Tile maker H&R; Johnson eyes new segment

In a bid to consolidate its position in the market, H&R Johnson (India) has launched an ‘innovative’ product – Porcelano – in Chennai

In a bid to consolidate its position in the market, H&R Johnson (India) Ltd. - subsidiary of the UK-based tile manufacturer Johnson Ceramics International - launched an ‘innovative' product - Porcelano - in Chennai earlier this week. Porcelano will be rolled out in other markets very soon. With the launch of Porcelano, the Rajan Raheja-group company (in which 76 per cent stake is held by Rajan Raheja and the balance by H & R Johnson, UK) is set to create a new niche in the Rs 2,400-crore Indian tile market.

Porcelano, the company claims, is the outcome of a year-long research. "The new product is the result of an IMRB-Gallup survey, which was done last year to find out what more the customers wanted in their tiles," says P K Sundaramoorthy, deputy general manager (marketing), H & R Johnson (India). "What emerged form the study was that many were looking for tiles without ugly joints. Some people wanted tiles that look like Italian marble, but are affordable and easy to maintain," he said.

Porcelano hopes to fulfill these requirements. It is a ‘modified tile' and the composition gives it a porcelain finish. In fact, porcelain tiles are a rage in international markets currently. "We are looking to introduce international trends and brands here within a few months of their debut in global markets," claims Sundaramoorthy.

Worldwide the market for porcelain tiles is estimated at $3 billion and the market is expanding. Porcelain tiles are preferred over ceramic floor tiles because of their high absorption capacity. "Because Porcelano has a white body unlike the conventional ceramic tiles in India (which have a black or red body), the joints are not visible. We have used a special technology that gives our tiles almost invisible, paper-thin joints and perfect edges," adds a company official.

Though the company is charging ahead with an aggressive marketing plan for Porcelano, it plans to steer clear of any high-voltage advertising activity. "We spend around 3 per cent of our sales turnover on publicity - which is mostly concentrated in print. Most of the creative and art-work is done in-house and we get very small agencies to release the ads," says a company spokesperson. The company's strategy stands at complete contrast to the other players in the tile market which have depended on high decibel advertising to generate brand recall.

Despite its low profile, the company happens to be the largest tile maker in the country today with a turnover of Rs 340 crore. Among its bigger competitors in the organised sector (estimated at Rs 1,600) are Kajaria (which is No 2 in terms of value), followed by Somany.

The company has tile manufacturing facilities at Kunigal (near Bangalore), Dewas (near Indore), Pen (near Mumbai) and Karaikal in Pondicherry and an annual capacity of 16 million sq mt. Industry observers believe that the takeover of the Parryware unit (which has a capacity of 1.6 million sq mt per annum) at Karakkal near Pondicherry last year was part of the strategic initiatives taken by the company to ensure a secure base in south India.

Recent studies indicate the tile industry is in for a major shakeout, following the building up of excess capacity leading to intense competition and shrinking margins. The tile market happens to be highly segmented with consumer preferences in different regional markets varying in a big way. With its innovative products and tremendous production capacity, H&R Johnson hopes make inroads into its competitions' turf very soon.

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