Despite challenges, ceramic tiles to grow
With the opportunities in the sector, customers are getting exposed to better design and technology and variety which they didn’t know that it existed in industry and get exposed only when they wish to purchase a new home.
Subrata Basu, AVP Marketing, Nitco Ltd
With growing economy, increase in living standards of people and rapid urbanisation and growth in real estate sector is helping ceramic tiles and sanitaryware sector to grow
Ceramic tiles and sanitaryware sector has been growing about 15-18 per cent annually over the last few years. According to Indian Council of Ceramic Tiles and Sanitaryware, the overall size of the Indian ceramic tile industry is approximately Rs 18,000 crore and is divided into organised and unorganised sector. The organised sector comprises of approximately 14 players. The current size of the organised sector is about Rs 7,200 crore. The unorganised sector accounts for nearly 60 per cent of the total industry bearing testimony of the growth potential of this sector.
Variations and varieties While talking about the current scenario of industry, Subrata Basu, Associate Vice President Marketing, Nitco Ltd., said, “There is lot of variations and varieties today which suits different projects like affordable projects and luxury projects. You can use tiles in a variety of manners, so I don’t think it is a limitation.”
K. G. Kundariya, Director and Mentor, Win-Stone Industries (India) Pvt. Ltd. said, “Real estate boom and rapid urbanisation will create more demand, and it result in rapid growth of the industries.”
Facing challengesAs the industry is growing, it also faces challenges like rising fuel price, import of cheap tiles from China, and competition from the unorganised sector. While talking about how the industry is facing the challenges, Mr Kundariya said, “Fuel price is main bottleneck for the industries. There is only one option available that is conventional energy source like coal gas instead of CNG. Import from China is not threat anymore as all products of ceramics is produced in India, especially in Gujarat, and quality of the products is very good. Export market is growing against China.”
He continued, “It is not a question of competition from unorganised sector. Now really there is very good competitive market environment for the industries. Before that market was in hand of a few organised sectors. Now all organised sector players buy (outsource) from Gujarat, especially from Morbi city. It has also equity participations with Morbi units.”
Whereas, Mr Basu has different views to overcome the challenges. He added, “That’s the reality and industry need not to cope up to the challenges, because industry is far greater and it is growing at larger pace and there is market for everyone. It is like you have option to buy from cheap, low end or expensive cars. With the opportunities in the sector, customers are getting exposed to better design and technology and variety which they didn’t know that it existed in industry and get exposed only when they wish to purchase a new home. Customers are willing to go up for price points when he actually sees what is available. It’s like we never knew great products are available earlier and once we get exposed to great products, we believe, we would like to have it in home. Home and real estate are one time investment, so customers will always not be so pricey about choosing what he wants to use lifelong and don’t have a feeling of design.”
Import – export scenarioWhile discussing about the import and export of the sector, Mr Kundariya added, “Import has already decreased now and it will decrease more day by day from China, Italy, and Spain. Today all types of tiles are produced here with export quality. Export from India is growing. In last one year, exports have increased substantially. Our main competitor in export market is China. Last year, Chinese export competitive edge is going down due to its currency appreciation and decrease in export incentives. China was main player in export market due to heavy export incentive and its currency fix rate.”
According to Mr Basu, imports and exports for the sector from China have lowered down a lot and there are lots of variability due to variations in currency which has actually limited the imports and exports largely. Quality imports and exports are happening, but that is not driving effectively. In India, it’s just 4 per cent products which come from imports and exports. It’s not a large variation industry which is helped by imports or exports,
Government support for industry “This industry does not look or use government as tool,” said Mr Basu. Whereas Mr Kundariya commented that the government hasn’t given any support to the industries. Even internal road is constructed by industries through personal financial contribution. The industries expect support from government like infrastructure, water and waste land.