Amongst the GCC countries, the Kingdom of Saudi Arabia (KSA) and Qatar are experiencing an increase in demand from the Building Materials industry due to their long term growth plans and World Cup related projects. This growth has witnessed increased participation of foreign players who in-turn have contributed to the overall market maturity.
As per Frost & Sullivan estimates, Chinese and European brands supply to more than 50 per cent of the ceramic tiles demand in the GCC, followed by local manufacturers along with small portions from other countries such as Malaysia, India and Egypt. More than 25 per cent of the total production in the GCC is currently being exported to non-GCC countries. It has been observed that demand for ceramic tiles is as high 70 per cent compared to a much lower 30 per cent demand for porcelain tiles. The UAE dominates demand for porcelain tiles, as there is high market penetration due to higher customer preferences and affordability. Furthermore, only 12 per cent of the porcelain tiles produced in the GCC is currently exported to non-GCC countries as the remainder is consumed in the GCC itself.
The major challenges for tiles market in the GCC markets are high degree of price sensitivity and emphasis on high quality. Additionally, availability of alternate products such as vitrified tiles is the key threat challenging the growth of ceramic and porcelain tiles market in the GCC. According to Frost & Sullivan estimates, as high as 60 per cent of new buildings in the UAE opt for vitrified tiles as these are more durable and long lasting compared to ceramic tiles. However, the influx of Chinese products has forced many GCC manufacturers to target only the high-end market, as Chinese products dominate the low-end market.
"Augmenting local production, aggressive marketing, and leveraging the existing distribution structure will bring down imports, which is currently one of the major challenges being faced by the tiles market. Product customisation, increasing product availability through prudent sales channel and applying innovation in manufacturing to cut down cost should be short term focus for the industry", said an Environmental and Building Technologies analyst from Frost & Sullivan.
Most of companies present in the GCC are planning to enter porcelain supply, as distributors fetch better profit margins for imports from China. Frost & Sullivan analysis forecasts that USD 4.30 trillion would be spent on the construction sector in the GCC over the next 10 years. Hence, the Tiles market in the GCC is expected to witness a positive trend and manufacturers are expected to give equal attention to exports and local market. Similarly, despite a low demand for Porcelain owing to cost-consciousness, as the market progresses in its life cycle, penetration of Porcelain is likely to increase.
If you are interested to know more about this market, please send an email with your contact details to Tanu Chopra/ Paroma Bhattacharya, Corporate Communications, Frost & Sullivan, at tanu.chopra[.]frost.com/ paromab[.]frost.com
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