Exports of tiles from Morbi has seen sharp fall in the month of September due to reduced competitiveness of the manufacturers. According to some analysts and experts, exports have come down to Rs 600-700 crore in September as against Rs 1,000 crore plus in July and prior to that.
According to some experts in the industry, increased logistic cost and also spike in natural gas prices have reduced the competitiveness of the Morbi tiles manufacturers. Many Morbi-based players had reduced\shut-down their operations for a month in August/September.
Gujarat Gas Limited (GGL) announced an increase of Rs 9.5/scm in industrial gas price (24%) which is likely to result in Rs 47 per scm cost to the Morbi consumers with effect from 5th October. This hike comes post the recent price increase of Rs 4/scm on 24th August 2021 thus cumulative price increase has been massive 62% (or Rs 18/scm) in CY21.
Prevailing situation has encouraged some of the non-Morbi manufacturers or those who have manufacturing facilities in multiple locations to look at exports as an additional revenue earning option. For example, Kajaria Ceramics whose main focus continues to remain on domestic market providing benefits of premium pricing, largely backed by its strong brand recall, and wide-distribution strength in the local markets is planning to rework its strategies. The export markets such as Europe have become attractive currently with sharp increase in product prices due to jump in input costs. The company is planning to raise the share of exports in its overall revenue to 5-8% from the current level of 2-3% to take advantage of the prevailing situation.