U.S. Tile Sales Hold Steady; Imports Continue Fueling Growth

August 1, 2002
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Florida Tile’s new Islands Portfolio. Photo courtesy of Florida Tile Industries, Lakeland, Fla., a subsidiary of Illinois Tool Works.

2001 was a year of tragedy and unexpected developments. Planning and forecasting is a difficult job at best, and the events of September 11th further clouded the crystal balls of the prognosticators.

The Tile Council of America’s economist, Dr. Mark Glueck with Capital Economics, predicted at Coverings 2001 that tile sales would reach 2.562 billion square feet in 2001 and would increase to over 3.0 billion square feet by the year 2005. In October, Glueck reduced the forecast to 2.339 billion square feet for 2001, increasing to 2.711 billion square feet by 2004.

Figure 1

The early reports from the U.S. government (which are subject to revision) indicate that sales were actually 2.262 billion square feet. This is essentially no change from sales in 2000 (see Figure 1). It should be noted that these are factory sales to distributors as well as imports arriving in the United States and are not sales to consumers. However, on a long-term basis, the sales numbers are about the same.

Figure 2

Virtually every major tile consuming country is experiencing an economic slowdown. The U.S. has few barriers to trade; as a result, imports have consumed nearly 75% of the market. Imported products have fueled much of the recent growth, and exporting countries are aggressively pricing their products to further penetrate this market (see Figure 2).

Figure 3

Plant Consolidations and Expansions

Three factories closed during the past year: the KPT factory in Bloomfield, Ind.; the Winburn factory in Little Rock, Ark.; and the Summitville factory in Morganton, N.C. However, all three of these factories are still in place and could be reopened, or the equipment could be re-deployed if needed. Equipment has been moved from some older and formerly shut down plants to new locations as well. Some manufacturers have resorted to importing a segment of their product lines for domestic resale, while others have installed or will install new, highly automated and efficient production lines.

On a positive note, Crossville Porcelain Stone Co. built a new state-of-the-art factory in Tennessee that can produce over 20 million square feet of porcelain tile, and Florim USA has added new equipment to increase its output. Other factories have also increased or will soon increase their capacity, including Huntington Tile and U.S. Ceramic Tile Co. (a division of Laufen, which is owned by Roca). Dal-Tile (now owned by Mohawk) plans construction of a new high-volume factory in Oklahoma to start within the next year with a capacity over 80 million square feet of glazed tile per year. There are also rumors of other companies looking to build new plants, although the uncertain near-term market may cause expansion plans to be reviewed or rescheduled.

Figure 4

Current Sales Statistics

A year with no significant decrease in sales despite the sluggish U.S. economy in 2000 and 2001 portends a bright future for ceramic tile. It may be hard to predict the sales levels near term, but in the long run, tile is a winner.

Figure 5

The U.S. is the ninth largest producer of ceramic tile in the world (see Figure 3). It is the largest importer on a yearly square footage basis (see Figure 4) and is the fourth largest consumer of ceramic tile on an absolute basis (see Figure 5). The “sunshine states” of the south and west lead in ceramic tile consumption, particularly California, Florida, Texas and Arizona (see Figure 6). While the economy may have taken a hit last year, the tile market is still vibrant.

Figure 6

The category with the largest market share is large-form (12 x 12 in. and larger) glazed floor tile with water absorption of less than 5%. Porcelain tile with water absorption of less than 0.5% has also increased in market share. Both of these categories are produced by the dust-pressed method and are fired in roller hearth kilns. Product demand in the high fashion segment is for ceramic tiles that emulate natural stone products.

The bulk of growth in the ceramic tile market is in the low water absorption floor tile category. Recently, overseas manufacturers have altered their processes to decrease the water absorption range of their product. This will no doubt add incentive for the U.S. manufacturers to do the same. New factories will probably be built with highly automated production lines that will produce both glazed and unglazed porcelain tiles.

Future Trends

Many factors contribute to the popularity of tile. It is long lasting; easy to maintain; great for wet areas such as pools, spas, bathrooms and kitchens; and offers unlimited design possibilities. Designers are learning more about what they can do with the variety of shapes, sizes, colors, textures and patterns that tile offers. Technology permits the manufacturer to make an infinite variety of shapes and sizes with high-tech precision. And tile’s long life and low cost of maintenance makes it a bargain for consumers.

Many consumers are asking for porcelain tile, and factories around the world are responding to this demand by making both glazed and unglazed finishes. However, this product is not well understood by the consumer, and the industry needs to do a better job educating sales people and installers. Porcelain tiles are low water absorption ceramic ties that are very dense and strong, but they require high quality bonding materials for proper installation.

Ceramic tile is made from clay, which is one of the most abundant raw materials found all over the world. Its limited demand on natural resources and its long life make it a sensible choice for ecology-minded consumers. Additionally, according to medical authorities, tile does not harbor mold or staphylococcus. In an age where super-germs are becoming more prevalent and resistant to elimination, tile is seen as a smart choice.

We have gone through a tough economic and emotional period in the past year, but the future looks bright. The U.S. tile industry will undoubtedly be ready to meet the challenges that lie ahead.

Editor's Note

This article is based on a paper presented at Coverings 2002 held in Orlando, Fla., in May.

International Tile Markets at a Glance

Italy
The Italian ceramic tile industry accounts for 20% of world and 43% of the European Union’s tile production. The sector has 253 companies, 31,368 employees and an output in excess of 630 million sq m (~6.8 billion square feet). Investments in technological innovation and product developments account for between 6% and 10% of annual turnover and have increased constantly since 1996. Exports (70% of the country’s total tile sales) generate more than $3.2 billion and, along with domestic sales, bring total turnover to more than $4.4 billion.

Italian tile alone accounts for 40% of all international trade in ceramic tile. Europe is the main outlet for Italian ceramic tiles, with France and Germany the largest and most consolidated foreign markets on this continent. Italian tiles also have a commanding position in the Americas, particularly in the U.S. Italian tiles also enjoy a strong—and in some cases expanding—presence in Central and Eastern European markets and in Latin America, and a number of prestigious contracts have also been secured in Asia, Africa and Australia.

Source: Assopiastrelle (www.italiatiles.com/cti/home.nsf/Home_eng)

Spain
Spain produced an estimated 638 million sq m (~6.9 billion square feet) of ceramic tile in 2001. Foreign sales rose 6.2% in 2001 to reach a total of $1.8 billion by the end of the year. Sales to the U.S., the leading destination for Spanish tile, accounted for 11.4% of total exports with a value of around $200.4 million, almost exactly the same as during 2000.

The European Union absorbed 39.7% of all Spanish exports, valued at $699.1 million, with the best performing countries being France ($149.7 million, +6.6%), the UK ($139.6 million, +9.6%) and Portugal ($118.6 million, -8.0%).

Business with Eastern Europe improved by 18.5% overall. Exports to Poland dropped 21.2% to $41.4 million, but this was countered by a 36.7% increase in exports to other Eastern European countries, with Russia alone gaining 28.6% to $39.7 million. In the Far East and Southeast Asia, South Korea ($24.7 million, +101.9%) and Hong Kong ($17 million, -3.8%) were the largest consumers of Spanish tile.

The Latin American market also performed well, with exports to those countries growing 7.7% overall. The Venezuelan and Dominican Republic markets led the way with increases in consumption of 47.8% and 19.8%, respectively. Mexico imported 18.9% more tiles from Spain than in 2000 to reach a value of $42.7 million.

Exports to the Middle East rose 18.4%, due largely to the outstanding results achieved in Saudi Arabia (an increase of 42.1% compared with 2000). Sales to Africa improved by 20.8% but sales to Oceania fell 8.3%.

Domestic sales registered a 3.9% increase in 2000 to reach an estimated value of $1.3 billion. Total estimated sales increased 5.2% in 2001 to a value of $3.1 billion.

Imports of ceramic tile into Spain were valued at $41.2 million, an increase of 25.3% over the previous year. Ninety-four percent of the total volume of imports came from the European Union, principally Italy ($30.5 million) and Portugal ($5.2 million). However, imported products accounted for just 1.3% of domestic consumption.

Source: ASCER (http://spaintiles.info/eng/index.asp)

Turkey
With production of over 180 million sq m (~1.9 billion square feet), Turkey is the fifth leading ceramic tile producer in the world and the third largest in Europe. Ceramic tile production in Turkey constitutes 3.5% of world production and 11% of European production. Turkey is also the eighth largest consumer of ceramic tile in the world, and it satisfies 99% of its annual domestic demand of 110 million sq m (~1.2 billion square feet) with domestic production.

In 2001, Turkey had a total of 24 tile producing companies with a capacity of 250 million sq m (~2.7 billion square feet). Kale, Toprak, Ege and Eczacıba¿ı Groups, which are the leaders in the sector, are among the largest manufacturers in the world. Kale Group, with a capacity of 60 million sq m (~645.8 million square feet), is reportedly the largest plant carrying out integrated manufacturing under a single roof of the world. The average capacity of other tile-producing companies in Turkey is around 10 million sq m (~107.6 million square feet).

Exports increased eightfold between 1990 and 2000. Today, Turkey is the third largest exporting country in the world, with exports of more than 60 million sq m to over 70 countries.

Source: The Ceramic Tile Manufacturers’ Association of Turkey (SERKAP) (www.turkishceramics.com)

Editor’s note: All sales figures in the foregoing text were converted from euros to dollars using an exchange rate of 12/31/01 to minimize the effect of currency fluctuations.

For more information, contact Tile Council of America, Inc. at (864) 646-8453 or visit www.tileusa.com.

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