Cera Sanitaryware, one of the leading manufacturers of tiles in the country, will be shuffling its product mix to increase its profitability. At present, 95% of the tiles sold by the company are soluble salt tiles. Now the company has decided on increasing the share of glazed vitrified tiles and full body tiles in its portfolio. Tiles contributed to 17% of revenues of the company last year. Interestingly, another tiles manufacturer from Gujarat recently indicated its intention to concentrate more on soluble salt tiles as this segment is in more demand due to increased emphasis given by the government on affordable housing.
Vitrified tiles are considered best flooring option because of maintenance free and very low porosity which make water resistant strong. On the other hand, Soluble Salt Tiles process is an old and cheaper technology and usually cater to lower end of the market. The company recently incurred a capex of Rs 12 crore for upgrading its 3.65msm tile facility.
This upgradation of production facility is likely to aid sale of GVT/full body tiles within the next two months. Realisation of GVT tiles is 20-30% higher than soluble salt tiles. High energy costs and product mix has resulted in low profit margins for the company in the tiles segment so far.
Cera Sanitaryware is the third largest sanitary ware player in India with 24% share in the organized segment. It is also present in the faucet and tiles segments. Cera has 23 depots, 10-12 display centres, 150 exclusive Cera Galaxy showrooms, 1,600 dealers and 15,000 multi brand outlets. The company plans to increase the number of display centres, which are company-owned and as large as 10,000sq.ft each.