Vitrified tile demand builds up

The Rs 1,800-crore domestic vitrified tile market is growing at 30 per cent and the trend is likely to continue due to the construction boom in the country, according to a report by Keynote Capital Research.

Growing disposable income among the middle class has also prompted customers to shell out more money for vitrified tiles, which are three times as costly as ceramic tiles.

Paresh Shah, director, Euro Ceramics said customers prefer tiles with better longevity. "As vitrified tiles require no renovation for life and maintenance is easy compared to ceramic tiles, the demand is likely to grow leaps and bounds," he said.

"We have advance orders for the next three months from construction companies and, therefore, realisation is much higher than industry standards."

The ceramic tile market, however, lags behind with a growth rate of 18 per cent and market size of Rs 3,000 crore. India ranks among the top seven tile producers in the world, with a contribution of 2.7 per cent.

Six large players, four producers and two importers control about 45 per cent of the market, while around 20 unorganised sector players share the rest, the report said.

Therefore, substantial scope exists for the growth of the organised sector, given the growth rate of the industry and the unorganised sector's huge market share. In India, the per capita consumption of ceramic tiles is a meagre 0.15 square metres per annum (SMPA) compared with 3 SMPA in China and 5-6 SMPA in Europe.

Unorganised sector players offer medium to low quality vitrified tiles at slightly low prices, which has a bearing on the industry at large. But, the industry is safeguarded by external supplies especially from China, thanks to the $8.25 per square metre anti-dumping duty imposed by the Centre.

Euro Ceramics claims to sell the highest quality vitrified tiles available in the market, thereby quoting a 20 per cent premium from the industry's average price and 9 per cent from its nearest competitors.

The tile industry is power and capital intensive. Hence, companies with captive power generation capacity are likely to have an edge over others, an expert said.

In the marble segment, imports of wall tiles from China are popular due to attractive designs and affordable prices. Recently, even wall tiles from Spain have entered the market.

Many companies such as Nitco, Kajaria and Johnson also rely heavily on trading in wall and vitrified tiles. These companies import tiles from China and market them in the country.