Retail boom fuelling tiles industry

The domestic tiles market is growing at a rate of 15 per cent for the past four years, riding on the construction and retail boom.

The market size of the tiles sector (both organised and unorganised) had grown from Rs 2,000 crore in 2001-02 to Rs 6,500 crore in the current year, said Abhishek Somany, joint managing director of Somany Ceramics.

Domestic companies are also importing tiles from China and the European countries and marketing them under their own brandname to complete their product portfolio. "We need to import some niche products from countries such as Italy and Spain together with some medium-range tiles from China as our dealers are seeing demand for them," said Somany.

Of late, tiles manufacturers are facing pressure owing to higher input costs from power, freight and, to a lesser extent, zinc. In the last two quarters, major producers have made marginal upward revision in prices. Prices of tiles would go up further by 3 to 5 per cent in the coming months, said Somany. Somany Ceramics has set up a new company to expand its retail presence in the booming tiles market.

"We have formed a new company called Somany Retail to focus on the retail market. But the model through which it will be done remains to be worked out," said Somany.

The company already has 10 display centres called Planet Somany in major cities, which are used only for display.

The company has expanded its capacity from 32,000 sq m a day in 2005-06 to 40,000 sq m and is working on taking it further to 50,000 sq m by June this year. The expansion will cost the company Rs 45 crore.

Somany Ceramics' turnover is projected to grow from Rs 245 crore in 2005-06 to Rs 300 crore this year.