Sri Lanka Royal Ceramics invests in OEM manufacture in India

ECONOMYNEXT – Sri Lanka’s Royal Ceramics group, the dominant domestic tile and sanitaryware manufacturer, has opted for making and importing tiles from India to exploit lower costs there and compete with cheap imports.

Royal Ceramics said it is the “undisputed market leader” in the tile sector with a market share of 35% for floor tiles and 40% for wall tiles after its acquisition of competitors Lanka Tile and Lanka Walltiles.

Both porcelain and ceramic tiles are manufactured in four factories by Royal Ceramics which are continuously upgraded through continuous investments, the company told shareholders in its latest annual report.

“We have also invested in OEM (original equipment manufacturing) bases in India to leverage lower production costs in India while increasing our tile supply through imports, strengthening our competitive positioning in the domestic and export markets,” it said.

“A broad presence across the value chain further enhances our ability to compete.”

Royal Ceramics has said one of the key risks it faces is competition primarily from low priced importers that could led to loss of market share and impose price pressure.

The report said Royal Ceramics has managed by focusing on cost management and productivity enhancements and also setting up OEM manufacturing bases in India to leverage on comparatively lower costs.
(COLOMBO, June 11, 2018)

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