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25
Annual Report 2011-12
24 Kajaria Ceramics Limited
Tiles tend to be produced near their consumption areas. Asia accounted for 66.9% of production and 64.4% of world
consumption, Europe (EU+ non-EU) 16.6% and 15% respectively, the US 12.6% and 14.7% and Africa 4% and 5.5%.
Indian tile industry
The Indian tile industry ranks third in terms of production
and consumption (estimated at
`
140 billion as of March
2011). The industry reported strong growth owing to the
emergence of tiles as durable, cost-effective and
convenient solutions over natural stone.
India’s consumption grew 12.95% CAGR between 2006-07
and 2010-11 to 557 MSM, which was about 2x the global
average. Its production grew at a 13.04% CAGR over the
same period to 550 MSM in FY11.
The tiles industry largely comprises ceramic wall and floor
tiles and polished and glazed vitrified tiles. The competitive
intensity is less in the vitrified tiles segment; the country
imports vitrified tiles (especially glazed). Tiles are largely
consumed by residential, commercial, retail, hospitality and
aviation segments.
The industry is fragmented with organised players
accounting for 50% of the industry turnover; the balance
was represented by small unorganised/unbranded players,
primarily in Gujarat.
Rapid capacity addition, increased home ownership and
rising brand aspirations resulted in a gradual shift of
consumer preference towards value-added products.
Kajaria is placed in various categories through the products given in the pyramid below:
TOP-10 PRODUCING NATIONS
Country
2007
2008 (MSM)
2009 (MSM)
2010 (MSM)
%age on 2010 % variance
world production
(10/09)
China
3,200
3,400
3,600
4,200
44.1
+16.7
Brazil
637
713
715
753
7.9
+5.4
India
385
390
490
550
5.8
+12.2
Iran
250
320
350
400
4.2
+14.3
Italy
559
513
368
387
4.1
+5.3
Vietnam
254
270
295
375
3.9
+27.1
Spain
585
495
324
366
3.8
+12.8
Indonesia
235
275
278
287
3.0
+3.2
Turkey
260
225
205
245
2.6
+19.5
Egypt
140
160
200
220
2.3
+10.0
Source: Ceramic world review
TOP-10 CONSUMING NATIONS
Country
2007
2008 (MSM)
2009 (MSM)
2010 (MSM)
China
2,700
2,830
3,030
3,500
Brazil
535
605
645
700
India
397
403
494
557
Iran
236
265
295
335
Vietnam
210
220
240
330
Indonesia
178
262
297
277
Egypt
105
140
180
200
USA
249
211
173
186
Saudi Arabia
110
136
166
182
Mexico
173
176
163
168
Source: Ceramic world review
Importing from China and commissioned a manufacturing
unit at Sikandrabad (UP) in February 2010 and in
Gailpur in March 2011. Acquired a 51% stake in Jaxx
Vitrified in February 2012 for import substitution
(total aggregate capacity 11.10 MSM)
Importing from Europe and China
and commissioned a manufacturing
unit at Gailpur in March 2011 (total
aggregate capacity 3 MSM)
Manufacturing upper end of the
segment. Acquired a 51% stake in
Soriso Ceramic (Total aggregate
capacity 21.90 MSM)
Imports
8 MSM
Domestic
352 MSM
Domestic
12 MSM
Imports
15 MSM
Domestic
150 MSM
Imports
20 MSM
Reasons
• Increased earning members in the family
• Increased working youth population
• Increased earnings and disposable income
Reasons
• Increased government programmes
• Earning through land acquisition
• IT and banking penetration growing
earning propensity
Aspiration drivers
Urban areas
Semi-urban areas
KAJARIA’S
VALUE-CHAIN
Sectoral optimism
Tiles represent a preferred flooring solution on account of their aesthetic appeal, longevity, variety and
application ease. The convergence of the AAAs – aspiration, affordability and availability – catalysed
tile demand in the last few years and this trend is expected to continue over the medium-term.
Glazed
vitrified tiles
(20 MSM/
`
10 billion)
Polished
vitrified tiles
(170 MSM/
`
55 billion)
Ceramic tiles
(367 MSM/
`
75 billion)