An analysis of the trends in the Serbian brick and tile industry in 2008 gives the following results:
› Lower sales in the domestic market
› Higher export to neighbouring countries, especially Romania, and then an abrupt decline of exports in December 2008
› Improvement of quality due to the increased market requirements
› Existence of a “black market economy” mostly without inclusion of VAT taxes, creating illegal competition in the market
› Drastic increase of the prices for natural gas
› More realistic prices for exported products and in the domestic market
› Large number of manufacturers of brick and tile products
› First noticeable effects of the financial crisis in the brick and tile sector and production stoppage of many plants by the end of the year
»Table 1 shows the production figures for 2008. Here it can be seen that there was an increase in production of 3% for wall and floor elements, while for the roofing tile sector there was a decline of 9%. This fall in production has been noticeable for several years already and it is mostly due to the decrease in residential building but also due to the competition from other materials such as gypsum boards, aerated autoclaved concrete and DEMIK facing elements.
If one considers the developments by the groups of products, the data show the fall in the production for 1/1 NF hollow and facing bricks.
Exports reached a scope of 858 110 t or 87 million US Dollars. As already mentioned, the most import export country is Romania, followed by Montenegro, Bulgaria, Bosnia-Herzegovina and Macedonia. Predominant materials exported are the “Giter” block and roofing tiles, and somewhat less hollow and ceiling elements that are mostly in demand in Kosovo. Earlier 15% to 20% of the production in Serbia was exported to Kosovo; today the figure is hardly 5% of the total production.
Beside the mentioned causes for the lower demand, another factor to be considered is the lack of masonry workers, without whom there is no possibility for usage of brick products.
The second interesting characteristic feature of this market is the production of small dimensions of the block products. This is due to two reasons: the market is not accepting the large-dimensioned blocks and technologically it is easier to produce smaller blocks. The assortment for the Romanian market consists of blocks with the dimensions 29 x 19 x 19 cm, 25 x 25 x 19 cm as well as 29 x 25 x 19 cm, while there is no interest on the domestic market for this assortment.
Although the prices of raw oil in the world market have fallen drastically, in Serbia the price of heavy oil is not following the price fall of raw oil. A matter of special concern is the relation of the prices of low-sulphur middle oil for firing and middle oil for firing. Before the difference between these two types of oil has been 2 Dinars (approx. 0.02 !) while in December this difference has risen to 10 Dinars (approx. 0.11 !). On the other side, there is an impression that the state oil monopoly NIS is not concerned with decreasing the pollution of air with poisonous gases, SO2 and others. The association has demanded an explanation but unfortunately no answer was given either by NIS or by the authorities, such as the Ministry for Mining and Energy and the Ministry for the Environment. This only shows that the monopoly is stronger than the government.
In the 5th Congress of the Serbian brick industry, there were solutions presented for the application of petrol coke as an alternative fuel in the brick industry, but there are no signs of activities in this direction. There are preparations being made in the brick factory Nasa Sloga in Kovin for the application of petrol coke. In this development the brick industry has followed the cement and fine ceramics industries – all the cement factories in Serbia are using petrol coke as alternative fuel. Probably, a few problems will arise with the introduction of this fuel in connection with higher moisture that appears after grinding. However, difficult sales, high energy prices and the effects of the financial crisis will give the push needed for the application of alternative fuels in the brick industry, especially now when the energy costs are higher than the salaries.
4 Application of mining law
Concerning this law and its application, there were certain conclusions brought in the 5th Congress of brick makers and these have been forwarded to the responsible ministry. These conclusions tackle all the questions that should be installed in the new law that is to be delivered. Here there is a need to point out one illogical element in the application of the Mining Law: This law proposes that every brick factory needs to employ one Mining Engineer. If it were a matter of underground exploitation it would make sense, but in this form it has no logic for the brick industry. The association does not know of any other European country that has a similar ruling.
In the opinion of the Serbian association, geological researches, mining law and similar laws should be adopted from EU legislation and a certain transition period should be defined for the application of these, without “inventing the holes in the flowerpot”.
5 Quality and standardization
The forces of the market influenced the improvement of quality and the higher exports in 2008 made the producers pay more attention to the quality of their products. The market is ever choosier and one is under the impression that the large majority of the buyers are paying attention to the quality of products. It is well known which companies have good products and where mistakes are possible in the delivery. One aspect where further improvement is needed is in the use of higher quality pallets and packaging with suitable foil, since the stretch foil is often not suitable for the handling of the packs and is also susceptible to the weather conditions.
The commission of the Institute of Standardization has accepted the proposal of the Standard for brick products EN 771-1 and plans acceptance of other standards in the field of masonry. There are no problems with this standard as it is already being applied in the export of brick products to Bulgaria and Romania. EN standards differ completely in their approach from the time of planned economy. With EN standards it is clearly determined in which cases the certificate is issued and that only the manufacturer is responsible for the warranty – based on the declaration and CE sign accompanying the product. The Certification Body carries out the supervision of factory control based on a specified system. One is under the impression that the representatives of the Institute are obstructing the acceptance of the EN standards, which is understandable since their interest is to conduct the tests twice a year for all assortments and these tests will be cancelled if the EN standard is accepted. The association has tried to promote among the manufacturers the set-up of the factory production control (FPC) with the necessary equipping of their laboratories, but there has been no movement in this direction among the brick makers.
The set-up of FPC itself demands funds, but it would be sufficient in the beginning to establish one testing centre in one region, which several producers in that region could use for tests that require special equipment.
Every factory has to make rule book about the method, time and frequency of control, about the raw material, shaping, drying, firing, packaging and final product. Based on the control, a written documentation is produced and this is the basis for the fact that the authorized person is responsible for the delivered product. The Certification Body performs occasional or permanent FPC and if it finds that there were mistakes in any of the periods, it asks for the documentation to see what measures have been taken to rectify these mistakes, which quantity is involved, and what has been done with these faulty products (sold as waste, destroyed or put into storage).
6 Market and prices of clay products
An analysis of sales data in 2008 indicates about the same level as in 2007. In total 935 million NF wall and floor elements and 163 million roofing tiles have been sold. Of these, exports accounted for 670 000 t, or 400 million NF wall and ceiling materials and 68 million roofing tiles. This means an export rate of about 37% of the total production in 2008. From these data, the conclusion can be drawn that the Serbian brick and tile industry would be in difficult situation if it was not for the exports.
Looking at the prices achieved, it is apparent that in the second half of the year more realistic prices were formed in the market. At present, there are signs of some producers lowering the achieved prices, but for the moment it is of no great concern. The association does not expect this trend to continue since there is no space for it.
The recommendation of the association is to somehow keep the prices at the level of 25 Dinar (0.28 €) per 25 x 19 x 19 cm block. With that price it is possible to cover the expenses with the decrease of the working power. In the export sector, somewhat lower prices expressed in the foreign currency are to be expected due to the drop in value of the national currencies (e.g. Romanian Lei).
Finally, it can be concluded that the Serbian brick industry has successfully sold its products in the domestic market of Serbia and in export. For the current year one should not expect to achieve the same high export level as in 2008, especially because of the present financial crisis. A further rise in prices for fuels – gas, heavy oil and electrical power – is to be expected. No increase in salaries is anticipated in 2009.