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Ceramic retailer Clay Craft caters to hospitality in India and exports
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Thursday, 24 July, 2014, 08 : 00 AM [IST]
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Anurag More, Mumbai
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fiogf49gjkf0d Clay Craft India’s range of products encompasses four market or product segments - retail, hospitality, distribution and exports.
Bharat Agarwal, the company’s director, said, “The first involves retailers such as Big Bazaar, Star Bazaar and Spencer’s,with whom we have tie-ups.”
“Our hospitality clients include restaurants and star hotels. Distribution is the third,” he added.
“Exports are the fourth, wherein we have products meeting the requirements of our customers overseas,” Agarwal stated.
He stated that products differ from country to country on the bases of shape, size and packaging.
“The offerings differ in Dubai from those in the United Kingdom because people in those countries have different tastes,” Agarwal stated.
“For instance, people in the United Kingdom like to have their tea or coffee in large mugs, whereas people in Turkey prefer to have them in small mugs,” he added.
“In India, generally we supply most of our products to hotels and other hospitality organisations,” Agarwal said.
When quizzed about the challenges faced by the ceramic sector, he stated that China continued to be the major supplier of ceramic products to India.
“The dumping of ceramic products by China in large numbers is adversely impacting profit margins of ceramic producers and manufacturers in India,” he added.
“As a result of this, several small units are on the verge of closure, according to an Associated Chambers of Commerce and Industry of India (ASSOCHAM) study,” Agarwal added.
“The consistent availability and supply of raw materials with optimal pricing are crucial for the growth and profitability of the Indian ceramics industry,” he stated.
Agarwal informed that the costs related to raw material, power and fuel have been on the rise for a long time.
“Ceramic manufacturers are not able to pass on the rise in input costs to the consumers owing to the emerging competition from Chinese ceramic imports, which further hurt their profitability and have even lead to the closure of certain ceramic units unable to bear rising production costs,” he added.
Small and unorganised manufacturers suffer the most due to limited access and the lack of quality raw materials at reasonable costs.
“The lack of availability of raw material for the bone china industry across India leads to excess production costs,” Agarwal stated.
Unorganised players in the industry are not fairly coping up with the challenges. They have to move up and get organised by investing in supply chain, front office, packaging and other ancillary units.
“However, organised players like Clay Craft India have backward-integrated most of its operation to cope up with industry challenges,” the Clay Craft India director said.
“Now, the packaging, decal designing, printing, machinery maintenance and reparing is all done in-house for Clay Craft. This gives the cimoany major control over its cost fluctuations,” he added.
The organised players has also formed a manufacturers’ association, where the challenges are discussed and unified decisions are made by the management.
Important insights are shared by the members at each meeting and the required actions are established.
“Another challenge is the lack of skilled labour availability. Clay Craft India has announced its plans to open up a skill development centre to cope up with this challenge,” Agarwal said.
Gujarat and Rajasthan are the ceramic hubs of India. The governments of both the states have supported the industry in a very strong way.
There are still some areas where the government needs to to look upon to support the struggling industry, which has a huge scope for international markets.
For instance, Rajasthan, being a hub of organised ceramic manufacturers, imposes a value-added tax (VAT) of 14 per cent.
“The state government should consider providing relaxation in mentioned tax rate, and thus not only supporting the manufacturers, but also the local raw material suppliers,” Agarwal said.
“We have been very strategic since we entered in the market. We have a very conservative strategy due to the increased competition from the unorganised sector,” he added.
Agarwal said, “We have recently acquired the branding rights of one of the largest ceramic manufacturers in Asia, Jaipur Ceramics Pvt Ltd (JCPL).”
“With the acquisition of the branding rights, we are also looking at manufacturing the products under the brand name of JCPL,” he added.
“This acquisition has been very fruitful, as we been able to add some more products to our kitty,” Agarwal stated.
“We are also looking at increasing our presence on social media and increasing our target audience base to the international market. We have recently shaken hands with Snapdeal.com, Jabong.com and Fabfurnish.com, to name a few,” he added.
Reiterating that they were looking at setting up a skill development centre to enable proper training to employees and generate employment opportunities for various workers.
“With this centre, we plan to train more than 2,500 employees per year. The skill development centre is likely to be located in Ringus, Rajasthan. The total investment to set it up would be approximately Rs 25 crore,” Agarwal added.
“In order to expand our capacity, we are looking at an investment of Rs 100 crore for setting up a plant at Ringus in Rajasthan,” he added.
Clay Craft is currently one of the market leaders in India’s organised retail market in this segment, and about 30 per cent of its Rs 150-crore turnover in 2013-14 came from online sales through other channels that the company used for direct dispatches.
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