India’s consumption grew 12.2% CAGR
between 2006-2007 and 2011-12 to
625 MSM, about 2x the global average.
Production grew at a 12.2% CAGR over
the period to 617 MSM.
India’s organised segment accounts for
50% of the country’s tile industry; the
units in Morbi (Gujarat) account for the
balance.
Over the last decade, aspirations,
affordability and availability have
shifted the average Indian consumer’s
preference to larger-sized and better
looking tiles. As a result, value-addition
is the order of the day, which has led
to the absorption of new technologies,
namely the digital-printing technology.
JV route:
It is increasingly difficult
to address growing tile demand on a
sustainable basis for three reasons:
frequent increases in fuel costs affects
pan-India distribution; progressive
increase in land and power costs
affect greenfield capacity creation;
gas shortage is a growing problem. To
circumvent these realities, organised
players are partnering unorganised
players (constituting around
50% of the industry) with plants
predominantly based out of Morbi,
acquiring a stake in the local unit for
the entire production.
These strategic joint ventures are
emerging as a win-win approach for
both partners. For the unorganised
player, the equipment which would
otherwise operate at sub-optimal
levels, is now sweated at full capacity.
In addition, the partner only needs to
focus on manufacturing as product
offtake is secured by the other partner.
The Indian tile
industry ranks third
in global production
and consumption
(estimated at
`
170
bn as of March 2012.
The industry largely
comprises ceramic wall
and floor tiles as well
as polished and glazed
vitrified tiles consumed
by residential,
commercial, retail,
healthcare, hospitality
and the aviation
segments.
Management discussion and analysis
Indiantile
industry
India-to-China penetration ratio in some
discretionary categories
Source: Euromonitor, World Bank, Credit Suisse estimates
0.70
0.60
0.50
0.40
0.30
0.10
0.20
0.00
SkinCare IceCream Tiles
4W Shampoo 2W
Penetrationratiofor India:Chinafor individualcategories
The number of ‘census towns’ in 2011 was
thrice of that in 2001.
Towns forming naturally
Source: India Population Census, 2011
9,000
8,000
7,000
6,000
5,000
1,000
2,000
3,000
4,000
0
2001
2011
Towns (Definedsuch)
CensusTowns
28
Kajaria Ceramics Limited
Annual Report
2012-13
25
YEARSOF
WORKINGWITH
ANATTITUDE
CELEBRATING
