Ahmedabad-based Cera Sanitaryware Limited, the country’s third-largest player in the sanitaryware products market, will be making a capital expenditure of Rs 150 crore for expanding its manufacturing capacities in the next two to three years, according to chairman and managing director Vikram Somany.
The rolling plan (a plan, which is adjusted according to changing circumstances), will include ramping up the production of sanitaryware from the current 2.7 million pieces to 3 million pieces a year, besides scaling up the capacity of faucets manufacturing from the present 2,500 pieces to 10,000 units a day at its facility in Kadi, Gujarat.
“We currently have Rs 30 crore in fixed deposits. Given the 50% rate at which the debt-free company is growing, we are hopeful of garnering enough money to fund the expansion through internal accruals,” he told Business Standard.
Relaunching Cera Style Studio, a ‘touch-and-feel’ products display outlet primarily targeting institutional sales, in Hyderabad on Sunday, Somany said the company currently had eight Cera Style Studios across the country, and would be launching three such stores – one each in New Delhi, Chennai and Kolkata – by October this year, each with a typical investment of between Rs 5 crore and Rs 10 crore.
The Indian sanitaryware market, which is currently pegged at Rs 2,500 crore, equally shared by branded and unbranded players, is growing at a compound annual growth rate (CAGR) of 15%.
Somany said the company was expecting its revenues to touch Rs 467 crore-500 crore this financial year, as against Rs 320 crore last fiscal, on the back of increasing demand for premium sanitaryware products and the replacement market, which is growing at 18% at present.
Plans plant in Andhra Pradesh
Stating that south India is an important market for the publicly-listed company, contributing about 40% to its overall sales, including 20% from Andhra Pradesh, Somany said Cera was contemplating setting up a manufacturing facility in the state, with an approximate investment of Rs 150 crore.
“The proposal will be on the drawing board stage until the clouds of political uncertainty (separate Telangana statehood issue) are cleared,” he added.
