World Ceramic Tiles Forum – National Context MEXICO 2011

National Context – MEXICO

I. General economic situation and trend in the construction

sector/demand

II. Trend in production, consumption and trade in ceramic tiles

III. Latest developments at national level in energy supply regulation

and taxation

IV. Development in standardisation or regulation at national level

affecting ceramic tiles

V. Other national developments

Building, 45.4%

Water plants and Irrigation,

5.5%

Electricity and Comunications,

6.4%

Transport, 25.6%

Petroquimic, 11.6%

Other Construction, 5.5%

I. General economic situation, trend

in the construction sector/demand

2010 Economic Overview

• Population 112.3 million

• Inflation 3.6%

• Bank rate 4.9%

• Wage increase 4.9%

• Unemployment 5.5%

Mexico

GDP

Construction

GDP

Building

GDP

2008 35,769,411 2,384,839 1,435,497

2009 33,594,999 2,231,050 1,246,935

2010 35,442,812 2,231,148 1,240,826

Change 08-09 -6.1% -6.4% -13.1%

Change 09-10 5.5% 0.0% -0.5%

Share 09 100.0% 6.6% 3.7%

Share 10 100.0% 6.3% 3.5%

Million pesos

I. General economic situation, trend

in the construction sector/demand

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2004 2005 2006 2007 2008 2009 2010

Building GDP Inv. Residential Building Inv. Commercial Building

Total

Investment

Inv.

Construction

Inv. Residential

Building

Inv. Commercial

Building

2008 8,265,378 4,877,113 1,933,690 1,258,187

2009 7,334,012 4,623,610 1,622,264 1,119,816

2010 7,505,977 4,679,605 1,614,892 1,168,770

Change 08-09 -11.3% -5.2% -16.1% -11.0%

Change 09-10 2.3% 1.2% -0.5% 4.4%

Share 09 100.0% 63.0% 35.1% 24.2%

Share 10 100.0% 62.3% 34.5% 25.0%

2010 Economic Overview

• Recession in 2009, 2010

• 2011* Building GDP 4%

• Consumer index 93.4

• Credit growth

Million pesos

II. Trend in production, consumption and trade

in ceramic tiles

2008 2009 2010

Change

08-09

Change

09-10

Production

(Mill. Sq. Meters) 217 183 204 -15% 11%

Plant Capacity

(Utilization Percentage) 82 68 77 -17% 13%

Work Force

(Monthly Average) 11,550 10,712 11,105 -7% 4%

Manufacturers members of TCNA (97%):

• Porcelanite-Lamosa

• Vitromex

• Interceramic

• Dal-Tile

• Nitropiso

• Ceramica San Lorenzo

• Cesantoni

Other manufacturers:

• Ceramica Venettia

• Ceramica Santa Julia

• Nacesa

Mexico Ceramic Tile Industry

2011 Profile

Source: TCNA - Mexico

II. Trend in production, consumption and trade

in ceramic tiles

1 735

584

281 235

67 61 51 40 32 36 31

317

1 735

705

289 248 84 57 57 54 42 32 32

135

2009 2010

8 515

3 600

715 490 350 368 295 324 278 205 180 183

1 527

9 515

4 200

753 550 400 387 375 366 287 245 220 204

1 528

2009 2010

11th Top

Manufacturing

Country

6th Top

Exporting

Country

Source: Ceramic World Review

II. Trend in production, consumption and trade

in ceramic tiles

1,3 1,4 1,4 1,4 1,5

1,5 1,6 1,6 1,5 1,5 1,5 1,6

2001 2002 2003 2004 2005 2006 2007 2008 2009 20102011*2012*

127 139 142

152 155 166

174 177 163 168 176 181

134 143 148

157

190 205 204

217

183

204 213 220

2001 2002 2003 2004 2005 2006 2007 2008 2009 20102011*2012*

2001 - 2010

Consumption + 3%

Production + 5%

2010

Consumption + 3%

Production + 11%

2011*

Consumption + 5%

2001-2010

Per Capita + 2%

2010

Per Capita + 2%

2011*

Per capita + 3%

Mill.

Meters Sq.

Source: TCNA-Mexico

II. Trend in production, consumption and trade

in ceramic tiles

7,8 7,9 7,4 7,0

8,5 9,5 9,3 9,2

6,8 7,7

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

781 794 777 744

904

1 020 1 009 1 014

760

863

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2001 - 2010

Consumption + 2%

2010

Consumption + 13%

2001 - 2010

Per Capita + 1%

2010

Per Capita + 12%

Million

USD

Source: TCNA-Mexico

II. Trend in production, consumption and trade

in ceramic tiles

7,6%

9,0% 9,8%

7,0% 5,7%

7,7% 8,4%

9,3%

6,7%

9,2%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

27 28 26

32

40 45

57

63

52

57

10 13 14

11 9 13 15 17

11 16

17 16 12

21

31 32

42 47

41 41

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2001 - 2010

Exports + 10%

Imports + 9%

2010

Exports + 10%

Imports + 42%

Mill Meters

Sq.

2001 - 2010

Imports / Consumption + 5%

2010

Imports / Consumption + 37%

Source: SAT

“28% of production”

II. Trend in production, consumption and trade

in ceramic tiles

53% Glazed Ceramic Tile

47% Unglazed Ceramic Tile

98% Glazed Ceramic Tile

2% Unglazed Ceramic Tile

Exports Imports

China 75%

Spain 14%

Italy 4%USA 2% Brazil 1% Others 4%

USA 59%Chile 19%

Colombia 4%

Costa Rica 4%Guatemala 3%

Others 11%

Meters

Sq.

Source: SAT

II. Trend in production, consumption and trade

in ceramic tiles

Production and Consumption Trends

• Manufactures glazed ceramic tile / imports unglazed

• Floor tile accounts for 80% of the market (75% in 2000)

• Certified porcelain tile meeting ASTM C373

• Slate and large format tile

• Digital decoration

• Certified green tile meeting ANSI A137.2

III. Latest developments at national level

in energy supply regulation and taxation

Producción Nacional

Importación USA

(por ductos)

PGPB

(PEM

EX

Gas y

Petro-

quími

ca

Básic

a)

VP

M (

Ve

nta

s d

e P

rim

era

Ma

no

)

Natural Gas

• Before 1995’s reform PEMEX had absolute control

Source: Comisión Reguladora de Energía (CRE)

III. Latest developments at national level

in energy supply regulation and taxation

Natural Gas

• After 1995’s reform PEMEX and private sector participate in the market

• Open access to supply chain, transportation, storage and distribution

Source: Comisión Reguladora de Energía (CRE)

III. Latest developments at national level

in energy supply regulation and taxation

III. Latest developments at national level

in energy supply regulation and taxation

Production

(CFE)

Transmission

(CFE)

Distribution

(CFE)

Consumers:

(Industry,

Commerce

Residential and

Export)

Small Production (0%)

Independient (21%)

Autosupply (7%)

Cogeneration (4%)

Export (2%)

Own utilization (1%)

Transmition

(CFE)

Distribution

(CFE)

Consumers:

(Industry,

Commerce,

Residential and

Export)

CFE (65%)

Before 1992 Reform

After 1992 Reform

Buying-Selling Production Surplus

Electricity

III. Latest developments at national level

in energy supply regulation and taxation

Installed Capacity: 63,094.7 MW*

Electricity

III. Latest developments at national level

in energy supply regulation and taxation

Taxation

• Value Added Tax 16% (IVA)

• Income Tax 30% (ISR)

• Cash Flow Tax 17.5% (IETU)

Industry Standards

ONNCCE

Organismo Nacional para Normalización y Certificación de Construccion y Edificación

• NMX-C-422-ONNCCE-2002

Ceramic Tile

• NMX-C-422-ONNCCE-2002

Installation Materials

IV. Any development in standardization or regulation

at national level affecting ceramic tiles

Certificacinz

IV. Any development in standardization or regulation

at national level affecting ceramic tiles

Certificación

1. National ceramic tile installation standard

2. Training centres / public schools

3. Installer certification program

Standard

Workshop

Credentials

• TCNA Pavilion in Mexico Construction Tradeshow

• Ceramic Tile and Installation Materials

• 3,500 Sq. Meters

• 22 Exhibitors

• 60,000+ Visitors

V. Other national developments

Questions?

Thanks for your attention!

Fernando Lozano Assad

TCNA–Mexico Director

flozanoassad@tcna.com.mx