RAK Ceramics looks to tap Gujarat as AP plan hits gas wall

With its expansion plans in Andhra Pradesh making no headway in the last three years, UAE-based Ras Al Khaimah (RAK) Ceramics is looking to set up a manufacturing plant in Gujarat with an investment of Rs 600 crore.

The world’s largest ceramic tiles manufacturer has 200 acres of surplus land at Samalkot in East Godavari district of AP.

“The purpose of taking 200 acre was to expand every alternate year and grow in India, and equally on a par with the parent company in the UAE. Unfortunately, because of non-availability of natural gas, we are unable to move forward. Production costs are increasing by the day and the competition doesn’t allow us to increase our product prices. We cannot go in for expansion at this rate where gas is not available,” said Sunil K Malesha, managing director or RAK Ceramics India.

 

Speaking to Business Standard on the sidelines of a Confederation of Indian Industry (CII) conference on natural gas here on Wednesday, Malesha said the company had approached the LNG Grid in Gujarat and submitted a proposal to facilitate setting up of a manufacturing plant to cater to the western part of the country.

RAK Ceramics India, which started production from Samalkot with 20,000-square metre (sqmt) per day, currently has a capacity of 30,000 sqmt. It is mostly dependent on propane, liquid petroleum gas and other fuels. The company had initially planned to take its production at Samalkot to 100,000 sqmt per day over a six-year period.

“We are in talks with the Gujarat government, which has identified 70 acres for us in and around Ahmedabad. We are yet to finalise the location. Once that is through, we will set up a plant probably in a year-and-a-half from now, initially with a capacity of 20,000 sqmt and then scale it up to 50,000 sqmt by the end of the fifth year,” he said.

While RAK’s Indian subsidiary primarily caters to the local market, the $1 billion UAE-based parent company exports to over 150 countries. The company exports only eight per cent of its production in India.

“Exports is always an opportunity market and our priority is to cater to the domestic market – south and east through our Samalkot hub and west through the proposed Ahmedabad plant,” said Malesha.