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Sun Earth Ceramics Ltd.

BSE: 532211 Sector: Consumer
BSE 05:30 | 01 Jan Sun Earth Ceramics Ltd
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Sun Earth Ceramics Ltd. (SUNEARTH) - Chairman Speech

Company chairman speech

ANNUAL REPORT 1999-2000 SUN EARTH CERAMICS LIMITED CHAIRMAN'S STATEMENT Before I answer, let me present the ground realities. Much of the competition in the international ceramic tiles industry arises from China, Korea, the Middle East and Europe. There is a vast difference in their respective quality: the Chinese, Korean and Middle Eastern products are inferior in quality and design, and are directed at a price- sensitive consuming market. The European material is value-added and reaches out to markets that can pay well for it. Some of these countries enjoy low energy costs; since the manufacture of ceramic tiles is energy-intensive, this gives them a significant competitive edge. Besides, the transport cost within India is prohibitive and, in some cases, it is cheaper to import than transfer material across the Indian land mass. This is Sun Earth's response to the competitive emerging scenario: Sun Earth is graduating to the value-added wall and floors segments of the Indian ceramic tiles industry where the competition is expected to be less. In 1999-2000, we produced the perfect form ar,d the third fired tiles to add value; in the conventional wall and floor tiles, we concentrated on the large size glossy varieties that enjoyed better margins. The emphasis in earning the highest average realizations per square metre in the country will continue. Sun Earth is raising its aggregate capacity to 1million sq. metres - the average size of a European company in 2001. This will not only enable us to capture an attractive economies of scale, it will also enable us to address an interesting evolution transpiring in the Indian market. A greater interest is going into the attractive presentation of the home and office interiors than ever before. Tiles were known for their utility but have now become an essential part of interior design. The modern Indian consumer wants products that are comparable in design, size and colour with those being used in the west - and is willing to pay well for it. As a result, a fair part of the demand is not necessarily coming from new construction activity; it is coming from the choosy and selective replacement market. Added to this, loan costs are dropping, there is a rise in home loan demand, disposable incomes are rising and the availability of land for sale arising from the repealing of the Urban Land Ceiling Act are expected to emerge as powerful drivers of growth in our industry. Sun Earth is in the process of emerging as a global entity by acquiring plants in Spain and Romania. This will accelerate our access to cutting- edge technology and designs. By carrying out these initiatives, Sun Earth expects to create competition for material coming into the country ! Suresh Motwani