To cater to the increased demand for ceramic tiles, Somany Ceramics Ltd (SCL), plans to set up a greenfield project at Ahmedabad.
The company, which has two plants in Harayana and Gujarat, has started a new plant at its manufacturing facility in Haryana to manufacture full-body glazed vertified tiles for the first time in India, said Abhishek Somany, joint managing director, SCL.
He added: ?We have grown at a compounded annual growth rate (CAGR) of 25% over the last three years, compared with the industry?s average growth rate of 12%. We envisage 25% growth in the current financial year.?
?To sustain growth and to become a number 2 player overall, the company has decided to increase its capacity. Accordingly, We plan to set up a greenfield project at Ahmedbad with an estimated investment of Rs 120 crore in two phases. The production capacity would be 15,000 sq m a day,” Somany said. Somany Ceramics has a production capacity of 56,000 sq m per day. It outsources 25,000 sq m a day of low-end tile products from contractors in Gujarat, he said.
He added the company, which has focused on the domestic market with little exposure to export (3% to 4% of its overall turnover), is set to give a major push to exports. The firm expects to double exports in the current financial year.
?We have been outsourcing our mass products from 16 different companies of this unorganised sector and this segment ?Somany Express? contributed 30% to our total turnover of Rs 560 crore last year. ?
Among the segments, floor tile is the fastest growing one and it contributes 65% to our turnover. The wall tile segment is also equally growing, he added. The south and north contributes 30% each followed by west (25%) and east (15%), he pointed out. The company has 600 designs under three different brands – Somany Signature, Somany and Somany Express.
The tile industry is estimated to be around Rs 11,000 crore of which organised sector is estimated to be around Rs 4,000 crore with 10 to 12 strong players. The Rs 7,000-crore unorganised sector has over 350 small to medium players and all are situated in and around of Morvi in Gujarat.