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Terracotta Panel Market in the Middle East

Corporate News

Since 2000, the real estate market in the Middle East had been flourishing, supported by the comprehensive factors including high oil price, liquidity surplus and the increase of per capita disposable income. After falling into stagnation under the impact of financial crisis in 2008, the real estate market in the Middle East (especially the most severely-hit Dubai and Abu Dhabi) has been slowly recovering, while the real estate markets in countries such as Kuwait and Saudi Arabia have been growing relatively rapidly, as the EU and US economies are recovering.

Benefiting from the recovery of the real estate in the Middle East, the market of buildings’ exterior wall cladding materials has perked up. In recent years, many professional manufacturers have hinted at efforts to grasp market shares in the region. However, from the overall market situation, the level of terracotta panel consumption is still low, mainly restricted by the following two factors:

1. From the current consumption status of buildings’ exterior wall cladding materials in the Middle East, the mainstream exterior wall cladding materials are still paints, marble, aluminum alloy plates and glass curtain wall, which combined accounts for over 90% of buildings’ exterior wall cladding materials in the region. This phenomenon is relevant to the traditional concept of design and consumption habit in the region. The consumption of terracotta panel makes up a relatively small proportion of the overall market of buildings’ exterior wall cladding materials in the Middle East.

2. Construction companies and real estate developers in the Middle East are relatively sensitive to the price of buildings’ exterior wall cladding materials. The renowned brands from EU and US failed to achieve satisfactory market performance in the region due to their high price. In contrast, aluminum alloy plates becomes an advantageous competitor of terracotta panel due to its low price.

However, from other perspectives, terracotta panel still has the potential for further growth in this market:

1. Terracotta panel is calcined from natural clay that is environment-friendly and has some “green” features such as temperature-preservation, frost-resistance and sound-proofing. In addition, terracotta panel has different color options and good texture . It is increasingly loved by designers.

2. As terracotta panel appeared one after another in Asian countries such as Vietnam and China, the cost-effective terracotta panel from those countries gradually drew the attention of construction companies and real estate developers in the Middle East. In 2013, LOPO China won the bidding of a project with an area of approximately 10,000 square meters in Kuwait. “Although a relative big quantity of terracotta panel is demanded by the project, its sales price has been brought down to a very low level.” as the responsible person from LOPO China said.

3. The installation of terracotta panel requires special installation system and specific technology. Traditionally there are many professional installation companies for curtain wall projects in the Middle East. This helps clear the way for promoting the application of terracotta panel.

In conclusion, terracotta panel still has relative promising prospect in the Middle East as the promotion and application cases of terracotta panel continue to increase.