Orient Ceramics and Industries Ltd, which recently acquired Bell Ceramics to expand its footprint in the south, would “aggressively increase” its sourcing of products from contract manufacturers while also growing organically.
Speaking to the media here on Tuesday, after opening its first shop-in-shop in the city, Vijay Shankar Sharma, chief financial officer, Orient Ceramics, said, “Trading accounts for 15 percent of our revenue and a couple of percentage points more in terms of volume. Going forward, we want to increase outsourcing contribution to double that level in two years, while also growing organically.”
According to Madhur Daga, executive director, the company would aim for full capacity utilisation at its three manufacturing plans at Sikandrabad (UP), Dora (Gujarat) and Hoskote (Karnataka).
“As market demand grows, we will increase our market share through joint ventures, outsourcing deals, etc,” he said. The current capacity utilisation at Orient's own UP plant is 90 percent while that at the other two plants of Bell is at 65 percent.
The company also plans to unveil a new umbrella brand for different categories of tiles imported from Europe. The products would be complementary to its own offerings, and would help it move up the value chain, Sharma said. The industry growth rate is around 30-40 percent while the company grew at an average rate of 18-20 percent over the last five years.
On September 21, 2010, Orient Ceramics announced acquisition of 62.92 percent of Bell Ceramics at Rs 20.69 per share. It also made an open offer for another 20 percent, of which it was able to acquire about 6 percent. It currently holds 68 percent stake in Bell, acquired for a sum of Rs 19 crore. The enterprise value of Bell Ceramics is Rs 120 crore. It could take up to 18 months for the merger process to be completed, he said.
