Supply chain: Manufacturers

TILE DIVISION

Nature of business
Manufacturer of tiles (South Africa and Australia) and bathroomware (South Africa).

Strategic positioning

Target market

Preferred supplier of tiles and bathroomware.

Retailers and wholesalers of fashionable and affordable tiles and bathroomware in South Africa, Australia and selected export markets.

Key differentiators

Leader in design and fashion, creating desirable products.
Low cost manufacturing ensures products are affordable.
Local supply ensures an understanding of customer requirements and a short, reliable supply chain. This supports our ‘always in stock’ policy, with consistent volume supply of fashionable well-priced product.
Complementary products for bathroom and complete home tiling solutions.
Ceramic’s factories rank among the most energy-efficient in the world.
Ceramic’s low-carbon footprint EcoTec tile range is recognised as a leader in the manufacture of ecologically-sensitive products.

TILE DIVISION

South Africa: Samca Wall (monoporosa wall tiles); Samca Floor and Pegasus (ceramic floor tiles);
Vitro (extruded fully vitrified tiles) and Gryphon (glazed porcelain tiles).
Australia: Centaurus (glazed porcelain tiles).

	South Africa		Australia
Key performance indicators	Trends 2021	Trends 2020	Trends 2021	Trends 2020
Sales
Production volumes
Average selling price
Margins
Net profit
Closing inventory

2020/21 priorities	Scorecard
Grow sales volumes through existing and new customers to optimise utilisation of production capacity.
Improve productivity.
Cost leadership.
Launch low-carbon footprint EcoTec range.
Continue to invest in training and new technology to ensure our products are differentiated on quality and fashion.
Improve planning, forecasting and scheduling to improve on-time in-full delivery.
Commence construction of a tile factory in Africa. Delayed due to Covid restrictions.

2020/21 major achievements
Grew sales and market share due to continued strong support for local product (driven by pro-local sentiment; low interest rates and a re-prioritisation of consumer discretionary spend); Enhanced our reputation as an import substitute with affordable high fashion and benefitted from disruptions in the import supply chain. Grew sales and gained market share in the Australian operation due to higher import costs and consumer preference for local product.

2021/22 priorities

2021/22 prospects

Drive productivity and cost improvements.
Commission Samca Plus, our cutting-edge technology floor tile factory.
Continue to invest in training and new technology to ensure our products are differentiated by quality and fashion.
Enhance demand planning to improve on-time in-full delivery rates.

Continued strong demand for tiles is expected in both South Africa and Australia due to low interest rates and changed pandemic-related spending patterns.
The ability to reduce energy consumption to offset above PPI increases in electricity and gas costs will be crucial to maintaining margin. Various initiatives are in place and underway to curtail consumption and supplement energy with renewable resources.
Refer to the Environmental report.

Grew sales and market share due to continued strong support for local product (driven by pro-local sentiment; low interest rates and a re-prioritisation of consumer discretionary spend);
Enhanced our reputation as an import substitute with affordable high fashion and benefitted from disruptions in the import supply chain.
Grew sales and gained market share in the Australian operation due to higher import costs and consumer preference for local product.

BATHROOMWARE DIVISION

Betta Sanitaryware (Betta) and Betta Baths.

Key performance indicators	Trends 2021	Trends 2020
Sales
Production volumes
Average selling price
Margins
Net profit
Closing inventory

2020/21 priorities	Scorecard
Complete the new warehouse facility. Temporarily delayed due to Covid restrictions on building activities.	Underway
Improve Betta’s sales volumes through wider customer base and improved on-time in-full delivery rates.
Continue to advance staff through training and development.
Improve Betta’s production yields. Yields remained in line with prior year due to raw material quality supply issues.
Reduce waste in the production process and rework.
Install and extend capacity in the bath and sanitaryware operations.
Improve the distribution model.

2020/21 major achievements

Grew Betta’s market share.
Increased production.
Grew exports to Southern African neighbours, improving volumes.
Improved the distribution model and enhanced customer service by delivering direct to smaller hardware and building merchants, thereby reducing distribution time.

2021/22 priorities		2021/22 prospects
Continue to improve self-directed work teams and advance staff through training and development. Improve production yields. Extend capacity at Betta through investment in further casting capacity. Complete construction of the sanitaryware warehouse. Increase BettaBath’s capacity to manufacture freestanding baths through additional plant space and specialised paint section.		Betta is now the only significant local producer of ceramic sanitaryware, which will afford opportunities to grow market share. While production volumes have increased, there is opportunity to enhance margins through improved yields and cost leadership.

BATHROOMWARE DIVISION

Manufacturer of cement-based adhesives, grouts, water-based paints and related products. Comprises 10 manufacturing facilities in
Johannesburg, Durban, Port Elizabeth, Cape Town, Bloemfontein, Mokopane, Windhoek, Mombasa, Lusaka and Harare.

Nature of business
Manufacturer of cement-based adhesives, grouts, water-based paints and related products. Comprises 10 manufacturing facilities in Johannesburg, Durban, Port Elizabeth, Cape Town, Bloemfontein, Mokopane, Windhoek, Mombasa, Lusaka and Harare.

Strategic positioning		Target market
Africa’s preferred tiling solutions.		Primarily the Group’s retail networks, Italtile Retail, CTM and TopT, as well as select open market customers including speciality tile retailers and big-box hardware stores.

Key performance indicators

Trends 2021

Trends 2020

Sales

Average selling price

Margins

Net profit

Stock turn

Closing inventory

Key differentiators

A national footprint of manufacturing plants which underpins Ezee Tile’s ‘always in stock’ policy with consistent supply of products.
Strong strategic partnerships with key raw material suppliers who provide access to the latest technologies to improve quality while reducing costs.

2020/21 priorities	Scorecard
Develop the product offering in paint and secure the majority share of paint business of our anchor client, TopT.
Roll out interactive online training programmes to upskill our clients’ sales staff.
Finalise construction of the new flagship factory in Brakpan, Gauteng.	Underway
Improve the profitability of our new factories in Lusaka and Harare.

2020/21 major achievements

Achieved increased profitability due to strong volume growth, coupled with improved cost controls and increased operational efficiencies.
Successfully maintained product quality and availability despite immense supply chain challenges.
Launched a ready-to-use surface preparation solution for the residential market.
Launched metallic floor hardeners for high-performance concrete factory floors.

2021/22 priorities		2021/22 prospects
Commission the new tile adhesive plant in Brakpan, Gauteng. Invest in our manufacturing operations to improve operational efficiencies. Expand the product offering in the paint business and investigate opportunities to broaden the customer base. Enhance the MRP system to improve on-time, in-full delivery. Build on the stable base of our four operations in the rest of Africa and target higher market share. Continue to enforce health and safety protocols for employees and customers concerning Covid-19.		Grow our market share in both the tile adhesives and paint segments. Expand market share in the construction chemicals market through the establishment of regional distributors. Upgrade the tile adhesive factory in Kenya.

•	the resilience of our team and robust business model;
•	our continued investment and emphasis on innovating for the future;
•	our unwavering focus on improving the customer shopping experience;
•	our ethos of profit-sharing and partnership with our people: and
•	pandemic related changes in consumer spending patterns.