Tilecast News w/e 15 June 2024

[00:00:01] Speaker A: Tilecast news, features and analysis brought to you by diary Vitaladict. [00:00:20] Speaker B: Hi, tile addicts. Well, we're back after a bit of a break, and the good news is that this will now become a regular weekly slot. Well, we do a brief roundup of the most important stories that have been happening in the tiling world. So as usual, Joe Simpson is the oracle who's been traveling the world gathering information. Hi, Joe. [00:00:39] Speaker C: Hi there. [00:00:41] Speaker B: So, you know, tell us what is going on. But first of all, I must a little bit of housekeeping. We must apologize for the bad sound quality of this particular recording. There is a bit of a howling gale outside, and we're not in a soundproof space. So if you hear stuff going on in the background, it's not Bigfoot trying to get in. We are just on a bit of a windy, cold, wet day. So anyway, Joe, what has been going on for the last week or so, as we've got a little bit of catching up to do. [00:01:09] Speaker C: Okay, well, it's nice to start with a bit of good news. And the good news is that Deutscher Steinzug, Kramer and Breuer and Agrob booktal have found an investor. The german tile industry has been going through a pretty bad patch at the moment. They've been particularly adversely affected by the war in Ukraine with energy prices, clay shortages, and the general increase in competition from China, India, etcetera. So this is really good news. A company called Metawulf has joined the largest german building ceramics manufacturer as a strategic partner. This is really hot off the press. The deal was only concluded on the 13 June, and it marks a decisive milestone in the continuation of the traditional ceramic industry in Germany and secures the future of four production sites over there. What I think is particularly interesting is that this takeover, which the investment sun is said to be in the mid double digit million euro range, is that not only will Deutsche Steinsehug become debt free at the end of the restructuring process and all its existing liabilities will be repaid. But this company it's teamed up with, Metawulf, are very strong in the sustainability sector. So the chief executive of Deutsche Steingold are very clear what they were trying to achieve, which is to preserve their broad portfolio, keep jobs, and offer architects, designers and their existing customer base the widest range of ceramic solutions for projects. But what Metawulf is doing is rather interesting. Their vision is to gradually electrify and thus decarbonize the production of tiles and create the necessary transformation that's already been initiated in industries such as steel and cement. So if they can pull this off, then they really are going to be bang on the market. They're going to have the german engineered ceramic solutions, they're going to have a green, great green story, and they're going to be based in the middle of a huge market. So it's very good news. And I think the german industry needed a bit of a shot in the arm. [00:03:18] Speaker B: And will they be one of the first to bring new energy methods to tile making? [00:03:24] Speaker C: Well, there is a lot of talk about particularly hydrogen in the market, and the problem with hydrogen is that producing it is so ungreen in its own way that that hasn't really happened. My feeling is that electrification will, at the end of the day, probably prove to be the answer. I mean, we've got huge roofs that can produce pv. There are lots of other ways that the tiling industry can generate electricity. I think it might be the way forward, but it's going to be a massive investment. The simple answer is, I don't know, but if somebody who's now got a big war chest that they're going to invest in green tile technology, I'm all for it. And I think that Deutsche Steinsug is a very good place to start. What they are telling us is that they're not yet able to comment on the details of the agreement and the reorganisation that's going to take place. So we don't know about any potential job losses, but I think they're going to be minimum. And the chief executive is just saying that we will be able to provide further information in the third quarter of 24. So that's from Dieter Schaffer's Boyce, and he's the head honcho there. So, yeah, good news. [00:04:37] Speaker B: Great stuff. Well, we'll keep. Keep an eye on that one. So, any other major mergers, acquisitions? I gather something's been going on in the States. [00:04:45] Speaker C: Yeah, well, this is a story that's close to tile Addict's heart, because our good friends at Marola Tile, and for those of you don't know, I do some consultancy work from Arolla Tile and have done, for the last couple of years, they have acquired Pan american ceramics. Now, for those of you who don't know, Morella Tiles, they're a New Jersey based distributor, a fantastic company, because John Marola is a real keen fan of small format, highly decorated, high value tiles. So basically, he's been swimming against the tide in America for some time now, and it's wonderful that the market is now swimming in the same direction as him. So he's literally got a big jump on the rest of them. He buys very sensitive, believe, from some fantastic factories, but he was based in New Jersey, so Pan american ceramics is a californian based, also has two sites and they're now going to be trading, going forward as pan american ceramics by Marolla Tile. Tom Carr and his entire team are on side. Seems to me it's a marriage made in heaven. So they're going to be. It's an important milestone in Marolla's development, but an important milestone in the whole american tile industry, because they are. They're going to be driving the decorative side, then they're going to be completely avoiding the kind of race to the bottom in commodity large format tiles. I think it's really good news and I'm delighted for John and his team, who are a really great, committed, passionate bunch who love tiles. I mean, if I'm a tile addict, John is an Uber tile addict. He has a fine collection of historic tiles. He can talk tiles to anybody. He loves tiles. And it's great to see passion rewarded. [00:06:35] Speaker B: That's fantastic news. Yeah. Good. Well done, Marolla. So, anything new? Anything else going on? [00:06:42] Speaker C: Well, you know, there, obviously, it's not all great news out there. The market is very tough. And I think the sad thing is, it's not a news story as such, in that it was announced a while ago, but production has now stopped at the last uk volume tile production, Johnson. When I first came into the industry, the UK had several large producers, so there were companies like Pilkington's and then we had british ceramic tile. But Johnson's were the kind of always the. The one everybody looked towards. Their crystal brand was one of the very few tile brands, when I first started that anybody had ever heard of. And it's sad to see production stopping in Stoke on Trent, which was synonymous with tile production. So now we're just left with relatively small niche players. I mean, and good luck to them. But it does seem sad that it's happening now when post Brexit, moving tiles around the world vast distances seems a harder and b, even less sustainable than it was in the past, that there is no place for a volume manufacturer in the UK. Hey ho. I mean, it's not that they didn't try hard, BCT didn't try hard, Pilkington's didn't try hard. It's, you know, it's a statement of fact, but it does seem to me remarkable that we can't sustain a volume tile manufacturer in this country. And maybe if there was a new electrified production method. Never say never. [00:08:11] Speaker B: Absolutely. So, I mean, does that reflect the market generally? What sort of results are companies reporting at the moment? [00:08:20] Speaker C: Yeah, let's face it, the market's really hard. I mean, if there's going to be one bellwether at the moment, it's going to be Mohawk Industries, who are the largest player in the world. They own brands like Emil, Ceramica, Marazzi, Vitramex, etc, etc, etc. And their first quarter earnings for 2024 were $105 million. And this is down about 5.5% on a legacy basis. The ceramics segment is about 1.4% down in net sales, or 5% down on a legacy basis. They're doing quite well in terms of maintaining their margin and everything, and they're still investing in new printing, polishing and rectifying technologies which are delivering higher value. But, yeah, the market is. Is really tough. And if it's tough for Mohawk, you can bet your bottom dollar it's going to be tough for everybody else. [00:09:21] Speaker B: And what about any other companies? [00:09:23] Speaker C: Well, I mean, yes, if you're looking at the big retailers in the UK, that obviously means tops tiles. They are still a very well run company, but their latest interim financial results for the 26 weeks to the 30 March show that sales were down 5.8% year on year, but that they are continuing to take market share. Tops are saying that they overall the UK market something like 20% down. So you can look at it in two ways. You can say they're performing badly or they're performing very well, but I think they are performing pretty well for a big player in a really, really tough market. And it doesn't really matter who you talk to, the market out there is tough. And it's not just tough in the UK, it's tough across Europe. The italian figures, production figures, export figures are pretty low compared with preceding years. Same is true in Spain. And then there are huge factors playing into it. We've had the export tariffs on China, and now with the US looking for the same for India, there are a lot of unknown variables out there, and these are not just like little tariffs. We're talking 400% to 800%, I mean, and retrospectively applied. So it's really hard to predict what's going out there. The only area which I am hearing is positive is that in the top end contract specification distribution side, where they think the companies supplying that end of the market are doing well. But in. Certainly in places like the UK and right across Europe, a lot of developers are kind of sitting on their hands at the moment because of all the uncertainties, not only about the economy, but you know pretty well everywhere you look there's an election happening and elections are the really bad news. The construction industry generally, until they're all sorted and then I suspect we might see a, a loosening of the barriers. But hey ho, you know, it's a very strange market at the moment. I've never experienced anything like it. And when you talk to people normally, even the optimists in the tile industry, you know, always find the silver lining. Well, they're struggling to do so at. [00:11:38] Speaker B: The moment, but there have been a few events, certainly since you last did it, did a report for tilecast. There have been at least sort of three shows. Have they been reflecting all of this? There was sevis sama in Spain, coverings in the USA and Clerkenwell design Week. I know you've done a report on Chivas Arma and I know there's a report coming on coverings which will be on our online tile addict site. So to look up those, if you want to find out what Joe thought of those shows. But do you want to give us a quick summary, Joe, of what you found about them all? [00:12:12] Speaker C: Yes, I mean, it seems odd now to think back to, to February and Sevisama, and you can look at it in two ways. You can say it was a great show because there were some fantastic products there and you'd be absolutely right because some of the companies like Natousser Peronda really smashed it out of the park. They had some awesome products there. And as you say, I've been writing about them on Daruvatar laddic since. And if you read the PR releases coming out of the organizers, 70,000 attendance, all's well and good. But the simple fact is if you talk to the people who are attending, that is the distributors and big retailers who, you know, they were all very disappointed because there were so many big brands not there. And frankly, if you, if they're, and we're talking, you know, the biggest brands, companies like Pamessa, who are the biggest in Europe, if they're not attending, it diminishes the show. And you can't have everybody driving up the motorway to Castiglione to see it. You really need to get everybody in the same place because a large part of going to these shows is comparing light for light. You go and see one travertine, then you see the next travertine effect and you compare and contrast and you talk prices. It's not the same if you see one and then you have to drive an hour and a half up the motorway to the next one and it just doesn't work. So I think it needs a radical rethink. And just pretending everything's great, frankly, isn't going to get the job done. I don't know when people's patience is going to run out, but my guess is the next show is really going to have to pull its socks up, otherwise they're going to be serious questions asked. I've even heard people questioning the logic of going to bologna and interestingly, you don't hear that in coverings. Now, that may be two reasons for that. One is because it's the american market and everyone still thinks that the american market is where the golden pavements are. But also it's because the american show is fantastic in nearly every respect. You get a really good global spread of exhibitors. It's fantastically well organized. It always takes place in a very big exhibition centre with loads of hotels nearby. The flights are generally pretty good. Now, I know Atlanta, where this year's show was, is nobody's favorite venue, but next year it'll be back to Orlando. It's a great show, but then you look at the numbers who attend it and it's, you know, it's nothing like even goes to Sevis Armour, let alone to Chesai. And I really don't understand why because if I was a retailer and I only could go to one show, I would seriously think about going to bologna one year and going to coverings the next year and just going. If that was a one a year, I think that would be a really good way of doing it. [00:15:24] Speaker B: In fact, if those shows alternated, it would get a bit more of a bite of the cherry. [00:15:28] Speaker C: I mean, it's never going to happen because there are all kinds of national pride and loss of revenue and all the other kind of issues driving it. But that would make enormous sense to me. But I'm, you know, as everyone who's ever heard me talk about, I'm a big fan of the american show and I think it's. It's very well run. And this year, once again, what you. What really drives home to you is just how much stride forward the american producers from the Tennessee tile belt, or whatever they're now calling it, have taken. Because some of the best tiles on show were from american factories. They may not be. I mean, they're not all american brands, so to speak, because there's, you know, there are italian brands there, brazilian brands there are chinese brands there, but they are all now proudly american. And if there was, you know, one outstanding one at coverings, it had to be portobello. But what was really interesting with this year was the accent colours, which are the deep blues and deep greens. And to name check, Marola again, I mean, they really caught the mood because their stand on the inside, it had the same ranges facing one another, but they had the blue designs basically facing off against the green designs. A simple idea, but, boy, it really brought home. It just shows somebody who's got their finger on the pulse of the market. That was awesome. But, I mean, generally it was a really good show for new designs. And if I, you know, it's sad to say it, but the array of spanish tiles at coverings was better than the array of spanish tiles at its home show service armor. And that surely is not. Right. [00:17:12] Speaker B: Right. No, no. Quite telling, perhaps. So the other end of the spectrum in terms of scale, but not in terms of quality. Clerkenwell design week. [00:17:22] Speaker C: Well, Clerkenwell is a fantastic show and it's a fantastic show, largely how it's done, which is a whole load of showrooms linked together with exhibition spaces, street parties, events. [00:17:36] Speaker B: This is in London. We must just. For those listening around from around the world. [00:17:40] Speaker C: Yes. Clerkenwell was a bit of a rundown area of London, and it's now the design capital. It apparently has more creative businesses in terms of architects, interior designers, than anywhere else on the planet. This is in, you know, per square mile and somewhere in the region of 160 showrooms take part in Clerkenwell design Week. When they say a week, it's a three day show, has. Starts in the morning and goes on through the night. There's normally parties, there's all kind of designers showing off their wares and leaking about. I mean, Dari Vitalelec gets actively involved because we do curated tours of showrooms for the organizers, media ten, which is a really very interesting exercise. And tile is now one of the great categories there. There are somewhere in the region of 20 tile showrooms. Out of those 160, there's some stellar brands. So we're talking the florim group, Marazzi, Iris, Ceramica, and then there are the specialist distributors. So Domus, Solus, Parkside, Pentagon, Eh Smith, they've all got showrooms there. They're all taking part. So you see a fantastic array of tiles. But what I like about it, and it was really highlighted by. There is a pavilion there this year. It's a two story pavilion of the italian brands organized by the ITA, the trading body out of Italy, 21 italian brands, and they each basically just choose to show three designs. And so it's like a sweet shop of the very best in italian ceramics. And there are some huge companies like Casa Grande Padana, and then there's some very small niche ones, like, who do smaller formats, like tonalite. There was a company there I'd never heard before 950, but, boy, I'm going to be looking out for them in the future, because their stuff was jaw droppingly gorgeous. There's other niche players like Chezy and acquire Etoue, but it was just. It was really what they'd chosen to show. There were fantastic tiles from very well known names like Keope, Ricketti, Marco Corona, you name it. I mean, there were some awesome tiles there, and I loved it. But if they. Overall, if I had to say one thing, it was that this was the year when sustainability really had some physical presence. So if you just looked at the. The main distributors there, Domus had La Pietra Compata, which is a cold pressed tile made up with a lot of recycled material. Fantastic. Solas had its Manchester terrazzo. Parkside had a variety of different things, so it had mass, the new sustainable body from alucid, which uses around 90% less energy than normal tiles. It also had crea terra two, which is the latest iteration of that, of a zero waste wall tile. And it had its ethical stone terrazzo, which is 100% british made, using british stone. So it was really interesting to see all of that. But my favourite of all was actually from he Smith, which had something called crumbles, which was a terrazzo tile, where, rather than where you'd expect to see concrete, the background or the base, or the thing that was binding all together was terracotta. It was absolutely gorgeous. I mean, very, very beautiful. So it had a whole that kind of venetian terrazzo look, but as though it was in a fired and mud. I mean, just beautiful. But there was one other thing I really should draw attention to, which was luche by rack ceramics. This is a translucent white body tile fired at low temperature. And the great thing is that its light passes through it, so you can backlight it and have incredible book matched marble displays or whatever. When you're going around showing designers things, you can gauge people's reaction to it, and they just love this. You can immediately see the brains whirring and they're asking you really detailed questions and, you know, they're talking about specific projects, and that's one of the excitements of doing that. I mean, I can tell. I can tell you for sure that one, at least one of the designers is thinking about a specific project because they rang me up to ask me if I could recommend a tiling contractor in Alabama for them. So, you know, that's not a random thing, which you did, presumably? Of course I did, yes. So that's really, really interesting. So Clerkenwell's really good. And, you know, I think exhibitions still have like this, exhibitions where there's a lot more human interaction between the. The products, where people have a conversation rather than just a viewing, are the way forward. [00:23:07] Speaker B: So a full map, perhaps, going forward, that other exhibitions might need to look at. [00:23:13] Speaker C: Which brings us neatly on to the next point, because that's exactly what they are doing in a couple of weeks time. Diary of a tall addict is curating a space show at the NEC in Birmingham, England, which is the biggest exhibition centre in the United Kingdom. And we have put together a collection of 16 different companies products to basically show the installer industry. So I'm talking about tile fixers, processors, kitchen specialists, just what's out there. And we're going to be showcasing what you can do with continuous pressing rectification, the latest polishing systems, and then advanced digital techniques. So we'll be looking at sinking inks, we'll be looking at granulars and digital glues. And most exciting of all, I think this could probably be the first time you'll be able to get your hands onto the product that won the Alpha d'Oro at Sevisama this year from Rio Londa. So this is digital glazing. So this is really exciting. This stuff hasn't even gone off the production lines yet, so it's not commercially available and I think it'll be outside of their own exhibition spaces. This will be the first time anybody has had their chance to get their hands on it. So I'm really excited by that. And we've got some other stunning stuff from Spain, Italy, Turkey and beyond. [00:24:46] Speaker B: So details of that show you'll put up on the die of the tile addict site, just so people can check where, when, how to get. [00:24:53] Speaker C: I mean, it's the 25th to the 27 June at the NEC Birmingham. And if you want to know what a tile addict looks like, you can turn up. And I will be there. I will show you the tiles there. I'm doing it with Jane Addis. Jane was the new product and design manager at original style in a former life. And she's, I'm very glad to say, agreed to share the curating duties with me, and we're really excited about it because I think it's going to be a lot of fun. One thing I found at doing this stuff at Clerkenwell is people have a real thirst for understanding how these things are made. And once they understand them, they appreciate their aesthetics and technical qualities even more. And it's kind of become my mission. [00:25:40] Speaker B: So let's make a brief roundup then, because this is. We're trying to make this a fairly compact sort of podcast so that no one feels like they're committed to an hour of their lives just to know what's going on. So a brief roundup, something, something good news. We've got always got to end on good news. [00:25:58] Speaker C: Okay. So, yeah, I mean, the roundup is, in a nutshell. It's a very mixed picture out there. If you just take the example of Brazil, their exports were down nearly 22% in 2023, but they've bounced back. And overall production is something like up 40% year on year in 2024 and exports are up 5%. So it's a mixed picture out there and you just don't know. So how do you gauge what's going to happen going forward? Well, for me, the easiest barometer is the people who make the kit that makes the tiles. So there you're really talking about the big players being system, ceramics and SaCMI. Well, SaCMI's sales are up something like 12% year on year, around the 2 billion euro mark. So if somebody is investing all that money in kit in a year, 18 months time, that's going to mean really high end tiles running down the line. And they are selling new plant in America, they're selling it in China, they're selling it in India, they're selling it across Europe, and I'm sure they're selling it in other places I haven't heard of. So I think that's good news. While people are still investing in new plant, it's got to be good news for the tile industry. And that's where we're going to see innovations like digital glues and whatever's going to follow them are going to come to the market. And the end result, as we saw at Clark and well, design week, are some stunning products. And that's just going to win more tile specifications. More house owners are going to want to have the tiles in there in their homes. So it's good news. [00:27:44] Speaker B: That sounds great. Sounds like there'll be a lot to talk about in the future. [00:27:48] Speaker C: That's the plan. [00:27:49] Speaker B: Okay, well, thank you for that, Joe. Just to remind everyone. Do make sure you hit the subscribe button to make sure you don't miss any episodes, and there will be more coming down the line for the rest of 2024. And also make sure you go onto the website Diary of a tile addict, which you can also subscribe to where there is a whole wealth of fantastic articles about all the weird stuff that goes on around the place and really, really fascinating for designers and just any tile addict, really. So thank you Joe, and we'll hear from you next week. [00:28:23] Speaker C: Cheers folks. [00:28:25] Speaker A: You've been listening to Tilecast, 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 thediaryofataladdict.com website. Get the inside track a diary of a tile addict.