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PROJECT REPORT OF Cera sanitaryware ltd ON Impact of foreign sanitaryware brands over Indian market Submitted by- Abhishek Gera 1
Transcript
Page 1: Cera Roject Report

PROJECT REPORT

OF

Cera sanitaryware ltd

ON

Impact of foreign sanitaryware brands over Indian market

Submitted by- Abhishek Gera(+91-9711972217)Amity Business School

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Self Certification by the Intern

I hereby certify that I, Abhishek Gera have successfully completed my internship with “Cera Sanitaryware ltd” in the month of may june‘10 from (3rd may 2010 to 30th june 2010). This is also to certify that this report is an original product and no unfair means like copying etc… have been used for its completion.

Name: Abhishek Gera Signature:Date

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PREFACE

As an extra advantage in my Graduation Course, I have done training at cera sanitary ware LTD. at Delhi from 03rd may 2010 to 30th june 2010 (Eight Weeks)

During my training, I have been given practical exposure to the field of marketing and Sales. I was to deal directly with various workshops in Delhi

It was quite an enriching experience for me as we had to deal with different having different personalities.

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Acknowledgement

No task is a single person effort, same is with this project. Thus I would like to extend my sincere thanks to all those people who helped me in accomplishing my project.

I owe my project success to all members for providing us with this wonderful opportunity and guidance. I would like to again extend my special gratitude to fellow trainees and management staff for providing excellent Guidence for the successful completion of this project. This project provided me a platform to increase my knowledge and empowered me with a better understanding of concepts in the real world scenario. And last but not the least special thanks to “cera sanitary ware ltd.” who accepted me in spite of my inexperience in the field and gave me the opportunity to work and learn with them.

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Table of Contents

S. No. Topic Page Number

1 Acknowledgement 4

2 Summer Internship Objective 6

3 Introduction to sanitaryware industry7

4 Outlook for sanitaryware industry in india

11

5 Introduction to cera sanitary ware ltd12

5 History of cera sanitary ware ltd 14

6 Mission and vision 16

7 Analysis 17

8 Study of customer response 25

9 Production capacities of organized players

30

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OBJECTIVE

To gain knowledge of impact of foreign sanitary ware brands over Indian market

To know how Cera works and method adopted. To know the overall development of Cera Sanitaryware Ltd

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Introduction to Sanitary ware industry

India is a large, highly populated Country of around one billion

people, with an economy, which is steadily growing. As per the study,

there were an estimated 125 million dwellings in India (1995), but 200

million households. This reveals an acute housing shortage. The U.N.

predicts an increase in the population of 1.6% per annum. There is a

gradual migrant shift from rural to urban areas and 27% of the population

now lives in urban areas as compared to 20% in 1971. There is a large

difference in amenities between the urban population and the rural. In

1994, 70% of the urban population had access to adequate sanitation,

whereas in the rural community only 14% had access.

In 1991, approximately 64% of urban households had some kind of toilet

facility compared with 9% of the rural areas. There is a widening

difference in income between different regions, the rich and the poor.

Sanitation is a must for every individual of our society. According to the

Government estimates, more than 50% of the urban population does not

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access to sanitation facilities. Condition of the rural areas abysmal that

only 6% of the population are covered by sanitation.

Sanitaryware Demand: Sanitaryware Industries in India for the last 6-7 years have

shown very dramatic growth with major players doubling their

production capacity. The Companies have also upgraded their

manufacturing system by introducing Battery Casting, Beam Casting and

have gone in for latest imported Fast Firing Cycle Kiln Technology.

These Companies have also upgraded their quality and have introduced

high value range in the market, which has been accepted and appreciated.

The demand for high value Sanitaryware in India is growing very fast.

The Companies are trying to meet the demand as the realization per

Metric Ton for high value product is very good which ultimately results

in good profitability. In order to educate the customers in India to go for

quality products and also for higher value sanitaryware, companies have

adopted a very aggressive advertisement campaign. Companies have also

strengthened their dealer network by offering showroom incentives and

some of the companies have also gone for their own retail outlets in

major towns. The demand for Sanitaryware in India is growing @ 15% -

17% every year.

The sanitaryware industry in India is divided in two sectors. The

organized sector consisting of 5 companies (M/s. Hindustan Sanitary

Industries Limited, M/s. E.I.D. Parry, M/s. Swastik Sanitaryware Limited,

M/s. Madhusudan Ceramics, M/s. Neycer India Limited), manufacturing

sanitaryware for the last 15-20 years and have established their Brand

image. The organized sectors produce fully vitrified sanitarywares, using

latest technology and best of Ceramic Raw Materials available in India.

The unorganized sectors have adopted local Indian technology to

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manufacture the basic sanitaryware products. Since the availability of raw

material is in abundance and also very cheap in the state of Gujarat &

Rajasthan, various companies have established their factory in these

areas. They are producing the basic sanitaryware in various brands.

Unorganized sector's percentage of production capacity and also their

sales in the local domestic market are higher than that of the organized

sectors' sales. Unorganized sanitaryware manufacturer comes under small

sectors and hence enjoy the benefit of Nil Excise Duty and Sales Tax and

hence they sell their products in the domestic market approximately 70%

cheaper than the organized sector products.

Opportunities: Government of India Policy on Housing Sector is very encouraging.

The Government has announced Income Tax rebate on housing loan to

boost the housing sector. All financial institutions are lending money for

construction of house at a very low rate of interest. Government figure

shows that Housing Sector is growing by approximately 25% every year.

The need of Housing in India with 100 crores population looks to be very

potential. As per DGTD Survey Report there is a shortage of about 20

million houses in the country by the end of 8th Five Year Plan. The

housing has become a basic necessity, as people in India are looking

forward for improved sanitary condition. The concept of making toilet is

fast growing even in village areas, where toilet till last two years did not

exist.

The cost of producing sanitaryware in India is substantially low as

compared to the advance countries, because the labour cost and the basic

raw materials for manufacturing quality sanitaryware is available at very

cheap rate and in abundance. Because of our low cost of production,

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Indian sanitaryware are very competitive in the neighboring countries and

hence export from India is also growing everyday.

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Outlook for Sanitaryware Industry in India:

In the next decade, India is expected to be one of the world's fastest

growing countries for sanitaryware consumption. The sanitation

penetration has more than trebled from 8% in 1982 to 18% in 1994 and to

29% in 1999.

The comparative penetration levels in neighboring countries are as follows: Pakistan: 50%, Sri Lanka: 65%, Malaysia: 94% and Thailand: 96%.

The government impetus to improve hygiene and sanitation is likely to

increase the demand for sanitaryware in India. Moreover the increasing

urbanization of India and the consequent requirement for residential and

commercial buildings will be a major driver for growth of sanitaryware.

Along with this the focus of the central and state governments to provide

housing facilities to the poor, is also expected to generate demand.

The National Housing Policy formulation that envisages "Housing for

all" by the end of Ninth Plan period is a big step towards this. Indira

Awaas Yojana, Samgra Awaas Yojana is programs for providing housing

to the rural poor is a key step taken by the government in this area. The

housing development organizations like HUDCO, State Housing

Development Boards and Rajiv Gandhi Rural Housing Corporation Ltd.

are also playing a large role in this initiative.

It is estimated that there is currently a demand for 20 million housing

units in India. Further, a significant number of the 115 million housing

units across the country will need reconstruction for improvement.

Therefore a replacement market will emerge, though currently original

equipment sanitaryware market accounts for nearly 90% of the market.

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Company Profile Introduction to CERA Sanitaryware Limited:

Cera Sanitaryware Limited (CSL) is one of the pioneers in the

Sanitaryware segment in India. CSL was founded in the year 1980 as a

division of Madhusudan Industries Limited. It is based in Kadi, Gujarat.

Realizing the future growth prospects of this division, in the year 2001,

management thought it worthwhile to have independent identity by de-

merging and transferring the entire business to a new company. The new

company was named Cera Sanitaryware Limited It is now the third

largest company in the organized sector with over 20% market share. It is

also the largest and only listed company in pure Sanitaryware space. CSL

is the first sanitary ware company to use natural gas and the first Indian

sanitary ware company to haveISO

9002and ISO 14001 certifications for its products.

. The first sanitary ware company to use natural gas, Cera has been on the

forefront of launching a versatile color range and introducing the bath

suite concept. It also launched innovative designs and water-saving

products. The twin-flush model launched in India by Cera for the first

time, it reduces the water needs of households considerably. WCs

designed to flush in just 4 liters of water is another notable innovation by

Cera. Based in Kadi, Gujarat, Cera Sanitaryware Ltd. uses German

technology, which has ensured Cera’s superiority over others in quality.

Established with an initial capacity of 3,600 MTPA, the plant has

undergone several periodical up gradations and modernizations to expand

to 15,000 MTPA.

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To achieve growth in the rapidly changing retail market in the country,

Cera, has launched its one of a kind Cera Bath Studios in Ahmadabad,

Bangalore, Chandigarh, Kolkata, Cochin and Hyderabad. With the

opening of the Cera Bath Studios, the discerning consumers, architects

and interior designers can have full view of the Cera’s premium ranges of

WC’s, Wash Basins, Shower Panels, Shower Cubicles, Bath Tubs,

Shower Temples, Whirlpools, CP fittings etc. Cera Bath Studios will

complement its existing network of 400 distributors and 4000 retailers.

Several Bathrooms are displayed live, so that the customers can get a feel

of Cera’s vast range of products. Soon, Cera will also launch premium

Spanish Tiles in Indian market….

The company is poised to become a total bathroom solutions provider.

Having shown a growth rate of more than 20% since last 3 years, Cera

Sanitaryware Ltd. today is the fastest growing sanitary ware company in

India.

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History of Cera Sanitary ware Limited

Vikram Somany, Chairman & Managing Director of Cera Sanitaryware

Limited. Mr. Somany possessed entrepreneurial spirit even while he was

managing Madhusudan Industries Limited in Gujarat. This company was

into production of vegetable oils and vanaspati. The turning point came

into the company when Mr. Somany met a government delegation in

1978.When he signed the MoU to commence the sanitary ware

manufacturing unit in Kadi in North Gujarat using natural gas, the first of

its kind in India. It was a kind of milestone. And it was just the

beginning.

Of course, one might argue that Mr. Somany had entrepreneurship in

his blood and had also inherited the understanding of this industry. His

father had rich experience in sanitary ware. He along with his brothers

had pioneered sanitary ware in India in the early sixties by setting up a

manufacturing unit, Hindustan Sanitaryware, in collaboration with

Twyfords of UK. Yes, this did give Vikram Somany some kind of

background. Also, there was a market opportunity. But Cera's success

does not rest on these two factors. It rests on his ability in transforming

the opportunity into a business success. The opportunity was open for

others as well but Cera made the most of it. Though those were the days

of sellers’ market for sanitary ware, most companies, which went into

production around the same time as Cera, did not succeed later. So what

was it that Cera did different? The quality of Cera matched international

norms. Cera focused on creative designs and paid equal attention to after-

sales service with the differentiating factor. Moreover, Mr. Somany did

not neglect the other relevant business aspects as well. Cera went on to

create history with its advertising campaign in the early 1980s: Your

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Bathroom is a Room Too…" An entrepreneur is successful because he

understands and respects the three Cs: customer, change and competition.

Apart from Cera, the other two major players are Parry ware and Hind

ware. Both have larger production capacities than Cera currently Cera,

however, is now expanding its capacities

To maintain that edge in the market, Cera keeps upgrading and increasing

its product portfolio regularly. Cera also recognizes its responsibility

towards environment. Like the other two major players in the organized

sector,. In fact, it’s gone a step ahead.

Well, looking at Cera's track record, Mr. Somany's vision is soon likely to

be transformed into reality. He is himself quite confident about it because

he has built a strong team. Success tips from Mr. Somany of Cera

Identify market opportunities Create a dedicated team and give it full

operational freedom Concentrate on brand- building right from the

beginning Recognize social and environmental responsibilities Follow

international norms of quality Keep innovating the product offerings

Provide good after-sales service.

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MISSION OF THE COMPANY:

To setup and carry out research and development for the manufacture and

development of Sanitaryware products. Provide high quality to sanitaryware products. The Company is aiming to achieve 50-60% of market share for

every product.

VISION OF THE COMPANY:

To be a total home solutions provider in the long run, providing products for every room in the home.

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International presence and exports:

CERA has exported, in the past, to developed countries like the US, huge

quantities. However, as the domestic market was giving better realization,

CERA has to curtail its exports. Currently, CERA has presence in several

markets like Gulf, New Zealand, Greece, South Africa, etc. With the

production going up in the coming months, CERA is now looking at

export market more seriously and talks are on with certain parties for OE

supplies.

World Technology:

To keep ahead of competition, Cera has always kept its technology ahead

of rest of the players in India. It took help from ceramic technology

suppliers from several countries in Europe time and again so that its

process and products are of international norms. It also helped Cera bag

large export orders from the US, unmatched by any other Indian

sanitaryware company. Cera could easily make products conforming to

ANSI, apart from European, Australian, Canadian and Indian norms.

CERA has been constantly using internationally renowned consultants in

the ceramic field to upgrade its

production processes, yield and finished goods quality.

Product innovation has been Cera’s forte. One after the other, Cera

launched not only new designs, but even new innovations in India. The

first was bathsuites—a unique design concept consisting of WCs, wash

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basins, bidets and accessories, giving the bathroom a distinct personality.

A series of bathsuites—Crowne, Conca, Capri, Cornet, Comet, Clair,

Cognac, Celebrity, Celeste, etc.—were launched in quick succession.

Cera is also credited with launch India’s first monoblock EWC, Cologne

and now has an array of one piece ewcs & wash basins to its kitty.

Innovation:

Water scarcity has always been a concern in most parts of India. When

there is shortage of water, can we not think of conserving it, by sending

less water per flush down the drain? This concern was brainstormed by

our technical and research personnel, designers and quality assurance and

marketing personnel and thus the concept of twin action flushing was

born. CERA found that in most households, a WC is used more as a

urinal and still it was using 8 to 12 liters of water for each flush. Cera

then came up with the idea of half flush along with full flush. A

household can

save substantial quantity of water by installing twin flush. Even where

water is available in abundance, we advise twin flush because the cost of

electricity for pumping extra water to overhead tank can be saved. In

India, ever since cera pioneered the twin action coupled closets two years

back, it has caught the fancy of all architects, plumbing consultants, trade,

customers and even competitors. One after the other, all manufacturers

commenced twin action.

For the economy range, Cera have also launched twin flush model of

Plastic Cisterns

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Credit analysisCERA SANITARYWARE LTD.Long-term bank loans/facilities CARE AShort-term bank loans/facilities PR1Ratings

CARE has retained the ‘CARE A-’ [Single A Minus] rating assigned to the long-termbank loans/facilities of Cera Sanitaryware Ltd. (CSL). This rating is applicable forfacilities having tenure of more than one year. Facilities with ‘Single A’ rating areconsidered to offer adequate safety for timely servicing of debt obligations. Suchfacilities carry low credit risk. CARE assigns '+' or '-' signs to be shown after theassigned rating (wherever necessary) to indicate the relative position within the bandcovered by the rating symbol.Further, CARE retained the ‘PR1’ [PR One] rating assigned to the short-term bankloans/facilities of CSL. This rating is applicable to facilities having tenure up to one year.Facilities with ‘PR One’ rating would have strong capacity for timely payment of shorttermdebt obligations and carry lowest credit risk. Within this category, facilities withrelatively better credit characteristics are assigned PR1+ rating.Total facilities rated by CARE aggregate to Rs.50.40 crore includingoutstanding/sanctioned term loans of Rs.19.65 crore, sanctioned fund based workingcapital limit of Rs.18 crore and sanctioned non-fund based limit of Rs.12.75 crore.The ratings continue to factor in CSL’s experienced promoters, its long track record ofoperations, strong position with established brand name in the retail segment of theIndian sanitaryware market, good manufacturing capabilities, healthy profitability,

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comfortable gearing level and liquidity position. The ratings are, however, constrainedby working capital intensive nature of operations and CSL’s linkage with the real estatesector which, being cyclical in nature, directly affects the demand for CSL’s products.Revival in demand for sanitaryware due to change in outlook for the real estate sector inIndia and maintenance/improvement in the overall financial profile are the key ratingsensitivities.

Company BackgroundIncorporated in 1998, as Madhusudan Oils & Fats Ltd., the company acquired 20 yearsold ceramic business of Madhusudan Industries Ltd. under the scheme of arrangement in2001, followed by the change in name to Cera Sanitaryware Ltd. The company ispromoted by Shri Vikram Somany of the Madhusudan group. Its manufacturing facilitiesare located in village Kadi in Mehsana district of Gujarat. CSL has also setup up itsdisplay centres at various locations across India for its retail customers. CSL is one ofCREDIT ANALYSIS & RESEARCH LIMITED 2the leading players in the organized sector in the Indian sanitaryware industry whichalso consists of a large unorganized sector.

OperationsCSL is into manufacturing of ceramic sanitaryware (60% of gross sales in FY09) andtrading of bath fittings (38%) in various design and sizes. Positioned as the third largestplayer in the Indian sanitaryware market, CSL has pan-India marketing network forretail market in addition to direct institutional sales to reputed construction companies.

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CSL has an installed capacity of 2 million pieces of sanitaryware per annum.Manufacturing of bath fittings, which are sold along with sanitaryware products under itsown brand CERA, is outsourced by CSL.Raw material and power cost are the two major costs in manufacturing of sanitaryware,accounting for about 55% of the total cost for FY09. CSL has installed 2.4 MW gasbasedcaptive power plant and 4.98 MW windmills to meet its power requirements. Thecompany uses natural gas as its primary fuel, which is sourced from GAIL. CSL’soperations are working capital intensive in nature as it requires maintaining significantfinished good inventories in order to respond to demand from the retail segment forvarious designs and sizes of its products.

Ongoing ProjectsCSL has planned to setup a plant for manufacturing of bath fittings, which the companypresently outsources from various units/parties in India and also imports some of itsrequirements. The total cost of the project is estimated at Rs.5 crore which will befinanced entirely by way of internal accruals. The project is expected to start fromOctober 2009 and the commercial production is expected to start at the end of FY10.

Financial PerformanceCSL’s total income has grown at CAGR of 27% over the past four years due to increasein demand from the real estate market coupled with increase in sales realizations ofbathware. CSL’s total operating income grew by 25% during FY09 compared to FY08while PBILDT margin improved to 18.68% during FY09 compared to 16.62% during FY08

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due to improvement in sales realization. PAT margin, however, increased marginallyduring FY09 compared to FY08 due to extraordinary loss suffered during the year in aforeign currency swap transaction.Both, long-term debt equity ratio and overall gearing improved and stood at 0.22 timesand 0.41 times as at Mar.31, 2009 compared to 0.29 times and 0.55 times as at Mar.31,2009 due to accretion of profits to networth and repayment of term loans. With theimprovement in profitability, interest coverage ratio improved to 6.03 times during FY09over FY08 level of 5.15 times.Liquidity position of the company was comfortable as indicated by current ratio of 1.51times as at Mar.31, 2009 which improved from 1.26 times as at Mar.31, 2008 due toCREDIT ANALYSIS & RESEARCH LIMITED 3increase in cash & cash balances and sundry debtors. CSL had a cash and bank balanceof Rs.21.64 crore as on Mar.31, 2009. Overall operating cycle marginally improvedduring FY09 to 134 days compared to 139 days during FY08.Latest quarterly performance: For the first quarter of FY10 ended Jun.30, 2009(Q1FY10), CSL reported a PAT (profit after tax) of Rs.3.35 crore on a total income ofRs.40.24 crore as against the PAT of Rs.2.54 crore registered on total income ofRs.33.90 crore during the corresponding quarter last year.

Industry ScenarioThe sanitaryware industry is characterized by its cyclical nature and working capitalintensive operations with close linkages to the real estate market. The domestic sanitaryware market is largely unorganised, with just 5-6 key players like Parryware – Roca,Hindware, Cera, Neycer, Classica, Raasi, Johnson Pedder and Liberty in branded

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segment. Shifting customer preferences towards branded products is leading to decliningshare of unorganized sector despite their selling of products at lower prices. Growthdrivers for the industry include growth in the real estate sector in India includingresidential and commercial property, shopping malls, multiplexes, hotels, hospitals,airports, business/IT parks etc. which is currently facing a slowdown. Initiatives takenby the government to boost the sales of residential properties through interest ratebenefits is likely to impact the demand for sanitarywares. This is further augmented byincreasing spending power of the Indian consumer. Increase in demand fromreplacement market is likely to increase from around 10% as compared to 80% indeveloped countries due to increasing preference for branded products and availability ofnew and better designs.

ProspectsCSL’s prospects would be driven by its ability to maintain sales volume growth andprofitability in light of weak scenario for the real estate sector. Control over workingcapital cycle and continuous introduction of new designs and products would be criticalfor the growth prospects of the company.CREDIT ANALYSIS & RESEARCH LIMITED 4

Financial Results(Rs. crore)For the period ended / as at 2007 2008 2009Mar.31, (12m, A) (12m, A) (12m, A)Working ResultsNet Sales 106.67 128.05 159.52Total operating income 106.67 128.05 159.85PBILDT 18.89 21.28 29.85

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Depreciation 3.54 4.94 5.93Interest 2.28 3.17 3.97PBT 13.98 15.54 19.90PAT (after deferred tax) 9.07 10.05 13.11Gross cash accruals 14.58 18.16 20.43

Financial PositionEquity capital 3.59 3.09 3.11Networth 47.58 58.71 70.53Total capital employed 86.22 110.07 118.43

Key Ratios

GrowthGrowth in total income (%) 33.42 20.05 24.83Growth in PAT [after deferred tax] (%) 53.70 10.84 30.45

Profitability (%)PBILDT / Total operating income (%) 17.71 16.62 18.68PAT / Total income (%) 8.50 7.85 8.20ROCE (%) 21.50 16.65 20.94Average cost of borrowing (%) 9.17 9.24 10.82

SolvencyLong-term debt equity ratio (x) 0.29 0.29 0.22Overall gearing ratio (x) 0.52 0.55 0.41Interest coverage (x) 6.74 5.15 6.03Term debt / GCA (years) 1.13 1.21 1.11

LiquidityCurrent ratio (x) 1.28 1.26 1.51Quick ratio (x) 0.86 0.79 1.06

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TurnoverCapital turnover ratio (x) 1.49 1.30 1.40Working capital turnover ratio (x) 5.03 4.24 4.00Avg. collection period (days) 56 63 60Avg. inventory period (days) 82 84 80Avg. creditors period (days) 8 8 7Total operating cycle (days) 130 139 134

Cera Sanitaryware Ltd: 30 years and counting

What started as a small plant with a capacity to manufacture about 1,000 pieces of sanitaryware per day is now the third-largest sanitaryware company in India. Cera Sanitaryware Limited (CSL) now commands a 20% share in the Rs 1,000-crore organised market.

A split in the family business, Hindustan Sanitaryware Industries Limited (HSIL), led Vikram Somany to start out on his own. He chose sanitaryware as it was one business he felt comfortable with. A young Vikram Somany started doing the rounds of the state government offices in Ahmedabad. He was promised land at Kadi and natural gas from an isolated field. That was all he needed to make a beginning. And as they say, the rest was history.

Today Vikram Somany, chairman and managing director of CSL, has 500 distributors and retails through 5,000 outlets in India.

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What set the plant apart from the rest in 1979 was the use of natural gas in its kiln. It was a conscious choice. Those days most furnaces used coal or other fuel that left specks on the ceramic. Somany decided to use natural gas and that made a huge difference in quality. In fact, right from day one, Cera was focused on just one aspect – quality.

Seated inside his office in Dalhousie Square, the heart of Kolkata’s central business district, Vikram Somany, said: "We wanted to make a name in quality. I knew everything else would follow." It took his competitors nearly 12-13 years to switch over to natural gas as a fuel. "So we had a head start," Somany added. The other thing that set Cera apart was contemporary style and the range of 30 colours it offered. "We offered sanitaryware in dark colours. Those days, coloured sanitaryware was much in demand," he said.

In a market dominated mainly by British designs, Cera’s designs too were a break from the past and refreshingly different. As a result, these products were lapped up by a younger and more youthful set of buyers. Within a year-and-half, capacity doubled. There was no looking back. While Cera had started off with a capacity of 1,000 pieces per day or 3 lakh pieces per year, post-expansion, it will soon have a capacity of 28 lakh pieces per year.

Of late, Cera has given a new thrust to its marketing and product range. It has earmarked a Rs 15-20 crore budget for an ad campaign across print, TV and outdoor. It has launched the Italian wellness brand, Novellini, to gain a foothold in the bathroomware segment, including shower enclosures and hydro massage bath cubicles. And it has yielded rich dividends for the company. Cera is now ready to launch the next phase of its growth. The company is betting big on the mid-to-premium segment of the market.

The emerging tastes and preferences of our customers is towards the more expensive items with contemporary styling and designs. The market is also graduated towards mainly two colours –ivory and white," Somany pointed out. The products offer double-glazed surfaces which is easier to maintain. In step, Cera has launched the ‘Whitest White’ range of products. The products are retailed through the company’s exclusive

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outlets, Cera Bath Studios and also through premium retail showrooms. To further consolidate its position in the premium segment, Cera is in talks to acquire a leading Italian sanitaryware brand. "We are negotiating with a few of the Italian players and we hope to close a deal within the next six months," Mr Somany who is back from a recent trip to Italy, said.

Today, Cera has a stronghold in western India states and in Kerala, Goa and Punjab. Apart from marketing strategy, the company is investing some Rs 100 crore in expanding capacity at its Kadi facility. While it will spend Rs 50 crore on new faucet unit, another Rs 50 crore will be spent on expanding its sanitaryware line. In revenue terms too, it has started giving results. Last year, it notched up Rs 190 crore in revenues, while this year it plans to earn around Rs 300 crore. In next 2-3 years, Cera has set a sales target of Rs 500 crore.

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Cera Sanitaryware eyes acquisition in Europe

With a view to tap high end sanitaryware market, Cera Sanitaryware Ltd, India's third largest sanitaryware manufacturing company, plans to acquire a company or a brand in Europe. Apart from this, the company intends to infuse Rs 60 crore for capacity expansion.

"Cera is pursuing overseas acquisition to expand its footprint and capture a larger global customer base. The company is in dialogue with leading European faucets and sanitaryware brand with intension of acquiring two super premium brands. There is major growth on cards with Cera becoming a complete bathroom solutions company,"

However, the company officials declined to divulge further details regarding acquisition saying that the board of the company has recently decided to make acquisition and the company is currently exploring various opportunities. "The company wants to tap high end sanitaryware market," added Vikram Somany, chairman, Cera.

The company, which enjoys 20 per cent share of Rs 1000 crore organised sanitaryware market in India, has already taken up substantial expansion in last four year involving an investment of Rs 53 crore. It is now in the process of setting up a green field plant to make faucets, popularly known as CP fittings, with a production capacity of 2500 pieces per day at Kadi, where it already has its existing facility for sanitarywares. The new unit for faucets is scheduled to start operations from September this year.

BSE

 | NSE

Price 

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"We have further decided to double the production of new facility for faucets. In addition to this, the existing unit for sanitaryware will also see capacity addition of 35 per cent to 2.7 million pieces from current 2 million pieces. We have earmarked capital outlay of Rs 60 crore for the capacity expansion," Vidush Somany informed.

Cera today announced a bonus issue of shares in the ratio of one share for every share held. Also, the company declared dividend of 50 per cent on the back of encouraging financial results. The net sales of the company have risen by 20 per cent to Rs 191.36 crore for the fiscal 2009-10 as compared to Rs 159.52 crore in 2008-09.

Indian Sanitary Ware Industry bullish:

Indian Sanitary Ware Industry bullish India, today, is all set to become the biggest manufacturing hub for international sanitary wares brand. Even foreign brands like H&R Johnson, Roca and Kohler have established their operations in India. India’s current sanitary ware market size is almost 500 crores and in fact is growing at an annual growth rate of 3-4 percent in the industry. Going forward, India will have a huge market for sanitary ware products and of course the export market will also grow simultaneously. Further, government’s support to improve sanitation and hygiene and increasing urbanization has given a big push to the Indian sanitary ware industry. The companies are applying accurate standards and using top machinery and stringent quality measures with latest designs to manufacture finest quality machines India, today, is all set to become the biggest manufacturing hub for international sanitary wares brand. Even foreign brands like H&R Johnson, Roca and Kohler have established their operations in India. For the starters, Indian sanitary wares are comparatively cheaper as opposed to our western counterparts, courtesy availability of ample raw materials and low cost labor in

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comparison to other countries. This in fact has given Indian sanitary ware products an edge over the competitors from the nearby countries and naturally the exports of sanitary wares from India is scaling up. On other hand, India’s population is growing at a growing at a significant rate. Of which 27 percent of the population hails from urban areas. However, there is large difference in distribution of amenities between the urban and rural population of the country. As per 1994 study, almost 70 percent of the urban population has access to sufficient sanitation, when it comes to the rural population only 14 percent has access. According to current government’s estimation, almost 50 percent of the urban population lacks proper sanitation facilities, while the condition of rural market is terrible. In the last five, six years, the Indian sanitary ware market has witnessed exponential growth, with major companies increasing their production capacities. Certainly, Industry’s growth is directly related to the development in real estate. Today, housing’s demands are on rise. And interestingly people have started taking interest in top sanitary wares, thanks to the rise in purchasing power parity. Actually the increased demand for sanitary ware is not just emanating from the new projects but there is a huge market for replacement products also. The remarkable growth by the industry has inspired industry majors to enhance their manufacturing system and even apply latest technology to give customers value for their money. Moreover, Indian companies are taking a step further to enlighten people about the advantages of premium sanitary wares. With 15 to 17 percent growth per year, Indian manufacturers have strengthened their dealer network all across the country. Demand for Made-in-india Sanitary Wares in the International Markets

China (Mainland), Nigeria, Hong Kong, Malawi, Nepal, Thailand, United States Prominent Destinations to Source Sanitary Wares from India Majority of the sanitary companies have set up their plants in Rajasthan and Gujarat given the availability of large quantity of raw material and low-priced labor there. Chennai, Mumbai, Morbi, Ahmedabad, Thangadh , Delhi, Pune , New Delhi, Bangalore, Rajkot, Jaipur, Jamnagar, Hyderabad, Vadodara, Kolkata, Gurgaon, Indore, Jalandhar, Nagpur, Surat, Ludhiana, Chandigarh, Jodhpur, Bharuch, Bikaner, Coimbatore, Thane, Patna, Secunderabad, Bahadurgarh, Faridabad, Guwahati, Surendranagar, Gandhidham, Ghaziabad, Navi Mumbai, Noida, Bhopal, Dhuva, Ernakulam, Kochi. Made-from-india.com, a leading B2B portal from India has listed on its portal top

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manufacturers, suppliers and exporters dealing in sanitary products. Keywords B2b portal,market, sanitary

The Indian sanitaryware market is the second largest market in South Asia and is growing at the rate of 22 per cent per annum, says a report by Netscribes (India) Pvt Ltd consulting solution. Many international brands like Kohler, H & R Johnson and Roca have entered the Indian market in the past decade. The latest addition to the list is a German brand Grohe, which seeing the huge potential of the Indian market could not resist but enter. The sanitaryware retailing has come a long way and now involves technology centres and trained fitters, who are also the source of information, regarding the local market, to the retailers.

 

Also, considering the construction of residential societies, and hotels etc to cater to the common wealth games, the time is right to tap the sanitaryware market in India. Let’s explore the basics.

 

Why tap India for sanitaryware?

India had a GDP of 6-7 per cent per annum even when other countries were dying of recession. The sanitaryware market has grown almost double to 2000 crore in 2009. All big international brands regardless of their category are entering India, the fastest growing country which has a young population of more than 50 per cent. The newer generation wants better homes, better services, better quality and better facilities; which is the reason enough for the sanitaryware market to grow in India.

 

“India is no longer a testing ground, but a lucrative market for premium brands. It’s increasingly willing to spend on premium quality and are becoming extremely value conscious. People are also aware of leading global brands in the space with high growth potential. India is being

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looked upon by the entire world as an emerging market and potential global hub for many products”, says Mathew Job, CEO, Grohe India.

 

Target Audience

Everyone needs a toilet! But sanitaryware isn’t only about toilets; the range goes from bath tubs, bath tiles, basins to shower accessories. Everyone requires them, be it your home, small shops, salons, corporate offices or restaurants, so the consumer is everyone. “Broadly speaking our target consumers are divided into B2B (business to business) and B2C (business to consumer). B2B primarily comprises developers, engineers, contractors and specifiers like architects, interior designers, purchase managers, sourcing managers, project heads etc.  B2C is focused on the end consumer” adds Job.

 

Product Innovation:

The Indian consumer which is the direct consumer is not very easy to tackle. It’s well educated, well placed, well travelled and ambitious; tracking it isn’t an easy job so how do you cater to their needs? “Known for its products and technology, Grohe has carved out a niche for itself in the premium segment with a strong backing of superior product quality and customer service. Most of the Grohe products that are available globally are already on offering in the Indian market. In fact, we are now launching a product line that will specifically cater to the Asian market. The new Grohe Baulines IS available in the market from April 2010”

 

Retail Channels

For a foreign sanitaryware brand, there are various channels through which it can enter India. Job states that a retailer can come in with help of various channels. You can have a joint venture (JV) with an Indian company who can sell your products in India. You can take help from

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wholesales, small retailer and also with your own outlets across the horizon. Having a JV with an Indian company surely helps as the Indian company is already known in India and also helps you to have a better image in front of the customers.

 

 

Hurdles in India:

Other than the obvious hurdles of FDI and other licensing issues, what other threats does the sanitary ware market see? “The lack of sufficiently trained plumbers was a huge concern for us when we came to the Indian market. Globally, plumbers (installers) are a major focus group for us. We work with them; we don’t just train them, we get feedback from them about what is it that the consumers like and don’t like. Plumbers are our greatest marketing research tool. But, we are concerned that plumbers in India are not organised to a great extent to allow us to benefit from this resource.  This is something we hope to change gradually in the coming years” contemplates Job.

 

Sanitary fittings industry in India witnesses a new entrant frequently and is growing at a significant rate every year. Also, with the construction spree going on to cater to the common wealth games like residential societies, hotels and malls it will create a boom in the near future. In addition, consumers are now willing to spend a lot more on making their bathrooms look and feel good. These factors when taken together will ensure a robust growth for the industry in the future. 

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Continuously improve the development of sanitary ware, more and more consumers to buy bathroom product is not only concerned about price, quality, service, brand awareness is more concerned about the reputation and business. If the business or remain in the seller's business philosophy in the past, certainly in the market competition at a disadvantage, even ruthlessly eliminated by the market, sanitary industry into the era of brand marketing. Enhance the concept of competitive high-end brand market Secretary-General of the Chinese Kitchen Works Committee, said Gao Yan: China has become the world's largest bathroom products consumer market, many domestic sanitary ware brand performance and quality to meet or exceed the foreign brands, however, TOTO, American Standard and other foreign funds sanitary ware brand strength using strong and high brand awareness, almost monopolized the high-end sanitary ware market in China. Except for historical reasons, China is not strong corporate brand awareness is an important reason leading to this situation.

Many companies have said in an interview, "low prices, high quality" is their current business philosophy. Some bathroom companies make full use of promotions to attract consumers to purchase desire. Thus, from the second quarter of this year, a large bathroom industry price war, the trend was intensified, and even a rare low-cost 199 yuan toilet. This price is clearly lower than production costs, but the brand must not only equal to sales. There currently the largest sanitary industry errors are: the business equivalent to the brand. In fact, the brand is independent of the spirit of the factory class of property, it belongs to you, you can also belong to other people. There are many companies mistakenly think that there is a good product, there will be a great brand big factories, the majority of resources into concrete things up, but unwilling to invest in brand marketing to do. Identify the precise positioning marketing The brands are an effective tool to compete, but also the tools to achieve business value and the carrier, not a luxury but necessary choice. Brand positioning is the most important issue the operation, but also the future development of corporate strategic issues. Facts have proved that the

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enterprise has never been outside their range, and no all-encompassing brand. Flooding and flooding in the information age products, accurate positioning of the brand can only be consumer awareness and choice. Through the study of international brands, and with reference to current market structure point of view, the future development of sanitary industry in China will be a number of trends: First, a few will appear in the "comprehensive sanitary ware brand," the second will be a "professional brand "Third, there are" personalized bathroom brand. "

A Study On Customer Response towards Technical Assistance:

Objective of the study:

To know the Customer satisfaction towards technical assistance

To know customers expectations about after sales service provided by the

company

Scope of the Study:

This study gives detailed view about customer satisfaction towards after

sales assistance by Cera Sanitaryware Ltd. The study focuses on to make

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a solution for the customer dissatisfaction towards technical assistance

those facing by Cera Sanitaryware Ltd. The analysis would be helpful to

the management for taking decision regarding marketing strategies and

formulating suitable policies to make their business more effective and to

make customer satisfied.

Data collection:

Primary Data: Through Questionnaire

Limitation of the study:

Many constraints were involved in doing this study. Some of them are as follows.

Time is critical factor limiting this study. To reach every client. The data provided by the company may not be 100% correct as the

Company has. Finding and suggestion have been given from personal point of

view. Due to work pressure, detailed interaction with the executives was

not possible. Unable to find fair responses from various clients. Because there

were different response from different customers…

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Findings:

Cera’s have more innovative idea to offer product with new innovation

Cera is currently stood on third rank in its production capacity.

Having shown a growth rate of more than 20% since last 3 years,

Cera Sanitary ware Ltd. today is the fastest growing sanitary ware company in

India.

Cera has a production capacity of 1.3 million pieces. Cera is upgrading it to reach

2.2 million pieces by this year end

Cera Sanitaryware Limited (CSL), announced all time high revenue of Rs.107.58

crore for the year ended March 31, 2007 up by 33.4% from Rs 80.64 crore.

Sanitary ware manufacturing is highly labor intensive, non-

availability of standardized raw-materials (every manufacturer has

to source raw materials from mines and have its own quality

assurance systems of taxes).

Many customers are satisfied with the use of cera’s product. Those

are not satisfied have not much knowledge about the product use,

and have less knowledge about the installation of product.

About 50 % customers have a view that Cera’s product and

services are similar like other product in market. According to

company report those customer have bought only simple or

medium level products.

More then 50 % of customers has got technical information from

the user manual. Because user manual is available with every

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products. Other customers have got it from website or helpline no.

because they were unable to find information in User Manual. About 84% customers are not satisfied with the technical assistance

provided by company.

Mostly customers are not satisfied with the information available in

User Manual. . According to them; It’s not about, how to use, how

to fit it, at any problem what should do etc. According to all data analysis customer have dissatisfaction

towards technical assistance. Company is unable to give full satisfaction to its customer.

Suggestions:

Need to give full knowledge about product use to customers through advertisement in magazines, newspaper or TV. channel.

Need to make some improvement in products to satisfy its customer.

Company has needed to expand its services and handling customer’s queries in a sound manner.

There should be all information regarding product use, installation, product features, and emergency repair of product in User Manual.

Company should add sufficient technical information in other mediums of information like website. So customer can use alternate way for information.

Company should provide technical expert employee for every specific area. Those can personally solve the problem of customer.

If company is not providing service to its customer timely. Then there should be provision of compensation to its customer.

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Introduction of designs to suit handicapped people, closets which

are the height of an average chair and therefore more comfortable,

lavatories with interesting shapes and designs. The technology of water saving should be in every product. So

customer will definitely attractive towards products. The company should launch low unit packs in all categories to

drive market penetration and to push volume. The product should be diversified in its maximum categories. More interest should be taken to increase the employee

participation in the management of the company. Mechanization should be done at each stage of the production

process, which will reduce the number of workers and then reduce the cost of the production.

100% production capacity should be utilized to increase the volume of production.

It is advisable to conduct market surveys before the introduction of new products.

Conclusion:

Cera Sanitaryware Limited (CSL) is one of the pioneers in the

Sanitaryware segment in India. It was the first sanitary ware company to

have ISO 9002 and ISO 14001 certifications for its products. Cera is the

first company that launches such equipment those are helpful in reduces

the water needs of households considerably. It has more innovative idea

to offer product with new innovation. Cera plans to be a total home

solutions provider in the long run, providing products for every room in

the home.

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