by Louis Iannaco
There are several obstacles currently preventing the ceramic segment from taking flight, according to industry executives. The economy, obviously, leads the way with raw materials costs and low-cost goods from around the world also among the main culprits. Also thrown into the mix are installation issues—from its cost to its number of failures.
And yet, many still see reasons for optimism. Why? For one, said economy turning around, albeit slowly—with an increase in home sales leading the way. Also, new technology that yields innovations such as slim tiles and digital printing.
Year to date, ceramic sales have shown some growth, according to Lori Kirk-Rolley, senior marketing director for Dal-Tile. She estimated the category’s growth between 4% and 6% in both square feet and dollars.
“We believe two factors contributed to this,” she explained. “A pick-up in housing and continued commercial growth, and there is some evidence of upgrades starting to increase as interest rates continue to stay at record lows.” Dal-Tile sales have exceeded industry growth, she said, with second-quarter sales increasing 8% on a constant exchange rate.
Bart Bettiga, executive director of the National Tile Contractors Association agreed with Kirk-Rolley in that the first six months of 2012 were slightly ahead of 2011. The commercial market continues to lead the way, he said, while residential remodeling has also seen a slight comeback.
“New residential construction projects continue to be sluggish,” he explained. “One positive trend is that both labor prices and the selling price of the tile and installation materials have gone up slightly. We expect 2012 to increase by no more than 5% in units with sales dollars up a little more, perhaps as much as 8% for the year.”
Hector Narvaez, vice president of sales and marketing for Marazzi Tile, sees things the same way, estimating the industry up 5% in volume through June—in line with expectations. “The difference will be the second half of the year. All indications are it will be softer than the first, perhaps even below last year’s numbers. So far, the year has unfolded much like we were expecting.”
He said the biggest challenge has been an over supply of low-priced goods from around the world, which makes it difficult for domestic manufacturers to compete with their high quality products. “Raw material costs are always an ongoing concern as they continually keep climbing.”
At Florida Tile, marketing director Sean Cilona said the company is up double digits in sales through the first half of the year. “This is in line with our budget and puts us in a good position for future growth. This is budgeted, but we’re obviously very happy that we are meeting those goals and working hard to surpass them.”
As Rocamador Rubio, director for the Trade Commission of Spain noted, while it has been mainly the economy that has affected the industry, it seems it is recovering in the U.S. “We just hope for the best, especially the economy in Europe so the companies there can focus on what they do best—manufacture quality products.”
Rising energy and raw material costs are always a concern, Bettiga said, but he feels two of the biggest issues today center on product quality and an alarming trend toward devaluing the importance of quality installation. “Installation failures in the tile industry are impeding our ability to increase the market. When you couple this with a trend toward new technology in which products enter the U.S. market without standards developed for installing them, you’re creating significant risk of failure.”
Jim Dougherty, director of tile business at Mannington, said the relatively high cost of installation is one of the issues that is always a factor in tile. “It can be a barrier for some consumers, yet in parts of the country, where tile installation costs are similar to other floor coverings, tile is used much more often.
“Secondly,” he added, “the lack of growth in home values has impacted the tile market because homeowners are putting off remodeling projects that would increase the value of their homes.”
Thin is in
One of the newest innovations in the tile industry is the increasing use of thin or slim-format tiles. Whether for floor or wall applications, the advantages of thin tiles include their ability to be placed over existing surfaces, therefore cutting down on the time spent on each job.
“Thin tile is a recent innovation gaining traction in the tile industry and presents a unique opportunity for the commercial marketplace,” Kirk-Rolley said. “Thin tile allows you to design with the beauty of tile in places where its weight and thickness traditionally limited your options, specifically the wall.”
Recently, the Daltile brand introduced its own line of thin tile called SlimLite, which includes Porcelain Panels and Slate & Quartzite. “The true advantage of these products lies in the endless design possibilities,” she explained, “as they can be installed over existing surfaces, including concrete, ceramic, wood, metal, plywood, fiberglass, backer board, tile, dry wall, painted surfaces, door skins, cabinetry columns and more.”
Crossville recently entered the thin category, as well. “Obviously, with our recent introduction of Laminam by Crossville, we believe that thinner, but more importantly, larger-format porcelain panels, will gain acceptance by U.S. designers,” said vice president of marketing Lindsey Ann Waldrep. “The versatility this product offers is amazing. Because of the flexibility in how these panels are used, the market is broad-reaching and even hard to define. This product can be used on such a wide range of surfaces.”
Bettiga noted while it is too early to have a clear-cut idea on the percentage of thin tile in the marketplace, it is relatively small. “But the design options for this product are fantastic, and we think the technology is here to stay.”
Green standard
Earlier this year the Tile Council of North America (TCNA) announced the establishment of Green Squared, the world’s first consensus-based sustainability standard and certification program developed exclusively for tiles and tile installation materials. ANSI A138.1, the standard upon which the Green Squared certification program is based, is a multi-attribute sustainability standard which was written by an ANSI-accredited standards committee.
When asked how they thought the recent passage of Green Squared would affect the industry moving forward, execs gave their unified stamp of approval. “Both designers and consumers expect corporations to be sustainable now and are very savvy to greenwashing,” Waldrep said. “Green Squared unifies and verifies green standards for our industry.
“Green Squared certification quickly identifies those who are committed to sustainability at large and provides a common platform which gives integrity to the industry,” she explained. “As one of the first companies to receive Green Squared certifications (we hold certification on all our U.S.-produced products), Crossville is committed to educating the A&D community on this important initiative.”
Daltile and American Olean were also among the first brands to endorse the initiative. “All of our U.S. facilities and our Monterrey, Mexico, operations were included in the third-party audit process, so architects and designers can be confident a selection of our products already meets the new standard’s stringent requirements,” Kirk-Rolley noted.
“As the use of sustainable products in building projects becomes more important,” she explained, “architects and designers are looking for products manufactured in an environmentally responsible manner. In the case of tile and tile installation products, Green Squared provides a green certification process architects and designers can trust.”
The new standard will help Dal-Tile better assist its customers in the specification of tile products that meet both the sustainability and usability needs of the spaces they create, Kirk-Rolley said. “The certification offers a clear definition of what the industry defines as a green product, thereby, making it easier for our customers to identify environmentally friendly products for their flooring needs.”
Eric Astrachan, TCNA’s executive director, couldn’t agree more. “With the establishment of the Green Squared/ANSI A138.1 standard, the North American tile industry has a unified position and standard for what it means for a product to be green. “Its passage led to the establishment of Green Squared Certified, a program through which internationally recognized, approved third parties can assess and certify products found to meet all requirements of the standard. With the emergence of Green Squared Certified products in the marketplace, consumers will be able to easily identify which tile products are truly sustainable.”
The need for an authentic, tile industry-recognized mechanism for acknowledging truly sustainable products was long overdue, he added, given the large variety of sustainability claims in the market. “Prior to Green Squared, the industry had no clear strategy for specifying products into green building projects.”
Moving forward, it’s expected the Green Squared/ANSI A138.1 standard and Green Squared Certified products will be acknowledged by various architectural standardization bodies and incorporated into green building standards, codes, rating systems and product acquisition initiatives.