Ceramics expands into wall tiles, sanitaryware
Royal Ceramics Ltd (RCL), the tile factory now controlled by the
Vallibel Group owned by investor Dhammika Perera, is expanding production
with a new wall tile plant and also plans to get into the manufacture
company expects a net profit of at least Rs. 250 million for the
financial year ending March 31, 2005. "We're expanding our
production capacity," Nimal Perera, Dhamikka Perera's investment
advisor, told The Sunday Times FT in a recent interview. "We
plan to put up a wall tile plant with an investment of around Rs
175 million and also set up a sanitaryware plant."
Perera's Vallibel Holdings has a 51 percent stake in Royal Ceramics
and Perera is the single largest shareholder of RCL and its deputy
chairman. But A.M. Weerasinghe remains chairman of the firm. RCL's
wall tile factory will be set up with a second-hand plant from the
Italian firm Sacmi.
is part of a growing trend where Western tile and ceramic ware manufacturers
are closing down their plants because of high production costs and
relocating their production bases to Asia where costs are much lower.
Nimal Perera also said RCL was holding talks with machinery suppliers
to set up a sanitaryware plant by the end of 2006.
the domestic market, the threat from cheap imports of tiles from
China and other low-cost Asian producers had receded after the government
effectively increased import taxes, Perera said. The government,
in its November budget, imposed a 20 percent cess on tile imports
and a floor price of Rs.100 per square metre.
market analysts said the construction boom anticipated because of
the cease-fire and subsequent damage caused by the tsunami is expected
to increase demand for floor tiles and boost RCL's profitability.