|Somany Ceramics Ltd (SCL) is gearing up to establish a new factory in Seemandhra region for producing tiles.|
The leading branded tile manufacturer is scouting for right location in Seemandhra to set up its south factory. It has initiated talks with the Chandrababu Naidu-led Seemandhra government to acquire lands for the proposed unit. The company is expected to finalise the plans during this year, its top company officials told The Hindu.
“South is definitely a region where we would like to have a unit. But it also depends on the availability of raw material and gas. However, I will not rule out south at all. It’s a preferred destination as far as Somany is concerned,” Chairman and Managing Director of the company Shreekant Somany said.
Noida-headquartered Somany has two factories, one each in Gujarat (Kadi) and Haryana (Kassar), with a total manufacturing capacity of about 22 million sq meters per annum. Besides, it has additional capacities through joint ventures and outsourced business.
However, absence of manufacturing unit in south has been a big disadvantage for the company. South being the largest market for tiles, it is an intensely-competitive region with branded and unorganised players and Chinese imports. While leading tile makers such as Kajaria and H&R Johnson have plants in the south, Somany has been spending heavily on freight to cater to the southern market. Also, it is spending even more in the case of movement of products from Western factories to eastern region. “It will be really tough for us to fight in big projects in this region without a plant,” said Sanjay Kaul, DGM – Business Development, SCL.
Thus, a production base in south is expected to offer twin benefits of serving both south and eastern markets. Also, south fetches a third of company’s revenues.
The Rs.1,598 crore firm hopes to sustain the present growth rate of over 20 per cent, aided by value-added tiles segment and deeper retail push. It is aiming Rs.2200 crore of revenues this fiscal.