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The Money Roller Live Make your Money Work
By: Nitin Khurana
Friday, July 9, 2015
Research report on Tiles, Sanitary ware and Fitting Industry
“An in-depth analysis to measure the Industry’s attractiveness”
An Initiative of The Money Roller
Lal Bahadur Shastri
Institute of
Management,New
Delhi
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Executive summary
The objective of this project was to understand the tile, sanitary ware and fitting industry together with the
factors responsible for their growth. The industry as a whole has been growing at pace of 15-20% in the last
four-five years, however with the renewed interest of the central government in clean India initiatives such
as Swachh Bharat Abhiyan, has opened the doors for robust growth in this sector. This report tries to find
out the growth potential of this sector, plus the companies which are most likely to be benefited from such
initiatives.
This report also includes the ground level research conducted by the TMR associates on sanitary ware
products across eight Indian cities to enquire about the prices of various branded and non branded sanitary
ware products. This research highlighted the price difference between the branded & unbranded products
and how the branded players are preparing to reduce that price difference.
At the end of this report we have tried to study CERA sanitary ware, which is the third largest sanitary ware
manufacturer in India and is catching up fast with ROCA India to become the second largest sanitary ware
manufacturer.
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Market size of Tiles, sanitary ware and fittings Industry
Market size of Ceramic Tiles - As per the Indian Council of Ceramic Tiles & Sanitary ware (ICCTAS) and
PWC;
Ceramic tiles industry has continued to grow at rate of 15% per annum in the last 5 years.
The overall size of the Indian ceramic industry was approximately INR 17,200 crores in financial
year 2012.
It is ranked third globally and accounts for 6% of the total global production.
The current size of the organized and unorganized sector is estimated to be about INR 7,200 and
10,000 crores respectively.
This is the testimony of the growth potential of this sector. Indian ceramic industry having huge production
capacity which can contribute significantly in countries exports (presently insignificant) with proper
planning and better quality control.
Market size of Sanitary ware and Bathroom fitting – Today India’s Sanitary ware and Bathroom fittings
industry is estimated to be valued at a combined INR 8,000 crore, which was used to be an INR 6000 crore
market two years ago.
The industry has grown nearly 25% in the last couple of years.
Today only 47% of the total population in India has access to sanitation facilities.
The share of Sanitary ware segment is estimated to be valued around INR 2700 crore and the
Bathroom fitting industry is estimated at approximately INR 5300 crore.
The organised segment in the sanitary and bathroom fitting industry comprises of nearly 55%. As per the
census 2011 data, 19% of urban homes in India do not have a toilet and this emphasises on the tremendous
growth potential this segment have.
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Industry growth in India
(Our analysis)
(Our analysis)
(Our analysis)
Ceramic tiles growth in India –
With the growth rate of 15%, the Indian Ceramic
tiles industry which at present is valued at
approximately INR 26000 crores is estimated to
be valued at approximately INR 35000 crores in
year 2017.
As per Indian Council of Ceramic Tiles and
Sanitary ware (ICCTAS) –
The world production of Ceramic tiles is
11913 million sq. m. per annum with a
growth rate of 11%.
The Indian ceramic tiles industry share is
750 million sq. m. per annum (6% of world
production) with growth rate of 15%.
It is estimated to account for 7% of the
world’s production by 2017.
It is one of the fastest growing Ceramic
tile industries in the world.
Sanitary wares and bathroom fitting growth in
India –
With the growth rate of nearly 13%, the Sanitary
ware and Bathroom fitting industry which at
present is valued at approximately INR 8000
crores is estimated to be valued at approximately
INR 10000 crores in year 2017.
The estimated revenue level for 2017 may be
achieved sooner than estimated if the government
0
10000
20000
30000
40000
2012 2013 2014 2015 2016 2017
Ceramic tiles Industry growth(estimated)
Revenue(in crores)
2014 2015 2016 2017
India 750 862.5 991.875 1140.656
World 11163 12390.93 13753.93 15266.86
0 2000 4000 6000 8000
10000 12000 14000 16000 18000
Mill
ion
sq
. m.
Production
0
5000
10000
15000
2013 2014 2015 2016 2017
Sanitary ware and bathroom fitting industry growth(estimated)
Revenue(In crores)
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(Our analysis)
successfully implements its Swachh bharat
abhiyaan, wherein crores of rupees would be
spend in construction of new sanitary facilities in
rural as well as urban areas.
Sanitary ware segment represents one third of
total revenue, whereas Bathroom fitting
represents two third of total revenue.
2013
2014
2015
2016
2017
Bathroom fittings
4000.0 4520.0 5107.6 5771.5 6521.8
Sanitary ware 2000.0 2260.0 2553.8 2885.7 3260.9
0.00
2000.00
4000.00
6000.00
8000.00
10000.00
12000.00
Re
ven
ue
(in
cro
res)
Comparative growth chart
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Industry growth drivers:
o Increasing level of income and growing
spending rate
(Source: IMF)
(Source: World Bank)
(Source: IBEF)
When combined with the growing Income Per
Capita (PPP), urbanisation rate, an increasing
number of nuclear families and an increasing
focus on spending, the consumer market potential
is clear. The diversity in spending patterns, eating
habits and lifestyle changes (focused on higher
spending) in various parts of the country offer a
sizable market for a range of industries wanting to
set up their office in India.
o Growth in real estate in India and rapid
urbanization
Due to the rapid urbanization, positive
demographic and rising income level, the Indian
real estate sector has attracted significant
investments over the past few years which have
directly or indirectly benefited the Ceramic tiles,
Sanitation and Bathroom fitting industries.
o Increasing awareness among consumers about
hygiene and government initiatives; such as
Swachh Bharat Abhiyaa.
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List of players in India
List of Ceramic tiles manufacturers in India List of Sanitary ware and bathroom fitting manufacturers in India
Company Name State Company
Name State Company
Name State Company Name State
Kajaria Delhi S'jegi Gujarat Cera Gujarat Rraghvir ceramics Gujarat
Johnson (Sentini) Mumbai HSIL Gurgaon Grohe Gurgaon UDAY VITEROUS Gujarat
RAK ceramics Mumbai simpolo Gujarat TOTO Gujarat DALWADI CERAMICS Gujarat
Orient tiles Delhi Varmora Gujarat Delta Gurgaon SHREE VARIA TILES WORKS COMPANY Gujarat
Asian granito Gujarat vita Gujarat Roca Chennai DOSHI CERAMICS Gujarat
Murudeshwar ceramics ltd. Bangalore Nitco Mumbai GEM Delhi SWADES EXIMPS Gujarat
Cengres tiles Gujarat AKW Gujarat Kohler Karnataka SANSO SANITARY Gujarat
Euro ceramics ltd. Mumbai Silica Andhra
Pradesh Kuldi Maharashtra SILVER CERAMICS Gujarat
Antique Gujarat Impolo Gujarat Viega Maharashtra AONE HOUSE Gujarat
Regent Gujarat Acer Gujarat Isenberg Maharashtra AGR-SANITARY
PVT. LTD. TAMIL NADU
graffiti tiles Gujarat
MERO SANITATION PVT. LTD. Delhi
Commander Gujarat
Top three ceramic tiles player by
turnover
COTO CERAMICS Gujarat
Restile ceramics ltd. Delhi
SUNVIT Gujarat
Coral gold Gujarat
Kajaria
Mulia brothers Gujarat
Flecto series Gujarat
Somany ceramics
Wideangle sanitaryware Gujarat
Coral vetrified Gujarat
Asian granite
Saniqua Delhi
Small Johnson Gujarat
Suryadeep ceramics industry Gujarat
Soild Johnson Gujarat
Top three sanitary ware player by
turnover
Paradise Sanitary ware Gujarat
Somany ceramics Noida
Jaquar
K9 CERAMICS Gujarat
HSIL
Dron Bracht Mumbai
SONATATILE Gujarat
Roca India
Sona ceramics Gujarat
SONATA CERAMICS Gujarat
Cera
Hansgrohe Maharashtra
eon interior products Delhi
KEUCO Maharashtra
swastik tiles Gujarat
GEBERIT Bangalore
Skylake ceramics Gujarat
JOHNSON Maharashtra
Arihant tiles Noida
Villeroy & Boch Maharashtra
Edge digital wall tiles Gujarat
American Standards Mumbai
Sungracis tiles Gujarat
Bell sanitaryware Gujarat
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Impact of Swachh Bharat Abhiyaan and Housing for all
The Swachh Bharat Abhiyan or the ‘Clean India Mission –
It is aimed at construction of 12 crore toilets in India in the next four year with an estimated cost of
approximately $ 10 billion.
The Mission is about construction of households and communities toilets to eliminate open defecation
and conversion of insanitary toilets to pour flush toilets.
The Housing for all Scheme –
It is aimed at constructing Housing facility for every family in India by 2022 with water connection,
toilet facility, 24*7 electricity supply and access”.
As per ministry of housing and urban poverty alleviation, the housing shortage in India is at around
18.78 million units in 2014.
Keeping the above statistics in mind and the census 2011 data, we have been able to estimate the demand for
the three sectors
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1. Ceramic tiles industry
(Our analysis)
(Our analysis)
The Top nine states with maximum housing
shortage are:
(Source: Ministry of housing and urban poverty alleviation)
Nearly about 11% of households in India have
tile floorings.
Total number
of
Households
Floor with tile
floor
Floor with other
material (Cement, mud,
etc.)
24.66 2.67 21.99
(In crores)
Upcoming households with tile flooring by 2022
would be 2.065 million units.
(In millions)
The average tile flooring in these states is around
13.5%.
Therefore, the estimated number of upcoming
houses with floor tiles is expected to be at around
2.41 million.
75% of the
housing demand
25% of the housing demand
Sum
14085000 4695000 18780000
13.50% 1901475 1901475
11% 516450 516450
Total 1901475 516450 2417925
11%
89%
Total Number of Households
With tile floor
Floor with other material(Cement, mud, etc.)
Total number of houses require by
2022
Number of households
with tile floors
Number of households with floor made of
other material
18780000.00
2065800
16714200
Estimated
Total number of houses require by
2022
Number of households with
tile floors
Number of households with
floor made of other material
18.78 2.06 16.71
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2. Sanitary ware Industry
(Our analysis)
(Our analysis)
(Our analysis)
(Our analysis)
As per census 2011, 53% of the households in
India don’t have in house toilet facility.
They either use public toilets or defecate in
open.
Total number of Households
Households with toilet
facility
Households without Toilet
facility
24.66 11.57 13.09 (In crores)
Out of the 53% of Indian household
population, 94% go for open defecation and
remaining 6% uses public toilets.
Number of households going for open
defecation is approximately 12.29 crores and in
addition to that there are 7.4 million
households’ uses public toilets.
Therefore construction of 12 crore toilets by
2019 will not be sufficient to achieve the
Swachh Bharat Abhiyaan by 2019.
Households opting for public
Toilets
Households going for
open defecation 7.48 122.95
(In millions)
The shortage of toilet facilities in Indian
households is majorly felt in the rural areas.
Area wise households without toilet facilities Rural Urban
11.62 1.43 (In crores)
The demand for sanitary products will not be
restricted to only 12 crore new toilet facility.
Total number of
houses require by 2022
Households without
Toilet facility Total
1.87 13.09 14.97 (In crores)
47% 53%
Households with toilet facility
Households without Toilet facility
6%
94%
Households opting for public Toilets
Households going for open defecation
89%
11%
Area wise households without toilet facility
Rural
Urban
12%
88%
Total number of new houses required by 2022
Households without Toilet facility
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To gauge the Sanitary ware demand state wise we have calculated the shortage of toilet facility in nine
states with highest housing shortage and those are;
(Our analysis)
Uttar Pradesh, Maharashtra, west Bengal,
Andhra Pradesh, Tamil Nadu, Rajasthan,
Madhya Pradesh, Karnataka, Gujarat.
These states represent 75% of housing shortage
and 70% of toilet shortage.
Therefore there is a need to construct
approximately 10.53 crore toilets in these
states alone which is 70.3% of overall toilet
facility demand.
Toilet demand in rest of
the states
Toilet demand in states with
highest housing shortage
4.44 10.53 (In crores)
30%
70%
Toilet demand in rest of the states
Toilet demand in states with highest housing shortage
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3. Bathroom fitting Industry -
(Our analysis)
In India 41% of households doesn’t have
bathing facility within their premises.
Total number of
Households
Bathing facility
within the premises
Bathing Facility
outside the
premises/open
24.66 14.5 10.16
100% 58.81% 41.19%
(In crores)
(Our analysis)
Total demand for bathing facility in India –
(Our analysis)
Majority of the shortage in bathing facility is
observed in rural areas.
Area wise households without bathing facility
Rural Urban
9.33 1.04
(In crores)
We have added the one bathing facility per new
house construction with the construction of
bathing facility for households which currently
doesn’t have such facility.
Total number of
houses require by
2022
Households without
bathing facility Total
1.87 10.16 12.03
(In crores)
246692667
145075848 10161681
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Total number of Households
with bathing facility within the
premises
Facility outside the premises/open
Avalability of bathing facility
90%
10%
Area wise Households without bathing facility
Rural
Urban
16%
84%
Total number of houses require by 2022
Households without bathing facility
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To gauge the Bathroom facility shortage state wise we have calculated the shortage of Bathing facility in
nine states with highest housing shortage;
(Our analysis)
These nine states consist of 64% of the total
shortage of bathing facility in India.
Bathing facility demand
in rest of the states
Bathing facility demand in
states with highest housing
shortage
3.65 6.5
(In crores)
Total bathing facility demand in nine states with highest housing shortage –
(Our analysis)
We have added the number of estimated
upcoming houses in these states with the
shortage of bathing facility in these states.
Upcoming houses
in these states
Bathing facility shortage
in these states
Total
demand
1.4 6.5 7.91
(In crores)
Therefore sanitary companies and bathroom fitting companies in these nine states are going to benefit allot
from the Swachh Bharat Abhiyaan and Housing for all scheme.
36%
64%
Bathing facility demand in rest of the states
Bathing facility demand in states with highest housing shortage
18%
82%
Upcoming houses in these states
Bathing facility shortage in these states
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Ground level research of sanitary ware industry
Toilets Region wise Prices (In INR)
Local brands Jaipur Agra Bangalore Bikaner Delhi Gurgaon Tamil Nadu Mumbai
Closed couple (No) 1200 900 350 1300 1200 1800 450 800-8000
Closed couple (Pre) 2300 1800 1100 2000 1900 2500 900 1500-2500
wall hung (No) 2500 2800 2500 2850 2900 3500 nil 2500-7000
wall hung(Pre) 3500 - 7500 6000 2800 4300 4500 4000 nil 4500-9000
Branded Jaguar Somany Parryware Parryware Parryware Cotto Parryware Parry/CERA
Closed couple (No) 8000-20000 1400 4000 6600 6500 22000 - 1 Lakh 7975 5000-7000
Closed couple (Pre) 17000-25000 8000 4500 12500 11500 1 Lakh -3 Lakh 12000 10000-20000
wall hung (No) 3300-7500 4000 5500 7000 6900 25000 -1.5 Lakh 7500 4500-6000
wall hung(Pre) 7000-14000 12000 6000 15000 16000 1.5 Lakh-3.5 Lakh 14000 8000-15000
Wash basins
Local Brands
wall hung 1200 to 1700 400 1000 450-900 950 600 400 450-1800
corner basin 500 to 1500 350 1250 300-800 550 400-500 950 450-750
over counter basin 3000 to 7500 1200 2000 NA 1000 1200 1500 800-2200
Branded Hindware Somany Parryware Parryware Somany Cotto Parryware Parry/CERA
wall hung 2000 - 15000 700-9000 4000 1800 1700 4000-10,000 2250 800-1500
corner basin 2000 - 20000 1000-1200 5000 1200 1000 3500-6000 4125 800-1500
over counter basin 2700 - 15000 3000-8000 5500 NA 2000 10,000-25000 7975 1700-8800
(Prices as on April 2015)(Abbreviations: No – Normal, Pre – Premium)
We have conducted a ground level research on sanitary ware in eight Indian cities to find out the reach and
cost of different brands in various locations and the cost of local brands in various locations.
Findings from primary data:
Toilets
There is a significant difference between the prices of local toilet in various
cities; however they all are much cheaper as compared to the branded
toilets.
The cheapest local closed couple toilet is available in Bangalore for Rs.
350. The costliest among local brands is in Mumbai; however Mumbai
does offer other cheaper local brands as well.
Parryware is the most easily available brand in all the cities, but the
cheapest of them is Somany brand in Agra offering standard closed couple
at Rs. 1400. Cotto is found to be offering the most expensive toilets in all
the ranges.
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Under the Branded wall hung toilet category it is the Jaquar, Parryware and
Somany which are offering the lowest prices.
Wash Basins
Under the local wall hung wash basin category the average price offered by
local manufacturers is around Rs. 500, almost half the price a person will
pay to purchase the cheapest branded wall hung wash basin.
Corner basins on the other hand could start from as low as Rs. 300 and can
go up to Rs. 1500 for local brands, whereas the cheapest branded corner
basin available is from Parryware for Rs. 893 and the costliest from
Hindware for Rs. 20000.
The over the counter basin are starting at a higher price under the local
brands with average cost Rs. 1500, where as the average price of over the
counter branded basin is Rs. 7000.
Findings from secondary data:
Brand name No. Of dealers Manufacturing units in India Total Bathroom solution provider
Parryware 700+ 5 Yes
Somany 790+ 3 Yes
Jaquar 1250+ 4 Yes
Hindware 600+ 4 Yes
Cera 1045+ 1 Yes (Source: respective company’s website)
Parryware –
o The easiest brand to find, has approximately 700 plus dealers in India, less than the number of
dealers of Somany, Jaquar and Cera sanitary ware.
o Parryware cheapest closed couple toilet is “Indus” priced at INR 4890, its cheapest wall hung is
priced at INR 6360.
o Its cheapest wall hung basin is “Cosmos” priced at INR 1030; Corner basin is available at INR
1130 and over counter is “Small Oval” priced at INR 1500.
Hindware –
o The cheapest closed couple toilet by Hindware is “EWC Papular P” priced at INR 3260.
o Its cheapest wall hung wash basin is” WB CUTE" priced at INR 810, similarly corner basin and
over counter basin are priced at INR 1,040 and INR 1,830.
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Cera –
o Its cheapest closed couple toilet is “Calibre” priced at INR 5860; its wall hung toilet is “Carat” is
priced at INR 4550(with seat cover).
o Its cheapest available wall hung wash basin is “Corren” is priced at INR 2945, its over counter
wash basin is “Oval” priced at INR 1270 and its corner basin is also available at a minimum
price of INR 940.
Estimated revenue generation from Swachh bharat abhiyaan and Housing for All scheme:
Sanitary ware
Total Demand 14.97 crs.
Cheapest Wash Basin (INR)
Revenue from Wash Basin (crs.)
Cheapest Toilet (INR)
Revenue from Toilet (crs.)
Total (crs.)
Organised sector share 55% 8.23 808 6652.668 1400 11526.9
Unorganised sector share 45% 6.24 350 2357.775 350 2357.775
Sum 9010.443 13884.675 22895.12 (Our analysis)
Considering the current share of organised players & unorganised player and our findings from the ground
level research, we have estimated that the minimum revenue generation in the sanitary ware industry from
the two government projects would be 22895.12 crores which is almost ten times the current size of this
industry.
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Evaluating sanitary industry attractiveness
Barriers to entry
As per our estimates, the number of toilets
required by 2022 is 14.9 crore.
Due to large number of regional players
product differentiation becomes inevitable.
Demand for cheaper brands will be high;
however the price difference (switching cost)
between cheaper brands is not much.
Therefore the industrial attractiveness is low
to neutral.
Rivalry among competitors
There are nearly about sixty sanitary ware
manufacturers present in India offering
products in all range with different price tag.
However the current capacity run of these firms
is the key indicator.
Cera Sanitary ware reported that it is running at
100% capacity level in January 2015. Roca
India is also expanding its Dewas plant facility
to meet future demands.
Therefore the industrial attractiveness is high.
Barriers to exit
If we go by numbers, sixty manufacturers is
not a large number for serving 24 crore
households of India.
Least asset specialization especially in the
regional sector.
The government doesn’t interfere in the entry
and exit of firms in sanitary industry.
Therefore the industrial attractiveness is low
to neutral.
Bargaining power of suppliers
Sanitary products are consisting of two types of
different raw materials, the first type is called the
body and the second type is called the glaze. The
raw material used for body is china clays, fire
clays, ball clay, quartz, feldspar etc. and the raw
material used for making glaze is clay, quartz,
feldspar and different oxides for different colours.
As per trade India there are more than three
hundred suppliers in India for china clay and
fire clay.
Two hundred plus suppliers for ball clay.
Five hundred plus suppliers for quartz and
feldspar.
Absence of real substitute to sanitary ware,
limits the number of buyers for these suppliers.
Therefore the industrial attractiveness is high.
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Threat of substitutes
Sanitary ware products range from wash
basins, closets, urinals, sinks, baths tubs etc.
Its properties of corrosion resistance and
glazing surface which can also offer different
colour options.
Its use has not been replaced by other
materials like steel, fibre etc. for sanitation
purpose.
Therefore the industrial attractiveness is high.
Bargaining power of buyers
The number of buyers in the coming seven
years will be very large.
Absence of real substitute of sanitary ware.
Therefore the industrial attractiveness is high.
Overall assessment
The demand in the coming years is going to
be huge.
Leading player have already exhausted their
existing capacity and are planning for
expansion.
Minimum government intervention.
Easy availability of raw material.
Absence of any real substitute.
Therefore the overall industrial
attractiveness is high.
