Clay Product & Refractory Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 920 clay product and refractory manufacturers in the US produce structural products, refractories, whitewares, and technical or engineered goods. Structural products include brick, roofing tiles, pipes, and flooring tiles. Refractories are made to withstand high temperature - over 1,000 degrees - and include fireplace liner bricks, kiln and forge lining materials, crucibles for metal and glass melting, and gas burner components. Whitewares tend to be more delicate and include dishes, china, wall tiles, lamp bases, statuary, pottery, sanitary porcelain (sinks, toilets, and urinals). Technical or engineered products include ceramic disk brakes, ballistic protection, biomedical implants, mechanical bearings, and missile nose cones.

Competition from Alternative Materials

Manufacturers of clay products compete for market share against manufacturers making similar products from alternative materials.

Variable Energy Costs

Clay product and refractory manufacturers have high expenses related to energy, because materials are baked or fired to obtain their rigid form.

Industry size & Structure

A typical clay product and refractory manufacturer operates out of 1-2 locations, employs 38 workers, and generates almost $9 million annually.

    • The clay product and refractory manufacturing industry consists of about 920 companies which employ about 35,000 workers and generate about $8 billion annually.
    • Pottery, ceramics and plumbing fixture manufacturers represent 60% of firms but employ just 35% of workers and generate 31% of industry revenue. Clay building materials and refractory product manufacturers represent 40% of firms and employ 65% of workers and generate 69% of industry revenue.
    • Customer industries include building materials distributors, construction firms, utilities (water/sewer/power), oil and gas producers, government (military/law enforcement), hardware and home improvement stores, electrical supplies distributors, electronic component manufacturers, home furnishings wholesalers and retailers, foodservice providers (restaurants, caterers, hotels), kiln manufacturers, and manufacturers of products that requiring kiln-firing or extremely high temperature to cure.
    • Large companies include Meridian Brick, Corning, Lenox, CoorsTek, Ortech Advanced Ceramics, American Standard, and Mohawk Industries (Dal-Tile, Marazzi).
    • The industry is concentrated with the 20 largest firms representing about 52% of industry revenue.
                                    Industry Forecast
                                    Clay Product & Refractory Manufacturers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Nov 15, 2022 - Lowe’s to Exit Canada
                                    • In a move that will impact makers of plumbing fixtures, brick, ceramic tiles, and more, Lowe’s – the US’s second-largest hardware retailer (behind Home Depot) -- has agreed to sell its Canadian division, Lowe’s Canada, to US private equity firm Sycamore Partners for $400 million in cash. Lowe’s exit from Canada, where it operates about 450 corporate and independent affiliate dealer stores under various banners including RONA, Lowe's Canada, Réno-Dépôt, and Dick's Lumber, signals a shakeup in the Canadian hardware sector. Lowe’s entered Canada with the purchase of RONA in 2016 but sustained deep losses there. Previously, the company sold its much smaller retail operation in Mexico in 2018. Lowe’s chairman said "The sale of our Canadian retail business is an important step toward simplifying the Lowe's business model,” and gives the hardware retailer the opportunity to focus on its core US retail business. The sale is expected to close in 2023.
                                    • The not seasonally adjusted US construction unemployment rate fell 1.1% in September 2022 from a year ago, down from 4.5% to 3.4%, according to a state-by-state analysis of Labor Department data released today by Associated Builders and Contractors (ABC). Forty-two states had lower unemployment rates over the same period, Arkansas and Wisconsin were unchanged, and six states were higher. Almost half of US states had estimated construction unemployment rates at or below 3%, ABC reported. Residential construction employment has fully recovered, while nonresidential construction employment remains below its pre-pandemic peak. September residential payroll construction employment was 162,000 above its pre-pandemic peak, while nonresidential payroll construction employment was 67,000 below its pre-pandemic peak. Construction employment/spending drive demand for brick, roofing tiles, pipes, flooring tiles, and other clay and refractory building products.
                                    • In a move expected to encourage domestic oil and gas production – a driver of demand for ceramic propping agents used in fracking – the OPEC+ energy cartel in October 2022 agreed to their first large production cut in more than two years. The cut of two million barrels a day represents about 2% of global oil production. Led by Saudi Arabia and Russia, the cartel said it was acting amid signs of a downturn in the world economy that might cause demand for oil to weaken and prices to fall. The price of Brent crude, the international benchmark, which had eased during the summer months, rose more than 1.5% after the meeting, extending the recent gains and bringing prices back to levels last seen in mid-September, The New York Times reported. The average price of gasoline in the United States has begun to rise again, tracking the price of oil.
                                    • The global market for advanced ceramics is projected to reach $13.9 billion in 2027, up from an estimated $10.9 billion in 2022, a CAGR of 5.1%, according to a new report published by MarketsAndMarkets Increasing demand from electronics products, growing population in the Asia-Pacific region, the Middle East & Africa, and South America, and growing demand for better alternative materials to conventional ones are among the factors driving growth in the advanced ceramics market. End-user industries for advanced ceramics include military & defense, aerospace, automotive, electronics, and energy & power.
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