Go to mobile


17:44 22-05-2017
Volkswagen and Chinese JAC Motor set up joint e-vehicles plant
17:17 22-05-2017
Nobody wants to build sea terminal for $15m in Kaliningrad region
16:58 22-05-2017
Modern Olympic Center to be erected in Russian North Caucasus
16:40 22-05-2017
First wind farm to be built in Kaliningrad region
16:24 22-05-2017
Russian Defense Ministry plans large-scale construction in Crimea
15:57 22-05-2017
Agreement establishing Russian-Turkish Investment Fund to be signed
15:45 22-05-2017
Primorye to provide guarantees for completion of Hyatt hotel
15:31 22-05-2017
6-hectare plot of land in Yekaterinburg put on auction
15:15 22-05-2017
Wonderful 17th-century stone bridge discovered in Moscow
14:58 22-05-2017
$2-million four-lane road needs to be constructed in Volgograd
14:39 22-05-2017
30-hectare low-rise micro-district to be built in Moscow region
14:20 22-05-2017
Third of new houses in Russia to be built from wood
13:48 22-05-2017
Sika building company’s CEO becomes head of LafargeHolcim
12:57 22-05-2017
Chinese CRIG to build fourth metro line in Kyiv
12:00 22-05-2017
Modern hotel for guests of New Jerusalem to be erected in Moscow region
11:45 22-05-2017
Italian Pizzarotti to build two health care facilities in Russia
10:47 22-05-2017
Swiss citizens vote against construction of new NPPs
09:51 22-05-2017
Saudi Arabia, UAE invest $100m in Ivanka Trump’s Fund
17:54 19-05-2017
Spanish Bustren to develop documents for Second Metro Ring in Moscow
17:38 19-05-2017
Radisson Blue hotel in Olympic Sochi put up for sale
17:19 19-05-2017
Italians set to invest in Russia’s cheese cluster worth $52 million
16:55 19-05-2017
Gas hydrate extraction in China not to affect Power of Siberia – Gazprom
16:35 19-05-2017
$12m allocated to build airport terminal in Russian city of Saransk
16:23 19-05-2017
Project for Russian industrial zone in Egypt likely to fail, expert says
15:59 19-05-2017
Construction of integrated tractor plant launched in Russia
15:48 19-05-2017
Builders install 500kg bench overlooking Kerch Bridge construction site
15:23 19-05-2017
Construction Minister attends opening of new waste sorting plant
14:49 19-05-2017
Russian Foreign Economic Affairs Bank opens offices in Abu Dhabi and Bahrain
13:02 19-05-2017
Seven fountains to be erected in Island of Dream theme park in Moscow
12:43 19-05-2017
Premises for private clinics put on auction in Moscow
All news


«    May 2017    »

The Russian market for ceramic tiles: survey, analysis, forecast

logo russianconstruction.com
The Russian market for ceramic tiles: survey, analysis, forecast

Uneasy times are coming for ceramic tile market players.

In spite of the high market share for home ceramic tiles, importers and distributors have strengthened their positions in key segments and are playing an important role in meeting the various requirements of buyers.
On one hand, they are ready to offer cheaper Chinese ceramic tile – to be used when quality and design are not of great importance. On the other hand, they can offer the best designers’ Italian and Spanish production, which have always been the world leaders in this sphere.


The Russian producers of ceramic tile have made significant progress lately, but they are still outdone by the Spanish and Italians in quality and design. Of course, the customers’ trust in imported products associated with high quality adds much to their success. And the Russians are ready to pay more.

New reality
According to our forecast, the growth rate decrease in the ceramic tile market will continue, but it is not wholly negative. It is connected, first of all, with the consumption volume reduction in the corporate sector. If in 2013 the construction volume reduction was 1.5%, in 2014 there was a slight growth. According to a number of experts, its main driver was the implementation of large-scale state-guaranteed orders connected with the construction of sports objects for the Football World Cup of 2018, transport infrastructure (including the Vostochny Space Centre), the Baikal-Amur Mainline reconstruction, the Northern Latitudinal Railway and Transsib construction, and the expansion of Moscow.
However, from our point of view, it is too early to make any optimistic conclusions: a business activity decrease at the end of 2014 has influenced industrial development in 2015. Certain changes will influence ceramic tile demand reduction both directly, through the customers’ buying capability, and indirectly, through the real estate market. It is important to take into account the medium-term prospect of demand decrease after feverish demand caused by expectations of further price rises for real estate and the desire to save money by investing it in property. Mortgage loan raises will also add to real estate demand decrease, as banks will include increased default risks from borrowers.
All the aforementioned factors will result in a decrease in the sphere of maintenance and construction, which in its turn will lead to a ceramic tile demand decrease in the market. If we don’t do something to turn the tide, the market for real estate and mortgage loans and, following them, that of construction and construction materials, will stagnate.

The crisis is the time to act
The situation with local producers’ ceramic tile is quite ambiguous. On one hand, it is evident that with the current market conditions the tendency of import replacement will grow. The population purchasing capacity decrease will result in market restructuring and customer demand will focus on more readily available home-produced ceramic tile. National producers will strengthen their position in the market. Many plants have already felt the growing demand for their product and are ready to to enhance their production capacity. At the same time, the growing cost of gas will influence the prime cost of Ukranian ceramic tile, which might take the place of Russian imports. The fact that Ukranian tile costs less than others is advantageous for Russian producers, and even a slight increase in its price will quickly lead customers to home-produced tile. So, ins pite of economic stagnation and the ceramic tile market decrease, the situation is quite advantageous for Russian producers of this material. The weakening of the rouble is contributing to the customers’(including the premium segment) “switching over” to Russian product, and the Ukranian producers’ hardships will allow our producers to struggle for economy-class product consumers.
However, there are no grounds for excessive optimism: in spite of some positive aspects, Russian producers will come across a number of difficulties. They may have problems with expanding their capacities, innovations development and implementation. The process of expanding capacities demands large-scale investments in current economic conditions because of the growing cost of debt. Besides, much production use foreign equipment, the cost of which grows as the currency goes up. Many producers simply cannot exhance their economic capacity in the short term. As far as innovations are concerned, most of them come from abroad, and in these new economic conditions many producers cannot afford them.
The country’s economic downturn will not only fundamentally influence ceramic tile market dynamics, but will also change its structure in respect of the balance of imported and local production. In 2015, ceramic tile imports will probably decrease, based on the import volume reduction, by more than 30%, as forecast by experts.

Thus, the imported production trade business will fall into a trap due to several negative factors: simultaneously, a consumer demand decrease and growing expenditures for imported ceramic tile purchase. To retain levels of profitability, businesses will have to raise prices for imported goods, but the customers won’t be able to afford expensive imported production in the same volumes as before. Of course, this situation will make traders look for ways around the problem; one of the most probable way is choosing providers who are ready to lower prices for deliveries.
Changes are expected in the import structure. Some foreign producers won’t be able to cut their prices and will be replaced by more flexible providers with their own production in China. Even now we can see the growth in imports of Chinese ceramic tile at a time when the import of ceramic tile from Spain and Italy is decreasing.
In 2015, the Russian economic recession will make life difficult for the market players. The current conditions will become a challenge for them: reliable producers and providers of good quality ceramic tile are likely to retain their positions, but non-competitive players will leave the market.

Konstantin Timikhin, President of Construction and Ornamental Ceramics Importers and Distributors’ Association;
Dmitry Kuznetsov, Assistant to the President of Construction and Ornamental Ceramics Importers and Distributors’ Association


Related publications