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SPL invests Rs 45 crore in capacity expansion

SPL Limited, the second largest producer of ceramic tiles in the country, plans to increase production of wall and floor tiles by 14,000 sq metre by next year.

Ritujoy Chakraborty
agencyfaqs!
NEW DELHI, July 17

SPL Limited, the second largest producer of ceramic tiles in the country, plans to increase the production capacity of wall and floor tiles by 14,000 sq metre by next year. Once the expansion process is complete, the company hopes to storm the growing markets of southern and western India with its three decade old brand of Somany Tiles.
The company brass point out that its current efforts have been prompted by the changing trends in the ceramic tiles market. The last five years have seen an increasing number of consumers switching from natural stones to ceramic tiles. Contends Abhishek Somany, senior president, SPL Limited, "Consider the virtues of ceramic tiles over stone tiles. They are longer lasting, easier to maintain and non-porous. So despite a marginally higher initial cost, consumers are realizing the long-term benefits of ceramic tiles and shifting over."
In the 120 million sq metre per annum ceramic tile market of India, nearly 50 million sq metre comprises of the unbranded sector. Of the remaining 70 million sq metre market of branded tiles, around 15 million sq metre is in floor tiles, the rest 55 million comprising of wall tiles. However, a recent survey shows the annual growth rate of floor tiles last year was 25-30 per cent as compared to 10 per cent for wall tiles.
Somany, which has a 23 per cent share in the Rs 1,000 crore organized segment, has been quick to see the opportunity in floor tiles and beef up production. The company has made an investment of Rs 45 crore on the project so far. About a month back, it launched a new range of floor tiles in technical collaboration with Italian ceramic group Leonardo 1502 Ceramica.
Currently, the company's production capacity for the new range of Greviti-Vetrified tiles stands at 2,800 sq metre, which it hopes to increase to 9,000 sq metre within two years.
The Rs 180-crore SPL group's plans of expansion in the south are expected to be fought tooth-and-nail by the largest player in the country, Johnson Tiles, which has a stranglehold over the southern markets. To achieve a target of Rs 250 crore by the end of this financial year, Somany will require aggressive marketing.
In the coming months, the company will launch a countrywide media-blitz with the support of its ad and PR agencies, TBWA-Anthem (both ad and PR) and Percept (only ad). The advertising will be print-led and will break out in October this year.

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