Ceramic Industry [PDF]

Zitiervorschau

CHAPTER - 1: INTRODUCTION

1.1 History of the ceramic tiles Rumors have it that the first clay tiles were produced seven to eight thousand years ago in the area now known as the Holy Land. Many companies independently verify that the actual known history of Tiles (and the known usage of wall and floor tile coverings) can be traced back as far as the company millennium BC (4000 BC) to Egypt.

In those days, in Egypt, tiles were used to decorate various houses. Clay bricks were dried beneath the sun or baked, and the first glazes were blue in color and were made from copper, very exquisite! During that period ceramics were also known to be found in Mesopotamia. These ceramics bore decorations, which were white and blue striped and later possessed more varied patterns and colors. Later on, in China too, the great center of ceramic art, a fine, white stoneware with the earliest Chinese glaze was produced during the Shang-Yin dynasty (1523-1028 BC). The usage and the art of making and decorating ceramic tiles had spread and by 900 A.D., decorative tiles had become widely used in Persia, Syria, and Turkey and across North Africa. As transport and communication developed, tile usage and its penetration in other territories increased. Wars and territory take-over’s caused this art to spread even faster. The Romans introduced tile making in Western Europe as they occupied territories. The Low Countries of Northern Europe somehow acquired the technology from Persia, while the Moors brought African tiles with them when they invaded Iberia (Spain). It was aboard the ships of Spanish conquistadors that decorative clay tiles found their way to the New World, where they were used primarily to decorate the Churches of newly built missions. By the end of the 12th century, use and manufacture of Ceramic Tiles had spread across Italy and Spain and into the rest of Europe. Till that time they were mainly used to decorate the floors of Cathedrals and Churches. The skill had eventually vanished from Europe in the 16th century following the reformation. But the decorative wall tile art had survived in Turkey and the Middle East and the Delft tiles art survived in Holland.

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A form of tile making had also evolved among the natives of North and South America at some point. The first decorative tiles to appear in Colonial North America were imported from Northern Europe, mainly England the Brits having hijacked the technology from the Dutch. The tiles were too expensive for utilitarian purposes in the Colonies and were found almost exclusively in the homes of the wealthy.

Through the centuries, tile decoration was improved upon, as were methods of tile manufacture. For example, during the Islamic period, all methods of tile decoration were brought to perfection in Persia. Throughout the known world, in various countries and cities, Ceramic tile production and decoration reached great heights. The tile mosaics of Spain and Portugal, the floor tiles of Renaissance Italy, the faiences of Antwerp, the development of tile iconography in the Netherlands, and the Ceramic tiles of Germany are all prominent landmarks in the history of Ceramic tile. In the early days, the tiles were hand-made, each tile was hand-formed and hand-painted, and thus each was a work of art in its own right. Ceramic tile was used almost everywhere on walls, floors, ceilings, fireplaces, in murals, and as an exterior cladding on buildings.

Today Ceramic tile throughout the world is not hand-made or hand-painted for the most part. Automated manufacturing techniques are used and the human hand does not enter into the picture until it is time to install the tile. They are used in an almost infinite number of ways and you don’t have to consider yourself company wealthy to own them. In commercial buildings, where both beauty and durability are considerations, ceramic tiles will be found, particularly in lobby areas and restrooms. In fact most modern houses throughout use Ceramic tiles for their bathrooms and kitchens and in every vital area of the premise. Ceramic tiles are also the choice of industry, where walls and floors must resist chemicals. And the Space Shuttle never leaves Earth without its protective jacket of high-tech, heat resistant tiles.

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1.2 Background Apart from their decorative looks, Ceramic Tiles are primarily hygiene products and that is how company broad spectrum of consumers views 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 company day to day life. A ceramic tile is basically a "utility product" and that remains company 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.

1.3 Overall picture of the Industry Ceramic tiles as a product segment have 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. 3

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.

1.4

Ceramic tiles industry in India

Introduction The word Ceramic comes from the Greek word “Keramos” meaning pottery, it is related to an old Sanskrit root meaning “to burn” but was primarily used to mean “burnt stuff”. In the early days the tiles were hand made, hand formed and hand-painted. But today the ceramic tile is not hand made or hand painted for most of the part. In fact in the modern house throughout use ceramic tiles for their bathrooms and kitchens and in every vital area of the premise. Apart from decorative look ceramic tiles are primarily hygiene products and that is evident from its usage ranging from bathrooms and kitchens in average Indian households to medical centers, labs, milk booths, schools, public conveniences etc. A ceramic tile is basically a “utility product” and popular housing projects are increasingly switching over to Ceramic Tiles from the traditional mosaic and even granite or marble, owing to several factors viz. ease in laying ability, versatility, low price and most importantly hygiene. The main product segments are the Wall tiles, Floor tiles, Vitrified tiles and Porcelain tileSegments. The market shares are 35 percent, 53 percent and 12 percent respectively for wall,Floor & Vitrified/Porcelain tiles. In India, Ceramic tile industry emerged in the late 1950s. Ceramic Tile Industry can be classified into three categories namely wall tile segment, floor tile segment and vitrified and porcelain tile segment. In India the floor tiles segment is growing at a faster rate. The market for the wall tiles is rising at a relatively slower pace and this has resulted in high excess 4

capacity in the wall tile segment. The entry of two new product categories Vitrified tiles and Porcelain tiles has increased the size of the market considerably. It is expected that these products will gradually take away the market from the conventional ceramic tiles (wall and floor). As far as manufacturing of ceramic tiles is concerned, both the organized and unorganized sector s play a very important role in India. The per capita consumption of ceramic tiles in India is very less as compared to the other countries in the world. It is as low as 0.30 sq.mtr per annum. This low per capita consumption shows the likely demand that is going to arise in the future in India as more and more development takes place. Ceramic Tiles are furnishing material apart from being utility or hygiene products. Despite an overall slowdown of the economy this sector continues to grow at a healthy 12 percent per annum. Growth of the unorganized sector accounted for 44 percent of the total production and the revenue earnings from the organized sector accounted to over Rs150 core. India ranks 7th in terms of production in the world and the market share of India have risen from 1.7 percent to 2.7 percent in terms of ceramic tile production in 2007-08. Graph:

(Source: www. Krchoksey.com, kisan ratilal choksey share and security private ltd)

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Industry Profile Ceramic tiles as a product segment have grown to 3.8 million tons production per annum. The potential seems to be great particularly in view of the boom in the housing sector, retail sector and IT and BPO sectors. The ceramic tile sector has been clocking a robust growth of 12-15 percent consistently over the last few years. The investment in the ceramic tile industry, in the last five years is approximately Rs2000 crores. This industry provides employment of 550000 people, 50000 of whom are directly employed. The potential is huge considering the per capita consumption of ceramic tiles in India. Currently it is at 0.5 sq.m per person in comparison to over 2 for like countries like China, Brazil and Malaysia. Some of the key statistics pertaining to the industry are summarized below: Table WORLD PRODUCTION

6400 MILLION SQM

INDIA'S SHARE

200 MILLION SQM

WORLD RANKING PER CAPITA CONSUMPTION

7 0.15 SQM

GLOBLE INDUSTRY GROWTH RATE

6%

GROWTH RATE ( INDIAN DOMESTIC MARKET )

12%

ORGANISED INDUSTRY TURNOVER

RS 22.50 BILLION

WALL TILES SHARE

40%

FLOOR TILES SHARE

46%

VITRIFIED TILES & PORCELAIN TILES

14%

INVESTMENT IN LAST FIVE YEAR

RS 20. BILLION

ORANISED SECTOR

45%

SHARE OF PRODUCTION

56%

NO. OF. UNITS

15%

UNORGANISED SECTOR

55%

SHARE OF PRODUCTION:

44%

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NO OF UNITS

200(APPROX)

WALL TILE SFARE

57%

FLOOR TILE SHARE

35%

VITRIFIED TILES & PORCELAIN TILES

8%

(Source: kiran ratilal choksey Mumbai)

Industry Highlights 

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

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

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Investments in the last 5 years have aggregated over Rs. 2000 crores and production during 2007-08 stood at approx. 340 million sq mts.

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

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

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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

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

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

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

Potential for the Ceramic Industry in India: Like developed markets the financial institutions (both foreign and domestic) are beginning to show interest in the sector. Various foreign Real Estate and Finance companies like GE Commercial Finance, Tishman Speyer, Ascendas and Farallon Capital have entered the Indian market. The Ceramic Tile Industry drives its demand from the Real Estate and Construction sector. Ceramic Tiles Export Region wise Weekender. 8

Ceramic tiles find its maximum usage in residential and commercial buildings and are also finding acceptance in other construction projects as well like airports, bus terminals etc. as they are found more suitable at places where there is more human traffic. In India the construction sector is expected to do well in future mainly due to fiscal incentives given to infrastructure development. India is the prime destination for the IT services outs company. In the coming five years at least 55 million sq.mt of extra office space must be completed in the premium office space alone. Investment commission report states that the retail sales were $206 billion in 2004 and is expected to grow three-fold in the next 10 years from $206 billion to about $660 billion by 2015. Organized retail was only $6.4 billion and is expected to grow rapidly to reach $100 billion by 2015. Further India is expected to be among the top 5 retail markets in the world in 10 years. The Ceramic tiles particularly the vitrified tiles are finding increasing usage in both these sectors and the sector would benefit from an upsurge in these areas as well. Indian economy is poised to grow at 7-8 percent and with growing incomes and urbanization, demand for houses is slated for growth. The increasing focus on rural areas, by government and corporate, the demand for housing would also increase in rural areas. The ceramic industry will also benefit from the above developments. Increasing demand is just one part of the story the availability of Finance is the other part. With the availability of loans at low interest rate and tax incentives have enabled the people to buy houses and build up their own establishment. With the increasing competition amongst both Banks and Housing Finance Companies the people are avail of getting better financing options and that too at a cheaper rate. This would further increase the demand for tiles. Another important driver is the distribution network of a ceramic tile manufacturing company. The distribution network is critical to success in this industry.

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Distribution Chain in Tile Industry: Direct Pr

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, company plants must be geared up to large units currently operating in China and Turkey is driven by economies of scale. These will also help us in lowering company 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. 10

1.5

Global scenario of ceramic tiles industry

Introduction 30 major tile manufacturing companies cover 95.8 percent of the total world production of ceramic tiles in 2005. Asia contributes 53 percent to the total world production in 2005, 54 percent in 2004 and 50 percent in 2003 respectively. China is the largest producer and contributes almost 33 percent of the world production in 2004. This is followed by Thailand, Poland, South Africa and Russia which are growing at almost 20 percent CAGR between 2001- 05 whereas countries like Japan, Italy have shown negative growth over the period. Asia tops the consumption chart followed by EU and South America. China dominates the consumption list and its consumption is almost company times that of Brazil. Germany, France features in the top 10 list of consuming countries but they are not there in the top 10 producing nations. Going further USA, Germany, France and even India consume more than they produce and they are meeting their demands through imports. The 30 major tiles manufacturing countries are also the biggest consumers and consume 88.20 percent of the total world consumption of ceramic tiles. Europe is the highest exporting region and exports almost 50 percent of its production to the other regions. Graph

(Source: www. Krchoksey.com, kisan ratilal choksey share and security private ltd, Mumbai 2007-08)

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Whereas Asia consumes most of its production in its own region and has little left to export. Italy, Spain and China are the leading exporters and USA, Germany and France are the leading importers. China which was the 3rd largest exporter in 2004 has at present become the 2end largest exporter. Exports of the 15 major exporting countries represent 23.9 percent world consumption and exports from Italy and Spain represent 42.6 percent of the world’s exports and 11.2 percent of world consumption.

The Global ceramic tiles industry has facts like: 1) Countries like Malaysia, Thailand, Indonesia, Shri-lanka and Vietnam are setting up their own plants. 2) China is emerging as the leading producer. 3) Producers of through Spain and Italy beneficial because of the lower transportation cost for the exports to the countries like U.S.A. and GERMANY. 4) In India per capital consumption is No.1 sum while comparison it is 3 to 5 sqm in China and Europe. 5) The top end of the global export is dominated by Italy and Spain. 6) The world top producing countries for the ceramic tiles are Spain and Italy. 7) Being a large continent with many as 3 countries marketing product and services in African countries is indeed a challenging task. However for a successful marketing effort it is an imperative to identify and association with reliable and efficient business partners in key African countries. A good starting point is via an organization that especially in marketing and business. Promotional in African market. Another tool to search for business association in African countries is the internet.

Conclusion can be made over there above global information that among the various countries Italy and Spain are the highly qualified competitors.

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Details about the globe: Now in details referring to the countries producing consuming and exporting well the ceramic tiles is being discussed well. Here important is given to the Europe since Spain and Italy are the major producers of the ceramic tiles, then America United kingdom and Germany are been referred. Among Asian countries Japan is been referred. The republic Macedonia is newly rising with good amenities for the development of ceramic tiles industry.

Market Trend in the World The industry’s revenue for the year 2006 was approximately $1,130,000,000. The gross profit was 43.4% at $490,420,000. There were 230 establishments in this industry that year. Thus, average contribution (or revenue) per establishment annually was $4,893,000. The total import export value for the year 2006 was $2,414,472,000. There were 105 countries that conducted foreign trade with the U.S. in 2006, 1 more than year 2005. The top trading countries were: Italy, $969,269,000 (40.14%); Spain, $345,204,000 (14.30%); Mexico, $279,343,000 (11.57%); Brazil, $252,174,000 (10.44%); and China, $203,993,000 (8.45%). Their combined total represents approximately 85% of all imports and exports. The total import value for the year 2006 was $1,918,510,000. This represents a 6.6% increase from year 2005. The U.S. had imported industry related merchandises from 72 countries in 2006. The top importing countries were: Italy, $820,298,000 (42.76%); Spain, $275,077,000 (14.34%); Mexico, $247,449,000 (12.90%); Brazil, $190,103,000 (9.91%); and China, $136,361,000 (7.11%). Their combined total represents approximately 87% of import from all countries. The total export value for the year 2006 was $48,542,000. This represents a 1.8% increase from year 2005. The U.S. had exported industry related merchandises to 75 countries in 2006. The top exporting countries were: Canada, $28,208,000 (58.11%); Mexico, $10,256,000 (21.13%); Japan, $1,592,000 (3.28%); Bahamas, $783,000 (1.61%); and Korea, $677,000 (1.39%). Their combined total represents approximately 86% of export to all countries. Adding the import and subtracting the export, the total U.S. consumption value of this industry for the year was $3,000,000,000.

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This industry report packs 10 years of data from hundreds of reliable government and private statistical resources. The data have been compared and verified to assure the highest research quality. These agencies and private companies were frequently contacted to acquire the latest information, most of which is unavailable to the general public. It is estimated that to gather and organize the same information into an easy-to-read format in each report, an individual researcher would spend at least a year’s worth of effort. The challenge is, by the time this is accomplished, some data is most likely obsolete. Our business is dedicated to the research of U.S. industries and their associated foreign trades. We can meet that challenge easily as our databases are directly linked to these resources. The U.S. manufacturing sector is expected to hit the monumental 5 trillion dollars net sales in 2006. U.S. economists have projected another 5% to 7% growth in the year 2007. To stay ahead, this industry report is intended for you to analyze the specific U.S. industry in greater detail. Not only does the report provide you with information on domestic production, it also supplies you with an industry’s import and export data. The report depicts what are the products of the industry and their respective contributions. You can compare these products with the industry’s materials, parts and components list that is in the report. The foreign trade data includes 10-years of statistics, and it is projected into year 2008. Such trade data is also provided at the commodity level based on the HTS classification.

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CHAPTER – 2 : MARKET ANALYSIS OF CERAMIC TILE INDUSTRY

2.1.

Product market description

Constituents of Ceramic tiles: In general there are basically company variety / segments in the Ceramic tiles

1. Floor tiles. 2. wall tiles 3. vitrified tiles 4. porcelain tiles

For the production of all the above the contiguous are used are generally same, they are clay send zircon and feldspar other metals {Fe (iron), Pb (plum bum), c (carbon) But in case of vitrified tiles glass is also being used as an Ingredient. In case of porcelain tiles the ration porcelain is higher compare to clay. The amount of porcelain present is approximately 37%.

Table 2.1 Clay

57%

Sand

28%

Feldspar

10%

Other materials

5%

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Graph

percentage of constituents

10%

5%

Clay Sand

28%

57%

Feldspar Other materials

Ceramics are classified as inorganic and nonmetallic materials that are essential to our daily lifestyle. Ceramic and materials engineers are the people who design the processes in which these products can be made, create new types of ceramic products, and find different uses for ceramic products in everyday life. Ceramics are all around us. This category of materials includes things like tile, bricks, plates, glass, and toilets. Ceramics can be found in products like watches (quartz tuning forks-the time keeping devices in watches), snow skies (piezoelectric-ceramics that stress when a voltage is applied to them), automobiles (sparkplugs and ceramic engine parts found in racecars), and phone lines. They can also be found on space shuttles, appliances (enamel coatings), and airplanes (nose cones). Depending on their method of formation, ceramics can be dense or lightweight. Typically, they will demonstrate excellent strength and hardness properties; however, they are often brittle in nature. Ceramics can also be formed to serve as electrically conductive materials, objects allowing electricity to pass through their mass, or insulators, materials preventing the flow of electricity. Some ceramics, like superconductors, also display magnetic properties. Ceramics are generally made by taking mixtures of clay, earthen elements, powders, and water and shaping them into desired forms. Once the ceramic has been shaped, it is fired in a high temperature oven known as a kiln. Often, ceramics are covered in decorative, waterproof, paint-like substances known as glazes.

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Ceramic Segments Table INDUSTRY SEGMENT

COMMON EXAMPLES

Structural clay products

Brick, sewer pipe, roofing tile, clay floor and wall tile (i.e., quarry tile), flue linings

White wares

Dinnerware, floor and wall tile, sanitary ware, electrical porcelain, decorative ceramics

Refractoriness

Brick and monolithic products are used in iron and steel, non-ferrous metals, glass, cements, ceramics, energy conversion, petroleum, and chemicals industries

Glasses

Flat glass (windows), container glass (bottles), pressed and blown glass (dinnerware), glass fibers (home insulation), and advanced/specialty glass (optical fibers)

Abrasives

Natural (garnet, diamond, etc.) and synthetic (silicon carbide, diamond, fused alumina, etc.) abrasives are used for grinding, cutting, polishing, lapping, or pressure blasting of materials

Cements

Used to produce concrete roads, bridges, buildings, dams, and the like

Advanced ceramics Structural

Wear parts, bio ceramics, cutting tools, and engine components

Electrical

Capacitors, insulators, substrates, integrated circuit packages, piezoelectric, magnets and superconductors

Coatings

Engine components, cutting tools, and industrial wear parts

Chemical and environmental Filters, membranes, catalysts, and catalyst supports

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Most of the above segments can be further broken down into more specific product classifications as seen on the table below. In 1974, the U.S. market for the ceramic industry was estimated at $20 million. Today, the U.S. market is estimated to be over $35 billion. Structure and Properties of Industries: The properties of ceramic materials, like all materials, are dictated by the types of atoms present, the types of bonding between the atoms, and the way the atoms are packed together. This is known as the atomic scale structure. Most ceramics are made up of two or more elements. This is called a compound. For example, alumina (Al2O3) is a compound made up of aluminum atoms and oxygen atoms. The atoms in ceramic materials are held together by a chemical bond. The two most common chemical bonds for ceramic materials are covalent and ionic. For metals, the chemical bond is called the metallic bond. The bonding of atoms together is much stronger in covalent and ionic bonding than in metallic. That is why, generally speaking, metals are ductile and ceramics are brittle. Another structure that plays an important factor in the final property of a material is called microstructure. The microstructure of a material is the structure that can be seen using a microscope, but seldom with the naked eye. For ceramics, the microstructure can be entirely glassy (glasses only); entirely crystalline; or a combination of crystalline and glassy. In the last case, the glassy phase usually surrounds small crystals, bonding them together. The atomic structure primarily affects the chemical, physical, thermal, electrical, magnetic, and optical properties. The microstructure also can affect these properties but has its major effect on mechanical properties and on the rate of chemical reaction. Due to ceramic materials wide range of properties, they are used for a multitude of applications. In general, most ceramics are: 

Hard,

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Wear-resistant,

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Brittle,

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Refractory,

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Thermal insulators,

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Electrical insulators,

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Nonmagnetic, 18

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Oxidation resistant,

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Prone to thermal shock, and

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Chemically stable.

Of course there are many exceptions to these generalizations. For example, borosilicate glasses (glasses that contain silica and boron as major ingredients) and certain glass ceramics (glasses that contain a crystalline phase) and NZP ceramics are very resistant to thermal shock and are used in applications such as ovenware, stove tops and kiln furniture respectively. Also, some ceramics are excellent electrical conductors and an entire commercial market is based on the fact that certain ceramics (ferrites) are magnetic.

Various types of tiles and their characteristics: The various types of tiles include earthenware tile, stoneware tile and porcelain tiles. Earthen ware tiles are company for interior use, while porcelain and stoneware tile are preferred for exterior use. Earthware Tiles: 

Porous tiles result in higher absorption of moisture

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Produce the good sound of tapping.

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Moisture absorption 22% or less

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Usually are unglazed.

Stoneware Tiles: 

Lacks clarity of the ceramic tiles.

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Low moisture absorption

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They are glazed and unglazed even

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About 1-5% of moisture is being absorbed.

Porcelain Tiles: 

Metallic sound and good clarity is there

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Absorption level is about 0-1%.

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They are usually glazed and unglazed. 19

Usage based classification: Based on the use of the ceramic tiles they are being classified as wall tiles, generally used foe the walls of the kitchen, bathrooms etc. the floor tiles used to apply them to the floor of swimming pools, basins, bathrooms, toilets and kitchen. The latest is the trend of the vitrified tiles, which have a glass like shine and strength compared to the marble and granite. Wall tiles: Ceramic wall tiles are normally less durable than tiles designed specifically for flooring. Most wall tiles are glazes with a semi-gloss or matte surface. The glazed surface has a very low slip resistance and become , slippery when wet therefore, glazed wall tiles is much more suited for wall or countertop application rather than floor tiles. Glazed ceramic tiles: Glazed ceramic tile is comprised of two basic elements, clay and water. Various clay is mined. Ground and blended to a fine powder, and pressed together to from the body of tile. The pressed clay body is then dried to reduce the moisture content. Next the surface of the tile is coated with a colored. The glaze is then permanently fused to the surface of the tiles by firing it in kilns are approximately 2000 Fahrenheit to form the finished product. Porcelain tiles: Porcelain tiles are made from a blend of fine grain clays and other minerals to produce a very dense body. Which makes it highly resistant to moisture, staining and wear? Because of these features, porcelain tiles will withstand years of heavy foot traffic in both interior and exterior application while maintaining its color and beauty. Color body porcelain tiles: This is the densest of all tiles types, color body porcelain tile has a through color and is defined by its ⁢ 0 5% water absorption. These tiles can withstand heavy foot traffic and are suitable for either indoor or outdoor application. To determine the overall performance and durability of the glazed surface of ceramic tiles, there are standardized industry tests and classification which rate tiles specifically resistance to scratching, breaking, abrasion moisture etc.

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Scratch hardness: Most tiles are rated for hardness or scratched resistance using the MOHS test and rating system the MOHS test rates tiles from 1 to 10. Ceramic tiles with a value of 5 or more is suitable for most normally acceptable for most commercial application or heavy traffic areas. Wear resting: To help select suitable tiles for specific application tiles are rated the P.E.I. (porcelain Enamel institute) scale. The tiles are evaluated for wear resistance on a scale from 1 (lowest) to 5 (highest). 1. Light traffic- recommend for residential bathrooms or other areas with light traffic and where shoes are not frequently used. 2. Medium traffic- recommended for residential interiors, except entryways, into contact with grave or sand 3. Medium heavy traffic – recommended for all residential interior and light commercial application. Not recommended for commercial entryway. 4. Heavy traffic- suitable for all residential interiors and most commercial application, including shopping malls and public areas. 5. Heavy-plus traffic- all residential and commercial areas where heavy- duty ability is needed.

Water absorption: ceramic tiles are also classified by their water absorption rate which reflects the density of the body of the tiles there is a direct relationship to the water absorption rate and the suitable of the various types of tiles for interior or exterior application. Tiles suitable for exterior application must have a very low water absorption rate. Especially in climate subject to freezing which have a moisture absorption rating of less than 5%. Shading: like the nature products themselves will very in shading this adds to the beauty and design of the product. When choosing a tile it’s best to views 2-3 tiles together to visually determine the overall appearance of the tiles.

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Ceramic tiles manufacturing process: The tile manufacturing process has mainly company routes Tunnel Bisquet and tunnel glost firing ; it is the oldest manufacturing process for the tiles. The advantage of this process is that it cans very small size to medium size tiles. The other processes are not geared up to handle such process. Tunnel Bisquet and roller glost firing ;the main advantage of this route when compared to the previous is that it can produce very large size products, which can not be made in the tunnel route of manufacturing. Single roller firing; this is the mossy mordent technology in the production of tiles today. The advantages are higher are higher productivity lower fuel consumption and reduced losses. Rolier rolier firing or double fast firing: the advantage of this technology is that tiles better surfaces can be produced. Figure 2.2

(Source: IFC, ceramic tiles and manufacturing sanitary ware) 22

Ceramic tiles raw material: The majority of raw materials used by the ceramic industry are the oxides of metals. The three metals which have been the mainstays of the industry for many years are clay, flint, and feldspar. These are the major materials contained in what is sometimes referred to in the industry as "classical ceramic bodies." Clay: Clays are hydrated aluminosilicates and are the end-product of the weathering of field’s pathos rock. The most important clay mineral is Kaolinite which has the composition AL2O3 - 2SiO2 - 2H2O. Clay is the material that gives a ceramic composition the plasticity which facilitates the fabrication of the material into the desired form prior to heat-treating. Flint Flint is a form of silicon dioxide (SiO2) usually produced from quartzite, sand or rock. It is used in a finely pulverized form as a filler to give the clay and final product the desired properties. Feldspar Feldspar is a broad, generic name applied to a group of alkali-aluminosilicates. For example, feldspars in which the alkali is potassium (K2O - Al2O3 - 6SiO2) are called "potash feldspars," and those containing sodium (Na2O - Al2O3 - 6SiO2) are called "soda feldspars." Most feldspar, however, are combinations of these two types. Feldspar is used and known as a "flux" in the ceramic industry. The flux is the material which starts to melt at the lowest temperature during the heat-treating process, thereby acting as the cementing element which gives the ceramic body its strength. A great many other naturally-occurring minerals and some synthetically produced chemicals are used as raw materials by the ceramic industry. A few of the more important ones, along with their chemical formulas, are now presented:

23

Raw Materials Listing in Ceramic tiles: Table Naturally Occurring (Chemical Composition) Artifically

Produced

Clay (Al2O3 - 2SiO2 - 2H2O)

Composition)

Feldspar (K2O or Na2O - Al2O3 - 6SiO2)

Alumina (Al2O3)

Flint (SiO2)

Litharge (PbO)

Whiting (CaCO3)

Zinc Oxide (ZnO)

Magnetite (MgCO3)

Tin Oxide (SnO2)

Talc (3MgO - 4Si2 - H2O)

Barium Titanate (BaO TiO2)

(Chemical

Nepheline Syenite (K2O - 3Na2O - 4Al2O3 - 9SiO2 + Lead Zirconate (PbO ZrO2) Feldspar) Iron Oxide (Fe2O3) Zircon (ZrO2 - SiO2) Silicone Carbide (SiC) Borax (Na2O - 2B2O3 - 10H2O) Titanium Carbide (TiC) Pyrophyllite (Al2O3 - 4SiO2 - H2O) Boron Nitride (BN) Spodumene (Li2O3 - Al2O3 - 6SiO2) Cobalt Oxide (CoO) Beryl (BeO - Al2O3 - 6SiO2)

24

Substitutes Of The Ceramic Tiles The use of the tile is being from 4000 years. But today seeing to the size and designs in them we find that lot many of innovations are being down. Hard Cover Flooring Is Divided Into Two 1. Subdivision: 2. Processed Floor Covering: A) agglomerated stones B) terrazzo tiles C) concrete paving stones

Natural floor covering Natural stone (e.g. marble, granite) Therefore it can be very well under stood from various options for the flooring in case of substitution to the ceramic tiles. So in case of the various substitutes available we find that marble, granite, terrazzo tiles. Kostas stone dholpuri stones are various highly favored in context to the ceramic tiles.

25

Product Life Cycle: The Product Life Cycle Is Concerned with the Sales History of a Product or product class. The concept holds that of product sales change over times in a predictable way and product go through a series of five distinct stages: 1) Introduction Stage 2) Growth Stage 3) Shake Out Stage 4) Maturity Stage 5) Decline Stage

But the CERAMIC TILES has undergone its introduction and growth stage, at present it is its “shake out stage” this is very clear from the characteristic it is following.

1) The market growth for the industry is “leveling off” it can be said that the growth is steady maintained. 2) The segment varies from few to large number. There are continuous innovation brought about for various purposes with a proper mass to be targeted e.g. joint free tiles or anti slip tiles according to purpose of good look and safety purpose. 3) The competitors are good in number but are getting reduced for certain laws like WTO, hence weaker are leaving off the market and few are acquired but big giants thereby increasing the capacity. 4) The pricing policy has been rationalized because different brand come up with newer and newer concepts in the market to sustain the market share it is an essential step. 5) The distribution network is being made strong. The dealers, sub dealers, distribution are raised up in their number to make the availability of the product easier and higher. These step followed every strongly playing firm in the market. The promotion of the product has been also enhanced by increasing or adding to the number of showrooms for proper understanding the usage of the tiles in contrast to its substitutes.

26

Application of the ceramic tiles: Historically, man has desired to create living spaces. Which were beautiful, durable and user friendly? With that in mind has made ceramic tiles 4000 years. Ceramic tiles have been valued for their beauty and durable for centuries. In the ancient civilization of Egypt, Greece and Rome. Tiles were used as a function material and as decoration in the houses of the most important citizen as well as public buildings such as baths and temples. The fact that when these building are excavated the tiled floor is still intact which a testament to the durability of ceramic tiles is. Ceramic tiles, particular floor tiles are once again at the very height of fashion. People are choosing ceramic tiles for many reasons. To start with hard flooring is now more popular than carpet and ceramic is the most durable of domestic hard flooring. A tiled floor should last for many years. Ceramic tiles are very safe, they are non-flammable and do not conduct electricity. They are hygienic and do not attract or absorb dirt and they are very easy to clean. They are also healthy and ideal for those with asthma or allergies as they do not harbor dust, pollen, dust mites, or cancer- causing benzene from car fumes. Ceramic tiles are very comfortable under foot. They have thermal insulation and soundproofing qualities. They are not cold; actually absorb and retain heat like mini storage heaters. They are also odor. But above all ceramic tiles are attractive. There is nothing that quite transforms a room like tiles and tiles will also add value to company home. It’s a building material as ancient as the clay harvested from the Nile River and as futuristic as the thermal glass used protects today’s space shuttles. Area of application 1) Esthetic value 2) Surface subjected to wear and tear 3) Under water/for flashing purpose.

27

Initially they ware only used for the flooring purpose, but gradually with the creation of glazed ceramic tiles they are used for cladding of walls in baths, toilets and kitchen as well as in decorative purpose. They are used in swimming pools and some water carrying bodies because of its water resistance and durability. Not only on an average in the India household but it is covering even the medical centers, labs, milk booths, schools. Public conveniences and countless other centers surrounding us. The presently devised porcelain tiles and varied tiles just picked up the one third of the ceramic tiles market. It has really pushed back the mosaic tiles flooring. Housing sector is connected to the overall growth in the economy. It has as witness significant growth during the last few years due to decline interest cost, steady real estate prices. Increased urbanization and fiscal incentive growth provided for tax purpose. The housing sector is set to grow at an annual rate of 50% for the next 4 years. Due to decline in demand for funds from industry side. The retail finance boom in the banking sector, the price war to acquire critical mass have helped more people to decline in demand for funds from industry side, the retail finance boom in the banking sector and the price war to acquire critical mass have helped more people to afford home loans. The rising salaries in telecom. It, banking coupled with cheaper availabilities of finance has turned more people debt friendly. The main driver in the commercial market segment has been IT companies, blotech companies and BPO.

28

2.2

Major players of Indian ceramic tile industry

Major Players In India

Asian Granito (I) Ltd Asian Granito is one of the largest ISO 9001 Certified vitrified tiles manufacturers in India. Asian has two state-of-the-art manufacturing plants, technically collaborated with SACMI, ITALY, the world class leader in ceramic technology. They have extensive network of business associates, 250 distributors, more then 3500 retail counters and 19 depots in all over India. The company has won 20 best display awards till date.

Gladder Ceramics Limited Manufacturer of Ceramic Floor Tiles with advanced technology Roller Kiln, Superior Raw Materials Enduring Ceramic Colours characterize the Floor Tiles manufactured by India's Gladder Ceramics Limited for Export.

Kajaria Ceramics - Wall and Floor Tiles. Kajaria Ceramics manufactures the widest range of floor and wall ceramic tiles to provide the complete wall and floor solutions.

29

Nitco Group - Nitco Tiles.

The Nitco Group is a pioneer in the manufacture of high quality mosaic and terrazzo tiles and is also one of the leading manufacturers of exterior paints and the largest processors of Italian Marble in India.

SOMANY Floor and Wall Tiles. The group's activities include ceramic glazed tiles, sanitary ware, glass containers, textiles and sanitary fittings. The group has launched a new range of vitrified tiles called greviti, in collaboration with Leonardo 1502 Ceramic Spa.

Sonata Floor Tiles Sonata is in involved in manufacturing of state of art masterpieces in ceramic industry. Having its production based in ancient town of Himatnagar, Sonata Ceramic Pvt. Ltd. is one of the most advance ceramic product manufacturers in India.

30

Varmora Granito Pvt Ltd Vermora has commissioned a fully automatic Italian plant for manufacturing floor tiles, wall tiles, porcelain tiles and vitrified tiles. The company offers a complete range of tile products using state-of-the-art manufacturing facilities with re-assuring quality checks. Encouraged by favorable market response to floor tiles, the company has now enhanced its skill and technology at production and marketing of floor tiles. Other Ceramic Company: Anant Raj Industries Ltd Bally Glass & Ceramics Cera Sanitaryware Ltd English Indian Clays Ltd Fag Bearings India Ltd Hindustan Sanitaryware & Industries Ltd Kajaria Ceramics Ltd Mangalam Industrial Products Murudeshwar Ceramics Limited NTB Hitech Ceramics Navrang Ceramic Orient Ceramics & Industries Ltd Rautec Ceramics Private Limited

31

Regency Ceramics Ltd Restile Ceramics Ltd SPL Ltd Spartek Ceramics India Ltd

Geographical Presence of Ceramic Tile Industries in India:

(Source: www.icctas.com)

32

Gujarat as a Special State for the Production: This includes a 10.2 per cent growth rate by March 2007, on the one hand, and the lifting of some one lakh families that are handpicked from 20,000 villages from below the poverty line. While the doubling of per capita agriculture income from Rs 8,000 to over Rs 15,000 over the next three years is but a natural corollary, Mr. Modi plans to set up five agro export zones across the State. The culmination of this process would be the erection of Asia's largest cold storage zone in the Dahej Special Economic Zone (SEZ) in south Gujarat, so as to create a link from the farm gate to the international customer for mangoes and other horticulture produce. "The Vibrant Gujarat meet was just the beginning and the floodgate of investments to the State has been opened. We had a Chinese company firming up plans to put up a ceramic tile manufacturing plant in Gujarat at an investment of Rs 55 crore on Monday. Later this week, Mr. Lawrence R. Klein, a 1988 Nobel laureate in economics, is coming to meet me along with Mr. Polk Carey, Chairman of the leading US investment banking firm, WP Carey & Company. Clearly, it is not merely a courtesy call as they also would be talking business," Mr. Modi said. For those who have been picking holes in the investment proposals worth Rs 65,000 crore that were signed at the Vibrant Gujarat meet, Mr. Modi's response is that there is nothing non-global about Indian companies investing in Gujarat. On the other hand, two more Chinese firms that are mulling fresh investment in Gujarat include a two-wheeler company and a machinery manufacturer for the ceramic tiles industry, the latter considering an export-oriented plant along the coast in Kutch district. Reportedly the government of Gujarat is taking initiatives on improving the competitiveness of the ceramic tiles industry. It has identify the for cluster Kutch, Rajkot, Morbi, Mahesana and Himmatnagar for the development of ceramic industry. It has plans to set up a gas based power plant which will lower power cost curing the industry.

33

Morbi, 62 kms from Rajkot has 300 mosaic tiles factories of which 90 running. Owners of more than 40 of the 90 factories want to close because of their losses mounting. But the industry has a real threat to industry from the ceramic tiles. Ceramic tiles are light and can be fixed without much hassled on the floor. Tills the early 1980s, slowly but steadily the ceramic were industry has grown in the state of Gujarat, because of location advantage; technology advancement has contributed to its growth and product diversification. With major group taking of from the early 1980s, currently it occupies the second position after Uttar Pradesh in India. Ceramic clusters Ahmedabad: There are 950 ceramic units in ceramic clusters in Gujarat and all are family base. Most of these clusters are poor in knowledge but have a high entrepreneurial spirit. To server this clusters units and cater to the need of the ceramic industry in the small scale sector of Gujarat and ad joining areas, central glass and ceramic research institutes (CGCRI) NARODA center Ahmadabad, one of the contiguous laboratories of the council of scientific and industrial research (CSIR) was establish in 1977. To improve the skill in these units, training and main power development programmed were initiated in 1978. Institute conducted 32 technology development programmed and trained 600 people; it has also conducted three entrepreneurship development programmed to encourage new enterprises. The cluster at Morbi, himmatnagar and mahesana has benefited a lot in technology development from CGCRI. 

It has been able to use the fly ash (highly polluting waste products in the manufacture of the ceramic tiles.



Ceramic tiles now contain 30% of the raw material as a fly ash.



It has also been able to produce the blue ceramic tiles, which are free from the lead.



Ceramic filters candles have been developed which also contain 20% to 30% of fly ash.



Cotton wick of the kerosene oil lamp has been replaced by the permanent ceramic wick, which need to replace at all.



It has developed the technology for production of Bone china utilizing the china clay of Gujarat.

34

2.3.

Market trend of ceramic tiles

Market trends of ceramic tiles in India

Wall Tiles: In the wall segment, prices begin from Rs 22 per sq feet. The popular sizes here include 10 cm X 10 cm and 20 cm X 20 cm. While glossy finishes and dark colors were popular earlier, pastel shades are the rage now. Ceramics offers wall tiles in sizes like 20 cm X 20 cm and 30 cm X 30 cm. Their prices range from Rs 20-40 per sq ft. They have recently introduced the 25 cm X 40 cm size where the price is Rs 35-40 per sq ft.

Floor Tiles, Bathrooms: In bathrooms too the trend is towards larger sized tiles. So many sizes ranging from 10 cm X 10 cm to 30 cm X 90 cm. The popular sizes include 25 cm X 35 cm, 30 cm X 45 cm, etc. Natural finishes like silk, leather, linen, etc are in. Also very popular are stone finishes like Jaisalmer stone, Udaipur green, Italian marble, etc. Customers also welcome jute and bamboo textures. Geometric patterns have fallen out of favor. Pastel shades are in vogue now. Manufacturers are offering full concepts, which include borders, motifs and matching wall and floor tiles. Customers don't want to spend time mixing and matching wall and floor tiles and then choosing the borders, hence manufacturers are offering those complete concepts. In bathroom tiles Kajaria has recently launched the 25 cm X 40 cm size.

35

Floors Tiles, Homes In grade A cities, natural finishes like stone, marble, rustic, leather and jute are in vogue. Matte finishes are preferred over glossy finishes. Wood look-alikes are also very much in demand. In smaller cities and towns, he said, glossy finishes, geometric designs and darker colors are still in demand.

In residential flooring again, customer preferences are shifting towards larger sizes. The minimum size in floor tiles today, is 30 cm X 30 cm. This can go up to 90 cm X 90 cm. Rishi Kajaria, director at Kajaria Ceramics Ltd., informed that their range of floor tiles for homes is available for Rs 20 to 40 per sq ft. Kajaria offers rustic styles like Kansas and Ranger. They also offer rectified (joint less) tiles under the brand name Rectificado. All these three types of tiles come in the price range of Rs 35-40 per sq. feet. They have also launched the Graphica range which comprises of designer tiles in the Rs 32-35 per sq ft price range. Floor Tiles, Offices In offices vitrified tiles are catching on very fast - in both polished and glazed finishes. In the glazed finish the advantage is that you get a lot of designs. In polished finishes you get restricted to beige color and marble finish. Vitrified tiles can take a lot of abrasion. For the polished finish, So many offers tiles in the price range of Rs 60 to Rs 120 per sq feet. For the glazed finish their prices range from Rs 40 to 60 per sq feet. So many has launched the VC Shield range which is made from Veil craft technology. Besides being abrasion resistant, these tiles are also frost and stain resistant, and they are also joint less. The VC Shield range comes only in matte finish, not in glossy finish. They come in two sizes: 40 cm X 40 cm and 50 cm X 50 cm.

For the office sector Kajaria imports vitrified (porcelain) tiles from Indonesia, which come in the Rs 50-70 per sq ft. The largest size they offer here is 60 cm X 60 cm.

36

Trends of the usages in global: The American taste: Time when the AMERICAN public associated ceramic tiles with a 10X10 cm white square used solely in the industry bathrooms and kitchen is long gone. Today the situation has turn around completely and it is becoming increasingly common to find ceramic tiles in specious communal areas of American homes – the hallway, living room, dinning room, and kitchen as well as in bathroom. The trend for making open home makes it impossible to divide floor space into rooms. As ceramic tiles are already valued as covering for high traffic areas like entrance and areas susceptible to staining such as a dinning room and kitchen, the new trend works to benefit A) Domestic housing: The fact that American housing has become larger and are still increasing in size means that the America are taking more and more to larger format tiles. In general term the most popular format are 15X15, 15X20, 20X25, and 20X30 cm for wall tiles, where as in floor tiles the 30X30, 33X33, 40X40, 45X45 cm size sell most. Large format are most popular in the state of Florida and California. On the design side rustic and distressed the stone tiles are no. one. Marble effect tiles also have market and semi polished tiles are fashionable. Modular size were small format are used for kitchen walls and workshops and in a combination larger format on floors, are also very popular. B) Neutrals shades: As far as color trends are concerned, the American are still wedded to neutral and pale shadecream, beiges, sand, toast, and so on. Darker shade are become popular especially those part of the country were tiles are mostly used. Other popular color is gray, pink and pale green. On the whole the American consumer trends to aim to create a comfortable house with traditional décor.

37

German taste: There is no such thing as “German taste” even in what is now a unified Germany the answer, surely, has to that there is no “central European taste”. In today’s world of long Haul travel and world wide communication network European have become living in global village. The most fashionable motifs are taken from natural out in the market place, those product with a design inspired be nature are the most successful. Faithfully replicating granite and marble is not enough: it is essential that color and texture be inspired by nature too. The trend is being spurred by the outstanding the specification that for porcelain stone ware can offer. Equally, it is decorative potential in both floor and wall tiles. A close look at the trends in floor tiles would seem to confirm that leading color are beiges, brown, anthracite, and black. White and blue; the preferred color for wall tiles is white, especially combine with blue. Combination of white and yellow green colors are frequently being popular in Germany there is currently move back to using loud colors in décor and this are gaining ground on the pastels It is important to note that the large format is greater in the south of the areas then in the north. In the north and east the traditional 20X25 cm format for wall tiles and 30X30 cm for floor tiles are preferred. As regard borders and complimentary pieces, anything goes: glass natural stone, metal, ceramic borders, are adopting latterly for the German customer.

United Kingdom taste: The British loves more formats. The United Kingdom is European country with the lowest per capital consumption of ceramic tiles, but is showing and increase years on year. Spain is playing a very important part in the leading foreign supplier of ceramic tiles the consumption of wall tiles is streets ahead of that of floor tiles (approximately 80%:20% ). Sale of floor tiles, however, is growing at faster pace than wall tiles in both value and volume. The main and almost exclusive use of tiles in the home is cover bathrooms and kitchen walls. The most widely sold format is small particularly 15X15 and 20X15 cm which together more appropriate. 38

The colors spectrum, consumers color preference to be conservative. Very small format in dark color (deep red, green and blue) are still popular for bathroom as is imitation marble. In kitchen British taste toward light color and traditional motifs for the wall, whilst the classical black and white checks board is still very popular for wall. Consumer with higher deposable income for more sophisticated taste is beginning to consider that floor adds value to there home. This is being reflected note just in rise in tiles sales but in greater diversity of style and colors and offer to gather with bolder decors. For instance imitation natural stone for floor and larger format in general both wall a floor. The use of tiles in increasingly frequently and become popular in country.

As arising opportunity in the republic of Macedonia: Since gaining independence in 1991, in spite of the difficulties posed by political and social unrest in the region, Macedonia has implemented in reform programmed design to develop free market economies and achieve and closures integration with international trading partner. The priority has been placed on economy reform and, in this; the government has worked closely both the World Bank and the MF. Macedonia has started working toward membership of the EU and has recently been granted full membership to WTO. The economy reform includes: 

Widespread privatization of state and socially own enterprise.



Regional European and world wide trade liberalization.



Promotion of FDI (including major foreign capital banking and insurance industry.

Macedonia took major steps toward integration with the EU with the signing of the stabilization an association agreement in April 2004 and a free agreement with the European Free Trade Association (EFTA) whose implementation this year. Duties and goods imported for EU into Macedonia will be progressively reduce to zero duty by the end of 2010.

39

Country has some very important trading partner like Slovenia, Yugoslavia, Romania, Croatia, Bulgaria, Turkey, Ukraine and Albania accounted for approximately total importing and exporting in 2000. Macedonia has now sign free trade agreement with this country and begun negotiation with Russian federation. Recently Macedonia enters in to WTO for the integration to world trading system. It expands the market of Macedonia goods and services. In order to attract FDI the government of Macedonia has taken initiative steps include:



A relatively low rate of corporate income tax (15%).



The custom duty exemptions on imports of equipment and other capitals assets.



Creation of Free Economic Zone.

The benefit of producing in Macedonia includes: 

Low labor cost



Highly skilled workforce



Strong industrial tradition



Stable macro economic situation



Easy access to export market in both EU and other Balkan state



Development of Macedonia relationship with the EU and the WTO

40

CHAPTER 3 :

STATISTICAL DATA OF CERAMIC TILE INDUSTRY

3.1

Statistical data of Indian ceramic tile industry

Indian market with present scenario Table

Quarterly Financial Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

SALES GROWTH

9.08

4.56

15.38

16.54

17.25

20.06

EXPENSE GROWTH

11.47

2.46

17.44

15.96

17.48

23.34

PBDIT GROWTH

0.12

14.57

7.09

19.25

17.52

5.51

PAT GROWTH

-20.24

179.97

369.71

219.96

315.4

1.01

EXPENSES

81.2

81.29

81.51

81.76

81.36

83.81

OTHER INCOME

1.15

3.1

1.12

1.52

1.15

1.7

0.55

0

0.5

0

0.53

EXTRA

ORP 0.03

INCOME/TOTAL INCOME PBD MARGIN

18.8

18.71

08.49

18.24

18.64

16.19

PAT MARGIN

1.75

4.83

3.44

4.64

5.33

3.72

(Source: www.ibef.com)

41

Indian ceramic exports details Table 3.2 YEAR

EXPORT(RS.CRORE) GROWTH

2000-01

65

2001-02

107

66%

2002-03

147

37%

2003-04

172

17%

2004-05

225

31%

2005-06

272

21%

2006-07

284

5%

2007-08

333

17%

2008-09

464

39%

2009-10

558

20%

(Source: www.niir.com) Graph 600 500 400 300 200

Export Growth

100 0

42

Growth

Growth

Interpretation Thus from the above figures it is clear that of ceramic has exhibited in general a healthy growth rate through in comparisons to the total world exports in this product range capexil’s share is low. Table

Key Statistic

EXPORT

UNITS

2006-2007

2007-2008

2008-2009

2009-2010

TONNES

4725

4916

3852

5382

RS. CRORES

1.7

2.7

2.4

2.9

TONNES

223

125

526

277

RS. CRORES

0.8

0.9

2.6

4.6

QUALITY EXPORT VALUE IMPORT QUANTITY IMPORT VALUE

43

SALES VALUE

RS. CRORES

1462.8

1699.4

1865.5

1626.3

MARKET SIZE

RS.CRORES

1463.9

1700

1868

1630

DOMESTIC

RS CRORES

1461.9

1697

1865.6

1627.9

CONSUMPTION (Source: www.niir.com) Interpretation: It is seen from the key statistics export quantity has been increasing from year 1999 and reached to good heights in years 2010. The excise duty has been reduced slowly from 55% in 1994 to 16% in present situation. This shows a positive impact on the ceramic tiles industry since it adds to the country economy. In comparison to imported quantity we have a quite larger export quantity this shows that production is quite sufficing and appreciable to meet company demand. The import duty has been increase the domestic consumption.

Major export destinations from India in this category Table Sr.NO

COUNTRY

EXPORT (IN LAC RS.)

1

SAUDI ARABIA

8622.33

2

UAE

6634.75

3

UK

4555.35

4

SRI LANKA

3275.42

5

GERMAN FED. REPUBLIC

2128.33

6

NIGERIA

1999.11

44

7

MALAYSIA

1868.85

8

USA

1867.65

9

SOUTH AFRICA

1176.53

10

BANGLADESH

1166.47

11

KOREA SOUTH

971.26

16

OTHERS

18048.89

(Source: www.ceramicindia.com)

Statistical data for the ceramic tiles Table

Growth& Profitability Year

Sales

Export

PBIT

PAT

PBIT

PAT

Growth

Growth

Growth

Growth

Margin

Margin

JUN-08

38.58

45.67

17.3

-40.55

21

2.19

SEP-08

32.64

40.11

8.8

-5.5

18.94

129

DEC-08

26.86

27.49

24.7

-7.11

21.84

4.05

MAR-08

12.88

18.15

5.56

-72.99

17.56

0.33

JUN-09

8.59

8.53

8.83

370.89

20.08

1.08

SEP-09

9.64

9.36

10.89

-21.37

17.95

1.9

DEC-09

9.08

11.47

0.12

-20.34

18.8

1.75

45

MAR-10

4.56

2.46

14.57

179.97

18.71

4.83

JUN-10

13.52

15.11

7.11

369.71

18.8

3.49

SEP-10

16.54

15.96

19.25

219.96

18.24

4.64

DEC-10

17.35

17.18

17.52

315.47

18.64

5.22

MAR-10

19.9

23.45

4.33

-4.73

16.14

3.7

(Source: department of industrial polices and promotion) Interpretation: It is being seen that sales growth was very good in the early years of 2006 but slowly it declined and referring to the facts of the years 2004. We can say that from June 2007 it has held constancy. This figures form a similarly even for the other terms. But a very huge gap was there in the year 2002. This constancy in sales growth consistency is because of decline in excise duty, which has positive, affected the exports. Table

Demand& Supply For The Country Year

Prodn.

Prodn

Imports

Imports

Exports

Exports

(Tonnes)

(% Chg) (Tonnes)

(% Chg)

Jul-09

60836

16.38

149

99233.33

324

161.84

Aug-09

60380

-7.98

25

82.62

307

19.53

Sep-09

61899

8.72

40

44.83

261

270.21

Oct-09

70691

22.1

726

-23.63

Nov-09

50883

-5.37

9

-13.38

177

-82.49

Dec-09

63800

-4.38

38

1604.04

106

-80.25

(% Chg)

46

Jan-09

59737

-6.01

Feb-09

63043

8.46

109

1792.36

832

84.56

790

470.6

(Source: department of industrial polices and promotion) Interpretation: It is been seen that the production of the ceramic tiles has been comparatively increasing slowly and gradually from year 2003 to June 2004. The imports of the imported till has been reduced and the export made by the various companies have gradually increased.

The Indian ceramic tile industry is estimated at US$ 0.35 billion Table Year

Billion

2006

97

2007

100

2008

103

2009

123

2010

207

(Source: www.icctas.com)

47

Graph

Income 250 200 150 Income

100 50 0 2006

2007

2008

2009

2010

Interpretation: The size of the Indian ceramic tile industry is estimated at US$ 0.35 billion. It comprises of wall tiles, floor tiles and vitrified tiles. The per capita consumption of ceramic tiles in India is just 0.15 square meters per annum, which is quite low as compared to developed countries. 3.1.6 Capacity of ceramic tiles Table Year

Million tones

2006

120

2007

120

2008

120

2009

120

2010

215

(Source: www.icctas.com)

48

Graph

Capacity of Ceramic Tiles 250 200 150 Capacity of Ceramic Tiles

100 50 0 2006

2007

2008

2009

2010

Interpretation: The industry has been experiencing increased demand, which, in recent years, has matched the installed capacity. While capacity has also increased significantly, from 120 million tones in 2006, to 215 million tones in 2010, the demand has grown nearly two and a half times in the same period, from 97 million tones to 207 million tones. Ceramic tiles are produced by organized, as well as unorganized players. The share of production of organized players is around 55 per cent.

49

3.2

Global statistical data of ceramic industry

Top manufacturing countries of ceramic tile Table

Country

2005 Production 2006 Production 2007 Production (Mill.Sq. Meter) (Mill.Sq. Meter) (Mill.Sq. Meter)

China Spain Italy Brazil Indonesia India Turkey Mexico Thailand Iran Vietnam Egypt Malaysia Portugal Russia Poland United States Germany UAE South Korea Taiwan Japan France Morocco Argentina Czech Republic Algeria South Africa Columbia Philippines Total

1,810 638 638 473 220 109 150 167 63 78 95 65 67 66 45 46 55 57 40 50 47 53 44 35 27 30 30 15 26 25 5,550

1,868 651 606 508 230 150 162 159 100 95 105 83 72 69 58 49 58 54 48 56 40 51 41 35 30 29 30 20 26 25 5,740

1,950 624 603 534 260 190 189 171 135 120 110 83 72 70 70 66 61 58 57 56 46 46 40 40 36 31 30 30 26 25 6,030

Percent

of

World

Production(Based on 2007) 32.3 10.4 Production Data) 10.0 8.9 % 4.3 3.2 3.1 2.8 2.2 2.0 1.8 1.4 1.2 1.2 1.2 1.1 1.0 1.0 0.9 0.9 0.8 0.8 0.7 0.7 0.6 0.5 0.5 0.5 0.4 0.4 100.0

World Production (Source "World Production and Consumption of Ceramic Tile", Ceramic World Review). 50

Top Consumption Countries for Ceramic Tiles: Table Country

2005

2006

2007

% of World

Consumption

Consumption

Consumption

Consumption

(Mill.Sq. Meter) (Mill.Sq. Meter) (Mill.Sq. Meter)

(Based on 2007)

China Brazil Spain United States Italy India Germany Mexico Indonesia France Vietnam Turkey South Korea Thailand Russia Iran Poland Egypt Saudi Arabia United Kingdom Portugal Japan Taiwan Malaysia Morocco Algeria South Africa Greece UAE

1,500 417 312 211 192 102 164 129 168 125 95 94 59 60 65 72 71 50 53 62 60 56 55 51 31 34 24 33 27

1,600 456 327 245 183 145 144 141 110 124 98 90 83 65 77 85 62 66 58 56 61 54 43 45 33 35 28 33 29

1,700 421 332 267 183 180 147 146 130 125 103 103 97 97 92 87 75 66 61 61 56 49 48 45 36 35 35 33 33

29.7 7.4 5.8 4.7 % 3.2 3.1 2.6 2.6 2.5 2.2 1.8 1.8 1.7 1.7 1.6 1.5 1.3 1.2 1.1 1.1 1.0 0.9 0.8 0.8 0.6 0.6 0.6 0.6 0.6

Australia Canada Total

29 25 4,426 5,142

33 29 4,638 5,426

32 31 4,906 5,724

0.6 0.5 85.7 100.0

Total Production

(Source from the “ceramic world review magazine article) 51

Highest: per capita consumption / SQM of ceramic tiles in the world: Table HIGHEST PER CAPITA COUNTRIES

CONSUMPTION / SQM

Argentina

1.50%

Turkey

1.60%

Poland

1.80%

France

2%

Brazil

2.20%

Alemay

2.30%

Italy

3.30%

Taiwan

5.20%

Portugal

6.30%

Spain

6.80%

(Source: www.ctasc.com, ceramic tiles and stone consultants) Graph HIGHEST PER CAPITA CONSUMPTION / SQM PER CAPITA CONSUMPTION / SQM

5.20% 3.30%

A IN S P

A IW A P N O R T U G A L

LY

2.20% 2.30%

IT A

2%

T

E A R G

6.30% 6.80%

N TI N A T U R K E Y P O LA N D F R A N C E B R A ZI L A LE M A Y

8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 1.80% 2.00% 1.50% 1.60% 1.00% 0.00%

52

HIGHEST PER CAPITA CONSUMPTION / SQM PER CAPITA CONSUMPTION / SQM

Interpretation It is mostly seen from the graph and figure that Spain and Portugal are the largest consuming countries for ceramic tiles, their share is about to be 6.8 % and 6.30% respectively. They are followed by Taiwan and Italy with share of 5.20% and 3.30% consumption in Spain is highest because better and more complex design and , in general, of possibilities of utilization in term of duration, cleanness and hygienic aspects The concept of eco labeling has also raised the demand for the ceramic tiles in the European country.

Highest ceramic tiles exporting countries in world: Table Country

2007 Exports

2008 Exports

2009 Exports

% of World

(Mill.Sq.

(Mill.Sq.

(Mill.Sq.

Export (Based

Italy

Meter) 441

Meter) 438

Meter) 418

on 2009) 7.3

Spain

339

357

336

5.9

China

53

125

206

3.6

Brazil Turkey Indonesia UAE Mexico Malaysia Portugal Germany France Czech Republic India Thailand Total

47 57 30 22 37 23 21 21 22 17 7 12 1,148

74 74 50 39 33 29 22 22 21 17 10 13 1,324

103 84 60 35 29 29 25 22 19 17 15 13 1,411

1.8 1.5 1.0 0.6 0.5 0.5 0.4 0.4 0.3 0.3 0.3 0.2 24.6

Total World

1,244

1,410

1,505

26.3

Exports (Source from the “ceramic world review magazine article) 53

Highest ceramic tiles importing countries in world Table Country

2007 Imports

2008 Imports

2009 Imports

(Million Square (Million Square (Million Square

Percent

of

World Imports

Meters)

Meters)

Meters)

United States Germany France Saudi Arabia United Kingdom South Korea Greece Australia Belgium

160 127 104 48 54 22 33 24 25

189 113 104 61 48 32 33 28 24

207 111 104 55 52 42 33 25 25

(Based on 2003 13.8 7.3 Import Data) 6.9 3.7 % 3.5 2.8 2.2 1.6 1.6

Israel Canada Poland Netherlands Austria Thailand Russia Mexico Hungary Italy South Africa UAE Total

31 24 26 19 16

26 27 23 19 15

13 8 13 14 7 9 776

12 13 14 16 12 13 824

25 25 23 18 16 15 14 14 13 13 12 12 851

1.6 1.6 1.5 1.2 1.0 1.0 0.9 0.9 0.9 0.9 0.8 0.8 56.5

Total

1,244

1,410

1,505

World Imports (Source from the “ceramic world review magazine article)

54

World Manufacturing Regions for Ceramic Tiles Table Regions

2009

Production

% of World Production

Asia European Union

(Million 3,058 Meters) 1,422

Square)

Central and South America Europe (non E.U.) North America Africa

652 420 234 212

10.8 7.0 3.9 3.5

Oceania Total

5 6,030

0.1

51.2 23.6

(Source: www.mrc.com) Graph

60 51.2 50 40 30

23.6

20 10.8 10

7

3.9

3.5

North America

Africa

0.1

0 Asia

European Union

Central and Europe (non South E.U.) America

Oceania

% of World Production

55

World Consumption Regions for Ceramic Tiles Table Regions

2009 Consumption (Million

Asia European Union Central and South America North America Europe (non E.U.) Africa Oceania

Meters) 2,973 1,044 579 444 412 238 34

Total

5,724

% of World Consumption

Square 51.9 18.2 10.1 7.8 7.2 4.2 0.6

(Source: www.mrc.com) Graph 60 51.9 50 40 30 18.2

20

10.1 10

7.8

7.2

4.2

0.6

0 Asia

European Union

Central and North America Europe (non South America E.U.)

Africa

Oceania

% of World Consumption

56

Ceramic tiles segment wise share: Table Floor tiles

46%

Wall tiles

42%

Vitrified and porcelain tiles

12%

(Source: www.mrc.com) Graph

Ceramic tites segment wise share

12%

floor tiles 46%

wall tiles 42%

vitrified and porcelain tiles

Interpretation: Tiles form the most significant part of the Indian ceramics industry and consist of floor tiles (46 per cent), vitrified and porcelain tiles (12 per cent) and wall tiles (42 per cent). The floor tiles segment is growing faster as compared to wall tiles. Vitrified and porcelain tiles are recent entrants into the ceramic tile industry and have increased the size of the market considerably. It is expected that this segment will capture the bulk of the market gradually, replacing the conventional floor and wall tiles segment. These tiles are light and have the added advantage of being offered in designer looks as compared to mosaic tiles, which are. Heavier and more expensive to transport. Both organized and unorganized sectors play a key role in the manufacturing of ceramic tiles in India. 57

CHAPTER – 4:

ANALYSIS OF INDIAN CERAMIC TILE INDUSTRY

4.1 Driving forces: Industry and competitive conditions change because forces are in motions that create incentives or pressure for change. The most dominant forces are called driving forces because they have the biggest influence on what kind of changes will take place in the industry’s structure and competitive environment. 1) A shrinking market growth heightens competitive pressures producing an often intense battle for the market share and inducing mergers and acquisitions that result in industry consolidation to a smaller number of participants. The same evenly implies to the ceramic tiles industry as companies like sun earth, H R Johnson and many other have made a number of acquisitions. 2) Product innovations can shake up the market structure of competition by broadening an industry’s customer base, rejuvenating industry growth and widening the degree of product differentiation among the rival sellers. Continuous innovations are being brought out for attraction of newer segments in the market. As for example bell grantee has brought out for attraction of newer segments in the market. As for example bell grantee has brought out with 3ft * 3ft tiles which are able to replace the slabs of natural stones. 3) Abundance of the raw material is available in our country, which is essential for the production of the ceramic tiles. Materials like zircon and feldspar are exported in large quantities by our country 4) Skillful labor require for the production of ceramic tiles is even available this increases the production rate. 5) E.bip concept has been now raised up globally which has made the procurement of the ceramic tiles and the supply scenario completely wide and good. 58

6) Housing sector is connected to the overall growth in the economy; it has as witnessed significant growth during the last few years due to declining interest cost, steady real estate prices, increased urbanization and fiscal incentives provided for tax purpose. The housing sector is set to grow at an annual rate of 50% for the next 4 years. This would thereby carry a promising future of the ceramic tiles also. 7) Due to decline in demand for funds from industry side and the retail in the banking sector and the price war to acquire critical mass have helped more people to banking sector and the price war to acquire critical mass have helped more people to decline in demand for funds from industry side and the retail finance boom in the banking sector and the price war to acquire critical mass have helped more people to afford home loans. The rising salaries in Telecom, IT, Banking coupled with cheaper availability of finance have turned more people debt friendly. The main drivers in the commercial market segments have been IT companies, biotech companies, BPO.

8) Ceramic tiles environmentally scored well over their counterparts (marble, granite, mosaics etc) due to it’s practically pollution free due to its practically pollution free manufacturing. This resulted in a sort of boom in the industry. Single roller firing, this is the most modern technology in the production of tiles today. The advantages are higher productivity lower fuel consumption and reduced losses. Technological developments can also produce

competitively significant changes in capital requirements minimum

efficient plant sizes, distribution channels and logistics and learning curve effects.

59

4.2 The competitive strategy: There are different business approaches and initiatives which undertakes to attract the customers and fulfill their expectations, to withstand the pressures and strengthen the market position. They are as follows: 1) A low cost strategy – appealing to a broad spectrum of customers based on being overall low cost provider of product or service. 2) A broad differentiation strategy – seeking to differentiate the company’s product offering from rivals in a way that appeal to the broad spectrum.

3) A best cost provider strategy – giving customers more value for the money by incorporating good to excellent product attributes at a lower cost of the rivals the target is of all attributes at low cost. 4) A focused strategy based on the differentiation – concentrating on a narrow buyer segment and out competing rivals by offering niche members customized attributes that meet their tastes and requirements better than rival’s product. Areas of application As ceramic tile is having number of application, from past to this present scenario. 1) Esthetic value 2) Surface subjected to wear and tear 3) Under water/for flashing purpose.

Initially they were only used for the flooring purpose, but gradually with the creation of glazed ceramic tiles they are used for cladding of walls in baths, toilets, and kitchens as well as in decorative purposes. They are used in swimming pools and some water resistance and durability.

60

Not only on an average in the Indian households but it is covering even medical centers, labs, milk booths ,schools, public conveniences and countless other centers surrounding us. So be more competitive and to cover the sections of its substitutes like marble, granite, terrazzo etc, it is becomes necessary for the ceramic tile industry to have a competitive strategy which would give it a broad section of buyer and have broad spectrum of buyers. So it is to follow the broad differentiation strategy, by following the strategy the companies would have chance for commanding a premium price & increase its unit sales.

4.3 PEST Analysis: Political Factors: (Government, Legal, and Legislations) 1) Antidumping duty: Government of India has laid antidumping duties on countries like china, Indonesia and Malaysia. Because of the imported product available at cheaper cost the domestically produced tiles was being negatively affected. Thereby safe guarding the Indian producer, anti dumping duties are beneficial.

2) Excise duty: The excise duty on the ceramic duty has been on downslide. From as high as 55 % in 1994 it is brought to 16%. This has helped the industry to have a growth rate of 12% year on year making it best amongst other comparable industry.

3) Uncontrolled export: As a long-term measure uncontrolled export of ten aw materials like feldspar, zircon, sand etc should be restricted. Instead they should be converted in to the country and even reduce the chances of shortage in our country. Thus proving beneficial to the country.

61

4) Custom duty: Currently the basic custom duty on import of raw materials is 20% while the basic custom duty on the imported ceramic tiles has been reduced to 10 % from selected countries including china. This puts the local manufacturer in a position of great disadvantage vis a vis the importers as they have locally manufactured tiles at a higher price as compared to the imported varieties in the same segment and the current market scenario is not conducive to any price rise.

5) Housing policies: Government is boosting the housing sector for which various schemes for the loans and policies are being raised up. Moreover it is been even seen that the housing sector is one adding to the economy of the country, so if the consumers are directed towards the ceramic tiles owing to several factors ease in laying ability, versatility, low price and the most important hygiene. This will have a positive impact on the industry.

6) Import duty: The Indian council of ceramic tiles and sanitary wares are suggesting waving the import duty on raw materials transferring ceramic tiles group ii of Bangkok agreement and making BIS specifications mandatory for imported tiles.

7) Various agreements: Today India is in among the top 8 countries producing ceramic tiles of the world, which is about 190 million sq meters, 45 % of this also consists of a large number of SSI units successfully nurtured by the government of India for the past 50 years. Hence, immediate steps should be taken to protect the domestic industry being swept away due to implementation

of

the

WTO

agreements,

Bangkok

agreement,

and

indo-silence

agreements.etc.

62

Economical factors: 1) Manufacturing process: Unlike other counterparts the manufacturing process for the ceramic tiles is pollution free. This provides not only concern for the environment but also tries to emphasis, that technology related to it is being continuously updated to make it eco-friendly.

2) Transportation expenses: Mosaic tiles are heavier and expend more on the transportation; while ceramic tiles are lighter therefore more number can be transferred in shorter span of time. This reduces overall transportation cost.

3) Production units: The production unit size in India as compared to the globally producing units is lesser which makes a hurdle to expand its work and further be a fully fleshed firm with all the amenities.

4) Per capita consumption: In India the per capita consumption is as low as 0.1 sqm compared to 3 and 5 sqm in china and Europe, respectively. Rising the disposal incomes of the growing middle class and 40 million units of the housing shortage, however hold out a great potential.

Social factors: 1) Religious facts: The holy temples of Swaminarayan and Jain religion still prefer and use marble of higher quality for the construction purpose. This reduces the demand for ceramic tiles at this juncture. It is even supported by the comment that marble granite is natural stone. The Swaminarayan maths in Darjeeling is best examples of red stones, the Palitana temple of Janis are the best examples of tile substitutes.

63

2) Psychology of groups: Still there are groups of people in our society who believe that marble, granite and other few stones are adding prestige to their status and living style. This decrease a segment of the society that is unaware of the ceramic tiles and their special characteristics making it put behind its substitutes. People still carry the fear from slipping and skidding over on the ceramic tiles.

3) Myth: There has also been a belief that marble becomes cooler and needs to be taken care during its usage in the winter season when it becomes very cool. It is also considered that the marble is pure and used in temple only, not for housing sector.

Technological factors

1) Technology: It would not be out of place to mention that we not lagging behind in technical know how which compares favorably with the newer international standard and since our newer technologies of fast firing have made the industry highly capital intensive. As per the latest trend the single roller technology is also being used in our country for the production of the glazed and unglazed ceramic tiles. Furthermore, this new technology also allowed the production of high quality, low water absorption tiles of larger dimensions and different shapes and colors. Design and application of computerization was easily embedded in the production process, and an increasing variety of new high quality products flooded the market afterwards.

2) Energy Efficient Bell Kiln for the Ceramic Industry In ceramic industry, glazing kilns consume significant amount of electricity to produce heat. Conventional electric kilns use heating elements embedded in the top or in the walls of the furnace. Therefore, heat loss from the outer casing of traditional glazing kiln is a major disadvantage leading to inefficient energy utilization. A new glazing kiln has been designed 64

using infrared radiation produced by the heaters, which are brought straight in to the heart of the kiln charge, via as short a distance as possible. The most important feature of the new kiln is that it is fired by MoSi2-glowing elements suspended between the charge stacks. The distance between the slack and the elements is around 400 mm.because of the high temperature of the elements (1600 c); the infrared radiation penetrates the charge stack faster and deeper than in the old situation. The kiln itself has been designed for optimal energy consumption, i.e.1.the mass is kept low by using a light insulation, 2. Wall thickness has been optimized with regard to heat accumulation and insulation and, 3. There are no heat conductors between the elements and the walls. Further, this kiln has additional advantages due to the even temperature distribution, reduced rejection of products and also contributing to energy saving. For a given production volume, the new kiln requires only 60% of the firings required by the old kiln, so total saving for a given production volume is around 53%. There are also additional unquantified benefits resulting from reduced maintenance and operational costs.

3) Innovations: Recently H R Johnson the leading company in India and globally has put up a new type of the tile, which is proving and providing the property of water repellence. This is technology, which works behind for all this. This makes newer segments and attract

65

4.4. Analysis of the Competitive Forces: Professor Michel porter of the Harvard business school has convincingly demonstrated. The state of competition in an industry is a composite of five competitive forces, which are as follows: 1) Competition among rivalry 2) Threats of new entrants 3) Threats of substitute products 4) Bargaining power of supplier 5) Bargaining power of buyer

We have analyzed here the five forces of competition in context with ceramic tile industry. Analysis of the five forces of competition is as under relating to ceramic tile industry.

Why competition entered Indian market? 1) Booming housing sector 2) Picking up of commercial buildings 3) Rise of real estate activity 4) Requirements of creativity 5) Conversion of mosaic tile to ceramic tile 4.5.1 Competition among rivals:

In the ceramic tile industry it is been found that the rivalry is centered by the continuous new innovations brought about in the types of tiles. Rivalry among the competitors in the ceramic tiles industry is because of following reasons.

66

Attributes of an industry that increase the threat of rivalry: 1) Large number of competitors 2) Plethora of unorganized sector 3) Productive capacity is adding up in increments 4) Merger and acquisitions 5) Strong distribution network

1)

Number of competitors increases:

In case of the ceramic tile industry wall tile share is 42%, floor tiles are 46% and that of newly entered vitrified & porcelain tiles are 13%. Share of the organized sector production is 56% and that of unorganized is 44%. Number of units for organized is just 25 while that of unorganized 200 approximately. Among the organized the top 3 of floor and wall tile producers are H R Johnson, malaria ceramics and SPL. H R Johnson has the market share of about 25.32%, kajaria ceramic is about 14.51% and SPL is about 12.31%. H R johnson is even winning the position as the global leader. Kajaria is the challenger brand and rest follow as the followers. H R Johnson (India) limited is the market leader in India with a market share of 30% in wall tiles, 20% in floor tiles and 25% in vitrified tile segments. Sun earth tiles have about 19 % market share in wall tiles and 11% in the floor tiles. Company exports have been to over 40 countries including Spain, Japan, Sweden, Singapore and New Zealand, these markets are fiercely quality conscious, competitive and extremely difficult to penetrate. In addition to these countries company has been exporting to the neighboring countries like Sri Lanka, Maldives, Mauritius, Seychelles, etc. Moreover exports orders of some countries like USA, UK are also executed by H R Johnson (India) limited in association with collaborator, Johnson ceramics international, UK. The product portfolio of kajaria consists of tiles of myriad shapes and sizes, which gives the consumer array of choices.

67

2)

Mergers and acquisitions:

The demand-supply situation is a cause of worry for the industry, on one hand, the demand is set to increase and on the other hand, industry is grappling with the over-capacity situation- a legacy continuing since the early nineties. That is getting corrected as the industry is passing through a consolidation phase. There will definitely be more mergers and an acquisition in the near future, e.g. the sun earth ceramics has acquired the savanna ceramics in February 2000. Sun earth recently acquired two ceramic tile companies, one in Spain and the other in Romania. Thus, it has become the first ceramic tiles company in the country to have an international presence. 3)

Plethora of unorganized sector:

The unorganized group producing the ceramic tiles is about 44% in India. This group has strong regional effects due to number of market players. These players try to dump down the products of national players by providing the product at the cheaper rate.

4)

Productivity expansion:

It is been found that there has scaling up of productivity made up various national playing competitors as Kajaria ,H R Johnson, Murudeshwar ceramics and SPL .they have proposed for 20000,9000,and 50000-tonnes/day capacity. Thus the competitive rivalry is high.

68

Threat of New Entrants: A second force affecting industry attractiveness is the threat of new entrants. Net competitors add capacity to the industry and bring with them the need to gain market share, thereby making more competition more intense. 1)

New entrance:

New entrants are firms that have either recently begun operation in an industry or that threaten to begin operations in an industry soon.

Barriers to entry into an industry 1) Huge investment 2) Product differentiation 3) Distribution network 4) Government regulation of entry

1)

Huge investment:

If the company wants to launch its ceramic tile company at national level then it requires the huge investment, so it is not easy for new companies to come in ceramic tile industry. So the entry is not so easy for new companies. High amount of capital is required to produce qualitative product. The cost of other infrastructure facilities is also to be considered by new entrants .so capital requirement is also one of the entry barriers. Moreover it is been found that the technology required for the production purpose is also very costly. 2)

Product differentiation:

It is been seen that various leading companies have come up continuously with large innovations, which makes its space specific and constant. a.

Murudeshwar is the pioneer in the vitrified section of the tiles, which was at a good position right from wall to floor tiles even before hand. 69

b. H.R. Johnson is moving up with the anti-slip and anti-water repellent tiles section in its recent launches. c.

NAVEEN of vitrified tiles has gained popularity in a short span of time. MCL’s brand distinction of producing largest size floor tiles for the first time in the country.

d. Bell granito revolutionized the India’s first fully flooring concept in India in the late nineties by introducing body homogeneous vitrified tiles. The tiles were a combination of classy designs of Italian marble and granite. e.

For the SUN EARTH, SONARA and SAVANA brands enjoy strong brand equity. The former is placed at the upper end of the price segment, where the competition from unorganized sector and imports is much less. On the other hand, savanna is pitted at the lower end of the market segment. Sun earth has also been quietly introducing some value-added products in the market, which have been getting good acceptance.

So it would be really a difficult task for the new entrant to put up a highly differentiated product. 3) Access to channel distribution:

H R JOHNSON India’s largest tile manufacturer and has geographically diversified manufacturing plants located at 5 different parts of India. Company has widest distribution network of 800 dealers and 7000 sub-dealers and our own 20 warehouses-cum-branch offices spread across the products. KAJARIA CERAMIC having established a good established network, marketing expenses in the future will be lower. This coupled with expected buoyancy in the housing sector should result in kajaria posting a healthy growth in earnings during the next two years. SUN EARTH markets the sonara and savanna brands through a network encompassing nearly 500 dealers and distributors. It has joined the rank of select ceramic tile companies that possess a distributor /dealer presence in all the states of the country. This ensures that the company’s

70

products reach the point of demand easily. Having a widespread distribution network acts as a high entry barrier for a lot of other players. MCL has a strong presence in south India, which contributes more than 50 % of its revenues and plans to tap northern and western market through its wide network. MCL is now the only company in India, which has the largest number of company, owned and operated showrooms, displaying the entire range of products manufactured by MCL. Currently, it has 50 showrooms and 35 depots operating in different parts of the country. It plans to add around 25 new showrooms, aggregating to total 75 showrooms. MCL has total 18 showrooms and 12 depots in western and northern India. Now taking about these big giants in the market having such a solid marled distribution channel it will be difficult for any entrant to get in the market.

4) Government regulation of entry:

The government on the countries like china, Malaysia and Indonesia has laid anti-dumping duty in order to protect the local manufacturers of the country. Thus the threats of the new entrants are moderate.

71

Threat of substitute products: Here the substitute products of the ceramic tiles are as follows: Marble, granite, terrazzo tile, mosaic tiles, agglomerated stones, concrete paving stones, Kota stones, and these substitutes can ultimately replace an industry’s products and services. Granite and marble still preferred because they are available in good big sizes to cover up good areas in a single hard covering. Moreover in case of the strength and prestigious looks it has been found that granite and marble are comparatively above ceramic tiles, marble and granite are naturally available stones therefore its properties remain in consistency. But there are chances that shades, strengths etc may vary. The price for 1 sq.ft of ceramic tile that too vitrified tiles is greater than marble or good quality granite.

Bargaining Power Of Buyers: Any industry’s customers constantly look for reduced prices, improved product quality and added services and thus can affect competition within an industry. Buyers play individual suppliers against one another in their efforts to obtain these and other concessions this is certain the case with some large retailers in their dealings with many of their suppliers. There are some reasons. a. The housing sector is witnessing a strong rise up hence it can be said that the buyers of the ceramic tiles, the construction companies have been playing a major role. Not only house holders but also even the constructors even prefer it because of the durability, longevity, creativity and lesser transportation costs. Therefore it is been seen that these companies can put up a reasonable rates compared to existing rates in the market.

72

b. Urbanization has also been proved to be awareness factor making people know about the concept of ceramic tiles. The number of companies playing regionally and nationally can prove to be a boon to the buyers fetching a good rate for a particular class of tiles.

c. Education level has created awareness among the people to use and know about various types of ceramic tiles. This is due to the promotional activities.

Conclusion: Analyzing the above five forces it can be said, the competition of rivals is very high i.e. the number of companies working in the production of the tiles. The threat of new entrants is low because of high distribution networks, huge investments and high product differentiation made by the giants continuously. The threat of substitutes is also high because it is found that still there are major groups following status, prestige and even groups in rural less aware about the product. The threat of suppliers is negligible because the raw material needed is very easily available and in abundance. The threat from the buyers is also high because of switching over nature of the consumers, urbanization, number of companies in the market and education.

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4.5.

The Boston consulting group approach:

The growth share matrix is divided in to four cells each indicating a different type of business:

Relative Market Growth

Star 

Question mark Ceramic tiles Ltd.

Cash cow

Dog

Relative Market Share

1. Question mark 2. Star 3. Cash cow 4. Dog

Among the four we can place the business in star cell because the market growth is high. The companies related to the ceramic tiles are making good profit through there is a variation in the sales. It is also found that the exports made by the country to various other countries are quite high while relating to the imports they are quite less. There is constant fight between the competitors for their continuous innovations being made. There has been good distribution access made throughout the country by the organized sector players making the product reachable to varied segments. But the unorganized sector is having 44% of the share in the country’s market, which affects the organized share. The vitrified and porcelain types of tiles which are new entrants to the segment of the ceramic tiles are also forming a good market share of 13 % replacing granite and marble the substitutes.

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4.6.

Critical success factors:

The key factors for success for the ceramics industry are similar to that for glass, as they operate in similar markets and address similar consumer segments. Both use energy intensive manufacturing processes. Hence the key success factors for the ceramics industry will include: • Efficient manufacturing processes • Technology– especially in growing areas like porcelain And vitrified tiles • Supply chain management and distribution • Branding Having a strong brand is more critical for ceramic tiles and sanitaryware, as these sectors address individual consumers. Players like H. & R. Johnson, EID Parry and Hindustan Sanitary ware invest substantially in advertising and brand building. Their efforts have been successful in creating a felt need for high-end ceramic products in houses, especially in urban areas. Going forward, the acceptance of technically superior, high-end products in these segments is expected to be better than in the past. However, as the market is getting increasingly competitive, players will still need to focus on creating a differentiated position in the market.

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CHAPTER – 5 Financial Analysis Balance sheet and Ratio Analysis : 1)

Asian Granito India Ltd Asian Granito India Ltd

Year SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability

Mar 11

Mar 10

Mar 09

Mar 08

Mar 07

21.06 202.92 0 0 223.98 145.32 0.01 145.33 369.31

21.06 185.27 0 0 206.33 137.08 0.04 137.12 343.45

21.06 168.7 0 0 189.76 100.98 8.54 109.52 299.28

21.06 136.36 0 0 157.42 57.31 0.52 57.83 215.25

14.06 51.46 0 0 65.52 49.94 3 52.94 118.46

255.6 67.15 0 188.45 0 0.9 0

234.52 48.19 0 186.33 0 0.06 0.05

190.49 33.08 0 157.41 0 0 0.05

103.83 14.59 0 89.24 0 11.24 17.7

51.64 9.12 0 42.52 0 2.61 4.11

123.76 83.66 17.12 40.61 265.15

110.88 64.46 21.73 43.29 240.36

89.75 51.33 12.31 41.4 194.79

63.61 38.74 6.72 30.84 139.91

48.71 31.76 3.54 13.46 97.47

53.32 19.02 72.34 192.81 2.93 0 15.78

47.91 26.29 74.2 166.16 5.27 0 14.42

26.78 19.85 46.63 148.16 5.5 0.49 12.33

28.46 14.57 43.03 96.88 6.3 0.15 6.26

21.46 5.16 26.62 70.85 3.19 0 4.82

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Net Deferred Tax Total Assets Contingent Liabilities

-15.78 369.31 66.56

-14.42 343.45 72.76

Asian Granito India Ltd 11-Mar 10-Mar Key Ratios Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio Turnover Ratios Fixed Assets Inventory Debtors Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) CPM (%) APATM (%) ROCE (%) RONW (%)

-11.84 299.28 8.35

-6.11 215.25 13.74

-4.82 118.46 15.36

9-Mar

8-Mar

7-Mar

0.66 0.17 1.32

0.62 0.2 1.37

0.48 0.15 1.49

0.5 0.16 1.53

0.87 0.43 1.54

2.21 4.62 7.32 2.98 10.84 7.34 8.37 7.21 3.71 11.29 9.34

2.03 4.3 7.45 3.7 11.73 8.21 9.51 7.94 4.41 11.2 9.61

2.38 4.58 7.79 3.98 16.06 12.94 12.81 10.24 7.13 18.07 14.41

2.61 3.61 5.76 7.22 23.5 20.81 20.62 15.73 13.04 26.05 23.74

3.86 3.75 6.44 6.36 21.28 18.78 18.32 15.35 12.85 30.77 38.28

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2)

Asian Tiles Year

SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities

Asian Tiles Ltd Mar 08

Mar 07

Mar 06

Mar 05

4.06 9.55 0 0 13.61 7.06 0.29 7.35 20.96

4.06 6.41 0 0 10.47 8.57 1.07 9.64 20.11

4.06 4.41 0 0 8.47 9.39 0.99 10.38 18.85

4.06 3.16 0 0 7.22 2.47 0.96 3.43 10.65

19.6 5.35 0 14.25 0 0 0

19.03 4 0 15.03 0 0 0

17.69 2.77 0 14.92 0 0 0

9.34 1.98 0 7.36 0 0 0.34

7.34 8.63 1.88 2.2 20.05

5.75 5.9 0.63 1.43 13.71

5.46 5.83 0.36 0.94 12.59

2.38 3.63 0.18 0.67 6.86

8.32 2.28 10.6 9.45 0.46 0 3.2 -3.2 20.96 0.03

4.61 0.99 5.6 8.11 0.01 0 3.04 -3.04 20.11 0.01

5.99 0.71 6.7 5.89 0.11 0 2.07 -2.07 18.85 0

3.56 0.37 3.93 2.93 0.02 0 0 0 10.65 0

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Asian Tiles Ltd 8-Mar 7-Mar Key Ratios Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio Turnover Ratios Fixed Assets Inventory Debtors Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) CPM (%) APATM (%) ROCE (%) RONW (%)

6-Mar

5-Mar

0.71 0.4 1.14

1.06 0.59 1

0.88 0.46 1.01

0.48 0.23 1.21

2.15 6.36 5.73 5.28 17.09 13.84 14.47 10.79 7.55 28.37 26.08

1.51 4.94 4.72 3.98 19.98 15.53 16.08 11.67 7.23 22.14 21.12

2.07 7.14 5.92 9.53 15.08 12.25 13.79 9.47 6.65 23.36 23.71

1.62 6.34 4.16 6.48 23.91 18.87 20.99 19.67 14.64 26.81 30.61

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3)

Orient Ceramic Year

Orient Ceramics & Industries Ltd Mar 11 Mar 10

SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities

Mar 09

Mar 08

Mar 07

10.53 58.29 0 0 68.82 72.45 30.36 102.81 171.63

10.53 50.98 0 0 61.51 53.53 10.28 63.81 125.32

10.53 41.97 0 0 52.5 59.19 13.27 72.46 124.96

10.53 37.45 0 0 47.98 72.51 21.77 94.28 142.26

10.53 35.49 0 0 46.02 52.61 7.34 59.95 105.97

207.33 128.24 0 79.09 0 1.54 20.08

199.64 118.83 0 80.81 0 0.26 0

195.76 108.22 0 87.54 0 0.72 0

190.73 97.6 0 93.13 0 1.3 0

156.76 88.14 0 68.62 0 0.97 0

69.05 40.32 1.89 30.14 141.4

57.37 31.6 1.6 13.44 104.01

41.37 26.34 1.19 11.88 80.78

42.4 40.45 0.7 14.96 98.51

27.82 34.92 1.95 22.42 87.11

62.91 3.06 65.97 75.43 0 0.66 5.17 -4.51 171.63 11.52

51.31 3 54.31 49.7 0 0.64 6.09 -5.45 125.32 6.51

35.33 2.04 37.37 43.41 0 0 6.71 -6.71 124.96 11.8

41.18 2.37 43.55 54.96 0 0.6 7.73 -7.13 142.26 8.93

30.72 13.75 44.47 42.64 0 0.53 6.79 -6.26 105.97 9.03

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Orient Ceramics & Industries Ltd 11-Mar 10-Mar

9-Mar

8-Mar

7-Mar

Key Ratios Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio

1.28 0.5 1.06

1.2 0.36 0.93

1.66 0.67 0.92

1.64 0.83 1.05

1.23 0.59 1.06

Turnover Ratios Fixed Assets Inventory Debtors Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) CPM (%) APATM (%) ROCE (%) RONW (%)

1.53 4.94 8.68 1.87 8.49 5.36 5.62 4.96 1.82 11.26 8.72

1.36 5.46 9.31 3.38 13.22 9.21 10.5 8.26 4.25 19.86 20.1

1.24 5.7 7.15 2.04 12.9 8.44 8.75 7.12 2.67 15.08 12.68

1.33 6.56 6.11 1.45 10.24 6.06 6.07 5.26 1.08 11.24 5.28

1.39 6.89 7.05 4.53 15.51 11.15 13.06 10.22 5.85 24.44 28.61

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4)

Regency Ceramic Year

SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities

Regency Ceramics Ltd Mar 11 Mar 10

Mar 09

Mar 08

Mar 07

26.44 -7.07 0 0 19.37 125.22 8.45 133.67 153.04

26.44 8.37 0 0 34.81 123.97 7.28 131.25 166.06

13.6 18.71 0 0 32.31 115.61 21.7 137.31 169.62

13.6 33.54 0 0 47.14 99.39 20.25 119.64 166.78

13.6 48.95 0 0 62.55 113.26 7.26 120.52 183.07

215.76 116.63 0 99.13 0 0.02 2.06

217.49 108.5 0 108.99 0 0 2.06

214.77 97.87 0 116.9 0 0 2.06

214.62 87.53 0 127.09 0 0 2.13

214.21 76.95 0 137.26 0 0.01 2.12

35.5 33 6.35 27.89 102.74

35.9 31.49 8.98 23.24 99.61

32.33 26.47 12.48 19.84 91.12

43.9 25.97 9.65 12.29 91.81

50.1 33.79 8.46 9.42 101.77

46.66 0.78 47.44 55.3 0 16.29 19.76 -3.47 153.04 7.15

33.51 0.88 34.39 65.22 0.06 13.48 23.75 -10.27 166.06 11.75

27.1 1.15 28.25 62.87 0.3 12.13 24.64 -12.51 169.62 19.18

37.14 1.15 38.29 53.52 0.53 9.15 25.64 -16.49 166.78 18.71

35.59 3.42 39.01 62.76 0.77 6.14 25.99 -19.85 183.07 16.34

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Regency Ceramics Ltd 11-Mar 10-Mar

9-Mar

8-Mar

7-Mar

Key Ratios Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio

4.89 3.3 1.1

4 2.85 1.15

3.23 2.45 1.14

2.19 1.62 1.09

1.86 1.34 1.07

Turnover Ratios Fixed Assets Inventory Debtors Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) CPM (%) APATM (%) ROCE (%) RONW (%)

0.95 5.79 6.42 -0.44 1.87 -3.3 -5.59 -2.3 -7.46 0 0

0.81 5.14 6.05 -0.09 5.34 -0.76 -2.8 -1.53 -7.64 0 0

0.78 4.37 6.35 -0.41 3.13 -3.25 -4.8 -2.52 -8.9 -3.23 -37.33

0.67 3.07 4.83 -0.29 4.43 -2.91 -5.6 -3.34 -10.68 -2.41 -28.12

0.73 3.35 5.21 0.78 13.97 7.09 4.86 4.53 -2.35 6.05 -5.72

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5)

Somany Ceramic Year

SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities

Somany Ceramics Ltd Mar 11 Mar 10

Mar 09

Mar 08

Mar 07

6.9 95.57 0 0 102.47 183.3 11.14 194.44 296.91

6.9 74.95 0 0 81.85 126.77 35.46 162.23 244.08

6.9 56.92 0 0 63.82 128.12 9.13 137.25 201.07

6.9 49.39 0 0 56.29 138.24 5.64 143.88 200.17

6.9 46.13 0 0 53.03 116.46 5.14 121.6 174.63

349.92 176.81 0 173.11 0 2.82 1.72

290.79 160.69 0 130.1 0 23.74 1.73

277.8 147.87 0 129.93 0 0.09 0.81

276.32 139.62 0 136.7 0 1.64 0.79

255.28 132.21 0 123.07 0 0.58 0.81

97.64 129.33 14.72 60.24 301.93

70.95 101 14.73 60.9 247.58

54.19 81.22 9.29 31.3 176

56.75 64.36 10.14 17.11 148.36

67.62 57.17 5.82 13.2 143.81

124.93 32.07 157 144.93 0 1.23 26.9 -25.67 296.91 16.37

112.44 23.43 135.87 111.71 0 0.94 24.14 -23.2 244.08 16.65

70.7 9.88 80.58 95.42 0 0.82 26 -25.18 201.07 17.45

60.03 2.09 62.12 86.24 0 3.22 28.42 -25.2 200.17 17.65

70.19 1.19 71.38 72.43 0 4.82 27.08 -22.26 174.63 17.51

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Somany Ceramics Ltd 11-Mar 10-Mar

9-Mar

8-Mar

7-Mar

Key Ratios Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio

1.94 1.02 1.08

2.06 1.15 1.07

2.34 1.36 1.04

2.43 1.47 1.02

2.35 1.49 0.99

Turnover Ratios Fixed Assets Inventory Debtors Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) CPM (%) APATM (%) ROCE (%) RONW (%)

2.34 8.91 6.52 2.82 9.26 6.96 6.78 5.42 3.12 19.33 25.42

1.98 8.99 6.17 3.18 10.5 7.93 8.01 6.21 3.64 20.03 28.08

1.67 8.34 6.35 1.81 9.53 6.49 5.95 4.93 1.89 14.97 14.55

1.32 5.65 5.78 1.44 10.84 7.01 5.96 4.99 1.16 13.13 7.45

1.15 4.46 6.31 1.35 10.6 6.37 5.89 5.08 0.85 10.83 4.87

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Limitation

We have collected the secondary data where we cannot able to get exact information about the telecommunication industry privilege in the market as ratio are based in past data and hence cannot be reliable guide to future performance as future is dependent on other factors.

86

CHAPTER – 5

CONCLUSIONS

There are at present 16 units in the organized sector with an installed capacity of 21 lakh million tones. It accounts for about 2.5% of world ceramic tile production. The Ceramic tiles industry has grown by about 12% per annum during the last three years. In India the per capita ceramic tile consumption is 0.15 sq. m. per annum as compared to 1.2 sq. m. per annum in China and 5 to 6 sq. m. per annum in European countries. Its demand is expected to increase with the growth in the housing sector. Indian tiles are competitive in the international market. These are exported to East and West Asian countries. The export was about Rs.558 Crores during 2009-10 Sanitaryware also is manufactured both in the large and small sector with variance in type, range, quality and standard. This industry has been growing by about 5% per annum during the last 2 years. There is significant export potential for sanitaryware. These are presently exported to East and West Asia, Africa, Europe and Canada. The export was about Rs.93.43 crores during 200809. Potteryware signifying crockery and tableware are produced both in the large scale and the small scale sector. Units are spread all over the country. There are 16 units in the organized sector with a total installed capacity of 43,000 tones per annum. Bone china crockeryware items are imported from Bangladesh and Sri Lanka in view of the availability of cheap natural gas and better availability of raw materials there. The export of potteryware during 2001-02 was of the order of Rs.45.50 crores.

1. It is very clear from the study of the ceramic tile industry that the industry is highly capital intensive because of the technology and infrastructure, therefore it requires a good economical and sound technological knowledge for this purpose to set up a plant or manufacturing the unit of ceramic tiles. 2. Since the housing and commercial sectors are booming and witnessing a strong pushup therefore the industry has good prospects for the future years. The new entrants have also pushed up the market share through vitrified and porcelain tiles.

87

3. Ceramic Tiles today have become an integral part of home improvement. It can make a huge difference to the way company interiors and outdoors look and express. 4. The Indian tile industry, despite an overall slowdown of the economy, continues to grow at a healthy 15% per annum. 5. Revenue earning industry - excise mops up over Rs. 350 crores annually from the organized sector itself. 6. There is urbanization and raised education level which will also create awareness among the mass for the usage of the ceramic tiles instead of its substitutes which also have a positive impact on the industry. 7. The WTO, various agreement and duties laid by the government will also prove to be a boon for the domestic and major players in the market. It will also be affecting positively the registered and non registered producers in the market. 8. The technology, labor as well as the abundance of the raw materials is the beneficent factors for the development of a ceramic tiles unit, which are well versed and furnished in our country. 9. The concept of efficient bidding and procurement if brought to India will also help in major destination of exports be increased and provide a good profit margin for the producers. But it still requires enhancement of technology at the stage of the dealers, subdealers, showrooms and even and local retail outlets. The infrastructure of our manufacturing also needs to be improved through expansion. 10. A strong and widespread of the distribution network is also adding to success point for the ceramic tiles industry because it makes it reach gig her and more availability. It wills thereby promoter the industry to get good sales growth, increasing the profit. 11. Gujarat accounts for around 70% of total ceramic production of India and in the unorganized sector it is 35% 12. It plays important role in growth of Indian economy because Indian ceramic industry provides employment to 550000 people, of whom 50000 are directly employed

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Bibliography

Reference Book: 

Marketing management, Philip Kotler.



Crafting and executing strategy Strick Land, Thompsom, Gamble and Jain

Web Links: 

http://dipp.nic.in/industry/ind_plcy_03/ceramic.htm

 

http://www.smeda.org.pk http://www.icctas.com/cer amicindustry/mainpage.htm#HISTORY



http://www.ibef.org/download/Glass_and_Ceramics_170708.pdf



http://dipp.nic.in/industry/content_industries/CERAMIC%20INDUSTRY.htm#ceramic



http://www.tata.com/pdf/tata_review_apr_09/business_ceramic_success.pdf



http://www.valuenotes.com/krc/krc_weekender_06Oct07.pdf



http://www.hotfrog.in/Companies/Morbi-Ceramic-Industry/Morbi-ceramic-industrygoes-International-2404



http://www.hotfrog.in/Companies/Morbi-Ceramic-Industry/n-Ceramic-IndustryPerspective-and-Export-Potential-4488



http://blog.morbiceramicindustry.com/2009/07/indian-ceramic-companies-receivedboost/



http://blog.morbiceramicindustry.com/2008/07/indian-ceramics-confirms-ahmedabadvenue-for-2009/



http://ibef.org/download/Glass_and_Ceramics_060109.pdf

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

www.eximbankindia.com/cera-wp.pdf



http://www.asiangranito.com



http://www.hrjohnsonindia.com



http://www.kajariaceramics.com



http://www.krchoksey.com



http://www.marketresearch.com



http://www.indian-ceramics.com

News papers: 

Times of India



Economic times



Business standard

Magazines 

Ceramic world review magazines

Search engine: 

www.google.com



www.bing.com

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