Cera plans expansion

Gujarat-based Cera Sanitaryware Limited (CSL) is on an expansion drive. The Rs 106 crore company intends to take its turnover to Rs 500 crore in the next 4-5 years and aims to be a major player in other segments like kitchenware and home furnishings.

With a market share of over 20 per cent, CSL is the third largest player in the organised sanitaryware market.

The company, which aims to be a total bathroom solutions provider, has planned a phased expansion for the next five years.

At present, Cera Sanitaryware is expanding its plant capacity from 1.2 million pieces to 2 million pieces per annum at a cost of Rs 30 crore.

Post expansion, the company expects a turnover of Rs 150 crore in sanitaryware and other allied products like bath fittings, shower temples, shower panels, among others.

CSL is also planning to launch vitrified tiles in the near future, apart from kitchenware and modular kitchen.

"We have also planned a further expansion of our plant at Kadi near Ahmedabad, where we will increase our plant capacity to 2.7 million pieces by 2009 at a cost of Rs 65 crore. Once expanded, it will be the largest plant in this segment at a single location. With such expansions, we want to be major players in kitchenware, tiles and eventually total home furnishings," said S C Kothari, CEO-cum-Wholetime Director, CSL.

According to Kothari, the capacity expansion to 2.7 million pieces per annum will be completed by mid 2009, while the full capacity utilisation will begin by 2010.

The company also intends to increase its exports from 2-3 per cent of the turnover last year to 8-10 per cent by end of present fiscal.

"We are in talks with parties in Bahrain, Qatar, South Africa and Australia for further exports. Moreover, on the domestic front we want to replicate our strength in sanitaryware. With such a large plant capacity at a single location, we are more economical than any other player in these segments. Also, with these expansions at Kadi, we will be able to achieve higher economies of scale and offer better returns to our shareholders as well," added Kothari.

The company is also setting up an additional 1.25 Mw captive wind power project, apart from an existing captive power project of 3.7 Mw.

CSL has already applied for carbon credit for the additional wind power project and hopes to earn a credit of Rs 6 lakh per annum for the next 10 years.