INDIA CERAMIC INDUSTRY

Industry Highlights

Ceramic Tiles today have become an integral part of home improvement. It can make a huge difference to the way your interiors and outdoors look and express.

The Indian tile industry, despite an overall slowdown of the economy, continues to grow at a healthy 15% per annum.

Investments in the last 5 years have aggregated over Rs. 2000 crores and production during 2006-07 stood at approx. 340 million sq mts.

The Indian tile industry is divided into organized and unorganized sector.

The organized sector comprises of approximately 16 players. The current size of the unorganized sector is about Rs 3000 crores

The unorganized sector accounts for 55% of the total industry bearing testimony of the attractive returns from this sector. The size of the unorganized sector is approximately Rs 3500 crores

Revenue earning industry - excise mops up over Rs. 350 crores annually from the organized sector itself.

Indian ranks in the top 5 list of countries in terms of tile production in the world.

With proper planning and better quality control our exports (presently insignificant) contribution can significantly increase.

BACKGROUND

Apart from their decorative looks, Ceramic Tiles are primarily hygiene products and that is how our broad spectrum of consumers view the product. This is fairly evident from its varied usage from bathrooms and kitchens in average Indian households to medical centers, labs, milk booths, schools, public conveniences, shopping malls and numerous other centers; which dot our day to day life. A ceramic tile is basically a "utility product" and that remains our promotional slogan. Popular housing projects are increasingly switching over to Ceramic Tiles moving away from the traditional use mosaic and even granite or marble, owing to several factors viz. ease in laying ability, versatility, low price and hygiene.Nevertheless, this decorative aspect of a Ceramic Tiles has forever been in the forefront. Heavy churning out of bolder and colorful designs by the industry are testament to the fact that most households regard a ceramic tile as an "adornment" for an otherwise "drab look" of their age-old floorings or an unfurnished wall.

OVERALL PICTURE OF THE INDUSTRY

Ceramic tiles as a product segment has grown to a sizeable chunk today at 340 Millions Square meters production per annum. However, the potential seems to be great, particularly as the housing sector, retail, IT & BPO sectors have been witnessing an unprecedented boom in recent times. The ceramic tiles sector has been clocking a robust growth of 12-15% consistently over the last few years. Today, India figures in the top 5 countries in the world manufacturing ceramic tiles.The key drivers for the ceramic tiles in India are the boom in housing sector coupled by government policies fuelling strong growth in housing sector. The retail boom in the Indian economy has also influenced the demand for higher end products.

Overall the bullish growth estimates in the Indian economy has significantly influenced the growth of the Indian Ceramic tile industry.The main product segments are the Wall tile, Floor tile, Vitrified tile and Porcelain tile segments. The market shares are 35%, 53% and 12% respectively for Wall, Floor & Vitrified/Porcelain tiles. The tiles are available in a wide variety of designs, textures and surface effects. They cater to tastes as varied from rustics to contemporary marble designs in super glossy mirror finishes.Both, traditional methods of manufacturing (tunnel ) and the latest single fast firing methods are deployed in manufacturing.

Some of the latest trends in manufacturing methods can be seen in India. The investments in the last five years are approx. Rs 2000 crores. The industry also enjoys the unique distinction of being highly indigenous with an abundance of raw materials, technical skills, infrastructural facilities despite being fairly capital intensive. A total of over 5,50,000 people are employed in the sector. Out of this, 50,000 people are directly employed and 5,00,000 are indirectly associated. The potential is huge considering the per capita consumption of ceramic tiles in India. Currently it is at 0.30 square meters per person in comparison to over 2 square meters per person for like countries like China, Brazil and Malaysia

WHERE WE STAND AND WHAT WE MUST DO?

As a foreign exchange earner or a global player, Indian Tile industry has captured the attention of the world in the ceramic tiles segment. India is projected to figure in the top 3 countries manufacturing ceramic tiles by 2010.
This however is subject to policies favorable for the tile industry to complete with international players on an even ground.
To compete internationally, our plants must be geared up to large units currently operating in China and Turkey are driven by economies of scale.
These will also help us in lowering our cost of production significantly. Also, infrastructural support is a key factor that determines the speed of growth. Better infrastructure will bring in better growth in terms of consistency and sustenance.
Freight, supply of power and gas remains the key cost-related issues impacting the industry. Availability, consistent supply and reasonable rates are extremely important for the growth of the ceramic tile industry.
Also, the prevailing anomalies pertaining to Basic Customs Duty on import of ceramic tiles from China and raw materials imported from abroad need to be corrected to prevent dumping of tiles from China. Rural thrust should be enhanced by favorable excise duty and MRP structure.

CURRENT STATUS OF THE INDUSTRY

The ceramic tiles industry in India has followed similar trends internationally which have been characterized by excess capacities and falling margins. Countries like Malaysia, Thailand, Indonesia, Sri Lanka and Vietnam are setting up their own plants.
China has emerged as a major competitor. Producers from Spain and Italy have the advantage of lower transportation costs while exporting to USA and Germany.
In India, the per capita consumption is as low as 0.30 square meters per person compared to China (2 square meters per person), Europe (5 to 6 square meters per person) or Brazil (2.5 square meters per person). Rising disposable incomes of the growing middle class and 40 million units of housing shortage hold out a great potential.
A major change that took over the ceramic tiles industry, was the introduction of vitrified and porcelain tiles. These new entrant product types are said to be the tiles of the future. Internationally these tiles are already the major sellers. These category of products account for 13% of all organized sales in this industry.

These new products and the conventional wall & floor tiles have together made the organized industry grow to a formidable Rs. 3000 crores industry. This coupled with a spate of expansions by many players make the industry look very promising in the future.The Indian Industry has developed an export market although at the lower end. In volume it constitutes less than half a percent of the global market. (Presently India does not figure in the list of major exporting countries). But this reality could change as Indian exports are rising at the rate of 15% per annum.
The top-end of the global export market is presently dominated by Italy (40.8%) and Spain (26.4%).

(Source: Compiled using information from Corporate Catalyst India, ASCER and other associations.)

CERAMIC TILE INDUSTRY STATISTICS:


1. World production: 6900 Million sq.mt.
2. India's Share: 340 Million sq.mt..
3. World ranking (in production): 5
4. Per capita consumption: 0.30 sq.mt.
5. Global Industry Growth Rate: 6%
6. Growth Rate (India Domestic Market): 15%

7.

Organized industry turnover (India): Rs 3000 crores

Glazed Wall Tile share: 40%
Glazed Floor Tile share: 46%
Unglazed Vitrified Tile share: 8%
Glazed Porcelain Tile Share: 6%

Unorganised Industry Turnover: Rs 3500 crores

Glazed Wall Tile share:57%
Glazed Floor Tile share: 35%
Unglazed Vitrified Tile share: 6%
Glazed Porcelain Tile Share:2%

8.Investments in last 5 years: Rs 2000 crores

9.

Organized sector:
Share of Production: 56%
No. of units: 16
Revenue (excise duty): Rs 300 crores

10.

Unorganized sector:

Share of Production:44%
No. of units: 200 (approx..) (70% based in Gujarat region)
Revenue (excise duty): Rs 350 crores per annum or less

11. Job Potential:

50,000 direct
500,000 indirect


MEMBERS IN CERAMIC TILE INDUSTRY:

Anant Raj Industries Ltd.
www.romano.trade-india.com
Antique Granito Pvt. Ltd.
www.antiquegranito.com
Asian Granito (India) Ltd.
www.asiangranito.com

City Tiles Ltd.
www.citytilesltd.com

Century Tiles Ltd.
www.centurytiles.com
Deco Lights Ceramics Ltd.
www.decocovering.com
Euro Ceramics Ltd.
www.eurogranamite.com
Gokul Ceramics Pvt. Ltd.
www.vrundavanceramic.com
H. & R. Johnson (India) Ltd.
www.hrjohnsonindia.com

Jalaram Ceramics Ltd.
www.siddharthceramics.com
Kajaria Ceramics Ltd.
www.kajariaceramics.com
Lorenzo Vitrified Tiles Pvt. Ltd.
www.lorenzovitrified.com
Murudeshwar Ceramics Ltd.
www.naveenceramics.com

Nitco Tiles Ltd.

Oracle Granito Ltd.
www.oraclegranito.com
Orient Ceramics And Industries Ltd.
www.orienttiles.com
Radiant Floor Tiles Pvt. Ltd.

RAK Ceramics India Pvt. Ltd.
www.rakceram.com
Regent Granito (India) Ltd.
www.regentgranito.com
Restile Ceramics Ltd.
www.restile.com
Sentini Cermica Pvt. Ltd.
www.sentinicermica.com
Silica Ceramica (P) Ltd.

Sogo Ceramics Pvt. Ltd.
www.sogovitrified.com
Somany Ceramics Limited
www.somanyceramics.com
Spectrum Tiles Pvt. Ltd.

Suman Ceramics
www.sumanceramics.com
Surani Ceramic

Umiya Ceramic Pvt. Ltd.

Vita Granito Pvt. Ltd.
www.vitagranito.com
Varmora Granito (P) Ltd.
www.varmora.com
Vrundavan Ceramics Ltd.
www.vrundawanceramic.com