Tile makers lose ground to Dragon

The domestic vitrified tile market is under threat from its Chinese counterpart with a decline in growth and the latter's products capturing a significant part of the local market.

Currently, China's market share in the vitrified tile segment in the country stands at 24 per cent. However, industry experts feel that with the current import rate of tiles, the Chinese manufacturers will capture up to 28 per cent of the local market by the end of this year touching Rs 450 crore.

The market share of the Chinese tile makers, which was 10 per cent in 2004, is rising on a yearly basis.

Since last year, the domestic market for vitrified tile, which is worth Rs 1,250-crore, has seen an unprecedented upsurge in the volume of tiles being dumped.

According to the Indian Council of Ceramic Tiles and Sanitaryware (ICCTS), the volume of dumped tiles in the domestic market touched Rs 300 crore, resulting in a growth of 200 per cent in the volume of dumped tiles.

Last year, the prices of tiles fell from Rs 60 per sq ft to Rs 40. However, when the last two years decline is taken into account, the fall in prices comes to 65 per cent. The price per sq ft for the tile was Rs 120 before the fall.

Indian tile manufacturers, last month, had made an appeal to the government to cut the excise duty from the current 16 per cent to 8 per cent. Manufacturers said that there had been consistent erosion in their profit margins in the last six months.

According to industry estimates, the current year is likely to see vitrified tile prices going down by another 25 per cent to Rs 30 per sq ft.