Somany Ceramics to expand sanitaryware business

Homegrown tile manufacturing major Somany Ceramics is looking to grow its business in the sanitaryware segment, an area it ventured into only few years ago.

Having decided to move into sanitaryware by 2012, the company put up a small manufacturing unit, under its subsidiary Somany Sanitaryware at Morvi, Gujarat, in 2015. This facility, with a capacity of 3.03 lakh pieces, saw an investment of Rs 20 crore. Explaining the reasons governing the company’s expansion strategy, Somany Ceramics Managing Director Abhishek Somany said, “We were sold out for the existing capacity, and were buying more capacity from the outside open market to meet demand. We had also bought a piece of land, envisaging that we would be trebling our capacity.”

Accordingly, the company trebled its sanitaryware capacity to 11.5 lakh pieces this year, with an investment of over Rs 30 crore, which included plant and machinery, and not land.

Unlike tiles, where Somany enjoys a wide pan-India presence, in sanitaryware, it sees strong traction mainly in North India, and some pockets of Kerala, Tamil Nadu, and Gujarat, among others. With the trebled capacity, it intends to enter all other markets.

“Sanitaryware is a serious vertical for us. We’re a late entrant into the segment, and it’s difficult to break into a market which is already occupied by strong players. Yet, it offers us better margins, and we have been able to scale up,” Somany told DH. Last year, the company earned around Rs 80 crore in the segment, when the sanitaryware market was valued at Rs 3,500 crore. It holds around 2.5% market share.

As part of its sanitaryware portfolio, Somany sells Indian pans, normal couple closets, single pieces, wall-hung toilets, and a range of basins and urinals, apart from premium brand French Collection.

As an extension of its sanitaryware ambitions, the company is also looking at setting up a greenfield plant for bathroom fittings at Bhiwadi, Rajasthan, which will be operational over the next 12 months.
Besides, Somany Ceramics will focus on expanding its distribution network across India through several franchisee stores, experience centres and design studio on wheels.

Last year, Somany saw a turnover of over Rs 1,800 crore, with tiles growing around 10%, while sanitaryware grew 30%.

“Currently, sanitaryware and fittings together contribute 5%-7% to our revenues. We aim to double it, and overtime, both businesses would constitute 12%-15% of our total revenues,” Somany concluded.