The Morbi ceramic industry has recently received a boost up from rising demand for ceramic tiles products in the rural Gujarat markets.
A few months back, India’s largest ceramic industry found it difficult to cope with declining orders and lower margins.
Several small and medium sized tiles units in the ceramic sector were struggling to stay floating. However, growing demand for ceramic products in the Tier II and Tier III cities as well as rural areas have provided a twinkle of hope to small units in the sector.
Last year’s scenario
During the last financial year, SMEs in the Morbi ceramic industry witnessed lower sales growth due to declining demand in both domestic and international markets. The growth rate of the industry had gone down from 30%-40% to 10%
Added to the falling orders, the unorganized ceramic and tiles sector had to grapple with rising costs and stiff competition from the cheaper Chinese products, which were flooding the domestic market.
“Last year, while several small tiles manufacturing units had to cut down production from four lines to two, many units in Morbi had to shut shop due to increasing production costs and falling revenues,” reveals D Patel, Spokesperson, Laxmi Tiles, a small-sized tile manufacturing company in Gujarat.
Moreover, small players in the Morbi ceramic industry were severely affected by higher taxes, rising costs of fuel and transportation, lack of raw materials and a slowdown in demand from the construction sector. Due to such problems, tile manufacturing units were compelled to operate at less than half the capacity.
Affirmative Signs of recovery
However, things have started improving in this financial year. “The ceramic sector is now on its way to recovery, as we can see orders flowing in. Though the ceramic industry is yet to see complete recovery, we are witnessing signs of revival. The industry is getting back to normalcy after facing the adverse effect of the slowdown,” feels M Parekh, Spokesperson, and Opera Ceramics in Morbi.
The Morbi ceramic industry has also pinned its hopes on the government for helping the sector revive completely. It has requested the Gujarat government to put a stop to the dumping of cheaper Chinese goods on Indian shores. In addition, the industry is demanding a reduction in prices of gas and fuel to survive the challenging times.