The acquisition forms part of the group's initiatives to become the leader in the tile manufacturing sector with largest capacity and presence in all major regional market segments in India. The company has eight tile manufacturing units spread across the country with an annual capacity of 15 million sq mts. Top company officials told The Financial Express that the take-over of the Parryware unit at Karakkal near Pondichery with a capacity of 1.6 million sq mts per annum was part of the strategic initiatives taken by the company to consolidate its position in tile manufacturing business.

According to a recent study done by a leading consultants, the tile industry is in for a major shakeout, following the building up of excess capacity leading to intense competition and shrinking margins. The industry is also witnessing a highly segmented market with consumer preferences in different regional market varying lock, stock and barrel. With the acquisition of Parrywares unit, the H&R Johnson Ltd would have a strong foothold in the burgeoning South Indian market, company officials said.

The company is presently doing the due diligence study of the Parryware unit and the transfer of management to the Raheja group would be completed within a couple of months. The Raheja group company is now the single largest player in the Rs 1,200-crore tile industry logging a turnover of Rs 214 crore in 1998-99.