Globally ceramics industry has evolved through cluster approach. Ceramic clusters are characterised by the availability of raw material, nearby consumption markets or ports, availability of labour, availability of technological knowhow, logistics support and entrepreneurial talent. Ceramic clusters evolved in developed countries like Spain and Italy towards the end of last century exactly due to these reasons and Morbi finding its place in the world ceramic map again is due to same factors.
The Morbi cluster, which accounts for more than 70% of India’s total production, is spread across a 10km stretch on the Morbi-Dhuva highway in Gujarat. Today, Morbi is the second largest ceramics cluster in the world, next only to Foshan in China.
Morbi is ideally located for any business to prosper – the nearest airport is at Rajkot, which is 67 Km away from Morbi. From Ahmedabad, the commercial capital of Gujarat, Morbi could be reached by Railway as well as by Road; the distance is about 184 KM. Morbi is also in the vicinity of major ports (such as Kandla and Mundra). Further, there is availability, in abundance, of raw material (local clay suitable for ceramic products) and of quartz, calcite/woolastonite, frits and glazes in Gujarat and in the neighbouring Rajasthan. Labour is also easily available.
Above all, the entrepreneurship of Patel community also played major role in Morbi becoming the ceramics hub of India. The Patel community which owns the tiles manufacturing factories is a tightly knit network. Most of them are co-owners in multiple factories. So, utilization and sharing of resources (logistics, labour, production knowledge and vendors) is highly efficient and cost-effective.
Morbi’s history as a ceramics cluster is less than four decades old. However, even before becoming the ceramics hub, Morbi was closely associated with building products manufacturing. Traditionally, Morbi was famous for roof tiles called ‘Naliya’. However, in the mid-80s, local entrepreneurs started importing machines that were being discarded by the clusters in Italy and Spain. There was a 55% duty on import of capital goods; however, SMEs were exempt up to the limit of Rs 1 crore, which was later increased to Rs 2 crore. These entrepreneurs installed the ceramic tile machines and started producing tiles. However, switch over to vitrified tiles is a recent phenomenon.
In Morbi cluster, overall technical understanding on ceramic manufacturing is good and rapidly increasing. Important equipment like kiln, polishing machine etc are bought from Italy (Sacmi) and China (Modena), which are leading suppliers of these equipment world over. Many of the unit owners are frequently visiting international ceramic fairs and ceramic process equipment suppliers, thus keeping them informed. Further, Morbi has offices and representatives from globally renowned Italian & Spanish tiles machinery manufacturers and design studios which provide technical assistance and training to tiles manufacturing companies.
In recent years, Morbi also has become an important zone for outsourcing of tile manufacturing. Large firms like Prism Johnson, Kajaria Ceramics and Somany Ceramics outsource part of their requirements from Morbi manufacturers. Some of the major players have taken small to sizeable stakes in the companies from where they outsource their requirement. Some companies have formed joint ventures and some are sourcing on contract manufacturing basis.
Vibrant Ceramic Expo is a turning point in the history of Morbi ceramics industry. It has not only increased the awareness of the Morbi ceramics industry world over but also has helped the local manufacturers with global players. Till now two Vibrant Ceramic Expo have been held in 2016 and 2017. It is said that about 5,000 customers visit Morbi every month compared to only 1,000 two years ago.
One of the important factors that has contributed to the growth of Morbi ceramics cluster is its lower cost of production compared to other locations/clusters. This is largely because of easy availability of raw material required for manufacturing ceramic products. As the raw material cost accounts for 50% of the cost of sales of ceramic products, plants closer to the source of raw materials (especially China clay, which is bulky) gain by way of lower freight cost. Further, due to subsidies given by Gujarat Govt, gas price for Morbi plants is Rs 32/scm and for non-Morbi plants it is Rs 37/scm.
Apart from catering to domestic market, Morbi manufacturers also export ceramics in a big way. Exports from Morbi is estimated to be around Rs 10,000 crore. There are now 800 manufacturers in the cluster and the number is expected to grow, and that too rapidly, in the coming years.