EghtesadOnline: Producing half of the 550 million square meters per year of the domestic output of tiles and ceramics, Yazd Province is the production hub of these products in Iran, the deputy head of Iran’s Tiles and Ceramics Association said.
“There are 76 production units active in the field in Yazd and the industry has created jobs for close to 300,000 people from the province’s 1.138 million population,” Nasrollah Sharif-Fard was also quoted as saying by IRNA.
Iran’s tile industry enjoys cheap and abundant energy and raw materials combined with indigenous expertise rooted in history. However, due to the market recession caused by an ongoing stagnation in the construction sector as well as the tile and ceramic industry’s overproduction due to the unrestrained issuance of factory licenses during the 1990s, production and exports have followed a downtrend over the past few years and growth in domestic demand has been weak.
Chairman of Iran Ceramic Producers Syndicate Behnam Aziz-Zadeh said last year that more than 150 million square meters of tiles and ceramics in excess demand were piled up in warehouses across the country, Financial Tribune reported.
“Local producers are operating at less than half their production capacity,” he said.
The production capacity of Iran’s tile and ceramic industry stands at about 700 million square meters whereas actual production is in the neighborhood of 400 million square meters per year, said former minister of industries, mining and trade, Mohammad Reza Nematzadeh, at the opening ceremony of the 24th International Exhibition of Tile, Ceramic and Sanitaryware, also known as CERAFAIR 2017, opened in Tehran last year.
The ex-minister noted that close to $350 million worth of tiles and ceramics were exported from Iran during the fiscal 2016-17.
Representatives of 170 companies, including 40 foreign firms from Italy, Spain, China, Switzerland, Belgium, the US, the Czech Republic, Germany, the UK, Bulgaria and Sweden were present at CERAFAIR 2017.
Overproduction in the industry came about after Iranian producers experienced a seven-year boom owing to the controversial state project Mehr Housing Plan, which was initiated in 2007 by the previous administration with the aim of providing two million low-income people with housing units through free land and cheap credit.
The plan, however, slowed down due to lack of funding, which dragged down domestic demand for construction materials in the process.
In the face of the slump in domestic market, producers have turned to exports.
Iraq, Afghanistan, Pakistan, Turkmenistan, Georgia, the UAE, Tajikistan, Armenia, Uzbekistan and Azerbaijan are major buyers of Iranian tiles.
Iranian tile producers have to compete with foreign producers, especially the Chinese, which have lower production costs and a considerably higher economies of scale.