The CEO of SA’s largest manufacturer of ceramic tiles has weighed in on the struggling economy saying that the government should spell out plans to stimulate growth and protect local manufacturers.
The moribund economy has stifled household consumption expenditure to the detriment of listed tile manufacturer Italtile, whose brands include CTM, TopT and U-Light.
Speaking after the release of the company’s results for the six months ended December 31, Italtile CEO Jan Potgieter said the government should come up with an incentive to stimulate investment in infrastructure.
“The current economic growth is not enough. We need a massive step change in the general economy to stimulate growth. We must also fix some of the state-owned companies. We need certainty. I think it is time we stop talking and start implementing. The government must build confidence,” Potgieter said.
He said local tile manufacturers also needed protection in the form of tariffs against cheaper imports from China, India, Italy and Spain.
“As a local manufacturer, we need some protection. We see what the rest of the world is doing to protect local manufacturers. We want to compete on the global stage. So it is no use if people can come and dump products. We are still optimistic about the long-term future and that it why we are investing in manufacturing facilities. So it is important that we get some protection,” Potgieter said.
Italtile, a manufacturer, franchiser and retailer of tiles, bathroom ware and other home-finishing products, has become the latest company to voice displeasure about imports, joining some of the largest chicken and cement makers.
“We need to compete on equal footing. We know that, from a cost point of view, we are extremely competitive,” he said.
Potgieter said the low economic growth would not derail Italtile’s expansion plans.
“We will keep on investing. Despite the negativity out there, we want to gain market share. We are going to compete vigorously to gain that market share. We are going to drive costs down in order to remain competitive,” he said.
Italtile spent R165m in a store upgrade programme, while it spent another R113m in its manufacturing operations.
In the six months to December, Italtile’s system wide turnover increased 1.4%, from R5.3bn to R5.4bn. System-wide turnover refers to group turnover, including franchisees, but excludes sales from owned supply chain businesses to its stores. Revenue from group-owned stores and businesses was R3.8bn, up from R3.7bn.
In the six month, Italtile opened 10 stores, with another five to eight to be opened in the next six months.