The Hindu Business Line : Tile-makers yet to see full turnaround

Mr P. N. Trivedi, Chairman, Indian Council of Ceramic Tiles and Sanitaryware, said some of the companies had cut production by 40 per cent between September last year and April this year.

The situation had since improved, though a few units continued to operate with a 20 per cent cut.

The tile-makers’ association represents majors such as H&R Johnson, Kajaria Tiles, Orient Ceramics, Somany Tiles and Murudeshwar Ceramics.

Recovery in the sector appears to be slow despite the Centre extending anti-dumping duty to ceramic glazed tiles as well.

The domestic tile business is pegged at Rs 8,610 crore, with the organised sector accounting for 30 per cent of the business.

The unorganised segment has consistently been charged with tax evasion and offering discounted rates which has put pressure on the margins of its organised players.

Mr Trivedi said despite the ceramic industry growing at 12-15 per cent, growth in local capacities had far exceeded this figure. This had led to a huge capacity build-up which could take over three years to absorb unless demand picked up.

Large-scale imports from China, which were still on the rise, had hit the industry though a few companies such as Nitco and Kajaria that had obtained duty exemptions, continued to import. Chinese imports were valued at Rs 364 crore in 2007-08, compared with Rs 189.18 crore in 2006-07 and Rs 163.14 crore the year before, he said.

However, Mr Paresh Shah, Director, Euro Ceramics, said sales had improved and the company was now working at full capacity. Chinese imports were of no consequence with the anti-dumping duty in place. More importantly, consumers today demanded quality and were not carried away by cheaper imports.