)
Sanitaryware major Roca is preparing to export products from its Indian manufacturing units to Europe and China . The company, which used to export earlier from China, is directing some of its global orders to India.
Roca says recent developments in the neighbouring country have blunted its competitive edge to some extent leading the company to procure global orders from India now.
“In a multinational company like ours, different subsidiaries have to fight among themselves to get the global supply orders for internal requirements, apart from competing with other players in the market,” said Pau Abello, managing director of Roca Bathroom Products (RBP) said. RBP – the company’s Indian arm – too, had to fight off China and Portugal to get the orders. RBP – now owns six manufacturing units and to prepare the grounds it has increased its production capacity in the recent years.
Also Read
For the $1.8-billion company, operating in 135 countries, China has now become a less attractive location for production as compared to India. While, in the past two years labour costs has increased significantly, tax liabilities has put “huge pressure on production costs”. "But India has a clear advantage in terms of labour costs. However, high energy prices in the country is a hitch," Abello explained.
To start, Roca has secured orders for faucets, plastic seats and covers and basins for the Malaysia, Czech Republic, Australia and China. Abello says RBP is ready with the required technology and capacity to export in Europe now and will soon start shipping out products manufactured in India.
The demand in Chinese market has started to show signs of a slowdown. Last year, average new home prices in 70 major Chinese cities fell 0.9% in July on a month-on-month basis, following a 0.5% decline in June, leading to speculations of a prospective "housing bubble burst" in the country. While Roca’s sales in India grew by 12.6% to Rs 775 crore during 2014, in China it slowed down to 2.6%. RBP estimates its sale to grow by 20% during 2015 since the company has now revamped its flagship brand in India – Parryware, which Roca acquired in 2010. And after introducing “entry-level plastic products in the sanitary-ware segment”, RBP is now eyeing the tier - II and -III towns.
