Production costs of Italian ceramic tiles

Dec 18, 2003

18/12/03 - In 2002 the average total production cost of Italian tiles amounted to 8.84 euro per square metre, 3% up on 2001. This figure emerges from the survey entitled “Costs by product types and average revenues in the ceramic tile industry” conducted by Assopiastrelle and Giorgio Olivieri & Associati and presented recently in Sassuolo.

The increase in total production cost was principally due to the rise in manufacturing costs (5.09 euro/sq.m compared to 4.90 euro/sq.m in 2001) and administrative costs (1.99 euro/sq.m compared to 1.93 euro/sq.m in 2001), whereas commercial costs have remained stable (1.76 euro/sq.m compared to 1.74 euro/sq.m in 2001).

The impact of the three cost items on average production costs has remained substantially stable over the last 5 years covered by the survey. Manufacturing costs account for 57.58% of the total, followed by administrative costs at 22.51% and then commercial costs at 19.91%.

Within the administrative costs, there has been a rise in general expenses (+21%) as well as financial expenses (24% up on 2001) due to the financial difficulties triggered by the poor performance of sales. Amortisation costs have fallen (-5%), while the cost of outsourcing work and the purchase of accessories have remained stable at 8% of average production costs.

Within the commercial costs, there has been an increase in commission and marketing expenses due to the need to sustain sales in an increasingly difficult market context. On the other hand, the cost of sales personnel is falling due to the continuing process of concentration of ceramic companies, in which an increasing number of brands are grouped under the same management.

A more detailed analysis of manufacturing costs reveals an increase in the cost of production personnel (1.42 euro/sq.m, 8.4% up on 2001), body raw materials (from 0.87 to 0.94 euro/sq.m, +8%), heat energy (from 0.70 to 0.73 euro/sq.m) and packaging materials (from 0.22 to 0.24 euro/sq.m). The costs of raw materials for glazes and colours has remained stable (0.85 euro/sq.m), while the cost of electrical energy has fallen for the first time in five years (-6.25%), and expenses for equipment and consumables have also fallen. Breaking down the average manufacturing cost according to homogeneous items, we find that raw materials account for 35%, labour 28%, energy costs 23% and other costs 14%. The proportions have remained substantially stable over the past five years. The survey also analyses the average manufacturing cost according to individual product type, which reveals that the greatest increase has affected unglazed porcelain tile (3.42% up on 2001 to a total of 5.75 euro/sq.m).

The in-focus section contains tables on: Average total production cost of Italian ceramic tiles, Average manufacturing cost according to cost item, Average manufacturing cost by productgrafico1.gifall data tablescosti2003_eng.pdf