Within a short span of 15 years, R A K Ceramics has firmly established

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itself as a leading producer of high qual- ity ceramic wall and floor tiles, vitrified tiles, and sani- tary ware. Accredited in 1997 with the ISO 9001 certifica- tion by CICS (Ceramic Industry Certification Scheme), UK, the company's products are being exported to more than 140 countries across five continents. In an interview with Ranjit Bhushan, B G Vyas, presi- dent, RAK Ceramics Operations, says more help from FIs is essential. Excerpts:

What is your take on the ceram- ic industry in India?

Ceramic industry is one of the most booming sectors in India with an average growth rate of 15 per cent per annum. Since recent times, one can notice a paradigm shift in func- tioning of this sector as its making way into the organised sectors.

With the rise in standards of living and awareness about home aesthet- ics, good quality flooring and sani- taryware are rapidly becoming a need rather than luxury products.

The unprecedented boom in hous- ing has has widened the overall market size and increased per capi- ta consumption making India one of the top players in the world.

After the downturn, it is expect- ed that the housing sector, especial- ly affordable housing, will witness a new boom phase. However, to make these houses really affordable, the government needs to give special exemption to all building product manufacturers such as tiles and sanitarywares for the supplies made towards the government-focused projects and government-controlled housing bodies, corporations and redevelopment bodies.

This will ensure that consumers get these houses at a really afford- able cost. Apart from that, the cus- toms duty on raw materials should be reduced to make it less than the custom duty on finished goods from China and other SAARC countries.

This will encourage Indian manu- facturers to supply such products at more competitive rates as these products now should fall under basic needs category and not premi- um luxury items.

What are the challenges this industry faces in India?

Customs duty on raw materials: This is a common issue across all sectors.

Allotment of fuel prices: It's not uniform in all states and hence in the end, the overall production costs go up. RAK Ceramics is the only company in India that pro- duces nine variants. It is one of the biggest tile producers in the coun- try. If proper allocation of fuel prices is done, everyone in this sec- tor can benefit.

Being an unorganised sector: The unorganised sector accounts for almost 55 per cent of this indus- try. This also stands as a hurdle for smooth functioning in this industry.

A sector can only expand well if it is organised, and rules and regula- tions pertaining to that sector ensure the same. The segment is not recognised among investors and financial institutions in India.

How has RAK Ceramics fared in the previous year?

Despite the downturn, demand for RAK's products had exceeded the supply, resulting in 50 per cent pro- duction expansion at RAK Ceramic's plant in Andhra Pradesh.

The extensive research and vast experience this global brand has helped the management foresee the real estate boom post recession.

For better supply chain and distri- bution, the number of dealers was increased to 600.

What are your expansion plans for 2010- 2011?

We plan to achieve cumulative growth of up to 30 per cent this year. We are also aiming at enhanc- ing our product portfolio by enter- ing into other allied product cate- gories. We are also working to fur- ther develop products to meet requirements of high-end cus- tomers. We are also planning to have a production base in Gujarat sometime this year.

What is the USP of your brand?

RAK Ceramics has always been a trendsetter with its constant inno- vation in products and services. In India, RAK Ceramics is the only company to offer all the nine vari- ants of vitrified tiles. We embrace and adapt modern technology to provide the best products to our consumers.

What are the trends you foresee for your industry in terms of product variations and innovations?

The trends depend a lot on what is expected. This year we will get to see consumers opting more for matt, satin, stone and wooden styles of finish than the regular glossy ones. The focus will also shift on basis of tile sizes, with larger tile sizes, rather slabs, coming into play over their smaller counterparts.

This will also be an year when con- sumers will be introduced to some of the slimmest tiles, with thickness as low as 4.5 mm. The ceramic industry is often considered to be a minor segment within the con- struction sector.

As a Rs 8,000 crore segment, the ceramic industry should not be considered as a minor segment. In times to come, it will become one of the major sectors driving the econ- omy. The per capita consumption of tiles is increasing rapidly in India.

With growth in different sectors, there is a need for quality infra- structure and hence floors. Apart from that, growth in population and nuclear families are also driving need for newer residential proper- ties in urban areas, which eventual- ly leads to more floor requirement.

What are the measures required to increase the awareness about your sector?

The government should give proper recognition to this segment. Edu- cating end users about the advantag- es of vitrified flooring over other fo- rms will help increase awareness about this sector at all levels. Ano- ther crucial measure would be edu- cating masons about the quality of flooring and brands. This will not only create awareness, but also help improve their knowledge and expertise about this sector.