New Delhi, Aug 13 () India's ceramic industry is looking to almost double its turnover to Rs 50,000 crore by 2020, driven by rising domestic consumption and exports to the Middle-East, Europe and other newer destinations. The manufacturers are poised to compete with China in the global ceramic market, which is a lead exporter with 40 per cent market share, by expanding product portfolio and scouting for new geographies. To attract more business and global customers, Gujarat- based Morbi Ceramic Cluster, a leading player, is organising the second edition of 'Vibrant Ceramics'. "The ceramics industry is looking at growth of 200 per cent by 2020 at Rs 50,000 crore, from Rs 25,000 crore at present," Vibrant Ceramics 2017 President Nilesh Jetpariya told . The industry employs more than 10 lakh skilled and unskilled personnel, he added. "We are looking for at least 50 per cent growth in production and value this year," said Jetpariya. Besides, the industry is expecting demand from semi-urban and rural areas to rise in coming year, apart from developed metro markets. The association is organising the second edition of the Vibrant Ceramics in Gandhinagar, Gujarat, during November 16-19 this year. "Vibrant Ceramics would provide us a platform to showcase our product and technology at the international level. It would also help us expand our global reach," he said, adding that this is on the lines of Vibrant Gujarat.
The Morbi’s ceramic industry that is facing anti-dumping duty from Gulf countries has urged the union government to intervene and take up the issue at diplomatic level. The office bearers of the Morbi Ceramic Association are trying to convince the government of India to use diplomatic channel with Saudi Arabia to put off the proceedings against Indian industry at Gulf Cooperation Council (GCC). The representatives of the ceramic industry have urged the government of India to persuade the Saudi government not to impose anti-dumping duty on Indian ceramic products. Saudi Ceramic Company and other such firms had complained to the GCC, a regional intergovernmental political and economic union consisting of all Arab states of the Persian Gulf except Iraq, alleging harmful practice in international trade specially from ceramic players from India. GCC members include countries are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates (UAE)
The huge increase in Morbi in the number of new units manufacturing vitrified tiles has left India’s largest ceramic industry cluster saddled with excess production of such tiles. Overproduction of vitrified tiles has put tile-makers in the area under pressure to keep prices low. In the past two years, around 133 new vitrified tile manufacturing facilities have become operational in Morbi. The production has capacity risen from 4 lakh boxes per day to 18 lakh boxes boxes a day, thus creating greater supply than demand. “Two years back, there were 77 units making vitrified tiles. Today, their number has jumped to 210,” said KG Kundariya, president, Morbi Ceramic Association. The excess capacity and production has put pressure on prices which have already come down by 10%
In the wake of growing demand from overseas countries, ceramic tile makers in Morbi expect 30% to 40% growth in exports this fiscal and are targeting exports worth Rs 10,000 crore by the end March 2018.According to industry players, exports of ceramic products’from Morbi, India’s largest cluster of ceramic tile makers, have already reached Rs 8,500 crore so far this financial year crossing Rs 6,200 crore exports achieved for the whole year of 2016-17. With a couple of months to go for the current fiscal, exports are expected to touch Rs 10,000 crore mark, say industry players in Morbi ceramic cluster, which has seen rapid capacity addition in vitrified tile manufacturing in last two years. Morbi also houses many wall and floor tiles units.
When the ceramic industry in Khurja is facing possible imposition of anti-dumping duty by the Gulf countries, it got a small reprieve, as Gujarat Gas Limited (GGL) has relaxed norms for gas sales agreements that the state-run company inks with ceramics units for natural gas. The company has decided to calculate ‘excess’ drawing of gas on a monthly basis, against the current practice of daily calculation. Ceramic units have to pay higher prices for gas consumed over the contracted limit. “The decision to calculate excess gas supply on monthly basis will give ceramic units greater flexibility in using gas. We can average consumption over the month and save costs, which was not possible with the daily basis formula,” said Mukesh Ughreja, president of the vitrified tiles division of the Morbi Ceramic Association. Morbi is the largest ceramic tiles manufacturing cluster in India.
Ceramic industry entrepreneurs in Morbi on Friday heaved a sigh of relief as the GST council in its meeting in Guwahati, Assam, pruned GST rate on ceramic tiles from 28% to 18%. Morbi district has been on the political boil since August 2015 due to the Patidar quota agitation and, more recently, because of the high GST slab as well as the complex compliance system. The ceramic tile makers, who are facing low demand due to GST and sluggish real estate market, expect business sentiment to improve after the GST rate reduction. Interestingly, more than 90% of ceramic tile unit owners are Patels and said to be traditional BJP supporters. Another major business cluster, some 65km from Morbi, is Thangadh in Surendranagar district, which is renowned for making sanitaryware products, especially low-cost water closet pans (toilet commodes). A little disappointed over the revised rate of 18%, entrepreneurs in this 100-year-old industrial hub say they had demanded 5% but even the 18% rate would help ease their problems to an extent. Thangadh courted infamy for killings of three dalit youths in police firing in 2013; the inquiry report has not yet been made public fearing law and order problems. The latest announcement to slash GST rates on ceramic and sanitaryware products along with 176 other items from 28% to 18% is expected to mollify business communities in these regions ahead of assembly polls.
While most industrial sectors slowly returning back to normalcy, Morbi’s ceramic units are bracing up for some tough times. The United Arab Emirates (UAE) has issued notification imposing anti-dumping duty of Indian ceramic products which comes into force from Saturday. The Dubai customs has also issued similar notification and other gulf countries are expected to follow the suit. The Gulf Cooperation Council (GCC) in it’s order dated April 20 had imposed anti-dumping duty ranging from 40% to 106% on Indian ceramic products. The GCC is a political and economic union of all Arab countries except Iraq and represents countries like Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates. The anti-dumping duty has been imposed for five years which will make it impossible for Morbi exporters to do business with gulf countries. Like many other sectors, Morbi’s ceramic industry is also under financial crisis because of the global lockdown on account of cornovirus pandemic.