TILE Magazine publisher Phil Johnson recently sat down with Bode Stone’s president and general manager, Ye Rongheng for a one-on-one interview addressing the U.S. and Chinese ceramic tile markets.
TILE: How has the U.S. economy affected your overall market, if at all?
Mr. Ye: The impact of the U.S. economy on Bode’s overall market is not much, for two main reasons:
- 1. The U.S. market is a part of our global market, which in general, is in good shape and moving forward. Therefore, the impact caused by U.S. economic crisis has been limited. On the other hand, Bode has a strong domestic market, which is a powerful support to us.
- 2. The fluctuation of the U.S. economy is only a periodical problem. It will recover and regain its strength.
Mr. Ye: Australia, Italy and Spain.
TILE: With past U.S. tile buyer missions to Foshan, distributors expressed various concerns of product consistency and styling specific for the American market. How have you addressed those concerns in terms of new products, quality and consistency?
Mr. Ye: The concerns about product consistency and styling specific are the focus of many markets, not just the U.S. As a highly internationalized company, Bode addresses product quality and consistency through the design, development and manufacturing processes. The export percentage of Bode is exceptionally high; our products have been sold to dozens of countries and areas, and well-tested by various countries and consumers. We have been extremely focused on new product development, product quality and consistency.
In order to ensure the quality and consistency of our products, Bode has set up strict standards, from product styling, to raw material selection, to the entire manufacturing process. We have carried out ISO9001 fully and established a strong quality assurance system. We’ve gained a good reputation in the international market, including the U.S.
TILE: How is the changing exchange rate with the floating RMB affecting your export business and how are you preparing for it?
Mr. Ye: In fact, the fluctuation of RMB vs. the U.S. dollar is a lot more serious than other currencies. It’s true that the rising value of RMB makes a great impact on the enterprises with high export percentage. Our strategy to face the challenge is:
- 1. Maintain the creativity and variation of Bode products. Some of our products in the U.S., or even in the overall international market, are unique to Bode. Along with the supreme quality that Bode always focused on, our sales in the overseas market will not be strongly affected.
- 2. Keep enhancing the internal management; continue to the reduce cost of production by increasing the productivity to absorb the loss caused by RMB fluctuation, in order to provide our international customers with higher P/P ratio (performance/price) products.
Mr. Ye: There’re indeed some mistaken perceptions in the U.S. towards Chinese manufacturers in terms of sustainable “green” practices. In fact, under the strong advocacy and support of the Chinese government and its strict regulation, many outstanding Chinese enterprises have put the Green Action Plan into practice. At Bode, for example, our enterprise has passed through the highest national certification of China’s environmental labeling. We adopt clean energy and make great efforts on reducing carbon emission. In the aspect of water resource, we accomplished the recycling utilization and make zero discharge for waste water.
Regarding the discharge to atmosphere, we have instilled the use of the most advanced equipment and have taken measures to ensure that the discharge meets the strict requirements of the government. Our company passed the certification of ISO14001 many years ago and is among the first group of clean production enterprises in Guangdong. Recently, we were also awarded the “Hong Kong – Guangdong Cleaner Production Partner (Manufacturing)” label.
TILE: There is a general opinion that tile from China should cost less. Do you think that is unfair and how would you like to change that perception?
Mr. Ye: Generally speaking, the prices of the tiles from China are not high. The prices of the tiles with common quality from some small factories are quite low. To change this perception, I think we should follow two steps:
- 1. Change the perception of international buyers of buying low-price products from China. It’s not true that the lower the price, the better it is. The price of a product is based on the production cost. If there’s no profit for a factory, or the price is even lower than the cost, then how can the quality be guaranteed? On the other hand, many countries have an anti-dumping policy against Chinese tiles because the selling price is too low while at the same time requiring Chinese factories to reduce their prices. This is obviously not fair.
- 2. We should offer consumers high P/P ratio products, and then set up reasonable prices while ensuring the quality and styling, in order to avoid disordered competition.
Mr. Ye: Parts of Bode products are sold under the brand of Bode via our distributors and we have a showroom and warehouse in Anaheim, CA. We have advertised in tile industry magazines and attended Covering shows, so Bode has a better standing compared to the new Chinese brands, which are totally unknown in the U.S. markets. However, that is not good enough. We will keep investing in the U.S. market on marketing and services. I believe with the growth of distributors and customers, the Bode brand will be more recognizable in future markets. The creativity, supreme quality and high performance of Bode products will be the key to gaining a good reputation in the U.S. market.
TILE: How do you, as one of the larger producers of tile, differentiate your company and products from the many trading companies and smaller, low-cost sellers of tile from China?
Mr. Ye: Bode always takes brand and product differentiation as the essence of the enterprise. Brand differentiation is taking “creativity and fineness” as the spirit, and making “create a perfect international brand” as the target of the enterprise. The Bode brand always attends the competition of international market on a higher starting point and with an internationalized image.
Product differentiation means that all of Bode’s products are designed by independent innovation and has its own proprietary intellectual property rights. Some of the products, such as Bode “Fine Jade Stone,” “Diamond Frits,” which carry a China Invention Patent, are regarded as, “The revolution of the world’s ceramic science and technology.” The product differentiation of Bode is well-known in both domestic and international market, and one of the reasons our products are in demand in the world.
16th China Int'l Ceramic & Sanitaryware Fair closes on upbeat, positive noteThe recently concluded 16th China International Ceramic & Sanitaryware Fair Foshan featured five days of “remarkable achievement” with an estimated turnover of a 3 billion RMB ($451M USD), 99,867 visitors (up by 96.93% from 2009’s autumn session). Foreign visitors accounted for 39.95% of attendees, while professional buyers accounted for 64.47% of the total. The majority of foreign buyers originated from other Asian countries and the Middle East.
According to China Ceramics City and China Ceramics Industry Headquarters, the fruitful results of this show have driven 70% of temporary exhibitors to buy booths for the next session even before the fair closed. The Spring Fair, set for April 18-22, will undoubtedly be another glorious chapter.”
The fall event also featured several education sessions and lectures, including “Impact on PRC Exporters Post Global Financial Crisis,” “U.S. Tile Market Report,” and “The Road for Innovation Breakthrough of Ceramic Industry.”
For more information, visit www.eccc.com.cn/en/tradeshows.asp.