THAILAND CERAMIC INDUSTRY

Ceramic Industry

Ceramic industry mainly uses domestic raw materials, requires high labor-intensive and aims at fulfilling the government policy in creating employment and distributing income to regional areas. Therefore, it is one of the most important industries.

1. Production

Ceramic production still expanded more from the increase of production capacity of each factory in order to meet the domestic real estate business’s needs that tended expand continuously but at a decelerating pace from booming to normal conditions. This is caused by a clear reflection of the measure to control real estate credit approval of the Bank of Thailand and the cancellation of governmental measures stimulating the real estate business. As the purchasing power for real estates used in 2003, a demand for construction materials including floor-tile, wall-tile and sanitary ware has begun to slow down and is not as strong as in the previous year. In 2004, 142.16 million square meters of floor-tiles and wall-tiles have been produced which is an increase of 18.28 % from 2003, and 7.79 million pieces of sanitary wares have been produced which is an increase of 6.65 % from 2003. (See Table 1)


2. Marketing

2.1 Domestic Market

Domestic distribution of ceramic continues to expand but with a slight slowdown corresponding to weaker conditions of real estate business expansion. In 2004, 151.63 million square meters of floor-tiles wall-tiles have been sold which is an increase of 8.72 % from 2003, and 4.36 million pieces of sanitary wares have been sold which is an increase of 20.27 % from 2003. (See Table 1)

Domestic distribution of ceramic is highly competitive because it must compete with imported products from foreign countries, especially from China, while the domestic selling prices of ceramic tend to be higher as a result of oil prices in global market. Many entrepreneurs’ policies have focused upon middle-end-market and high-end-market to enhance value-added to their products by emphasizing on research and development on new products, design, marketing strategy including advertising through media, increasing the number of distributors, improving displays, adding more product shops, and participating in the exhibition and product fairs.

2.2 Export

Most ceramic products have been exported to Japan, U.S., United Kingdom, Australia, Taiwan, Canada, Germany, Hong Kong, South Korea and ASEAN countries. In 2004, the export value of ceramic products is US$ 540.3 million, increased by 3.01 % from 2003 (See Table 2). This is an increase in the U.S. market, the main market for floor-tile and wall-tile, while the exporting growth rate of other products has declined almost in every main market.

2.3 Import

In 2004, the import value of ceramic products is approximately US$ 219.6 million, increased by 41.59 % from 2003 (See Table 2). They are mostly imported from Japan, China, Germany, Malaysia, Indonesia, Italy, U.S., Singapore, Spain and Taiwan, etc. Mostly, products with high growth rate of import are good quality and expensive, which cannot be produced domestically, such as fireproof brick and laboratory devices that are imported from Japan, and products with lower costs than those produced domestically, especially floor-tile and wall-tile that are imported from China.


3. Summary

Domestic production and distribution of ceramic, particularly ceramic that are used as construction materials such as floor-tile, wall-tile and sanitary ware, have continued to increase as a result of the expansion of domestic real estate business even though the expansion is not as strong as last year. This is caused by measures controlling real estate credit approval from the Bank of Thailand, cancellation of governmental measures stimulating the real estate business, and rising interest rate. However, the production and distribution of ceramic products still have a positive trend because major markets of ceramic are those who buy it for home improvement. Particularly, in the southern provinces damaged by Tsunami, there is an urgent need to revive the tourism business and repair a large number of houses. For the sales of ceramic, prices tend to increase as a result of oil price change. Export of ceramic products is at high growth rate with positive trend. However, export of ceramic can be affected by devaluation of the dollar.