WORLD CERAMIC TILE FORUM NOVEMBER 2014

ECONOMY CONSTRUCTION CERAMIC TILE INDUSTRY

ENERGY STANDARDS FUTURE CHALLENGES

ABOUT BRAZIL

SIZE:

5th Largest - 8.511.965 km²

POPULATION:

5th Largest - 202 milion

TERRITORY: 47% of South - America’s area

BRAZILIAN GDP

2013 – US$ 2,246 trillion

2020 – US$ 3.647 trillion

7th in the World

5th in the World

• Our energy matrix is the cleaner and most renewable in the world;

• 5th larger territory in length, with 8 million square kilometers;

• 2nd largest food exporter;

• 1st producer of soybeans, coffee, sugar, orange juice, beef and chicken;

• 3rd manufacturer of commercial aircrafts;

• 7th largest producer of vehicles;

• 4th largest shipbuilding industry;

• 2nd largest generator of hydroelectric power;

• 1st producer of ethanol;

• 3rd largest market of personal computers;

• 5th in international reserves (US $ 377 billion).

ABOUT BRAZIL

Sou

rce:

Wo

rld

Ban

k

BRAZILIAN GDP GROWTH PER YEAR (%) AND FORECAST

So

urc

e: IB

GE

a

nd

IL

O

BRAZILIAN UNEMPLOYMENT RATE (%) EVOLUTION AND FORECAST

So

urc

e: B

razili

an

Ce

ntr

al B

an

k a

nd

De

loitte

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(f)

32,779

22,457

16,590

10,144

18,146

15,066

18,822

34,585

45,058

25,949

48,506

66,660 65,272

64,000

60,000

FOREIGN DIRECT INVESTIMENT EVOLUTION - US$ BILLION

ECONOMY CONSTRUCTION CERAMIC TILE INDUSTRY

ENERGY STANDARDS FUTURE CHALLENGES

BRAZILIAN CONSTRUCTION INDUSTRY 2013

• 5th Largest Industry in Brazil

• 5,4 % of the country’s total GDP

GDP variation compared to the previous year 1,6%

-

50.000

100.000

150.000

200.000

250.000

300.000

Un

idad

es F

inan

ciad

as

Operações Contratadas com Recursos de Poupança SBPE - UnidadesConstrução, Aquisição Reforma e Material para Construção

Construção Aquisição Total

National Indicators of Real Estate Market – ABCIP

Real Estate Financing for Construction – Number of Units - SBPE Resources:

The number of units financed under the SBPE in the first semester of 2014 grew 6.5% Construction, 3.8% Acquisition and 4.6% Total regarding the first semester of 2013.

Resource: ABCIP set-2014

Transactions with features of SBPE savings - Units

Construction, Acquisition, Remodeling and Construction Material

Fin

ance

d U

nit

s

Construction Acquisition Total

ECONOMY CONSTRUCTION CERAMIC TILE INDUSTRY ENERGY STANDARDS FUTURE CHALLENGES

Sou

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: A

NFA

CER

PRODUCTION CAPACITY EVOLUTION

BRAZIL PRODUCTION OF CERAMIC TILES

Sou

rce:

AN

FAC

ER

CERAMIC TILES – DOMESTIC MARKET SALES

Sou

rce

: A

NFA

CER

Sou

rce:

AN

FAC

ER

CERAMIC TILES – EXPORTS

2014* 67.4

Sou

rce:

AN

FAC

ER

BRAZILIAN EXPORTS 2013 - MARKETS

TYPES OF PRODUCT

Sou

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: A

NFA

CER

Piso

Floor Tile

3,2%*

*Average Annual

Growth Rate[%]

Do

me

stic P

rod

uctio

n

Parede

Wall Tile

Pared

5,2%*

Fachada

Façade

3,4%*

Porcelanato Esmaltado

Glazed Porcelain Tile

17,1%*

Porcelanato Técnico

Unglazed Porcelain Tile

8,2%*

milh

õe

s d

e m

² | sq

m m

illio

n | m

ill/m

²

20

14

: E

stim

ativa

| E

stim

ate

| C

álc

ulo

ECONOMY CONSTRUCTION CERAMIC TILE INDUSTRY

ENERGY STANDARDS FUTURE CHALLENGES

NATURAL GAS CONSUMPTION

BRAZIL - BIGGEST INDUSTRIAL CONSUMERS BY SECTOR - 2013

Percentage % 106 m3/day

CHEMICAL 20,92% 6,34

CERAMICS 13,90% 4,21

PIG-IRON AND STEEL 10,47% 3,18

NON FERROUS/OTHER METALLURGICAL 9,67% 2,93

PULP & PAPER 8,31% 2,52

FOOD & BEVERAGES 7,06% 2,14

MINING/PELLETIZATION 6,51% 1,97

TEXTILES 3,21% 0,97

CEMENT 0,32% 0,10

OTHERS 19,64% 5,95

TOTAL INDUSTRIAL CONSUMPTION 100,00% 30,32

NATURAL GAS PRICES EVOLUTION

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

NATURAL GAS PRICES EVOLUTION - US$ per MM BTU

Brazilian city-gate Bolivian Brent EUA UK

BRAZIL AVERAGE PRICE

U$ 14 – U$ 19 / MM BTU Increase of more than 250% from 2004 to 2014

Sou

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: A

BR

AC

E

ECONOMY CONSTRUCTION CERAMIC TILE INDUSTRY

ENERGY STANDARDS FUTURE CHALLENGES

• ABNT NBR 13.818 - CERAMIC TILES - SPECIFICATIONS AND TEST METHODS

• ABNT NBR 13.817 - CERAMIC TILE - CLASSIFICATION

• ABNT NBR 13.816 - CERAMIC TILES - TERMINOLOGY

• ABNT NBR 15.463 - CERAMIC TILES - PORCELAIN

• ABNT NBR 15.825 - CERAMIC TILE - INSTALLER

• ABNT NBR 15.873 - MODULAR COORDINATION FOR CONSTRUCTION MATERIALS

• ABNT NBR 15.575 - PERFORMANCE FOR EDIFICATIONS

• ABNT NBR 15.825 – TILE INSTALLER

STANDARDS AND REGULATIONS

ECONOMY CONSTRUCTION CERAMIC TILE INDUSTRY

ENERGY STANDARD FUTURE CHALLENGES

Country

Investment on infrastructure

Reduce industrial taxation

Increase educational levels

Address housing deficit

Advance in Competitiveness

Expand markets

Internationalization of the sector

Compliance control with the technical

standards of products

Ensure the practice of fair trade

Ceramic Tile Sector

FUTURE CHALLENGES