Tilecast news w/e 12 July 2024

[00:00:01] Speaker A: Tilecast news, features and analysis brought to. [00:00:04] Speaker B: You by Dari Vitaladict. Hello, tile addicts, and welcome to Tile cars for weekending the 12 July 2020 a little bit housekeeping first, don't forget to subscribe or click like so that we can keep on growing the podcast. We are seeing increasing numbers week on week, so that's good. But we know it's all going to take time. But this is the most important half hour of your week. If you want to know what's going on in the world of tiles, you need to know who the movers and shakers are, who's been buying who, who's moved where, who's putting money in where, all very important stuff. If you want to know what's going on in the world of tiles. Our design focus is very much on the website, which is diaryofatileaddict.com. so go there to find out what's going on very much in the design world. So again, we have Jo Simpson, who keeps her eagle eye on what goes on in the market from week to week. Hello, Joe. [00:01:14] Speaker C: Hello, everybody. [00:01:15] Speaker B: And obviously this week we now know who is lead in the UK, well, based in the UK. So we will start with that because it has big implications for the UK market, if not for perception and how people are feeling about business. Joe, what's been the impact, do you think? [00:01:34] Speaker C: Well, the first thing to say is that Labour appeared to have hit the ground running. I don't think it was a complete surprise to them that they won the election, so they've obviously formed a plan of what they were going to do. And for me, the most interesting thing for the tile industry was that while construction, housing, whatever, took a backseat during the actual election campaign, Labour have put it front and centre in their first ten days, which is great news. Number one, the first thing is that Angela Rayner, the new deputy prime minister, is going to carry on the role that she's been already carrying out for the last year or so as housing minister, which shows the priority that Labour are putting on this sector with the deputy prime minister driving it. I think you can reckon that the key elements of their plan, which include 1.5 million new homes, boost to affordable housing planning reforms, new towns, etc, etc, actually might happen and backing that up. The other thing is that Rachel Reeves, the UK's first female chancellor, has also prioritised planning in her first major speech. Among the other things that she has prioritised, infrastructure developments, the end to the what she called absurd ban on offshore wind developments. And all in all, I would say that this is a very promising start. I mean, it's. It's really, really early days, but they're talking a good game. If they can deliver it, it will be fantastic news for uk construction in general, and the tiling industry, obviously, will benefit from that. So, a good start. [00:02:58] Speaker B: Right, okay, so. And do we have any more recent statistics on where we are with the construction market? [00:03:04] Speaker C: We do. I mean, it's fairly patchy. But the one that a lot of people refer to, which is the S and P Global's UK construction purchase managers index, or PMI, which is a seasonally adjusted index, tracking changes in total industry activity stood at 52.2 in June, 50 being the breakeven point. So it's slightly down from the maize figure, but the 50% percent no change mark has been exceeded for the past four months. So that's kind of good news. And it's not like dramatic good news, but it is showing a little level of sustained improvement in overall construction activity in the UK. The main driver, though, is commercial, and the only category to record a drop in activity was housing. My guess is that now, with Labour having been voted in, we'll see that turnaround in the next three to six months, possibly quite sharply. [00:03:54] Speaker B: Yeah, well, keep an eye on that. [00:03:56] Speaker C: Another good bellwether is normally how the large groups that involve tiling have done. And one of the biggest rocker has now reported its figures for 2023. And it showed a slight decrease of 1.7% from the €2.09 billion achieved in 2022, with net profits down to €27 million. But that was due to the fact they took a huge hit by the hyperinflation adjustment. In Argentina, Roca, which is based in Barcelona, is a big player. I mean, they're talking 79 factories, 20,000 employees and operations across Europe, America, North Africa and Asia. And I think that this is generally quite good news. I mean, only 1.7% down, given the turmoil in the global economy, is pretty good news. And they've also managed to increase their investment to €153 million plus, which is a 30% up year on year. And like a lot of others, they've been acquiring new companies. In 2023, they made three significant acquisitions. Madeleine, in the USA, which is in the sort of premium bathroom furniture segment. Clark, also in the USA, bathtub and shower tray company, and Alape, a german manufacturer of high quality steel wash basins. So, like a lot of the big groups, they are spending money on related topics. They're creating a one stop shop kind of idea. And, yeah, good luck. To them. [00:05:23] Speaker B: Okay, so you talked investment. I gather Chris Nicholson has been a bit more user. [00:05:28] Speaker C: Yeah, I mean, Cress Nicholson, one of the UK's biggest house builders, has had a couple of bids recently. It's rejected a bid by Avant Holmes, which is a house builder run by the former boss of Persimmon, James Fairburn, and funded by a New York hedge fund, Elliot. And it said it is now minded to accept a sweetened 720 million pound bid from Belway. What is interesting about this is that, I mean, last year, Barrett made a successful bid for Red row in a 2.5 billion pound deal. And legal in general, is believed to be in the process of selling the scottish based Carla homes. There's clearly an appetite for investing in the house building sector, and I think the news coming out of the Labour party is only going to drive that further. It's definitely a case of watch this space. I think there'll be other deals down the track. [00:06:18] Speaker B: Yeah. And so from elsewhere in the world, any other news? [00:06:21] Speaker C: Well, you know, we've talked about some of the economic turmoils in, in South America, so how about a bit of good news? Ceramica Canduelas, the argentinian ceramic tile manufacturer, has just fired up its third plant. This is believed to have a capacity of around 36,000 day, and it's going to be on the large format side. 50 by 50, 60 by 60, up to 60 by 120. As ever, italian machinery is firing all this up. In this case, sack me. It just shows, as tal addict and talcast always points out, this is a truly global industry and the key to it is the investment in cutting edge manufacturing technology. And this is ceramica. Canoe lasts, is just the latest example. On a more domestic side, Johnson Tiles, who, as we've known, has said it's in a stopped production and is now going to a purely outsourced model, has now opened a second retail site in Wakefield, West Yorkshire. So it's got now Stoke and Wakefield. This is part of the move to reposition the company following its exit from manufacturing. It's not a vast story, but it's an interesting change of direction that there is still investment in bricks and mortar tile retailing in the UK. And it's, you know, we've seen Tile Mountain and now we've seen a manufacturer, ex manufacturer Johnson, going down this route. So it's not all gloom and gloom in the bricks and mortar tile retailing. [00:07:48] Speaker B: Good news, people moving about. [00:07:50] Speaker C: Yeah, well, there's always, you know, moving about, and I'm not going to be covering all of them, but there's a couple of caught my eye. Number one is that litter Cole, who are one of the global leaders in ceramic tile installation products, you know, adhesive grouts, etcetera, who are based in Rubiera in Italy, have appointed Gian Lucas Gigoni as CEO. His appointment was announced by the chairwoman, Daniela Cotafavi, who's littercol's majority shareholder and the daughter of the founder, Luciano Cotofavi. Litticol is a big player. They've got eight companies located in Italy, Greece, China, India, Armenia, Ukraine and Russia. It employs around 650 people and generates revenues of around €100 million. So it's no sport player. And they've gone for a heavy hitter who looks to be going to drive significant growth in the company. So an interesting appointment, right? And the second one is much nearer to home, which is Capietra's parent company, has named a new group, MDO. The parent company, Sarsen Stone Group, has appointed Steve McGuire to this role. He's had a lot of experience in brands such as Tom Dixon, LSA International and established and Sons. He will take responsibility for the management of Sarsen Stones brands, which include artisans of devises, National Trust tile collection and proper good paint, as well as Capietra. This follows at the end of 2023 a comprehensive rebranding of Capietra, which was the culmination of many years work. Hamish Schmidt, the CEO of the Sarsen Stone Group, said, pointing, Steve is a major milestone for the company as we look to capitalize on Steve's expertise to spearhead our future growth and standing within the tile and stone industry. And I think it's going to be an interesting brand to watch because they occupy quite a unique design space. These kind of branded companies that, that support and work with retailing have been very dynamic over the past 1015 years and I expect to see them leading the industry going ahead. [00:09:52] Speaker B: Well, congratulations to Steve and Jan Luker and we look forward to hearing from all from those companies on general things that are going on in terms of initiatives. [00:10:00] Speaker C: And yeah, I thought I'd pick out a couple of these. The first one is that from the. Just coming up from the 17th to the 18 July, there is a huge flooring sustainability summit taking place in Washington DC. This has really got some pretty big names making presentations. There's Geoff Grove of ASTM International, who's going to be taking on the subject of standardization. Sarah Templin of Gensler is going to be looking at architecture and designer initiatives. And perhaps the biggest of all, Elliot dooms. The US General Services Administration will be looking at the area of federal procurement. I don't want to go into massive amounts of detail here, but if you are interested in seeing what the program covers, you can look at [email protected]. what is important about this is that it is really bringing together the whole industry. So it's being co hosted by the Tile Council of North America, the Natural Stone Institute, the Natural Wood Flooring association and the North American Laminate Flooring association. So it's getting a good spread. It's bringing everybody else under the green umbrella. I think it's a really good initiative. This is the first time this has happened in the US and I think it's going to be something that grows and grows. So good news. [00:11:14] Speaker B: So it's a shame you couldn't get to that one yourself. But presumably you'll be able to follow up from what. [00:11:19] Speaker C: Yeah, no, I'll be looking at the papers, following it online. Anything critical that comes through, I'll feed into dire over tile addict or tile cars going forward. [00:11:29] Speaker B: Brilliant. And so on to Spain. [00:11:31] Speaker C: Right, okay. Well, this is an interesting one, I think, as everybody who has read what I've had to say about the subject on Dara Vatar, laddict and in other places, Sevis armour has been struggling of late. It hasn't attracted all the exhibitors. It would alight with some notable absentees, especially the Pamesa group. And while the footfall has not been utterly disastrous, it's fair to say that it's where it was once challenging chasai, it is now, you know, firmly on the back foot. And to try and turn this around, the organisers have announced a very big marketing campaign for the next year's event. Interestingly, I mean, last year they really put the focus on international buyers. This year it seems like they're really targeting the domestic market. They're going to be running a, what sounds like it's going to be very expensive spanish guest buyer recruitment campaign with a particular focus on retail and buying groups, as well as running a special scheme for these groups who will be offered free hotel accommodation and some other incentives to a ton. They're also going to be extending this theme to local specifiers, architects, builders and interior designers. [00:12:41] Speaker B: Is going to become a much bigger show for Spain. Was that where it came from originally, before it went? [00:12:46] Speaker C: Yeah, international, definitely. I mean, I think perhaps one of the weaknesses has been that it has maybe tried to focus internationally and then lost a bit of sight of the local market. That's underpinning it as also because the spanish economy has been a bit of a basket case for the last. Well, for quite a while, really, since 2008. And so if you don't have that base underpinning it, it's much harder to run a viable international show. And I think this is probably a sensible move. You can get the local buyers down. It doesn't make a jot of difference to the international buyers, to the attractiveness of the show, but it gives more of a buzz there. It makes it a much better return on investment for the exhibitors and hopefully it'll tempt some of the stayaways to come back. But what is particularly interesting about this campaign, while it's obviously going to use its own database of spanish and international buyers to try and boost attendance, the exhibitors themselves will also be involved. This has been carrying on for several years, but now, at their own request, the exhibitors are being asked to play a bigger role in 2025. They will be able to invite their own customers directly and still benefit from the sort of subsidized accommodation route, which I think is going to strengthen the pull of that drive. At the same time, I'm also extremely skeptical that essentially bribing people to attend a show is sustainable in the long term. Really, you've got to put on an event that draws people there. Nobody's going to go to a tile show unless it's a good tile show, even if you pay for their hotel room. Certainly wouldn't. I mean, the only reason I travel to places like Revestirin is because it's a great show. Otherwise, you. You know, I would never fly to Brazil to go to an exhibition just because somebody's going to pay for my hotel room. I mean, life's too short to do that. So I think this is a laudable initiative. I remain deeply sceptical that it is going to prove to be the golden bullet for Sevis armour. But I would love to be proved wrong because it's a great show. It's a particularly good for UK buyers because, you know, we still do a tremendous amount of business with Spain, so I wish it well. And really, that's about it. The proof, as they say, will be in the pudding next year. [00:14:52] Speaker B: Okay, well, thank you, Jo. I think that's it for this week. Again, don't forget, this is the most important half hour of your week. If you haven't heard this, you won't know what's going on. We look forward to speaking to you next week. [00:15:02] Speaker C: All right, bye. [00:15:03] Speaker A: Folks, you've been listening to Talcast, produced by Diary of a tile addict to ensure you don't miss any future episodes, don't forget to follow us. You can also find show notes and receive updates on newsfeeds, articles, podcasts, and videos direct to your inbox by subscribing to thediaryofataleddict.com website. Get the inside track a diary of a tile addict.