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CLOSE THIS BOOKForming Techniques for the Self-Reliant Potter (GTZ, 1991, 194 p.)
2. Products and options
VIEW THE DOCUMENT(introduction...)
VIEW THE DOCUMENT2.1. Market sectors and forming considerations
VIEW THE DOCUMENT2.2. Investment decisions
VIEW THE DOCUMENT2.3. Choosing your product line

Forming Techniques for the Self-Reliant Potter (GTZ, 1991, 194 p.)

2. Products and options

This chapter presents a summary of various articles that the small producer can make.

2.1. Market sectors and forming considerations

2.1.1. THE EXPORT MARKET
2.1.2. THE LOCAL MARKET

In developing countries, there are two main market sectors: the export market and the local market. They require different kinds of products in most cases.

2.1.1. The export market

CAUTION!

Exportation from many countries is very difficult, due to customs regulations. Before dreaming about huge profits from exports, it is important to find out about rules and costs, and to be sure that you have a reliable buyer.

profitability

Because of high labor costs in industrialized countries, it has become profitable in developing countries to produce ceramics for export. There is now a very large market for floor and wall tiles, tableware, and decorative or novelty items, which are very competitive in the world market in spite of high shipping costs. Any product which is labor-intensive (for example, requiring hand-painting or large amounts of handling) has a good scope for export, because it takes advantage of low labor costs.

success in Thailand

For example, factories in northern Thailand producing cheap novelty items for export have orders for the coming two years, and are finding it difficult to increase their capacity enough to supply the demand. Many of these factories are small-scale and use simple forming techniques, such as slip casting or jiggering. The products are often designed by the customer, and most of these products do not require special finishing and quality control. For example, 1,000,000 “Elvis Presley” figurines were ordered from Thailand for a U.S. promotion campaign. They were produced by slip casting with something like a 500% profit margin.

traditional products

Another market sector is “ethnic” arts, for example ceramic dolls dressed in the traditional costumes of their country. Although this is not a large volume market, it can be profitable for a small producer. In Nepal, one small pottery makes most of its profit sending hand-painted dolls to Japan. Similarly, decorative pottery (like candlestands, ashtrays, etc.) that is done with traditional shapes and decoration has its own market for export.

labor-intensive products

Anything handmade has an export market for example, special designs of handmade tile can fetch a high price in the West. Similarly, there are some businesses which import high-quality tableware from Europe, hand-paint it with overglaze, and send it back to the country of origin for a high profit.

joint venture factories

Another export sector which is growing rapidly is joint-venture floor and wall tile production. This is usually done on a large scale, using high capital-investment foreign machinery, and as such is outside the scope of this book.

punctual delivery

Products for export need to be selected very carefully, and problems of quality control and punctual delivery must be thought about. Western buyers expect to get their orders on time, and will not accept excuses for late delivery. This means that the producer must have a realistic idea about whether he has the capacity to produce an order, and he has to make an accurate estimate of the time it will take. It may be tempting to accept a big order, but if it requires ten times your normal capacity, it would be foolish to do so.

Be sure of your ability to produce

Traditional designs already being made in your country, but adjusted for export, are easier to control for quality, because they are familiar to the workers. Orders for designs that have not been tried before should never be accepted- the rule is, do not try to fool the customer, because it will only backfire on you in the end.

2.1.2. The local market

The local market usually already has a demand for glazed ceramics, except in remote areas where they may still be unknown.

However, needs for new products are changing fast, in line with modern times. It is easy to see that in every country the introduction of plastic and aluminum has revolutionized the way people live. In the same way, a ceramics producer who keeps his eyes open to how things are changing will find a good market for new products.

example: Nepal

Nepal had no glazed ceramics production until very recently. However, the market had developed based on household ware imported from India, which is mostly low-quality- white stoneware. Because there are no suitable local raw materials for stoneware, Ceramics Promotion Project developed low temperature glazed red clay technology. Now, small producers are finding a good market. The new industry has found customers ranging from tourist hotels to local housewives. Because the products are low-cost, they can be sold even though the quality still has to be improved. This is a good example of introducing a new variation into an existing market.

local market possibilities

There are at least three main possibilities for the local market:

Import substitution: where feasible, local production of goods that are usually imported.

Improving existing products.

Introducing new products.

Import substitution is only feasible if locally made products can be made more cheaply than the imports, or if import duties keep the cost high. Wherever there is a tourist trade, obvious customers are hotels and restaurants. Hotels often like to have locally-made ceramics as decoration and advertisement, such as ashtrays and flower vases. A small producer who can capture the orders of even one large hotel has a guaranteed business, as smart hotels encourage customers to take ashtrays home as souvenirs - it is good advertising for them.

Where there is already local production, a clever producer may find ways to produce the same quality at a lower cost, or to improve the product in a way (better glaze, more attractive decoration) that attracts customers.

New products are often risky for the producer, since the market is unknown. However, part of being a successful producer is being able to see a need that nobody else has seen. For example, everybody needs containers for drinking water, and replacing traditional jars with new designs fitted with a tap appeals to customers wanting to be modern. Likewise, there is a lot of money in rural sanitation projects, and these projects generally are interested in promoting local production efforts.

hotels and restaurants

Within the local market, there are also several different sectors. Mainly, there is the profitable hotel and restaurant trade, which is low in volume but has a high profit margin. In the beginning, producers will try to capture that until the market is saturated. In the long run, most producers will be supported by the local market for cheap household items, which is large in volume but has a much lower profit margin.

2.2. Investment decisions

Because risk is high in starting any new industry, it usually is best to start small and expand gradually.

A profitable ceramics business can be run in the corner of a room, and requires only a table, clay, glaze and a small electric kiln. The total investment may be less than US$100, and the products would be small, handmade decorative and novelty items (like animals, dolls, etc.).

At the other extreme, perhaps the most costly “small”-scale investment would be a sewage pipe factory, where equipment and kilns could total US$ 750,000. This is also a profitable business, but requires large volume production in order to pay back the machinery.

questions to ask

Before deciding to invest in ceramics, you should answer the following questions, which are standard questions for any new business:

1. Is there a market for the product? If so, what is the size of the market? If the product is being made locally, how much of the market sector can you expect to capture? If the product is imported, can you equal the quality or make it significantly cheaper?

2. Do you know enough about the business? Can you get machinery? Technical assistance?

3. Is there enough skilled labor available?

4. Is the amount of investment required too much? Are you able to get a loan? If so, what is the payback period - and are you able to get the business running smoothly in time?

2.3. Choosing your product line

2.3.1. MACHINERY CONSIDERATIONS

For new producers of ceramics, there is one main rule to follow: KEEP IT SIMPLE. Choose only one product line, and make that successful before trying to diversify. Avoid trying too many kinds of forming at once (don’t start jiggering, slip casting and semidry pressing at the same time). As with most businesses, if there is one successful unit, it will soon be copied. If the market sector is large enough, this is a safe way to go. On the other hand, the really successful producers are usually the ones who start a new business before anyone else does. There is more risk in this, but by definition being a businessman means being willing to take greater risks than most people.

expanding your product line

For existing producers wanting to expand their product line, it is important to think about the total system. In other words, if you are already producing cups by jigger, it is easy to make new moulds for producing soup bowls, with little additional investment. On the other hand, this may mean purchasing additional jigger machines, getting additional workers, and expanding kiln capacity. If you want to produce glazed tiles by semidry pressing, this requires a greater investment, since the clay processing, production line and even the kilns will have to be different.

2.3.1. MACHINERY CONSIDERATIONS

Depending on the size of your industry, there are several options for machinery.

Ready-made machinery

Most countries have suppliers for ceramics machinery that is appropriate for local conditions. In big countries such as India, there are many suppliers producing different qualities. Try to get the right machine for the work to be done. Before choosing an expensive machine, you should get as much advice as possible regarding what capacity and quality you need. For example, nondeairing pug mills can be very cheap, and are often satisfactory if you do not run the machine all the time and do not mind doing periodic maintenance and repairs (they usually are made from low quality steel and have cheap bearings). However, if you expect to be running your pug mill at full capacity for 2 shifts per day, it probably is a cheaper long-term investment to get a more expensive, better quality pug mill.

Talk to other producers using machinery to get a better idea. Never believe a machinery salesman until you have talked to his other customers.

Used machinery

It is often possible to buy already-used machinery at low cost from factories that are upgrading their machinery or that have gone out of business. Many small producers have started out this way.

If you are starting a small-scale industry which requires heavier machinery, it is often possible to get used machines from Europe at a low cost. Their condition is generally certified, and many are almost new. European factories have to upgrade their equipment quite frequently in order to compete, and many have gone out of business because of competition from imports! So there are some good bargains available. Catalogs and price lists are available from advertisements in “Interceram” and “Tile & Brick International” magazines (see Appendix).

Making your own machinery

It is not recommended to make your own machinery unless you have another machine to copy, or a lot of money to spend. Even simple machines like hand extruders need some attention to detail. We have made a lot of prototype machinery in Nepal (potter’s wheels, pug mills, vibrating screens, etc., many of which are shown in this book), and have rarely had a successful prototype the first time. On the other hand, an inventive mechanic could probably follow plans and have a good chance of success - but he will probably have to try the machine out and make some changes before it works correctly.

Make it strong

In any case, it is most important to get the details right: for example, use good bearings if available, and always make things stronger than you think is necessary. Even simple machines like hand extruders can have problems: the metal piece that holds the die in place can break if the steel is too thin, the handle can bend if too thin, etc.

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