In April, while China’s ceramic tile retailing hasn’t fully recovered, some big ceramic companies have already received orders for thick tiles worth hundreds of millions yuan from construction projects.
On April 29, the Yinmei brand under Mingsheng Ceramics successfully got two bidding orders for glazed porcelain thick tiles from Longfor Group, a listed company who focused on property development. Since mid-April, Yinmei has got four orders from construction projects with a total value of 150 million yuan.
On April 26, Hongyu Group (ceramics) became a strategic partner with Evergrande Tourism Group on outdoor granite tiles, which belonged to a Fortune Global 500 listed company-- Evergrande Group that focused on real estate. Before that, Hongyu had outbid other competitors and signed strategic cooperation contracts with Greenland Group, China Merchants Group, Tahoe Group Co., Ltd., and Helenbergh China Holdings Limited, four big real estate companies in China.
Also in April, Sanfi Ceramics won the bidding and reached strategic cooperation with Sichuan Languang Group on wall and floor tile supply. The order is worth hundreds of millions yuan.
Fujian Wanli Ceramics as well won three tenders consecutively in April for thick slabs, with a total value over 100 million yuan.
Kito Ceramics gained two strategic procurement orders, one from Greenland Group for outdoor granite tiles, the other from Seazen Holdings Co., Ltd for exterior wall glazed porcelain thick tiles.
On April 17, New Jincheng Ceramic signed a strategic cooperation agreement with Guangdong Haiyi Group, only two months after its strategic partnership with Tahoe Group in February.
Increasing Demands for Thick Tiles in Recent Years
According to the general manager of Kalona Ceramics, the demands for tiles with the thickness of 2 CM will reach 1.5 to 3 billion square meters in the future. “Currently, the producing capacity of thick tiles can not meet the demands. I believe the booming for thick tiles in China would at least last for four to five years. ”
“We now have five thick tile production lines which produce only thick tiles. We plans to build one more at the end of the month.” said the president of Wanli Ceramics.
“Nearly all the ceramic factories in Fujian province have thick tile production lines. Some of them may produce thick tiles for a couple of months which would be put in stock for sales in the future, as thick tiles have only a few patterns and are not easy to go out of style.” said a manager from Qunyi Pigment.
The ban on mining in the stone quarries in Fujian province has driven the development of thick tile market. In addition, the low porosity, excellent performance in resistance to breaks, stains and frost all make thick tiles a good alternative to natural stone tiles. Moreover, thick tiles are not as heavy as nature stones, which gives it the advantages in transport and processing.
At present, thick tiles have already been widely used in squares, outdoor yards, pavements, and gardens in China.
Real Estate Companies Seek for Strategic Cooperation with Ceramic Companies
In the summit dialogue during the CCPL event, deputy president of Eagle Ceramics indicated that since 2019, nearly half of the top 50 real estate enterprises in China had sought financing with building material suppliers, for the stringent regulation and control on real estate by the Chines government.
In 2020, more and more real estate enterprises are seeking for a strategic cooperation with ceramic companies. Besides wall and floor tiles, outdoor and exterior wall thick tiles are getting popular among real estate companies. They are included in these companies’ strategic purchase list.
However, some manager in a ceramic enterprise told CTW that only big ceramic companies could receive such orders as real estate groups were at the same time looking for tens of millions of financing. Small companies do not have the money to invest.
Especially this year, enterprises in the upstream chain tend to seek business with real estate companies by directly investing money. From January to March, the ABS bonds issued by real estate industry has reached 49.76 billion yuan, accounting for 28% of the total issued bonds.
In the past, most real estate companies emphasized on lower price, longer payment time, and better quality and services while looking for a material supplier. Now things have changed. “Ceramic enterprises are no longer in an inferior status in front of these real estate companies as they need our money for development.” said the president of Dongpeng Ceramics.