This document summarizes the competitive environment for ceramic tiles in the United States. It discusses historical and projected trends in US tile consumption and imports. The main suppliers of ceramic tiles to the US market are discussed. It also outlines the major players in the US tile distribution system including manufacturers, importers, distributors, home centers, and retailers. Key factors that may affect the future ceramic tile market in the US are identified as housing starts, competition between US manufacturers, and the number of professional tile installers.

1. The Future
Competitive
Environment for
Ceramic Tiles
Donato Grosser

2. Presentation Topics
2
U.S. Ceramic Tile Consumption & Imports
U.S. Ceramic Tile Distribution
Competitive Environment
Future Environment

3. U.S. Ceramic Tile
Consumption & Imports
3

4. U.S. Ceramic Tile Consumption, 2002-2015 (Million sq. ft.)
4
Source: U.S. Department of Commerce and TCNA data
2,649
2,815
3,148
3,258 3,315
2,675
2,268
1,959
2,057 2,082
2,194
2,478 2,490
2,737
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

5. 5
Source: U.S. Department of Commerce and TCNA data
$2,469
$2,599
$2,998
$3,083
$3,314
$2,714
$2,586
$2,062 $2,185
$2,268
$2,415
$2,802
$2,974
$3,265
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
U.S. Ceramic Tile Consumption, 2002-2015 (Million of $)

6. 6
U.S. Ceramic Tile Market: Main Suppliers in 2015
Country Million sq. ft. % of Total
USA 857 31.3%
China 546 19.9%
Mexico 508 18.6%
Italy 348 12.7%
Spain 136 5.0%
Turkey 86 3.1%
Brasil 85 3.1%
Others 171 6.2%
Total 2737 100.0%

7. 7
U.S. Ceramic Tile Imports: Main Suppliers in 2015
Country Million sq. ft. % of Total
China 546 29.0%
Mexico 508 27.0%
Italy 348 18.5%
Spain 136 7.2%
Turkey 86 4.6%
Brasil 85 4.5%
Others 171 9.1%
Total 1880 100.0%

8. Competitive Environment
8

9. Landed prices of ceramic tile by country of origin
(2015)
9
Country
Quantity
(million sq.ft.)
Landed cost of
import (million $)
Average landed
prices ($/sq.ft.)
Italy 348 695 2.00
US* 857 1259 1.46
Spain 136 194 1.43
Turkey 86 95.3 1.11
China 546 521 0.95
Brasil 85 60.5 0.71
Mexico 508 287.8 0.57
(*) Average price of shipments for U.S. customers

10. Competitors in U.S Tile Distribution
10
U.S. Tile Manufacturers
34%
Production
Foreign Tile Manufacturers
66%
U.S. Manufacturers’
Showrooms
Tile Distributors
Flooring
Distributors
Home CentersTile RetailersFlooring Retailers
Wholesale
Retail

11. Largest U.S. Ceramic Tile
Manufacturers
11
Crossville-1
Dal Tile-7+2 (one plant opening in 2016)
Del Conca-1
Florida Tile-1
Florim-1
Marazzi-3
Stonepeak-1
Atlas Concorde-1 (plant opening in 2016)
Wonderful Group-1 (projected in 2018)

12. U.S. manufacturers are also large importers
They distribute about 50% of all tiles sold in the country
through:
25% of all wholesale showrooms in the U.S.
Home Centers
Independent distributors
12
U.S. Tile Manufacturers

13. Ceramic Tile Distributors in the U.S.
13
1,353
1,346
1,376
1,370
1,374
1,392
1,320
1,330
1,340
1,350
1,360
1,370
1,380
1,390
1,400
2011 2012 2013 2014 2015 2016

14. Ceramic Tile Distributors in the US: by State, 2016
14
276
129
96
77 71
48 48 38 32 32
0
50
100
150
200
250
300

15. About 800 importers (Distributors and Retailers) handle
35/40% of tiles sold in the country
The largest importers are M.S.I., Emser, Bedrosians
that control 15% of all imports
They sell to builders, contractors and retailers
15
Tile Importers

16. Their share of ceramic tile rose during the recession
Home Depot, Lowe’s and Menard handle 30%+ of
tile sold to D.I.Y., builders and remodelers
16
Home Centers

17. Flooring retailers (about 15,000) handle 14/16% of
tile sold to consumers
Ceramic retailers (about 3,000) handle 14/16% of tile
sold to consumers and remodelers
17
Flooring and Tile Retailers

18. 21,725
16,630
18,334
17,558
18,258
1,713 1,353 1,370 1,374
1,392
6,986 7,226 7,805 7,685
7,659
0
5,000
10,000
15,000
20,000
25,000
2008 2011 2014 2015 2016
Tile contractors & Dealers Tile Distributors Home Centers
18
Home Centers, Tile Distributors &
Dealers

19. Future Environment

20. Housing starts
U.S. Manufacturers’ competition
Professional tile installers
20
Factors Affecting the Future of the US
Ceramic Tile Market

21. 21
Housing Starts and U.S. Tile
Consumption

22. 22
U.S. Tile Consumption Forecast 2016-2017
Year Housing Starts %
Tile Consumption
[Million sq. ft.] %
2017* 1,435 18.3% 295-312 9-12%
2016* 1,213 9.6% 271-279 7-10%
2015 1,106 10.4% 254 9.9%
2014 1,001 7.9% 231 0.4%
2013 928 18.4% 230 18.5%
2012 784 194

23. Three new factories being built
Danger of excessive capacity if market doesn’t
expand at the same pace
Weaker companies may suffer
Effect of imports
Increase of company owned showrooms
23
Manufacturers’ competition

24. The number of contractors went down
The decline is worrisome
It could create a bottleneck that might favor
competitive flooring products
24
Professional Tile Installers

25. Ceramic Tile Contractors and Dealers in the U.S.
25
21,725
16,630
17,447 18,863
18,334
17,558
18,258
0
5,000
10,000
15,000
20,000
25,000
2008 2011 2012 2013 2014 2015 2016

26. Thank you for
attending!
Any questions?
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