Documente Academic
Documente Profesional
Documente Cultură
Topic
Page No.
Cover page-
Content page-
Candidate declaration-
Acknowledgement
Chap-I-
5-6
Chap-II-
6-17
6-7
8-15
Industry Statistics
16-17
Export-Import Scenario
17
Chap-III-
17-26
Research Methodology&Findings
17-25
Limitations
25-26
Chap-IV-
26-39
About OCIL
26-29
30-36
Demand Drivers
37
SWOT Analysis
38
Distribution System
38
Ceramic Marketing
38-39
Chap-V
39-41
Other Recommendations
39
1
40
Conclusion
40-41
References
41
Chapter I
Preface
The word "Ceramic" has originated from the Greek word, "Keramos", which means
pottery. It also relates to an ancient Sanskrit word whose root meaning is to burn, but
it is predominantly used to indicate "burnt stuff". Almost 10,000 years later, with the
establishment of settled communities, tiles were manufactured in Mesopotamia and
India. The first instance of functional pottery vessels being used for storing water and
food is thought to be around 9,000 or 10,000 BC. Clay bricks were also made around the
same time.
The ceramics industry in India came into existence about a century ago and has
matured over time to form a industrial base. From traditional pottery making, the
industry has evolved to find its place in the market for sophisticated insulators,
electronic and electrical items. Over the years, the industry has been modernising
through new innovations in product profile, quality and design to emerge as a modern,
world-class industry, ready to take on global competition.
Though there are a number of large companies in the ceramics sector, small and medium
enterprises (SMEs) account for more than 50 per cent of the total market in India,
offering a wide range of articles including crockery, art ware, sanitary ware, ceramic
tiles, refractory and stoneware pipes among others. Most of the players are grouped
together in clusters.
Over the last two decades, the technical ceramics segment has recorded an impressive
growth propelled by the demand for high-alumina ceramics, cuttings tools and structural
ceramics from the industry. Overall, the Indian ceramics industry has emerged as a
major manufacturer and supplier in the global market.
Ceramic tile comes under Building Material Industry. Over the years, Indian Building
Material Industry poised to grow at a fast pace of almost 16%/annum due to boom in
real estate and construction industry. Increase in income levels and availability of a
range of financing options for housing is enabling rapid growth in housing
construction.
In India, particularly in NCR region, growth rate of building material industry is at very
high and constantly growing. By this project finding, we have been trying to catch the
opportunities and demand of various tile making organisations for their commercial and
residential needs in Ghaziabad and Meerut region.
Also as marble prices begin to pinch purses in these times of meltdown, tiles are making
deeper inroads into urban homes. And they are getting more designer makeovers to suit
market demands.
Determine the market size and potential of all the organise and unorganised
players
Chapter-II
Global Tiles Industry
There are three major regions in the world, namely, Asia, Latin America and European
Union (EU), that produce and export ceramic tiles in bulk. In 2008, they had jointly
produced more than 87% of the global output. World production of ceramic tiles was
7565 million sq.mt. in 2008.China was the largest producer with a total production of
2200 million sq.mt. Spain and Italy were the 2 nd and 3rd largest producers with
production of 635 million sq.mt. and 589 million sq.mt. respectively. India ranks at 5 th
position with production of 270 million sq.mt., which is around 2.5% of global
production.
The ratio between consumption and production has been stable at around 94 per
cent. Ceramic tile production has been increasing at a cumulative rate of close to 6 per
cent. Asia is the most signifcant region by production, as well as consumption,
accounting for more than 50 per cent of both. China is the leading country in the
production of ceramic tiles with a share of 33 per cent at a total production of 2,200
million square metres, followed by Spain and Italy. Europe accounts for 30 per cent
and USA accounts for 14 per cent of the total global production of ceramic tiles. In
terms of consumption the pattern remains similar, with Asia accounting for 51
per cent, Europe for 26 per cent and USA accounting for 18 per cent of the total
global ceramic tile consumption.
4
significant part
of the Indian ceramics industry and consist of floor tiles (46 per cent), vitrified and
porcelain tiles (12 per cent) and wall tiles (42 per cent). The floor tiles segment is growing
faster as compared to wall tiles. Vitrifed and porcelain tiles are recent entrants into
the ceramic tile industry and have increased the size of the market considerably.
It is expected that this segment will capture the bulk of the market gradually,
replacing the conventional floor and wall tiles segment. These tiles are light and
have the added advantage of being offered in designer looks as compared to mosaic
tiles, which
to
unorganised sectors play a key role in the manufacturing of ceramic tiles in India. The
per capita consumption of ceramic tiles in India is very less as compared to the other
countries in the world. It is as low as 0.15 sq.mtr per annum. This low per capita
consumption shows the likely demand that is going to arise in the future in India as
more and more development takes place. Ceramic Tiles are furnishing material apart
from being utility or hygiene products. Despite an overall slowdown of the economy this
sector continues to grow at a healthy 12 percent per annum. Growth of the unorganized
sector accounted for 44 percent of the total Production and the revenue earnings from
the organized sector accounted to over Rs150 crore. India ranks 7 th
in terms of
production in the world and the market share of India have risen from 1.7 percent to 2.7
percent in terms of ceramic tile production.
The industry has been experiencing increased demand, which, in recent years, has
matched the installed capacity. While capacity has also increased significantly, from
120 million tonnes in 2004, to 215 million tonnes in 2008, the demand has grown
nearly two and a half times in the same period, from 97 Million tonnes to 207 million
tonnes. Ceramic tiles are produced by organised, as well as unorganised players. The
share of production of organised players is around 55 per cent. The organised sector is
characterised by the existence of a few
H.
&
R.
Johnson,
Kajaria Ceramics, Bell Ceramics, SPL, Spartek and Murudeshwar Ceramics,OCIL and
Nitco.
ORGANISED PLAYERS
o
o
o
o
o
o
o
o
Quality
Durability
Aesthetic Appeal
KAJARIA TILES:
It is the largest ceramic floor and wall tile manufacturer in the second most populous
country in the world. It is promoted by Mr. Ashok Kajaria and Kajaria Export Limited
(Group Company) in technical collaboration with Todagres,
S.A.,
Spain. It
ASIAN TILES:
This company is the result of the dreams of three entrepreneurs, materialized with
the grassroots of passion, experience & dynamism With starting a quest for
11
H & R JOHNSONS:
H. & R. Johnson (India) Limited is India's No. 1 tile company
of wall and floor tile products across various segments v.i.z. Wall, Floor, Vitrified,
Exterior and Industrial. The company also has diversified interests in sanitary ware
and bathroom accessories. With a vast portfolio comprising of 5 well-known brands
in India (Johnson, Marbonite, Porselano, Endura & Milano) the company provides the
most innovative products of international standards that is coupled with the best of
pre and after sales service.
EURO CERAMICS:
Part of Euro Group Integral part of the Decorative industry in India.
Promoters:
Mr. Nenshi Shah: Mr. Talakshi Nandu : Mr. Kumar Shah : Mr Paresh Shah
Current Business Profile:
Vitrified Ceramic Tiles
79,971 MTPA.
Sanitary ware
1800 MTPA
45,000 MTPA
11,000 MTPA
12
Technology:
SACMI (For Vitrified Tiles & Sanitary ware)
Quality focus:
Vitrified Tiles
ISO
13006.
Applied
Consumer
Florida, U.S.A. VJTI, Mumbai
Manufacturing facilities :
Services
Inc.
NITCO TILES:
A foundation laid on innovation. Since 1953.Going beyond the ordinary and leading
by example is a common tradition practised at Nitco. No wonder, the company is
renowned and revered for its revolutionary concepts, pioneering endeavours and
premium products in the construction industry for over five decades.Today, with its
rich repertoire in offering unique Floor Tiles, Mosaico, Wall Tiles and Marble, Nitco
has gone to become the most preferred name and the ideal choice of millions of
house-holds and the real estate fraternity. An avant-garde at the core, the company
has continued to pioneer ground breaking innovations in all its offerings. Ceramic
Tiles, Vitrified Tiles, Pavers, Imported Marble, Engineered Marble, Intarsiasplendours of inlay marble and Mosaico- artistic creations in mosaic rendered in
stone, ceramic and marble, for instance. Winning 13 Capexil awards for innovation
and design is the perfect testament to all of its achievements.
SOMANY TILES:
In the Indian tiles sector, Somany has achieved a clear leadership position by
wholeheartedly adopting forward thinking and an innovative and futuristic approach.
Whether ceramic glazed tiles, vitrified tiles, sanitary ware or porcelain floor tiles,
Somany prides itself in being at the very forefront of style and quality. From raw
material imported from Italy and Spain, to the constant endeavor to be the first to
introduce new products in India, Somany has been, and will always strive to be a
dynamic leader in its field.
It began as a vision of things to come, and is today a trail-blazer that others follow. In
1969 Shri H L Somany incorporated a company called Somany Pilkington's, which
later became Somany Ceramics Ltd. It was the power of a dream and the zeal to
excel, that drove Shri H L Somany to forge a path of unparalleled success for this
13
company.
The dynamic leadership team in Somany not only spans three generations of able
leaders, it also brings together their staggering breadth of experience and wisdom.
With Shri H L Somany at the helm as Founder, Shri Shreekant Somany as the CMD
and Shri Abhishek Somany as the JMD, the company is heading towards an exciting
phase of expansion and growth. This core leadership team along with a large team of
highly dedicated and talented people is continuously working towards creating more
value for all stakeholders. Their commitment to excel in every sphere and to fuel
growth in the core as well as new sectors has truly created a powerful vitality within
the company, both in mind and spirit.
In 1971 the very first unit of Somany started production in Kassar, Haryana. Since
then Somany has reached and surpassed many milestones setting-up of second
unit in 1981, buyout of all equity shares by Somany's Indian promoters in 1994;
achieving Government recognition for its R&D Department in 1996 (a first in the tiles
industry); getting ISO 9002 certification in 1998; achieving ISO 14001 for
environment friendly facilities, in 1999; ventured in retailing in 2007, joint venture
with Keraben under brand name Synergy, got patent for VC technology-a first ever
in Indian Ceramics industry and incorporation of HL Somany group.
Somany Global flagship retail showrooms are currently located in Delhi, Gurgaon,
Ludhiana and Mumbai, Pune and Indore. Many other retail showrooms are about to
be opened in leading centres. These showrooms cater to high-end customers and
offer imported tiles as well as exclusive Aquaware brand sanitary ware. A large
network of Somany display centers are also spread across the country.
A wide cutting-edge array of designs and material make up the inspiring Somany
range of tiles. Somany strives to bring its customers floor, wall, vitrified, ceramic,
porcelain and innovative tiles that are the very latest in the world. Somany prides
itself in the sheer variety of design and finish, and constantly looks to bring new and
trend-setting ideas into the tile industry. The futuristic patented VC Shield range of
tiles from Somany, are the world's most durable floor tiles. Created using the
breakthrough, 'Veilcraft technology', that creates a special layer on the tiles that keep
them free from abrasion, scratches and stains, these tiles retain the original glaze
and finish for years. No wonder then, that these tiles comprehensively outperform
ordinary ceramic tiles including PEI grade 5 tiles.
Venturing into the burgeoning sanitary ware sector, Somany has already made major
in-roads into this market. With its range of high quality products and offerings under
the brand name of Aquaware, Somany is focusing on creating a niche for itself in this
sector, by bringing in and adopting the latest in design, concept and technology.
In the endeavor to bring the very best to customers, we source our raw material from
as far as Italy, Spain, and China besides Rajasthan, Uttar Pradesh, Madhya Pradesh
14
INDUSTRY STATISTICS:
1.
2.
World production:
India's Share:
3.
4.
5.
6.
7.
0.30 sq.mt.
6%
15%
Rs 3000 crores
40%
46%
Rs 3500 crores
57%
35%
10.
Rs 2000 crores
Organized sector:
Share of Production:
56%
No. of units:
16
Rs 300 crores
Unorganized sector:
Share of Production:
44%
200 (approx..) (70% based in
No. of units:
Gujarat region)
less
11.
Job Potential:
50,000 direct
500,000 indirect
CHAPTER-III
Research Methodology
Title:
17
To determine the perception about various tiles quality, brand equity, price and
customer service.
Title Justification:
Title is self-explanatory. The study mainly deals with the quality, brand awareness,
price analysis and above all customer experience about the various tile products and
categories.
Objective:
To determine the awareness level of different major tile players among the
architects.
To determine the customer awareness level, particularly for new users of tiles.
In depth study on the dealer network of various tiles manufacturers.
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Research Design:
Type of Research: Exploratory and descriptive experimental research
Size of sample: 20 Architect, 25 dealers and 150 customers.
Area of study: Ghaziabad and Meerut City
Sampling procedure: Convenience Sampling
Method: The research is primarily both exploratory as well as descriptive in nature.
The sources of information are both primary & secondary.
A well-structured questionnaire was prepared and personal interviews were
conducted to come to the conclusion.
MEAN RATING
19
INTERPRETATION:
According to the architects brand awareness, Kajaria Tiles is on the top followed by
Somany tiles, H.R.Johnsons Pvt. Ltd., Orient tiles and Nitco Tiles.
Quality Analysis:
Quality Rating
20
Quality Mean
INTERPRETATION:
According to the Architects, quality wise Kajaria Tiles is leading the market followed
by H.R.Johnson Pvt. Ltd., Somany Tiles, Orient Tiles and Nitco Tiles.
21
Dealers Network:
Dealers Network Rating
INTERPRETATION:
According to Architects view, Kajaria ceramics has the widest dealers network in
the sample area followed by Orient Tiles, Somany Tiles, H.R.Johnson Pvt. Ltd, and
Nitco Tiles.
22
INTERPRETATION:
Overall view of the Architects leads to this fact that the surveyed region is mostly
favoured by Kajaria Tiles Pvt. Ltd., followed by Somany Tiles Pvt. Ltd., Orient Tiles
Pvt. Ltd. And Nitco Tiles in the branded and organised ceramic tiles segment.
Customer Experience Study:
A total number of 100 customers (new user) being interviewed at various locations of
Ghaziabad and being asked to rate the above mentioned tile brands in terms of their
awareness and choice and usage.
The parameters are as follows:
1.
2.
3.
4.
5.
6.
Price
Durability and quality
Awareness
Response pace
Availability
Variety
23
Interpretation:
24
The above mentioned graph shows a very tough competition among all the
major organised players. Kajaria tiles is ahead in terms of customer rating followed by
Orient Tiles, H.R.Johnson Ltd., Somany Tiles and Nitco Tiles.
25
Interpretation:
26
In terms of dealers study, Kajaria Tiles is the most sought after brand followed
by Somany Tiles,Orient Tiles, H.R.Johnson Ltd. And Nitco Tiles.
There was lack of time and resources that prevented from carrying out an in
depth study.
The findings of the survey are based on the subjective opinion of the
respondents and there is no way of assessing truth of the statements.
some amount of error exists in the data filling process because of the
following reasons:
Influence of others.
Misunderstanding of the concept.
Hurried filling of the questionnaire.
The research is confined to a certain parts of Ghaziabad and Meerut and
does not necessarily shows a pattern applicable to all of Country.
Some respondents were reluctant to divulge personal information which
can affect the validity of all responses.
In a rapidly changing industry, analysis on one day or in one segment can
change very quickly. The environmental changes are vital to be considered
27
Chapter IV
ORIENT TILES
. (OCIL)
Quality
28
Durability
Aesthetic Appeal
History of OCIL:
Headquartered at New Delhi, Orient was incorporated as a Public Limited Company
on 18th May 1977 for the manufacture of ceramic tiles with an installed capacity of
0.4 Million sq. mtrs. per annum which has now grown to 14 million sq. mtrs. per
annum.
Mr. Mahendra K. Daga currently heads Orient Ceramics as Chairman & Managing
Director with the credo of delivering products of sustained excellence and superior
quality.
Our state of the art manufacturing unit at Sikandrabad (Bulandshar, U.P.) is spread
across 40 acres of land and conforms to the IS 13753-56:1993 of BIS, ISO 105451/17 & ISO 13006 specifications. We have also been accredited with the ISO
9001:2000 certification for quality control management.
Since inception, OCIL has been scaling new heights and has evinced a steady growth
rate. Our commitment to excellence and quality has earned us a wide and diverse
customer base, which spreads across Europe, South East Asia, Middle East and the
SAARC countries.
rural areas. The ceramic industry will also benefit from the above developments.
Increasing demand is just one part of the story the availability of Finance is the other
part. With the availability of loans at low interest rate and tax incentives have
enabled the people to buy houses and build up their own establishment. With the
increasing competition amongst both Banks and Housing Finance Companies the
people are avail of getting better financing options and that too at a cheaper rate. This
would further increase the demand for tiles.
Exterior Range
Floor Tiles (in cm.)
30*30
39.5*39.5
40*40
Wall Tiles (in cm.)
14.8*14.8
20*40
Price Analysis
The price of ceramic tiles depends on the various size and measurements of the tiles.
Although we have noticed that tile dealers are not ready to give price details fairly,
somehow we have managed to extract some of the tiles prices of various players.
the mostly used vitrified tile size for living room is 2 X 2, for kitchen and for toilet
people used to install ceramic tiles of 16 X 16 and 12 X 12. For dining they used to
stick with vitrified tiles of 2 X 2 size.
Now , in wall tiles segment, the general market price in Ghaziabad starts from
Rs.21/sqft,in floor it is Rs.22/sqft and in vitrified it is Rs.35/sqft.
31
32
33
2. Profitability ratios
3. Investors interests ratios
4.RETURN ON INVESTMENT/RETURN ON CAPITAL EMPLOYEDIT INDICATES THE PERCENTAGE OF RETURN ON THE TOTAL CAPITAL
EMPLOYED IN THE BUSINESS.
=operating profit/capital employed
=43685580/14939220722=2.92%(in2007-08)
And comparison with 2006-07
=173837365/1122303254=15%(2006-07)
In 2008 the ROI was very less and will called as totally unsatisfactory as your
operating cost is higher than to return.no one can dare to run a investment in
just 3% which is below than to the interest of banks saving account.
Company gave some reasons behind thisa. High operating cost due to high inflation.
b. The maximum projects that company undertook were in bulk discounted so
they increased the sales revenue but could not increase profit margin.
c. High competition from local players.
5.RETURN ON EQUITY SHARE HOLDERS FUND=PROFIT AFTER TAX/EQUITY SHARE HOLDERS FUND
=24873117/479817704
=5.1%(2008)
In compare to 2007-25%
So the return has been decreased by 80%.and it could not be said as satisfactory as
36
On this ratio investors will not go for investing in company as they will get high yield
in other investments so company should consider shareholders benefits or try to
increase dividend yield.
9.EARNING PER SHARE- THE EPS HELPS IN DETERMINING THE MARKET PRICE
OF THE EQUITY SHARE OF THE COMPANY.
=PROFIT AFTER TAX/NO OF SHARES
COMPARISON
Euro ceramics=16(F.V.=10) 160%
KAJARIA=2.3(F.V.=2)115%
Orient=2.46(F.V.=10)24.6%
So in comparison with other company orient has got less EPS.so we can say that the
capital of shareholders is not being effectively used.
10. PRICE EARNING RATIO=MARKET PRICE PER SHARE/EARNING PER SHARE
EURO-2.5=40.05/EPS=16.02(F.V.=10)
KAJARIA-24.9=29.25/EPS=1.17(F.V.=2)
BELL-46=6.90/EPS=.15(F.V.=10)
ORIENT=16.9=30/EPS=1.79(F.V.=10)
P/E RATIO COMPARISONEURO<KAJARIA<ORIENT<BELL
This suggests that orient and bell are less par performing than to the euro and
kajaria, so they are over valued than to the kajaria and euro.
38
Demand drivers: The demand for value-added tiles (large-format) outpaced that of
the plainer variants, thanks to two important realities: rising incomes and growing
urbanisation, catalysing housing demand.
Growing affluence: The average Indians per capita income increased from Rs.
11,672 in 2003-04 to Rs. 24,321 in 2007-08, and is estimated at Rs. 31,448 by 2010.
Annual household incomes between Rs. 90,000 and Rs. 2,00,000 increased from
41.3 million in 2001-02 to 53.3 million in 2005-06, and are expected to rise to 75.3
million by 2010.Families with Rs. 2,01,000 to Rs. 10,00,000 annual income grew
from 10.7 million in 2001-02 to 16.4 million in 2005-06, and is expected to reach
28.5 million by 2010. More surprisingly, families whose annual income is above Rs.
10,00,000 grew from a mere 0.8 million in 2001-02 to 1.7 million in 2005-06, and is
expected to be 3.8 million by 2010. Interestingly, a majority of this affluent class will
stay in cities and create an income pool comparable with the major US cities by 2015
(Source: India Infoline).
Increasing urban demand: The urban population (28% of the total Indian
population) grew 2.77%, higher than the overall population growth of 2.3%. Going
forward, the overall population will grow at 1.5%, while the urban population will
maintain a 2.27% growth till 2010. As a result, urban population is expected to touch
590 million by 2030 [Source:IBEF], leading to a robust housing demand of over 24.3
million dwelling units in urban India by 2015 (Source: Housing Skyline of India
2007-08).
2008 Sales
Employees:
2,145,679,729
(Year Ending Jan 2009).
750
39
SWOT ANALYSIS:
Distribution System:
Ceramic Marketing:
The 4Ps of ceramic marketing are like different levers that can be used in different
degrees to achieve the same objective.
40
Product There is a wide range of designs and sizes to choose from. Introduction of
two new categories-i.e., Vitrified and Concept tiles.
Price The price range is very vast. Due to capacity expansion supply is increased
so price is lowered down by 35%. Moreover price war from china has also lowered
down prices.
Promotion Advertising is done in leading Construction magazines and interior
design journals. Taking part in international exhibitions is routine.
Place Wide distribution network in and outside state. Products delivered within
feasible timeline of order.
CHAPTER-V
RECOMMENDATIONS:
MARKETING:
Should adopt the widest distribution network model to deliver products to the
end user in quickest and most effective way. It would also accelerate the sales.
It may include company owned showrooms, franchises, multi-product dealers
and sub-dealers.
Distribution network should be clearly segregated towards specific product
segments.
May introduce three dimensional catalogue visual experiences to its customers
and also give customer a chance to design product in their own way of choice
(customized design specification).
Setting up exclusive showrooms for special products instead of keeping with
with the regular range. As example, the upcoming product ORVIT-a product in
high glaze tiles segment should have an exclusive place to showcase. It would
add to the exclusive ambience of the product.
More introduction of matching wall and floor tiles.
To grow its institutional business, the company should organize more
interactions with architects, developers and government agencies at its dealer
outlets. This would serve a dual purpose: it would enable the company to
acquire an insight into evolving preferences of some of the most prominent and
trend- influencing architects; on the other hand, it helped the company cater to
their evolving preferences.
BRAND:
41
5. Due to high inflation and tightening of credit by RBI, finance costs may be
adversely affected in the coming year.
Conclusion:
42
The prospect and the future of ceramic tiles lies not only in northern region but it
spread across the country. I would like to produce some of the evidences aligning
with this and with this I would like to conclude my project
A report, published in June 2008, stated that the growth in demand for
ceramic products has been further strengthened by the boom in the Indian real
estate sector, which is registering 30 per cent growth per annum, for the last
few years. The growth in the hospitality industry and the advent of new malls,
commercial complexes and multiplexes also lend support to the growth
prospects of this industry.
The industry can reap the benefit of its low cost of production, which is 25-30
per cent lower compared to the US and Europe, primarily owing to labour
costs. Production of ceramics through conversion from coal-fired to gas/oil
fired- furnaces is likely to enhance fuel efficiency and reduce cost as well as
ensure better quality and reduction of environmental pollution.
Reduction in threshold limit under Zero Duty Export Promotion Capital Goods
(EPCG) Scheme would also help accelerate the modernisation process in
ceramics industry.
References:
For secondary data
www.icctas.com
Company websites
Annual reports
43
Questionnaire
44