GUANGZHOU: As the ceramics industry in Guangdong province faces big challenges this year, experts suggest that the industry as a whole should adapt and attach greater importance to brandname marketing.

"The ceramics industry is labor-intensive and high-energy-consuming; it does not agree with the State's macro-policy to save energy and protect the environment," said Li Qingqing, associate economics professor at South China Normal University.

Visitors look at some ceramic products at a trade fair. Guangdong's ceramics sector is urged to step up brand-building efforts. Jing Wei

"That means the ceramics industry will be subject to the State's industrial macro-adjustment and won't benefit from the State's preferential policies for exports, including the tariff rebate."

The industry will also face challenges from yuan appreciation, price increases of raw materials, rises in labor costs, implementation of the new labor-contract law, she said.

And the shrinking real estate market - from State policies to keep the soaring house prices under control - will lead to a dwindling domestic market for ceramics firms.

The falling growth rate of the nation's ceramics exports in 2007 marked the beginning of the trend, she said, the province of Guangdong, as the nation's leading ceramics export base, will undoubtedly bear the brunt.

Official statistics indicate that the nation's ceramics exports were worth $6.64 billion in 2007, rising 5.5 percent from 2006.

The growth rate in 2007 dropped 19.4 percentage points from 2006.

Guangdong's ceramics exports were worth $3.21 billion in 2007, rising 4.5 percent from 2006 and making up 48.4 percent of the nation's total.

"It is high time that the ceramics firms spend more revamping the technology, upgrading the product structure, and building up their product reputation and corporate brand," she said.

Li's viewpoint is strongly advocated by Keith Chan, chairman of the Hong Kong Porcelain Merchants Association.

"Ceramics firms should step up R&D and brand-building efforts, which are expected to help enterprises gain added value," he said at a seminar during the recent 2008 China (Guangzhou) International Ceramics Exhibition. The show attracted about 200 ceramics firms seeking business opportunities.

He stressed the importance of research and development among ceramics firms, as well as the efforts to build a regional brand.

(HK Edition 03/25/2008 page2)