【Part Two】Future Proofing - North Africa Sets for Tile Growth
Algeria, the second largest country in Africa is the second largest ceramic tile producer and market among North African countries. Catered by nine ceramic tile producers and significant imports, Algerian ceramic tile demand has registered average growth rates in recent years. Low crude oil prices have had some negative effect on the ceramic tile industry growth as the country's economy to a large extent is dependent on oil and natural gas exports.
The pace of construction activities started gaining momentum in Algeria in the second half of 2017. Large scale construction activities in commercial segment and government's initiatives of building 2.2 million housing units by 2019 under affordable housing scheme in order to address the current housing shortage is also expected to play a key role in the ceramic tile demand in the current and next year.
Average growth in ceramic tile industry and huge imports (though the import level has stabilized) have discouraged huge investment by existing players in ceramic tile industry. Though, the domestic manufacturing situation is more optimistic in comparison to Morocco. As a few factors have given a boost to domestic tile manufacturing industry in last three years. For example, since the second half of 2014, Algerian government has mandated that property developers with projects that are part or wholly financed by the state to use locally produced building materials rather than imported products. This made the positive impact on the domestic ceramic tile industry.
The modernization of building construction and growing demand among consumers for higher quality ceramic tiles has kept the imports at a significant level for past few years. Though, the volume of imports has stabilized in last few years, but it still form a large proportion of total domestic demand.
Spanish companies have a good presence in Algerian ceramic tile market. In fact, Spain is the largest exporter of ceramic tiles in the country. According to data from ASCER, Spanish tile producers exported ceramic tiles worth 123 million Euros to Algeria in 2016. Though, year on year, it was a decline off more than 5% as compared to 2015 (Spanish producers exported about 130 million Euros worth of ceramic tiles in 2015), yet, Algeria remains one of the key export markets for Spanish ceramic tile producer. In 2016, Groupo Porcelanosa, a leading Spanish ceramic tile producer opened a large showroom in Oran to facilitate the imports of ceramic tiles in the country.
Notwithstanding its small scale, Tunisian ceramic tile manufacturing industry has undergone significant changes during the in recent years. Domestic demand had increased by average levels. Major producers have added capacities and streamlined their operations resulting in increase off capacity. However rising imports and lack of demand in some of the export markets for Tunisian producers (most notably Libya) has led to low capacity utilisation in the domestic industry.
The Domestic industry has made various representations to different government authorities to take necessary actions against huge influx off ceramic tiles in the country in order to safeguard the interests of domestic producers. In early 2016, the authorities initiated anti-dumping investigations, which have not concluded till the time of writing of the article. by eight mid sized companies and a number of small units in Nabeul, Tunisian ceramic tile industry has an installed capacity of about 38 million square metres of ceramic tiles. Polina Group's subsidiary company, Carthago Ceramic is the market leader in Tunisia with a share of 32.74% of total installed capacity. Sisiter companies, Somocer and Sotemail, with a cumulative installed capacity off 10.2 million square metres per annum of ceramic tiles occupies the second position with a share off 26.75% of ceramic tile installed capacity in Tunisia.
Sources from Asian Ceramics AC18-1 Edition