Strategies of ceramic tile sector players on a dwindling market

Wall and floor tile consumption shrank by around 30% this year, to 200m euros, and estimates for next year are not indicating a trend reversal in terms of value. Under the circumstances, players' interest will again focus on reducing stocks of millions of square metres piled up starting 2008.

The only producer on the Romanian market, Lasselsberger, and ceramic tile distributors will fight next year on a market that will continue to fall, mainly targeting a larger market share, reads Business Construct monthly in its 29 October issue. Whereas Lasselsberger wants to profit from the fact that it is the only domestic market producer and absorb from the sales of importers, which have accumulated stocks and find it unprofitable to bring new products, Bulgaria's Kai Group, which arrived in Romania this year, wants to reach 25% market share by 2012 as it has its production facilities close to Bucharest. "(...) One of Kai's advantages is that it can provide high-quality import products at domestic producer prices," stated Catalin Rotaru, Kai Group's manager for Romania.

Instead, Delta Distribution, the biggest ceramic tile distributor domestically, has shifted to the luxury segment, a more profitable one, even though sales will fall by more than the 30% it had projected at the start of the year.

Ceramic tile consumption will go down by 30% this year, to 25 million square metres, the equivalent of around 200m euros, from the 15-20% market players had estimated. Domestic production now accounts for just 25% in the market, with the rest covered by imports from countries such as Spain, Italy, Bulgaria, China, Turkey and Egypt.

The low-price segment accounts for more than 50% in the market, with prices ranging between 15 and 25 RON/square metre. On the medium segment, namely 30-35% of the market, prices range between 25 and 70 RON/square metre, while on the premium segment, which accounts for 15% of the market, prices go beyond 100 RON/square metre, according to the data provided by KAI Ceramics.