The Spanish tile industry survives the year of the pandemic

Preliminary estimates point to 2020 sales of between -1% and +2% of the 2019 figure thanks to exports to the USA, Germany, France, Saudi Arabia and the UAE

Daniel Llorens

The Spanish ceramic tile industry has overcome the year of the Covid-19 pandemic with good results. According to the national trade association Ascer, the preliminary 2020 figures suggest that the sector’s total turnover will not differ greatly from the 3,757 million euros of 2019, with a projected year-on-year variation of between -1% and at best +2%. Even a 1% downturn would be a very positive result given the huge hurdles that businesses have had to overcome, especially during the early months of the pandemic. Of course, this result is far short of the 6% growth that the Spanish ceramic tile industry had set itself as an achievable target for 2020 at the beginning of last year, but no one could have imagined what would happen during the year!

Ascer’s chairman Vicente Nomdedeu described 2020 as “the year of uncertainty”, while pointing out that after the toughest months (March and April saw a decline in turnover of almost 50%), the Spanish ceramic tile industry has made a steady recovery, especially in international markets. By contrast, the domestic market experienced a more negative trend and has been unable to return to its normal sales levels.

Exports make up 75% of the sector’s turnover and are expected to see between 1% and 4% revenue growth in 2020 compared to the 2,818 million euros of 2019.

Domestic sales on the other hand are expected to close the year with a decline of between -7% and -4%.

The Spanish industry also lowered by 3-4% its production volumes (compared to the 510 million sqm of 2019), a move that has enabled companies in the Castellón district to balance out supply and demand and significantly reduce their inventories.

Nomdedeu himself acknowledges that the tile industry’s results “are apparently positive, especially when compared to those of other sectors that are going through very challenging times”. However, as Ascer’s chairman points out, because of Covid-19 “the sector has suffered a 5-6 percentage point fall in revenues and the recovery in sales has not been uniform across the sector, with some companies enjoying growth while others experience serious difficulties”.

The figures for Spanish tile exports in the first 10 months of 2020 up to October show a sharp rise in sales to the United States (+15.1%), which has become the largest export market ahead of France, which still recorded a positive +1.8%. Spain also registered export growth in Germany (+16.6%), Saudi Arabia (+71.3%, with a further increase in November to +90.8%) and the United Arab Emirates (+52.6%). Regarding Saudi Arabia and the UAE, one of the most important results achieved by Ascer in 2020 was the outcome of the anti-dumping investigations in the Gulf countries, which led to measures being imposed against tile imports from India and China but not from Spain. As evidenced by the figures, this has enabled Spanish companies to occupy certain market segments in this region.

By contrast, the UK was one of the foreign markets where Spanish exports saw a decline, largely due to the pandemic. Sales were down 9.8% to the end of October but by the end of November had regained a little ground (-4.5%).

“The Spanish ceramic tile industry is a net exporter,” explains Nomdedeu. “It is the fourth largest sector in Spain’s economy in terms of trade surplus, with a surplus of €2,700 million in 2019 that has helped reduce Spain’s trade deficit by 8%. Moreover, the Castellón ceramic tile district accounts for 14.4% of the industrial GDP of the Valencian Community and over 20% of that of the province of Castelló alone. We generate a significant knock-on and multiplier effect, as every euro of direct GDP in the sector produces 2.1 euros of additional GDP for the national economy and for every direct employee there are 2.8 indirect employees.”

Based on these figures, the Chairman of Ascer and the sector in general are calling for greater attention from the central government and the Valencian Community, for example through the development of an integrated plan to boost demand with projects and incentives for the renovation and renewal of the building stock. Further measures sought by the sector include reducing the tax burden to allow companies greater liquidity, training of tile layers to remedy the still low levels of specialisation, supporting research into technologies that help companies adapt to the European Union’s decarbonisation objectives, and digital transformation of the district and the distribution channel.