With a number of offerings in floor and wall segment, customers are spoilt with a number of options in choosing their ceramic tile needs. However, different regions, age groups and end user segments often choose different variants of ceramic tiles. 

 

GCC or the Middle East region has emerged as one of the largest and most lucrative ceramic tiles markets, globally. The United Arab Emirates (UAE) is the most active construction market in the region, with the Kingdom of Saudi Arabia (KSA) and Qatar contributing as growth centers. There are over 10,000 projects under construction or in the design and planning phase in the GCC. The large-scale construction projects in this region consistently feed the demand for large volumes of ceramic tiles.

 

High per capita income of most of the countries in the region, rush of petro Dollars, emergence of the region as a tourist and business hub, never stopping constructions, race to outdo other countries in high rise and premium constructions and upcoming events like Dubai 2020 expo and FIFA World Cup in 2020 in Doha has led to a very steady growth in the demand of ceramic tiles from almost all the countries in the region.

UAE and Saudi Arabia are two of the largest and most lucrative ceramic tile markets from the volume and value point of view. Both markets are leading the growth of regional ceramic tile industry, and are being driven by young and fast-growing demographics, in addition to long-term transformational plans with Saudi Vision 2030 and the UAE Vision 2021. Some of the other countries in the region- particularly Qatar and Oman-are also catching up with the two leaders in demand growth of ceramic tile industry. 

Presence of two of the top global ceramic tile producers- RAK Ceramics and Saudi Ceramics- and emergence of a number of second tier producers in the region offers a number of option to the ceramic tile users in the region.

 

Besides regional production, imports play a major role in the GCC tiles market; the region imports almost 40 percent of this total demand. China, Spain, Italy, Egypt, and India are the largest exporters of tiles to the countries in the GCC. The region also actively exports tiles mainly to other nations i the Middle East and Africa. It is able to competitively price its products mainly due to the availability of raw materials and comparatively lower energy prices.

 

Though, exact numbers for ceramic tile consumption and production in the region in 2017 are not out. But, the ceramic tile industry had made gains of more than 8 % in volumes in the just concluded year. Regional construction market has exhibited growth in 2017, recording a 30% rise on year-on-year basis. According to a study by MENA Research Partners (MRP), projects worth $130bn were completed in the region in 2017, $30bn more compared to $100 billion for the whole of 2016, despite headwinds that extended from low oil prices to budget adjustments in many GCC countries.

 

Oil Slump A Continued Benefit

Though, it might sound surprising, but, slump in the oil prices is expected to act as a booster for ceramic tile consumption in the region. Though, in the short term, slump in the oil prices has Merely affected the economies of most of the countries in the Gulf Cooperation Council (GCC), which has lowered government revenues which have negatively affected spending plans.

 

Oil price volatility is anticipated to continue in the short and term. GCC governments expect to raise non-oil sector revenues to fund their spending programs and reinforce the regional economic growth. Most of the governments are reviewing their spending commitments and priorities on infrastructure projects. One of the key non-oil sectors that are earmarked to diversify revenue streams and economic base is real estate, hospitality and construction. These activities will boost the ceramic tile demand to a further high in the region. 

 

High Per Capita Usage

With a total demand of 526 million square meters of ceramic tile in 2016, GCC region is one of the highest per capita users of ceramic tile in Asia. Though, per capita tile usage differs from country to country (globally, UAE is the largest per capita user of ceramic tiles), but overall per capita tile usage in the region averages much higher than the global usage amount.

 

Differing Demands

Before understanding the buying trends for ceramic tiles in the GCC region, it is important to understand the end-using segments in terms of residential, commercial, retail and hospitality sub-segments in the GCC region.

 

More than 60 % of the volume and about 72 % of the total sales value of ceramic tiles comes from commercial sub-segment of construction in the Middle East region. Large & luxurious hotels, commercial establishments, hospitals and educational institutes accounts for majority of consumption of premium and luxury ceramic tile products.

 

Governments in the GCC countries are currently undertaking a number of measures to cope with oil price fluctuations and are continuously reviewing their spending priorities. GCC countries are expected to spend USD 560 billion on construction in the current year and 2019. Regional governments are now aggressively pursuing economic diversification programmes and therefore capitalizing on other revenue-generating sectors. This is evident in GCC economies retaining spending on key sectors such as hospitality to promote tourism, education, and health care.

 

Accounting for 40 % of the volume and 28 % of the value，residential segment has increased its share in the total ceramic tiles market in recent years. Increasing importance of residential market in the total construction mix has influenced the structural change in distribution of tiles in the Middle East. The market is characterized by a large number of high-rise apartments built by large and international contractors on one side and, on the other side; individual units are built countrywide by local contractors. While large projects procure directly, small individual units procure through the distribution or merchant network.

 

Regional ceramic producers account for about 34 % of this high value demand, while, the rest, i.e. 66 % of the region demand for high value ceramic tile is met through imports, primarily from Europe, China, and India. UAE, Saudi Arabia and Qatar are three largest users and importers of these premium and luxury ceramic tiles. These three countries imported about 62%, 68% and 100% of their ceramic tiles demand in 2016.

 

Ceramic Tile Buying Trends in GCC Countries

Regional governments' commitment to host mega events, such as Expo 2020 Dubai, 2022 FIFA World Cup Qatar and various initiatives of the GCC governments should boost the consumption' of premium and luxury ceramic tile products. 

High Value Purchases

In ceramic tile industry, the purchasing trends are greatly influenced by macroeconomic and demographic factors of any country / region. High GDR increasing per capita income and higher purchasing power, which are some of the key characteristics of the Middle East region play an important role in the purchase of high value/ higher quality ceramic tiles.

 

Home to a large number of High Net worth Individuals (HNI) makes GCC region a natural choice for luxury and high-quality products. The vast number of large-scale projects demands high-quality tiles mainly from the European market. The Middle East is the largest importer of ceramic tiles from Europe. Due to slowdown in European economies and construction markets, high-quality products have found their way into the Middle East market where there is a significant demand for the same.

 

Large Size Ceramic Tiles

Large sized ceramic tiles and mega slabs for wall & floor segments and countertop surfaces in large sizes (120 x 260 cm, 120 x 240 cm and 120 x 120 cm) have become very popular in last few years in the Middle East region. Offered in thicknesses of 6mm to12 mm, these mega slabs are preferred in commercial and high value home segments.

Stefan Schmied of RAK Ceramics says that large format tiles are gaining in popularity, as they provide a setting that promotes a very open look. According to Schmied, "The new trend at the moment is to go bigger and bolder. RAK Ceramics created an evolution in the large tiles segment of the industry with the launch of the extra-large format slab which appears almost as a single flooring or wall piece. The company was the first to manufacture it in the region using SACMI

 

Continua+ technology. Maximus mega slab is available in four gigantic sizes (135x305cm, 120x240cm, 120x120cm and 290x240cm) and three thicknesses giving customers the flexibility to choose."

 

RAK Ceramics began manufacturing of large size tiles back in 2001, when leading technology supplier Sacmi supplied (for the very first time outside the Sassuolo district) the technology needed to make tiles as big as 1200x1800 and up to 2 cm thick, a result then achieved with traditional pressing methods and a high-tonnage PH7200 press.

 

Mohammed El Shamy, director of Dubai, UAE based Arteco Ceramics, says that its large sized ceramic tiles have been very successful in the region due to its luxury appeal.

 

Shamy says, "We are proud to be the leading distributors of the large format porcelain tile from leading Italian ceramic tile producer, Graniti Fiandre. Maximum series, in its innovative 300*150cm format, combines design freedom with great flexibility. On one hand the maxi-slab dramatically reduces the number of interruptions in the design unit and on the other, the wide range of sub-multiples offered guarantees great versatility concept that goes beyond that of an individual slab. It enables designers to reinvent design criteria, giving them maximum freedom and minimal restrictions.

 

Though, GCC countries have one of the highest per ca-pita incomes and one of the highest living standards. But, there is a very healthy demand of low priced ceramics tiles in the region. While, a few years back the demand of most of the low price products was from the housing for expats and smaller cities and the towns in the region. But, low oil prices have forced most of the governments in the region to drastically cut their expenditure. This has resulted in these low priced ceramic tiles products finding a huge market in government run projects in the region.

 

  Edited from Asian Ceramics