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Chinese Model of Manufacturing Empowers Global Ceramic Industrial Upgrading for a Better Future

80 30 Jun 2023

Shared from ChinaNews | Published on  30 June 2023 

Technological progress in step with rapid urbanization has ushered in some thirty years of tremendous growth for China's building ceramic industry. The push and pull effect demonstrates its magic by driving China to become the biggest manufacturer, consumer and exporter of ceramic tiles, while creating a batch of global market-leading players. This huge wave of development has also increased the popularity of ceramic tiles among consumers, with per capita consumption soaring from less than 0.1 to 6.88 square meters within merely thirty years.

The ceramic machinery and equipment sector plays a role of a locomotive in the ceramic economy. It contributes not only to technological innovations but, more importantly, it has worked out a new business model together with the ceramics manufacturers to respond to and accelerate the demand increase. This model, which originated from the Chinese realities, features "large production capacities leveraged by small investment, and high returns yielded by low cost"—named the Chinese model for short.

With the export of Chinese ceramic machinery and equipment, the Chinese model has spread across the world and shows its general applicability time and again.

Indonesia is where the Chinese model has proven successful. Mulia, the largest tile manufacturer in Indonesia, was among the first to cooperate with a Chinese machinery and equipment company, and then adopt the Chinese model. In 2018, Mulia installed a KEDA production line with a daily capacity of 40,000 square meters, replacing the one that could only produce 6,000 square meters per day. This record-setting line gave Mulia a decided competitive edge in meeting increasing market demand by reducing the cost of product per unit drastically. With this upgrade, Mulia may have achieved a 30% cost reduction compared with its old-technology rivals.

"Those new lines equipped with advanced technologies with daily capacities of 10,000-20,000 square meters possess combined strengths in production efficiency and cost economy, which guarantees cost reductions by 20%-30%. The reduction of costs by 30% or even 20% is vital, as the variation of net margins, if  positive, is no more than 5% across the world," said Bian Cheng, Chairman of KEDA Industrial Group, "for those lines built 15 or even 20 years ago with daily capacities of 5000 square meters or lower, upgrading is a must, and the "large capacity and low cost" of the Chinese model is very suitable for these upgrading needs."

The competition is becoming increasingly intense, as capacity surplus is a current problem shared by those in the major production regions globally. And this tough situation is aggravated by the rising inflation and prices of energy, raw materials and so on that are biting into earnings.

The manufacturer who turns to the Chinese model with "large production capacities leveraged by small investment, and high returns yielded by low cost" earlier secures a better position in the competition. In 2015, KEDA built a 259-meter-long kiln with a daily capacity of 18,000 square meters for a Turkish company, which was more than twice the national average at that time. This ambitious project proved its true worth soon. The company recouped its investment in just over a year. Then it signed agreements with KEDA across another four kilns, totaling its production capacity to 180,000 square meters per day. This quickly made it the largest manufacturer in Turkey.

Large production capacities and high-quality products are two sides of the same coin. By offering good-quality products that meet the functional and decorative needs of consumers, the ceramic economy fueled by the Chinese model has witnessed a boom in the past decade in India, Vietnam and more developing countries. The success of Indonesian and Turkish ceramic manufacturers who have adopted the Chinese model shows how they manage to stay ahead in the competition.

With the installation of KEDA lines, Mulia introduced the white-body tile facilitated by the new technologies to the market, a product with lower water absorption and better aesthetic effects than the then-mainstream red-body tile. It immediately became a hit upon its launch and has since remained the major source of profit contribution. "The lines producing white-body tiles are in full operation, even with up to 30% of the total suspended due to slowing demand this year. Generally, manufacturers equipped with updated facilities perform better, as products targeting middle to higher consumer groups gain more popularity," said Yao Jie, Overseas Marketing Director of KEDA Ceramic Machinery.

Being quick to respond and ready to solve problems is another defining characteristic of the Chinese model. With ceramic machinery and equipment being exported to more countries and regions, strenuous work has been done to build up a high-quality service supply. In this course, KEDA has put forth and practiced the idea of "globalizing and localizing service," setting up 88 service stations overseas. This has significantly improved service accessibility and efficiency, gaining more prestige for the Chinese model.

"Making every effort to solve problems that concern the client is of utmost importance," said Yang Yu, Sales Director(Regional) of KEDA Ceramic Machinery, recalling how she made breakthroughs in the Turkish market. "An untimely maintenance or supply of spare parts could interrupt production and cause losses as high as tens of thousands of dollars in a single day."

Now, Turkey is one of the major production areas where the Chinese model is earning a growing reputation. Mehmet Oguzman, Chairman of Termal Seramik Turkey, said, "Our work [with KEDA] has continued in great harmony until now. KEDA offers high-level solutions both in technical service capability and in the adequacy of rehabilitation processes. We Technology is changing every day. We follow the new technologies that KEDA has reached, and we always want to use them."

In the land where the Oriental culture meets the West, the Chinese model of manufacturing is being gradually integrated with the Italian model, which features small capacity, flexibility and customization, to cater to the diverse needs of consumers.

"The integrated model is popular in Turkey, and it has begun to make its way to Europe." Yang Yu added.

"The Chinese model is by no means exclusive to Chinese brands. The manufacturer can employ a combined system which incorporates the strengths of Chinese machinery and equipment and its Europe counterparts. And, of course, any machinery suppliers can supply products fitted for the Chinese model. In the age rife with challenges, it's important to keep open-minded and work together to provide better cost-effective solutions to the clients," Yang Xuexian, General Manager of KEDA Industrial Group, summarized.  

As the Chinese model and its modifications are shaping the landscape of the world ceramic manufacturing, their fruits have been brought to more places all over the world, with the distribution of the manufacturers optimized, technological exchanges enhanced and the local ceramic industry developed. Owing to these changes, a larger number of people than ever have access to better living conditions at affordable prices. The Chinese model has played and will play a greater role in the global ceramic industry upgrading for a better future that benefits all.

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