Episode Transcript
[00:00:01] Speaker A: Tilecast news, features and analysis brought to you by diary vitaladict hello and welcome to Tile cast, your insider's guide to the latest news in the ceramic tile sector worldwide. As ever, I'm joined by direct Joe Simpson. Hello, Joe. What have you got for us this week?
[00:00:30] Speaker B: Hello, everybody. Right, well, let's kick off with some statistics which I said I'd do last week. Just depict a few from the latest report as the rest will be available on diary of a tile addict. And they make quite sober reading.
Global tile production decreased 5.5% in 2023 to just under 16 billion. Having just seen the cream of Europe's tile production struck their stuff at Chesaidhouse, many might find it hard to believe that Europe now accounts for just 10.4% of global world tile production, with Spain at 8th and Italy at 9th in the league table now accounting for less than 2.5% of world production each. With this places them behind Brazil, Iran, Indonesia, Egypt and Vietnam, while India at 15% and China at over 42% are now streets ahead of everyone. In volume terms.
[00:01:30] Speaker A: Just out of interest, where was Europe? I mean, how big a fall has this been?
[00:01:37] Speaker B: Well, when I started writing about it, they would have probably accounted for more than 50% and probably nearer 60%.
So it's a massive change in three decades, essentially.
[00:01:50] Speaker A: Okay. And the USA must be starting to come onto the radar in terms of production.
[00:01:56] Speaker B: No, they won't really.
[00:01:57] Speaker A: Just so small.
[00:01:58] Speaker B: It's too small. I mean, you're talking a handful of factories. The fast emerging ones are places like Egypt, Saudi Arabia, where they are really ramping it up. And a lot of this is with investment from other car producing nations who are trying to move outside their home base.
[00:02:16] Speaker A: Right? Right. Okay, so any other surprises in the stats?
[00:02:19] Speaker B: Okay, how about one? Ghana is now the world's 8th largest tile exporter and that places it ahead of Mexico, Portugal and other really long established tile nations. I mean, I think that's pretty impressive.
[00:02:34] Speaker A: I mean, maybe we're just showing our age, but I mean, it means your whole perspective on who makes tiles is completely different, isn't it?
[00:02:40] Speaker B: But that was my point. I mean, we go to these big european tile shows and we still largely see spanish and italian tiles, but really they're a drop in the ocean. That's 5% of world production. So, you know, if you're really wanting to have get a global grip on it, you really have to be in Asia.
[00:02:59] Speaker A: Okay, so it's the start of a.
[00:03:01] Speaker B: Trend then, I think. So we're going to see the Middle east and Africa emerge as the new tile production powerhouses after China and India.
And it's, as I say, it's largely because the Chinese in particular, are investing in overseas production and collaborating with local players, much as Italy has done in Tennessee over the past decade.
[00:03:24] Speaker A: Right. That's all very interesting. I think it shows that perhaps in the future, the big shows to go to will be in maybe the Middle east, maybe Africa.
[00:03:34] Speaker B: I think that's quite possible. I mean, there is a new one kicking off this week in South Africa that may well be, you know, the name to follow going forward.
[00:03:44] Speaker A: Right. Although a long way from Ghana or.
[00:03:47] Speaker B: But that's the trouble with Africa. I mean, where do you. If you want to put it, right in the center of Africa. You're going to a place where there's probably no tile production and not very good transport links. So it tends to be either North Africa or South Africa or maybe somewhere like Nigeria or Kenya. But, yeah, you know, it's a fool's errand to say that Africa is one place because it's.
[00:04:10] Speaker A: South Africa is probably one of the most stable nations within the continent.
[00:04:14] Speaker B: Well, it's also one of the most established in these kind of things. Cape Town has long been a kind of a venue for these events because it's got the.
[00:04:22] Speaker A: It's a design center.
[00:04:23] Speaker B: It's a design center and it's got the hotels and it's got the air transport links, but, yeah, that's probably ten years away.
[00:04:31] Speaker A: Yeah. Okay, so any news close to home?
[00:04:34] Speaker B: Yeah, I'll start with the sad news that Neville Johnson, the man widely credited with inventing the concept of the fitted kitchen, has died at the age of 81. He went from selling four mica worktops from a garage in Manchester, creating several multi million pound businesses, including the eponymous kitchen and later, staircase businesses. But I think it's great that his name's going to live on as the brand now owned by B hid still has his name proudly above the door.
[00:05:03] Speaker A: So put this in context. Neville Johnson. It was a british company. They probably weren't re international, were they?
[00:05:09] Speaker B: No, they weren't, but they, you know, they were pioneers of quality fitted kitchens and along with names like Smallbone and John Lewis of Hungerford, must be one of the most revered names in the UK kitchen sector. He's a truly inspirational figure.
[00:05:26] Speaker A: From inspiration to bafflement.
[00:05:29] Speaker B: Yeah, too right. I've been scratching my head ever since I learned that the Competitions and Markets Authority has opened an inquiry into the recent acquisition of CTD tiles by Topps tiles.
[00:05:40] Speaker A: This is UK again.
[00:05:42] Speaker B: UK again. But, you know, a significant, two very significant players in the UK and in the global terms. So if you cast your mind back a few weeks to August, you'll remember that tops acquired 30 CTD tiles and the business intellectual property rights in a deal worth around 9 million. So that included CTD trade, CTD architectural tiles, as well as the retail operation and selected stock. Now, the CMA has served an initial enforcement order, an ieo on tops tiles plc and tiles for less limited, with the launch of an official merger inquiry likely to follow in the near future.
[00:06:25] Speaker A: Okay, so what does that mean for the business?
[00:06:28] Speaker B: Well, in short, Tots will have to delay any further integration of the CTD tiles business, and the CTD brand will have to carry on trading independently until the CMA's inquiry is closed. What I find baffling is that the CMA's remit is to investigate significant lessening of competition in the wider market. I don't see that adding 30 more stores to tops portfolio, over 300 shops, is really going to have a profound effect on the market, particularly as tile giant and Kajaria added over 20 stores between them in the same deal.
My hope is that sense will prevail and the focus will be more on the jobs that have been saved in a really hard retail market and that the CMA will conclude that no further investigation or action is needed. The 42 million pound debt mountain left behind by CTD was quite enough. Bad news already, I think.
[00:07:20] Speaker A: Yeah. Yeah. So is that all the news in the mergers and acquisitions?
[00:07:24] Speaker B: No, not a bit of it. The big is better theme continues. And while the Crest Nicholson Belway acquisition, these are two big UK house builders who tried and failed to merge. Barrett and Red Row have had their deal accepted by the CMA to create a 2.5 billion pound merger. It's interesting that you'd think that if they're going to worry about top style buying CTD, if you get two enormous players like Barrett and Red Row getting together, that that is okay, because we're talking about 23,000 homes and a 7 billion pound plus joint revenue annually.
[00:08:06] Speaker A: Right. So that house building giant has just been born then?
[00:08:11] Speaker B: Yeah.
It's going to be headed up by David Thomas, the CEO of Barrett, and they aim to make around 90 million pound worth of annual cost efficiencies. And about 10% of the combined workforce, or around 800 jobs, are going to be lost. But the result will be a real powerhouse that should shape the future of uk house building going forward for some years to come. We'd think.
[00:08:34] Speaker A: Okay, well, let's hope that's good news. Although it sounds like there might be some job losses there.
[00:08:38] Speaker B: Yeah, they're going to be some job losses. I think that was kind of inevitable. I mean, these. You're talking about two companies with pretty big staff levels, but probably better to have one that's really strong than two that might be as strong. I don't know.
[00:08:54] Speaker A: Yeah. Yeah. So, back to tiles. Anything more on the Ceramique internationales acquisition?
[00:09:02] Speaker B: CI, as we call it?
[00:09:03] Speaker A: Yeah, well, let's stick with acronyms. We've got a lot of acronyms already today, but go on then.
[00:09:08] Speaker B: Yeah, well, anyway, it's now public knowledge. Ceramique International is now officially part of a group of companies that include external tiles, bathrooms, spectrum paving and tiles, Penrith Tile Centre and Exton tiles Poulton. The main benefit is strengthening the combined commercial offer, while the spectrum range of paving and tiles will now be available through ceramics distribution to Sea's retail customers.
It'll be interesting to see what happens to CI tiles and mosaics retail, Sherman Leeds and the online e commerce website going forward. You'd think that they're going to be ripe for investment.
[00:09:47] Speaker A: Yeah. I mean, this is all northern based, isn't it?
[00:09:50] Speaker B: This is Leeds.
[00:09:50] Speaker A: This is the UK based.
[00:09:52] Speaker B: Yeah, CI are based in Leeds.
[00:09:54] Speaker A: That all sounds positive. So how's the market doing?
[00:09:57] Speaker B: In a word, challenging. Doesn't matter which sector. Retail distribution, commercial contract specification. It's hard out there. Tight margins and intense competition tops tiles, who is a great bellwether for the UK tile market, saw sales falls 6% in the last year to just below 250 million. But the last quarter of trading saw a marginal improvement over the rest of the year. But weak demand in the domestic RMI sector. So repair, maintenance and improvement. But trade sales have been quite resilient.
[00:10:30] Speaker A: And all bad news for the UK.
[00:10:34] Speaker B: Well, on the positive side, victorian plumbing revenues are up year on year, even if they fell 1% on a light for light basis.
The acquisition of Victoria Plumb. And remember, these were separate companies. Victoria Plumbing, Victoria Plum. All very confusing.
Victoria Plumbing bought Victoria Plum in May 2024, which has boosted their order volume growth.
And the company has now taken the decision to close Victoria plum business by the end of the year, which they are seeing as an opportunity to accelerate their own growth. Basically, they've taken a competition out, got rid of some confusion in the market and one strong players should be moving forward strongly. That's their hope.
[00:11:21] Speaker A: Yeah, and it will make your Internet searches a lot easier. So what about needs from further afield.
[00:11:26] Speaker B: Okay. A couple of stories caught my eye this week. The first was an impressive high rise contract completion in the USA. One Domino square, which features two massive towers, the tallest 55 storeys. It's located by the Williamsburg bridge in Brooklyn, New York.
Designed by Seldorf Architects, the towers have been clad in a really distinctive pearlescent porcelain tiles. They were chosen for their reflective qualities, which contrast with the light grain granite cladding on the six story pyramidal base that supports the two towers. They were manufactured in Spain by cor Associados Architectos, and I think it's the kind of scheme that can take ceramic facades to a whole new level.
The pictures I've seen, obviously I haven't seen it in the flesh, are really impressive, brilliant, and they're going to go.
[00:12:17] Speaker A: Up on the website.
[00:12:19] Speaker B: I will be putting them up as soon as I can source some better quality images.
[00:12:23] Speaker A: Yeah, brilliant. Okay, and you said two stories. Where next?
[00:12:26] Speaker B: Okay, well, surprisingly, Austria, I don't think a country that's ever featured in dire Batale to date. And I have to say this isn't a tal story, but it's just. Having bumped around the UK's and potholed roads for the past few years, this tale just instantly chimed with me. An austrian based construction group, Strabag, has just trialed the first autonomous asphalt paver workstation on a sector of the a nine near Graz. The system uses a special module for autonomous control via a digital interface and features object recognition sensors and satellite navigation to keep it on the right course, which opens up fantastic minds of this thing going.
[00:13:12] Speaker A: Is this just a thing wandering around, filling in potholes? Does someone occasionally put some more asphalt in the top?
[00:13:18] Speaker B: I presume so. They didn't mention how you get asphalt in the top, but that was the whole thing. It's also other robotics technology will also be used on the project, including mobile safety cone robots, which I think is a fantastic idea, which are used to segment the trial section and then in a very blade runner refinement, these were coordinated and networked by drones. And then once the fresh asphalt has been laid, small autonomous three wheeled robots with paint tanks will mark the roads.
I know it's not a tall story, but I really want to watch the film.
[00:13:57] Speaker A: I think this looks like something that could be hacked into and could just run amok. Great for a stag night, actually, wouldn't we? That's the thing, yeah. Okay, back to news skills.
[00:14:09] Speaker B: Yeah. Does appear to be a bit of a recurring theme at the moment and it's been highlighted by a study from the construction platform plan radar that found that labor shortages are the top challenge for all house builders. And I'm not just talking UK house builders here. With 65% experiencing wage increases and over 75% citing project delays due to labor shortages, this report surveyed 669 companies from 17 countries. So it really is a big global issue.
And underlining the problem, the most recent purchase managers index shows that the construction industry in the UK is plagued by global skills shortage. And the HKA's crux Insight report identifies the global skill shortage as a mega disruptor. With nearly 50% of projects across the world having issues which will all be attributed to gaps in skills and or experience, the report lists aging workforces, a lack of investment in human capital and failure to attract younger talent is the key cause of the problem. But it's a big issue and it's not just affecting tiling, it's affecting everything.
[00:15:23] Speaker A: But it's also been rumbling along in the background for a very long time. It wasn't like nobody knew this was coming. What can be done?
[00:15:31] Speaker B: No, I mean, I think one of the problems is that every country has probably looked at it and thought it's, it's our problem and actually it isn't. It's a global problem and we've got to start basically attracting more people into construction. We've got to make it look like a better career choice, whether that's, you know, designing, purchasing or installing materials.
[00:15:53] Speaker A: Yeah, well, I guess it doesn't look like you can earn your money quite as quickly as you can on TikTok. I guess that's one of the issues with the younger workforce, isn't it?
[00:16:01] Speaker B: I think that's right.
[00:16:02] Speaker A: So. But you're hoping to do a little bit, your little bit towards this, aren't you? Install a show?
[00:16:08] Speaker B: Yeah, I am, yes. I'm planning to do my little bit. I think they're going to be some initiatives at next year's installer show that will be a step in the right direction, least here in the UK. As I say, we need to convince school leavers, graduates and career changers that construction is a great industry and obviously that tiling is a great part of a great industry. And I'll be doing my small bit at the NEC in June next year. But one of the keys has to be to grab people's attention. And that's why I'm so excited by the installer show's plans for house, which is Hausden, a full scale two story dwelling that will be built at the 2025 event using NBS's adept modular system, and it's going to be built in just three days. The whole idea is it's designed for full adaptability and non destructive disassembly.
[00:17:05] Speaker A: What does that mean?
[00:17:06] Speaker B: Basically, you can take it apart and put it up again without any lack of quality or.
And the idea is that after the show is finished, house will become a case study at the University of Suffolk, where it will be tested to study the building's energy performance. The ultimate goal is for it to become a pilot for sustainable development for local authorities and commercial developers. As I say, I think it's a really exciting initiative, and it's certainly one that's grabbed people's attention, talking to the people who are running the show. Their phones have been red hot since announce this plan.
[00:17:43] Speaker A: Right. That sounds fascinating, actually. I mean, if you really could put it up and take it down, maybe we should all just buy our houses and just move it to our next plot of land.
[00:17:52] Speaker B: Yeah, you're going to need a lot of these nice, flat asphalt, though roads for you wandering around.
[00:17:57] Speaker A: Oh, that's okay. Well, we'll send the austrian bot in first and sort out the road works. Okay, so, um, I got. That's it for this week's news. What about a takeaway for Talcast loyal listeners? Something to keep their brains firing for the next seven days.
[00:18:11] Speaker B: Okay, challenge accepted. KBB, a leading publication in the american kitchen and bath industry, has named Free Power as its 2024 kitchen product of the year. This embedded wireless charging technology has also claimed the top spot in the smart innovation category. Freepower brings embedded free position wireless charging to workdops. That is you. You can just leave your phone on the worktop and it'll charge.
[00:18:36] Speaker A: So it's actually set underneath the worktop?
[00:18:38] Speaker B: Yes, it's inset. It's one of the great things that you can do. Along with invisible induction hobs with porcelain worktops, which is why I'm excited about it. This one features a trademark device, a charging halo that combines edge to edge power with interactive lighting. Free Power's flagship three device wireless charger is now rolling out across the USA through hundreds of worktop fabricators and kitchen and bathroom specialists. It's a great USP for choosing porcelain worktops. Other invisible charging brands are out there, of course, but this seems like the perfect I'm working from home kitchen upgrade, and it's, you know, it's something to shout about.
[00:19:17] Speaker A: Okay, again, I presume you're putting on the website about that, and you say there are others, so maybe at some point.
[00:19:23] Speaker B: Yeah, no, there are a few. I've done stuff with them at other shows. I think it's a really. It's a really neat technology. You can either put something on the worktop to show where it is, or you just have to remember, like, a lot of these things because it's hidden. You have to explain it when you sell the house. But, you know, it's. We all know the pain of looking for a phone charger if you've got one built in and you can just leave your phone top, it seems to me it's a great addition to any kitchen.
[00:19:53] Speaker A: Yeah, brilliant. And would be compatible with all phones, presumably that can do that.
[00:19:58] Speaker B: Yeah.
[00:19:58] Speaker A: Maybe we need to all upgrade phones.
[00:20:00] Speaker B: Well, we're all going to have to upgrade whatever. I mean, we're on that relentless commercial treadmill, aren't we?
[00:20:05] Speaker A: So that's it then. Joe, thanks again for good news updates.
[00:20:11] Speaker B: All right, Cheerio, folks. See you next week.
[00:20:14] Speaker A: Okay? And don't forget to, like, subscribe. Share the link to the podcast with all your friends and family and anyone else you think you might be interested. We can't do without you.
[00:20:25] Speaker B: And send your news stories to tileukol.com. that's tileukol.com.
[00:20:32] Speaker A: Brilliant. Thanks, Jo.
[00:20:33] Speaker B: Bye.
[00:20:34] 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.
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