The Tile Industry in South Africa 2023

Introduction

The tile industry provides an important input to the building and construction sector. Some major players such as Italtile and Norcros SA are vertically integrated. Italtile’s manufacturing operation Ceramic Industries supplies more than 50% of the tiles used per annum. . The industry benefited from an increase in home DIY activity during lockdown, but now faces low economic growth, high unemployment, increased costs of living and poor levels of gross fixed capital formation. Manufacturers are faced with rising energy costs and growing pressure to adopt environmentally-sustainable processes.

Opportunities

Continued and intensified power cuts raising input costs and disrupting operations. International entrants leveraging weaknesses of rand and lower production costs. Ongoing global energy crisis, low economic growth and expectations of continued inflationary environment. OpportunitiesOutlook The outlook for the tile industry largely depends on expected construction and building activity. The construction industry has been in decline since 2017, and poor infrastructure delivery has further weakened the sector. A shortage of housing, growing middle class and extensions to RDP homes present opportunities. Companies are likely to face increasingly erratic and sparse power supply, increases in energy costs and reduced customer discretionary spend. Challenges to building activity in future include increasing energy input costs, construction mafia group disruptions and the failure of government to implement infrastructure development plans.

Report Coverage

This report on the tile industry in South Africa, including manufacture, wholesale and retail, provides information on the state of the industry and influencing factors including the pace of infrastructure development, levels of construction activity, building plans passed, retail sales trends, competition and barriers to entry. There are profiles of 20 companies including Italtile, Norcros SA, Union Tiles, Mazista and Metrotile and building materials companies such as Massmart and Spar Group.

Strengths

A widely distributed retail footprint across the country. Local company Ceramic Industries ranked among the top 25 ceramic tile producers in the world. Locally-available raw materials.

Threats

Eastern Cape provincial government IDZ clay beneficiation and building materials production programme. Housing backlog in South Africa representing potential demand. Implementation of increased infrastructure and housing budgets. New technologies to reduce negative environmental impact of tile production.

Weaknesses

Continued cost of living crisis reducing customer discretionary spend. Negative environmental impact of tile manufacturing processes. Rand depreciation that increases cost of imported goods. Threats Unreliable energy supply leading to disruptions in production.