The demand for tiles and ceramics has been witnessing an upward trend, and the sector is evolving into a contemporary and competitive market in the GCC.
The GCC remains among the largest markets for tiles and ceramics. Despite the decline in oil prices and other challenges facing the region, players such as RAK Ceramics reported strong sales in 2015, both in the UAE and Saudi Arabia. ¨Performance in our core markets is solid, despite ongoing global economic challenges,¨ says Abdallah Massaad, Group CEO, RAK Ceramics.
There is positivity over the continued growth of the construction industry across the GCC. Saudi Arabia, the UAE, and Qatar are the leading consumers of ceramic tiles in the region. ¨We anticipate that demand will continue to grow, as these countries have secured the rights to host international events such as the Dubai Expo in 2020 and the FIFA World Cup 2022 in Qatar. In Saudi Arabia, the Saudi National Development Plan to improve housing is also an exciting project,¨ says Massaad.
Somany, another major in this space, has been exporting to the GCC region for the past 15 years. It has a strong presence in the key markets of Qatar, Oman, Bahrain, Dubai and Saudi Arabia, among others, with an extensive point-of-sale infrastructure. However, Amit Bhatnagar, Head General Manager-International Business, Somany, believes that the market for this segment has been stagnant over the last year because of falling oil prices, due to which, the construction activity in the GCC is at a standstill. ¨The industry is cautious and is not moving at the fast pace as it was a few years ago,¨ he says.
But the overall market sentiment is still positive. ¨We generate at least 30-35 per cent of our business from the region, exporting to the Middle East,¨ says Shahid Khan, Manager-Export, Qutone. The company supplies to the markets of Saudi Arabia, the UAE, Qatar, Oman and Bahrain, with a presence in Egypt. Apart from Dubai, it is also focussing on Sharjah and other parts of the UAE, and is exploring business prospects in Bahrain, Qatar and Kuwait.
Another strong player, Asian Granito India, sells 60-70 per cent of its offerings in the GCC. Girish Patel, Director-Marketing Export, Asian Granito India, says, ¨The GCC industry is certainly growing, month-to-month and year-to-year.¨
Although the design approach in the Middle East is strongly influenced by the Arabic culture and heritage, it is also contemporary.
The new trend is a mix-and-match fusion of contemporary and classic design, and the most important is the way in which the industry is using different materials. ¨It is a modern way to use ceramics, bringing together traditional and modern materials, small sizes with super-sized slabs, different shapes and shades of colour, and creating an exciting new style of interior design,¨ says Massaad. ¨Mixing is a must be it in colours, textures, designs or sizes.¨
The market is moving towards big size tiles, with larger homes and villas trending in the region. ¨The current trending size is 60 x 120 cm, and we are getting enormous queries for big sizes, which is something new and innovative in the Gulf market,¨ adds Khan. ¨We are focussing on manufacturing bigger sized tiles in the near future, and will also introduce a unique innovation from India to the Middle East market.¨
Of course, the market demands quality. Bhatnagar says, ¨In the Saudi Arabia market particularly, there is a strong demand for Indian products. We believe that the segment is yet to cater to higher plots with better quality.¨ Patel concurs, saying, ¨The GCC market is driven by volume. So, our ceramic products that were earlier sourced from China are now being bought from India.¨
The secret sauce is environment-friendly, hygienic and the aesthetic features. ¨We work hard to make our manufacturing processes eco-friendly,¨ says Massaad.
¨Our factories have water recycling and heat recovery systems. We have developed a range of products designed to promote energy-efficiency and environmental sustainability. In tiles, we were the first to produce RAK Slim, an environmentally-friendly tile, which has the same finish and features of a standard tile, but consumes 50 per cent less raw materials. In sanitaryware, we became the first manufacturer in the region to introduce a 2.5-litre half-flush and 4-litre full-flush for our water closets in 2009, and in 2014, we launched Eco Fresh - an advanced urinal sanitation system, which uses unique ´odour trap´ technology and requires no water to flush.¨ What´s more, RAK Ceramics is currently working on a new range of thermal tile products called ´Klima´.
This range includes warmth-generating ceramic floor tiles for indoor use, cooling ceramic products for outdoor use and energy-saving ceramic fatades.
With fierce competition in the market, prices have come down, but demand is still seeing an upward trend with increase in consumption, believes Patel. Asian Granito India has its team in the Middle East, which looks after projects in the region. The company has supplied to the Barari project in Dubai, among other installations.
RAK Ceramics is the market leader in the region with more than 20 per cent of the market share for tiles in the UAE and 8 per cent in KSA, says Massaad. And, 50 per cent of Somany´s exports are to the GCC market, with the company having undertaken work for airport and road projects in Dubai along with several villas in the GCC. ¨We also see a good futuristic opportunity in bidding for the upcoming FIFA projects,¨ adds Bhatnagar. For Khan, ¨The main strength of Qutone lies in customisation. We consider tiles not as a commodity, but a fashion, and so, we continuously update ourselves with this fashion.¨ He adds, ¨In Saudi Arabia, which is the biggest market in the Middle East for tiles and ceramics, we are market leaders.¨ Integrated solutions give customers the freedom to be creative. Massaad says, ¨We have one of the largest ceramic manufacturing plants in the world, with all the latest technologies under one roof.
With technology, we have evolved from being a ceramic manufacturer to becoming an inspirational lifestyle ceramics brand.
We are able to consistently produce high quality tiles, sanitaryware, tableware and faucets with an impeccable finish.¨
The company´s products feature in iconic buildings like the Burj Al Arab, Atlantis on The Palm and Ferrari World, Wembley Stadium, The O2 Arena, Princess Noura Bint Abdul Rahman University, KSA, a few Mercedes Benz showrooms, airports, residential developments and shopping malls.
Manufacturing or exports?
RAK Ceramics has grown from a single factory in Ras Al Khaimah to becoming a global player; and Somany prefers exporting to the GCC from India, considering it to be a more cost-effective business model. While Asian Granito India believes that it is faster to export to the GCC market, it has plans to set up a manufacturing facility in the GCC. Qutone does not have plans to set up a manufacturing facility in the Middle East, owing to the non-availability of raw materials for producing tiles, which have clay as their main ingredient. However, Khan says, ¨We are open to partnering, through JVs, companies who need our assistance in setting up factories in the region.¨
Qutone recently received a contract from a leading manufacturer in Iran - a big manufacturing hub for tiles - and will be supplying its products to them. Khan says that considering the demand from the Middle East market, the company´s business is definitely growing, and based on this, it has invested in additional new production lines in India.
RAK Ceramics produces 110 million sq m of tiles, 5 million pieces of sanitaryware, 24 million pieces of porcelain tableware and 600,000 pieces of faucets per year at its 17 state-of-the-art plants across the UAE, India, Bangladesh and Iran. ¨We specialise in ceramic and GrFs porcelain wall and floor tiles, tableware, sanitaryware and faucets,¨ says Massaad. In the UAE, besides the distributor, the company also sells through 10 retail showrooms across the country and 40 trade-partner showrooms, supplying to mostly retail and small contractors.
It is evident that companies in the sector are well prepared to further drive the market in the region - that too, with style!
- Seraphina d´souza