Business Opinion

Shutdown of 110-year-old South African company leaves a big hole

Luke Fraser

 ·25 Aug 2025

110-year-old company Johnson Tiles has ceased operations in South Africa, which has placed JSE-listed Italtile and the larger South African tile industry under pressure. 

Johnson Tiles was a division of Norcros SA Proprietary Limited, a leading glazed ceramic wall and floor tiles manufacturer, that forms part of the UK-based  Norcros group.  

It was one of the largest manufacturers of ceramic tiles, with production facilities based in Olifantsfontein, Johannesburg. 

Following a strategic review, Johnson Tiles was closed by its UK-based parent company in June of this year. 

Norcros said the tough macroenvironment over the last five years hurt the business. Its latest £12.3 million in revenue was not enough to stop it falling into an operating loss. 

This closure profoundly impacts the South African industry, with retailer Italtile stating that it severely hits local capacity.

In its financial results for the year ended 30 June 2025, Italtile said that intense competition in tile manufacturing and retail segments continued unabated. 

It said that newly commissioned capacity in Zambia, Zimbabwe and Mozambique has led to excess capacity and production, far exceeding consumer demand within the SADC region. 

Product dumping and overstocking by most retailers, wholesalers and manufacturers continued to drive price inflation, resulting in margin pressure. 

The over-capacity resulted in consolidation, including Johnson Tiles South Africa ceasing operations. 

“As a result of the closure of this 110-year-old business, regional tile manufacturing capacity reduced by five million square metres per annum, leaving only two local producers,” said Italtie.

“The adhesive industry, which has no regulated standards on its products, has seen a proliferation of adhesive producers offering inferior, low-priced products.” 

The introduction of tariffs on imports by Zambia and Zimbabwe to protect their local production has affected the ability of local producers to export into these countries, impacting export market share. 

The group noted that establishing major new manufacturing facilities in neighbouring countries highlights South Africa’s difficult and relatively unsupportive investment climate for manufacturers. 

“Continued proliferation of new tile retailers, including regional retail chains extending their footprint, continues to place margins under pressure and will influence sustainable retail capacity.” 

The group said that it will only consider opening new stores where feasible, and added two stores to expand its network to 210. 

“The profusion of informal retailers being supplied by the new manufacturing competitors, especially in the rural areas, has increased competition for our TopT brand.” 

“Our strategy has been to continue to build on our established strengths in this market and continue to expand the TopT footprint.” 

Flat financials 

The group’s flat financial highlights the tough operating environment, with turnover dropping by 2% to R11.3 billion.

Trading profit was flat at R2.1 billion, while earnings per share increased by 3% to 125.6 cents. 

Despite the weak financial growth, the group declared a special cash dividend of 98 cents per share, an 18% increase from the prior year’s special dividend. 

The group gave the special cash dividend due to its strong cash generation and cash reserves exceeding operational requirements. 

The group’s total dividend also increased by 17% to 148 cents per share over the period.