Somany Ceramics, the walls and floor tiles manufacturer, has decided to revise its plans on its opening of retail stores in the country. It was earlier planning to open 60-65 retail stores but now it will go ahead with only 50 stores with a focus on the tier II and tier III, said Abhishek Somany, joint managing director (JMD), of the company.
With real estate segment standing still on sales and increase in raw material costs, ceramics industry is facing cost pressure on its earnings before interest, depreciation, tax and ammortisation (ebidta) margins.
Somany said, “The major reason for contraction in margin is the overall sentiment and substantial increase in input cost. We expect a fall of a percent on our ebidta margins even after passing on the increase in production costs to our customers. But we are still confident to grow at 25 per cent on an annual basis.”
The company opened its first Global Exclusive (GE) showroom in Kolkata and plans to open another three in next six months span. It will also set shop in Siliguri. It is betting big on the GE showroom concept and is offering higher incentives to its dealers on sales from this segment.
Under the Global Exclusive brand Somany is selling high end imported tiles which have been sourced from Spain, Malaysia, Italy, Turkey and Spain. 50 per cent of its imports are coming from Spain and Malaysia followed by China and Italy.