Kajaria - If Real Estate Is Booming, Why Not Ceramic Tiles

Kajaria Ceramics Plans Unit In Gujarat

Kajaria Ceramics Ltd, a Rs 350-crore Delhi-based ceramic tiles manufacturing company, is planning to have its own unit in Gujarat. The company may either set up a new facility or opt for an existing one, for which it is in talks with some local firms.

Speaking to the media, Ashok Kajaria, managing director, said, “If the acquisition does not work out, then we will set up a unit for which we have earmarked Rs 100 crore. We have identified some areas including Morbi, Himmatnagar and Mehsana.”However, he said, if the company plans set up its own unit, it would take around 15 months.

Kajaria was in Ahmedabad to launch the company’s first office-cum-tile display centre in Gujarat. The company currently has 17 dealers in the state and is aiming to have 30 dealers by the end of 2007. Talking about the Morbi ceramics industry, he said, “Earlier, the Morbi ceramics industry was considered as a small industry. Now, it has become a regional player. But the Morbi industry lacks in technology in comparison with the country’s large players.”

According to Kajaria, there are around 13 large players in the Indian ceramics industry and all of them have state-of-the-art technology. On the ceramics market of the country, Kajaria said, “The market is growing at a rate of 16-18 per cent and the trend is likely to continue till 2011. Various SEZs, upcoming townships and the infrastructure development across the country will fuel this growth.”

Kajaria indicated that the rising oil prices is still the biggest hindrance in the growth of ceramics industry. “We have two units, one in Sikandarabad (Uttar Pradesh) and another in Gailpur in Rajasthan, with a total manufacturing capacity of 26.4 million sq mt per annum. The Sikandarabad unit uses liquefied natural gas(LNG) while in the Rajasthan unit, the company is forced to use propane because we do not have pipeline infrastructure in place for LNG there. This affects the production cost directly. Twenty three per cent of our total expenditure in Gailpur unit goes in fuel while only 15 per cent is spent on the Sikandarabad unit,” he said.