Trikeenan’s Riverstone

By Louis Iannaco
The ceramic tile segment is a growing one, no news flash there. But how companies are getting product into the country from locations all over the world involves a lot of know-how, overseas savvy as well as the cultivation and nurturing of international relationships. As several ceramic tile executives related to FCNews recently, sourcing the world for product can be both exciting as well as nerve wracking.

“Sourcing [ceramic] product provides real opportunities but also presents some real challenges,” said Zach Zehner, director of porcelain tile business, Mannington Mills. “The obvious and primary challenges are logistic in nature, such as transportation lead times and customs clearance, and the impact of rising energy prices.” As for importing, he noted, the U.S. tile consumption market share by country of origin has Italy at 21.4%; Spain 13.2%; Brazil 14.2%; Mexico 13.1%; China 7.7% and Turkey, 5.6% (FCNews, July 10/17).

“Of course,” he explained, “the steady increase in these costs has had a significant impact on the cost of importing tile, or any product for that matter. At Mannington we have worked diligently to streamline our processes to help control some of these costs, but like the rest of the industry we’ve also had to pass on some of these increases. Still, we think our tile products continue to provide a great value to the consumer.”

Marcio Muller, general manager of Eliane, North America, believes the U.S. ceramic tile market has become an example of a truly globalized market. “At any point of sale you will find products made in the U.S.A., as well as products made in Latin American, European and Asian countries. All Eliane factories are in Brazil, but we also complement our offering by bringing products sourced in Europe and the Far East.

Muller added that rising energy costs over the last few years have had a major impact on the tile industry. Not only on the transportation side, but also as it relates to the cost of natural gas used to fire the kilns and raw materials in general. “As a manufacturer, Eliane has absorbed a portion of the cost increase but we have had to pass on a price increase as well.”

Jim Dougherty, vice president of marketing for Florim USA, agreed with Zehner in that a couple of the typical challenges in sourcing tile from abroad concerns both logistics as well as lead times. “Besides [those two], another problem is shading. Shading, in a sense that many people have trim made for their field tile, and shading for trim becomes an issue. Typically, you have shading on the field tile, but you’re only usually getting one shade of trim.”

While admitting Florim does not import “a lot” of tile, with most coming from Italy, Dougherty noted the No. 1 importer is still Italy. “Ceramic tile really allows the designers to show their creativity, because the layout is critical and they can do patterning.”

Regarding energy costs, obviously always a major concern for those sourcing product from different parts of the world, Dougherty noted, “We’ve probably seen a 30% to 40% increase in the cost of getting containers over here from Italy. I can’t speak about other countries but I know it’s up at least that much with containers from Italy. Plus, there has also been a drag on ships because many have moved to the Pacific Rim, so there are not as many coming out of the tile-producing areas as there used to be. I know two years ago Brazil was backed up for about a six-month period.”

As far as reducing costs, he noted, “One of the things Florim is doing is putting in a rail head or rail line into our factories so we can ship via rail. We will have the capability of shipping to the West Coast, or anywhere in the country via rail as opposed to it all being done by truck.” Dougherty also said rising energy costs have been absorbed by Florim as well as passed on to its customers.

With the rise in demand for ceramic tile in the U.S. has come more sourcing from abroad. But what are some of the reasons for this rise in demand? One reason is that designers and architects are looking for a lot of functionality from the product in the sense of slip resistance and strength. There is no doubt the A&D community has created a demand.

“For all of our new products, including tile, we do extensive research on design trends and changing consumer preferences,” Zehner said. “Our product line remains focused on the specialty retail channel, but we are certainly keeping an eye on products, styles and visuals that are attracting attention from the A&D community. Part of our product development process will continue to include response to new product concepts from consumers and other end users, including those in the specifier community.”

Even when the entire product is not sourced, many companies source raw materials from around the world. For them, getting the main ingredients to make the product can be just as challenging the sourcing the product. “As a manufacturer, Trikeenan does not source ceramic tile, but we do source raw materials,” said Kristin Powers, co-owner and managing director of Trikeenan Tileworks. “From that perspective, it can be difficult to maintain or mandate an adequate supply at a quick turnaround time. As a result, we can sometimes be forced to pay higher prices or buy more than we need in the short term.

“To counter this, Trikeenan has started trying to get our suppliers to stock larger amounts of the products we require regularly. This is critical to positive production and cash flow—but not always easy to get suppliers to agree to.

“I do believe the A&D community has created a greater demand for ceramic tile, and they are helping to push the end user to look more closely at tile as a significant part of the design palette. Design shows have not had as strong an impact for us. However, we see them as being one more avenue to increase awareness and are considering exhibiting at high-end A&D-specific shows like NeoCon or hospitality shows. Other influences we see include the media, and attention to ceramic tile by magazines home decor resources, and more.”

As for the future, Zehner said, “We see countries like Turkey and China gaining strength in the market—particularly in the higher-end porcelain tile arena, which is the focus of our line. The tile market already has an abundance of ordinary product, and we’re confident that porcelain will continue to be a growing area because of its superior nature, performance and visual. As the quality of the porcelain product from these countries continues to improve, their presence will continue to grow.”