At present there are more than 16 industrial units are operating in organized sector & more then 250 units in unorganized sector comprising of total production capacity of more than 175mn sq. The ceramic tile industry caters to the housing, infrastructure and the real estate sectors which are experiencing unprecedented growth. As a consequence, the ceramic tile industry is also growing at a rapid
pace. Most of the companies in this sector have started reporting robust results form FY 2006 onwards. Though the ceramic tile industry is well-developed in India (quality of the organized sector being on par with international standards), the ceramic tile penetration is still very low. The per capita consumption in India is as low as 0.15 sq mt as compared to 2 sq mtr in China, 6 sq mt in Europe and 2.5 sq mt in Brazil. Booming economy, rising disposable incomes of the middle-class, booming real estate sector, however, hold out a great potential in India. There has been a large addition in capacity in the unorganized sector in Gujarat. The tiles manufactured are based on second-hand imported plant and the quality is suspect. This, therefore, does not offer much scope for consolidation to us. The major players are all growing by adding new capacities themselves. It has been believed that it has not necessary for a company to manufacture all the tiles in-house as long as the same can be outsourced and meet market stringent quality parameters. The entire requirements of ceramic tiles are currently being outsourced from a supplier in China with whom the company has an exclusive arrangement. Thus this has been resulted into a domestic and imported ceramic tiles consumption. Ceramic tiles are available in various colors, design and size. This requires stocking adequate quantities of tiles of different varieties and also at different locations across the country. As a result, each company has to hold large inventories to cater to the market needs. 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. 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.)
