ONE OF THE CHALLENGES THAT THIS BUSINESS FACED DURING THE YEAR WAS THE ORDERLY MANAGEMENT OF PRODUCTION CAPACITY TO ADAPT TO NEW CONSUMER DEMANDS WHICH AFFECTED THE TRADITIONAL PRODUCT MIX

For the Wall and Floor Tiles Business, the uncertainty and limited growth expectations at the beginning of the year gradually dissipated during the course of 2014. By yearend, the domestic market had begun to recover and demand to grow.

The Business responded rapidly and effectively to the improvement, exceeding the average growth rate of the industry. As a result, the upswing in the domestic market more than offset the sales decline in foreign markets, such that total sales for 2014 grew 3% year-over-year.

One of the challenges of the year was the orderly management of production capacity to adapt to new consumer demands which affected the traditional product mix. Continuous innovation, with the development and rollout of new products, has given the Wall and Floor Tiles Business more robust product lines that include large porcelanite tiles and offerings with novel properties, designs, textures and high-quality digital decorations.

The investments Grupo Lamosa has made in technology allowed it to rollout new products with industry-leading styles and applications in accordance with the latest trends. These included “Striato,” “Basaltina” and “Marino,” market leading, large-sized (60cm X 90cm and 60cm X 120cm) tiles that look like marble and natural stone. The Business also launched a wide variety of ceramic high value added products that have the appearance of wood but the superior properties of ceramic.

The continuous search for innovation and to offer products with superior properties resulted in the launch of “Slim” tiles through the high-value “Firenze” brand. These porcelain tiles are light, ultra-thin, with a thickness of three millimeters, and perfect for commercial areas and vertical residential constructions. Porcelain tiles have recently found a new use in construction: for faÇades, and this represents a source of potential growth for the Business in the institutional market.

As in previous years, in 2014 the Business participated in trade fairs and exhibitions both in Mexico and abroad. Some of these events included the Coverings Trade Show, one of the world’s most important construction industry fairs. It was held during the second quarter of the year in Las Vegas, Nevada, in the USA. During the fourth quarter of the year, the Wall and Floor Tiles Business took advantage of its presence at Expo CIHAC in Mexico City to present new lines of products across its different brands.

In order to assure that the regulations currently applicable to the ceramics industry are followed, during 2014 the Wall and Floor Tiles Business, through the corresponding associations and government agencies, made a great effort to promote a culture of legality and healthy competition in the porcelain tiles market. The objective of such actions is to prevent companies cheating the consumer, since on occasions ceramic products are sold that fail to comply with the required characteristics and technical specifications.

The Business is aware that it will face significant challenges in the future. The search for opportunities for organic and inorganic growth, both in Mexico and export markets, will provide avenues of expansion that Grupo Lamosa, with its leadership and positioning, will know how to leverage successfully.

 

SALES
(Millions of Mexican pesos)
3% growth