| In 2002-03, the company's exports stood at Rs 29 crore, which is around 36 per cent of the country's total exports. In 2002-03, it achieved a turnover of Rs 239.01 crore against Rs 227.84 crore in the previous corresponding financial year. Its net profit stood at Rs 9.93 crore compared with Rs 2.63 crore in 2001-02. |
| For the six months ended September 30, 2003, the company reported a turnover of Rs 124.17 crore against Rs 111.76 crore and a profit after tax of Rs. 6.98 crore against Rs 4.04 crore for the same period the previous year. |
| A K Kajaria, chairman and managing director, speaks about the company's future plans. |
| What is the status of the ceramic industry? World-wide production of ceramic tiles stood at around 5904 million square metres in 2002, which in value terms translates close to $30 billion. |
| China is the largest producer with a total production of 2100 million square metres per annum while Spain stands second with a production of 651 million square metres per annum. |
| But Italy, with a production of 606 million square metres per annum, dominates the world scenario on account of high quality. |
| India produces only 150 million square metres. Of which 110 million is produced in the organised sector and the balance 40 million in the unorganised sector. India accounts for only 2.5 per cent of the world's production, but is one of the fastest growing countries. |
| In the last five-to-six years, the industry has grown at a compounded annual growth rate of around 15 per cent. |
| How is Kajaria placed in the industry? What is its market share? We have a market share of 13 per cent in the organised sector with a capacity of 12 million square metres. We are expanding our capacities at both our plants - Sikandrabad in Uttar Pradesh and Gailpur in Rajasthan - to 14 million square metres per annum. |
| The expansion is expected to be completed by February 2004. We plan to further expand our capacity to 21 million square metres per annum by February 2005 at an estimated cost of Rs 125 crore. |
| We are the largest exporter of ceramic tiles from India, contributing around 36 per cent (Rs 29 crore) to the country's total export worth Rs 80 crore. |
| Kajaria's presence is primarily in the western and north regions. Is the company looking to increase its presence in other markets? We are increasing our dealer network in both the western and southern parts of the country and upgrading the showrooms of dealers and sub-dealers for more visibility and better display. |
| We have been regularly participating in 'inside-outside' exhibitions for building materials in major cities. We are also organising city-level exhibitions in smaller towns to display tiles. |
| How is the competition from unorganised market? We are not facing any competition from the unorganised sector because of our aesthetic designs and quality. |
| Unorganised players mainly target smaller towns where customers are not very much quality conscious but upgrading themselves to tiles as compared to mosaic and cement floor. |
| The Centre for Monitoring Indian Economy (CMIE) has recently rated Kajaria as one of the top ceramic brands in the country. |
| Do you plan to retire high-cost debt? What are your financial projections for the next few years? Yes, we are in the process of replacing the existing high-cost debt with low-cost rupee/foreign currency loan to make substantial savings in interest costs. |
| Our average cost of long-term funds stood at around 15 per cent as on April 2003 which is expected to come down to around 8 per cent within a year. |
| However, we expect to perform well and achieve a turnover of Rs 270 crore for the fiscal year ending March 31, 2004 with a net profit of Rs 15 crore. Next fiscal, we hope to save around Rs 5 crore on interest costs through debt restructuring. |
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