quality & efficiency performed quite well.
-Outstanding growth of marketing,branding & sales channels.
-The growth of export is higher than that of domestic demand situation keeping continued.
-Digital printing technology applied to the production of up to 70% of all the industry.
-Keeping the policy of thinner tile.
-"Energy saving and environment protection" became the main driving force for the development of the industry
-Over 1,435 companies played an important role to contribute 61.8 billion U.S. dollar sales revenue which increased by 17.4%.
-The total profit of enterprises increased by 24.6%.
-The average rate of return on sale increased by 7.6%.
-The percentage of loss-making enterprises in the whole industry shared 7.02%.
-The total investment was about 13.6 billion U.S. dollar, increasing by 35.3%.
-The integrated operation cost of enterprises increased by 18.2% in average
-The development of sales and profits can be seen from the presented graph. The output of the industry by region is presented, so is the structure of the produced output by type of tile. The majority of produced tiles were porcelain tiles (67.31% of production).
-Asia was the most prominent export destination (51.96%). 5.11% of Chinese exports go to Europe. Export value and quantity increased since 2008, so did the prices.
-After a peak in 2011 Chinese imports decreased to 503.7 m ² in 2013.
Estimated situation for 2014
-Total production capacity becoming stable with single digit growth
-Sales markets all over the country were "sluggish
-The situation of "growth of export higher than that of domestic demand" has been reversed.
-Regulation of environmental protection & emission reduction will be much more severe than before
-Contradiction caused by over capacity "suddenly increased“.
-Middle & small-sized enterprises encountered difficulties in financing issues.
-The pace of "structure adjustment and upgrading promotion" was accelerated.
-Rapid growth of the real estate market no longer existed and expectation on market demand reduced.
Overall situation in 2014 – estimates
-The capacity will be around 8.16 billion m², increasing by 7.5%.
-Sales revenue will be increased by 14.9%.
-Sales profit will be increased by 12.8%.
-The exportation volume will be 0.83 billion m2 , decreasing by 1.1%.
-The export value will be 5.41 billion U.S. dollar, reducing by 2.7%.
-The import volume will be 4.25 million m2, increasing by 14.2%
-The import value will be 72.30 million U.S. dollar, increasing by 22.6
Key factors for the rapid growth of the ceramic tiles industry
-After the reform and opening policies were implemented, environment for development of the economy was much more improved.
-The living standard was upgraded & real estate industry rapidly developed
-Ceramics is a Chinese tradition widely accepted everywhere
-Compared to other materials, ceramic tiles have better advantages
-Rich raw materials sources and suitable for mass production.
-Threshold for investment and technology is comparatively low.
-The efficient supply chain & value chain of ceramic tiles has been well built up.
-The demand in the market is huge and the rate of return on investment is high.
Overview of development of domestic real estate:
-The new finished housing area was 1.014 billion m2. The residential area per capita was 36m2 of which, it was 32.7m2 in cities and towns, 37.1m2 in villages comparing in 2001, it was only 20.8m2 in cities and 25.7m2 in villages
-In 2013, urbanisation rate in China was 53.7% (it was 36.2% in 2000) The urbanisation rate increased by 1% each year & the newly increased population was 14 million. It was estimated that in the next decade, the newly built houses in China will represent over 2 billion m2, of which two thirds is transformed from old and dilapidated houses.
Key issues in the development of the industry:
-Pressure caused by resource, energy and emission reduction is bigger and bigger.
-Lack of innovation, ability & talents.
-Lack of international branding & marketing concept as solid business model
-Enterprises are not well organized, managed and supervised
-Industrial zone spread all over the country make inefficient operating
-Production line structure is unreasonable.
-Management ability & employee’s quality should be further improved.
Notable issues in the future:
-New entry barrier regulations for the new factory of Ceramic tile Industry in 6 fields & 25 requirements.
-Limit on thickness of ceramic tile in GB of Ceramic Tile.
-Criterion for Limit on Energy Consumption for ceramics tile.
-Pollution Discharge Standard of Ceramic Industry will be revised
-Drafting of Standard for Safety Production of Building Ceramic Industry.
-"The 13th Five-Year Plan" for the national economy is being developed.
-The urbanisation is promoted steadily in China.
Forecast on industry development in 2015
-The growth of export higher will be still lower than that of domestic demand
-The domestic sales will be increased by over 10% and growth of exporting remains stable.
-Operating cost for enterprises will be further increased.
-Some middle and small-sized enterprises will be "knocked out of the game“.
-The pace of "adjusting structure of product and promoting upgrading of industry" is accelerated.
-The trend of thinner tile continues to be accelerated.
-The production capacity will show little growth
-The new O2O business model will be incredible growing
Questions and answers
-Will China explore shale gas in the foreseeable future or are there policies being developed in this field?
CBCSA answers that so far shalegas is not being used in the ceramic tiles industry. It is however being used in the ceramic sanitaryware sector. So far the use is limited.
4)Global trade, production and consumption in ceramic tiles
As the WCTF secretariat did not receive the answers to the statistics questionnaire in time the trends in global trade, production and consumption of ceramic tiles cannot be presented. The data will be circulated amongst the members of the WCTF when available.
5)Report by the members of the Forum on national situation and trends
5.1) Australia
Trends in the construction sector/demand
-Construction activity increased, especially in the residential building sector
-Australia: AAA credit rating ; Population 23.4M 1.7% growth
-A$ better valued: US$1.00 = A$0.87 (A$1.05, November 2013)
-Reserve Bank official interest rate at historical 2.5% low (15 months)
-Economic growth 3.1%; loss of more manufacturing; mining downturn
-Many ill-considered microeconomic reforms with dubious outcomes
-Housing development plays a major role in Australian economy
-CPI rose by 3.0% through year, to June quarter 2014
-High unemployment at 6.1%, likely to last until 2016. “457 visas”
-Sentiment still good in most States: much home building expected
-Melbourne – World’s most livable city – 25% population increase since 2000 (4.35M people); infrastructural development lagging
-Housing prices continue to increase: average price A$555K, US$485K
-Impending oversupply of (poor quality) inner city high rise apartments
-Detached houses are cheaper than 2 bedroom inner city apartments
-22 years of consecutive growth
-Household savings rates have strengthened
-Business balance sheets look good
-Business credit quality looking good
-Government understands risk of excessive borrowing
-Governments committed to infrastructure
-Central bank manages monetary policy exceptionally well
Trend in production, consumption and trade of ceramic tiles
-Australia has only one significant producer, National Ceramic Industries Australia,
-Imports for the 2013 calendar year totaled 34.4M m2, with a customs value of A$298.2M (US$288.6M). There were 36.9M m2 for imports in the 2013-14 financial year, customs value A$342.6M (US$314.7M).
-The imports statistics reveal an increase in the prices being paid for Chinese tiles.
-Some builders are importing tiles directly, and even in prefabricated bathrooms
Latest developments in national level on energy supply regulation and taxation
-Australia has been without a climate change policy since July when it passed the Clean Energy Legislation (Carbon Tax Repeal) Act 2014.
-The Government seeks to introduce a direct actionpolicy – a scheme that takes money from taxpayers and gives it to polluting industries (to deliver emission cuts). Key crossbench senators oppose this and seek an emissions trading scheme that would start when major trading partners have similarly aggressive climate change policies.
-A failure to confirm the 2020 renewal energy target is adversely affecting the development of the renewal energy industry.
-Electricity prices have risen considerably, are approaching the highest in the developed world, and seemingly set to reach the highest. Retailers are forced to buy a rising proportion of their power from renewable sources with the cost passed on to consumers.
-Household gas prices have risen by about 1/3 over the last 5 years and are set to rise steeply due to gas export projects pushing domestic prices to international levels.
-The level of public anger and frustration is high.
Any development of national legislation or standardization affecting ceramic tiles
-The National Construction Code (NCC) 2014 introduced slip resistance requirements for stairs and ramps in new buildings and houses.
-These are defined in terms of the new AS 4586:2013 wet pendulum (P) and oil wet ramp (R) classifications (for new surfaces).
-Class P3 (35-44 BPN, slider 96) is required for dry residential stairways.
-Increased tread width requirements would provide far greater safety.
-Quantified requirements are likely to be introduced in 2016 for publicly accessible paths of travel in public areas. Other bodies, e.g. Livable Housing Australia, have proposed P3 for residential bathrooms.
-AS 4586:2013 requires urgent revision, due to relying on CEN/TS 16165, which specified inappropriate shoes when published in 2012.
-The public education of architects and merchants has been lacking.
-HB 198 introduces AS 4586 and AS 4663:2013 (slip measurements for existing surfaces); summarises the NCC requirements; recommends classes for other areas; but lacks selection guidance to enable architects’ desired outcome of at least 5 years ‘compliance’.
Other national developments
-The Australian Tile Council appears to be largely dysfunctional.
-Focus still on reducing the weight of tile cartons to maximum 23 kg
-Seek 3 simple ISO pictorial black & white labels for overweight cartons
-Cartons not correctly labeled to ISO 13006 → second class products
-Much tile promotion advertises cheap discounted stock.
-There has been minimal national tiling Standards development for several years.
-We may be losing market share because of the global apathy towards solving common problems of tiling installation and system performance
-Any industry that cannot solve its own problems is severely threatened.
-Lost Australian sales adversely affect all foreign manufacturers.
-BIM libraries contain tiling system components but fail to assist in enabling specification of systems appropriate to the situation.
-Should we be seeking to determine the % of tiles used as a wall and floor finishing material, and to monitor year on year performance?
5.2) Brazil
State of the Brazilian economy
-GDP growth rate: 2.6% (2013); 1.5% (2014); 2.7% (2015); 3.1 (2016)
-Unemployment decreased in the course of the last years but is expected to rise again; 5.4% (2013)
-FDI peaked in 2011 started decreasing and is expected to further decrease; USD 64.000 bn (2013)
Development of the Construction sector
-5th largest industry in Brazil (2013)
-5.4% of the country’s GDP (2013)
-National indicators of the real estate market: The number of units financed under the SBPE in the first semester of 2014 grew 6.5% Construction, 3.8% Acquisition and 4.6% Total regarding the first semester of 2013
Ceramic Tile industry
-Production capacity increased in the course of the last years; 1390 mio m² (2014)
-Production increased in the course of the last years; 871.1 mio m² (2013)
-Domestic market sales increased in the course of the last years; 837.5 mio m² (2013)
-Exports decreased since 2007; 61.5 mio m² (2013)
-Biggest export markets are south and central America
-Production by tile type:
- Floor tiles: increased 3.2% to 590 mio m² in 2014;
- Wall tiles: increased 5.2% to 185 mio m² in 2014
- Facades: increased 3.4% to 26 mio m²
- Glazed porcelain tiles: increased17.1% to 86 mio m² in 2014
- Unglazed porcelain tiles: increased 8.2% to 17 mio m² in 2014
Energy
-The ceramic tiles industry belongs with the biggest consumers of natural gas in brazil; 13.9% of total industry consumption; 4.21*106 m³/day
-Prices for natural gas in Brazil increased more than 250% between 2004 and 2014
Standards and regulations:
-ABNT NBR 13.818 - CERAMIC TILES - SPECIFICATIONS AND TEST METHODS
-ABNT NBR 13.817 - CERAMIC TILE - CLASSIFICATION
-ABNT NBR 13.816 - CERAMIC TILES - TERMINOLOGY
-ABNT NBR 15.463 - CERAMIC TILES - PORCELAIN
-ABNT NBR 15.825 - CERAMIC TILE - INSTALLER
-ABNT NBR 15.873 - MODULAR COORDINATION FOR CONSTRUCTION MATERIALS