Royal Ceramics to commission new tile making plant targeting price-sensitive market segment

• To increase company’s tile production by 20%
• Equipped with Chinese machinery, new plant to source local raw materials

By Nishel Fernando 
Dhammika Perera-controlled Royal Ceramics Lanka PLC plans to commission a new tile manufacturing plant, targeting the more price-sensitive segment of the market and increasing the company’s tile production capacity by 20 percent.

“We are planning a new manufacturing plant. We have land plots in several locations. We want to be outside of population centres as much as possible. We know we are catering more to the higher-end of the market right now,” Royal Ceramics Lanka PLC Managing Director Aravinda Perera told Mirror Business.

However, he didn’t reveal the size of the planned investment, due to its price sensitivity, while noting it would be a significant investment.

Royal Ceramics currently manufacturers floor and wall tiles under the brand name of ‘ROCELL’, targeting the higher-end of the market.

Perera noted that the new plant would be equipped with Chinese machinery and raw materials will be sourced locally. 

In addition, he revealed that the company also plans to increase bath ware and tile production capacities by around 20 percent and 10 percent with expansions in the existing plants. 

Prior to import restrictions came into place early last year, the country’s tile supply was met through both local manufacturing and imports, forming 43 percent and 57 percent of the total supply.

However, following the import restrictions, the demand for locally manufactured tiles and sanitariware, including bath ware products, rose significantly, despite the slowdown in the country’s construction industry. This trend supported local manufactures to clear their piled-up inventories by end of last year.

The tiles and associated products sector remains the largest contributor to Royal Ceramics Group’s top and bottom lines by contributing to over 60 percent of the group revenue and profit after tax.

Royal Ceramics along with its subsidiary, Lanka Tiles held 43 percent market share in the floor tile category and 25 percent market share in the wall tile category, at the end of last financial year. 

The two companies also have 25 acres of mining land. 

Sri Lanka’s ceramic industry expects to draw Rs.20 billion worth of investments to the sector by expanding the current production and setting up new factories.

With several newcomers expected to enter the industry, the competition in the industry is expected to heighten over next two years.