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[February 2004]
Interceramic Posts 2003 Year End Results
Interceramic, the Chihuahua, Mexico based ceramic tile producer, reported consolidated sales for 2003 of US$306.4 million, up 2.14% from sales of US$300 million in 2002 - and thus establishing a new record high for the company. The company did add, however, that the figure was certainly below its expectations for the year.
The growth in sales was largely offset by increases in certain components of the cost of goods sold, as well as by lower price levels, mainly the result of the growth of imported product in the company's mix of sales. Accordingly, the gross margin for 2003 of 34.7% was 2.3 points lower than the 37% recorded in 2002.
The primary reason for higher costs was the further slide of the Mexican Peso against the US dollar. Many raw materials, the natural gas fuel and also imported tiles which round off the company's offering are all paid for in US dollars and so all became more expensive during the year.
Steps were taken to lower the cost of production and during 2003 Interceramic put into production a new, state-of-the-art kiln in one of its Chihuahua plants and yet another new kiln is about to come on line. The company also implemented a fully automated tile selection process in its plants - the critical stage where tile is packaged and categorised into first class, second class or scrap - not only reducing the labour cost but also improving the accuracy of the process. Additional improvements included major changes to the glazing process. All of these initiatives are designed to help Interceramic produce higher quality, more innovative products at a lower cost.
ENDS