It's dog eat dog in the tile trade
The stagnation of the overall economy, and specifically the real-estate sector, has meant, says a minor manufacturer of concrete roof tiles, that it is under pressure from the pricing policies of a large producer which controls half the market.
The Elephant Brand of the Siam Cement Group is the current market leader and is, says its competitor, putting the squeeze on it. Valit Jiyavoranand, manager of Mahaphant Group, which has 15 per cent of the Thai concrete-tile market, said: "As a medium-sized manufacturer, we are under pressure, with prices having fallen about 5 per cent at the beginning of the year." He said aggressive price campaigns had been launched in the flaccid market, which was hurting businesses when combined with the slowdown in the housing market. "The sale of concrete tiles to home-owners dropped by between 5 and 8 per cent last year, while projected sales declined by 10 per cent," said Valit. "We estimate that the retail sales of concrete roof tiles this year will be maintained or grow if the real-state sector improves," he said. "Projected sales of tiles are expected to be the same or better than last year," he added. Valit said the tile market had been slowing down since the second half of last year. He said the group had achieved growth of 4 per cent in retail sales and 3 per cent in project sales in the first quarter of this year, signalling a rebound, and that the growth in the construction of medium-sized homes priced below Bt3.5 million was increasing trade. Mahaphant, manufacturer and distributor of Ha Huang tiles and Shera fibre cement, recently launched the Granada concrete roof tile, which is aimed at the upper end of the crowded market. Valit said the group was confident of achieving Bt550 million in sales this year, an increase of almost Bt150 million from last year. He said Thai manufacturers needed to find a niche market through innovations to meet the lifestyle of target customers. "We realise that major consumers are concerned with finding a home that reflects their lifestyle and character, with a distinct architectural design," Valit added. "Tile-manufactures must compete to offer more advanced technologies in response to the different demands of consumers," said Valit. Deepong Sahachartsiri, product manager, said the Granada tile aimed to attract upmarket customers. "We will distribute Granada tiles through our more than 2,000 Thai dealers and introduce them to all major real-estate projects, designers and architects." The company has allocated a marketing budget of Bt40 million to promote the tiles, which have unique natural-earth tones and come in Spanish, French Riviera, Californian or Moroccan styles. The concrete-tile market is worth about Bt2.3 billion, and the group wants to see its sales grow by 60 per cent in 2008 and to increase its chunk of the tile market to 30 per cent by 2009.
Kwanchai Rungfapaisarn The Nation
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