Italian tile industry reports fall in production while prices remain buoyant

May 30, 2005

30/05/05 - Production has fallen slightly to 589.2 million sq.m, 14 million sq.m down on 2003 (-2.36%).
Average prices have risen (+3.73%) although margins have been eroded by higher production costs.

Turnover has reached 5,334.1 million euro (+2.98%), consisting of 1,487.8 million euro Italian sales (+3.15%) and 3,856.3 million euro exports (+2.91%).

These are the main figures emerging from the 25th National Statistical Survey of the Italian ceramic tile industry in 2004, unveiled today at the Assopiastrelle headquarters.
The Italian ceramic tile industry has essentially maintained its industrial structure in terms of equilibrium between production quantities and sales.

The quantities sold in 2004 totalled 583.7 million square metres (-0.73%). In terms of destination markets, the 171 million square metres sold in Italy (+0.52%) correspond to 29% of the total, while the 412.5 million square metres exported (-1.24%) account for 72% of sales.
The 3.73% increase in average price is the net result of a 2.62% increase in Italy and a 4.20% increase abroad (the latter being a particularly significant figure given the devaluation of the dollar). This increase reflects an improvement in the mix of offerings but is also a response to rising costs, particularly of natural gas and transport.
So not all companies will be able to improve their profit margins, and those that do will only do so partially.

Investments remain stationary at 4.51% of the sector’s turnover. As for product types, porcelain tile now accounts for 61% of production (glazed porcelain tile 40.4%), followed by single firing (25%) and double firing (8.8%).

According to the outgoing chairman Sergio Sassi, the first two months of 2005 were highly negative, especially in central European markets. The situation was particularly critical in Germany (sales down by 12-15%). By contrast there was a slight recovery in the months of March and April. In the United States many of the new market shares were being met by Brazilian producers and leading competitors such as Spain, Mexico and China. Initial estimates indicate that the sector’s turnover will remain substantially stable in the current year.

The in-focus section contains the structure of the sector and the markets in 2004 asso300505.jpgThe structure of the sectorThe structure of the sector

On 31 December 2004 there were 228 companies operating in Italy, 11 fewer than the previous year, which employed a total workforce of 29,817 people, down by 447 (-1.48%).

There were a total of 317 factories (6 fewer than in 2003) with 721 kilns (26 fewer than 12 months earlier). During 2004 investments totalled 241.5 million euro (4.51% of turnover), in line with past investments and those planned for the current year.

Through gradual rationalisation the sector is aiming to eliminate unprofitable activities, to incorporate companies into larger groups and to improve the productivity of individual factories.The marketsThe markets

As regards foreign markets in 2004, the difficulties of sales in Germany (-6.5%) are offset by strong expansion in Scandinavian countries (increases close to 20% in value) and reasonable growth in France (+3.4%), Italy’s third largest export market.

Outside Europe the situation varies substantially, although the figure for the United States is particularly significant (up 3.6% in quantity and 5.64 by value, although the times of double-figure growth rates are long gone). On the other hand we are seeing downturns in Asia (-6.2%) and Australia (-9.7%), largely due to fierce competition from producers from the Far East.