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[October 2009]
Indian Tile Industry Sees Recovery
While real-estate developers have been reporting higher sales since May, tile makers in India are now reportedly starting to see the first effects of this revised market buoyancy.
Mr P N Trivedi, Chairman of the Indian Council of Ceramic Tiles & Sanitaryware (ICCTAS), said some of the companies had cut production by 40 per cent between September last year and April this year. The situation, however, had improved considerably, though a few units continued to operate with a 20 per cent cut.
ICCTAS represents majors such as H&R Johnson (India), Kajaria Ceramics, Orient Ceramics, Somany Ceramics and Murudeshwar Ceramics.
Recovery in the sector remains relatively slow despite the extension of anti-dumping duty to ceramic glazed tiles as well, but in global terms is still significant.
The domestic tile business is pegged at Rs 8,610 crore, with the organised sector accounting for 30 per cent of the business.
However, local pressures continue from within the industry itself. The unorganised segment has consistently been charged with tax evasion and offering discounted rates, which has put pressure on the margins of its organised players.
Mr Trivedi said despite the ceramic industry growing at 12% to 15%, growth in local capacities had far exceeded this figure. This had led to a huge capacity build-up which could take over three years to absorb.
Large-scale imports from China, which were still on the rise, had hit the industry though a few companies such as Nitco and Kajaria that had obtained duty exemptions, continued to import. Chinese imports were valued at Rs 364 crore in 2007-08, compared with Rs 189.18 crore in 2006-07 and Rs 163.14 crore the year before, he said.
However, Mr Paresh Shah, Director, Euro Ceramics, said sales had improved and the company was now working at full capacity. Chinese imports were of no consequence with the anti-dumping duty in place. More importantly, consumers today demanded quality and were not carried away by cheaper imports, which has provided a fantastic opportunity for Indian tile companies to replace the imports of recent years with their own, domestic brands.
"With optimism continuing to grow in India’s tile sector, investments continue to be on the cards," said Kevin Hudson, Exhibition Director for Indian Ceramics 2010. "This is a great time for tile technology companies to be making their plays in India, and with Gujarat home to over 70% of production, Indian Ceramics 2010, in Ahmedabad, is once again perfectly poised.
"Certainly, the fact that now over 50% of the available space has been booked bears testament to that fact!"
www.indian-ceramics.com
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