The Hindu Business Line : Tiles industry resents `dumping' by China

According to industry players, while the sales of tiles have gone up 17 per cent in the first half of the current fiscal, tile manufacturers have witnessed negligible growth (2-5 per cent) in sales. Some of them have even witnessed negative growth.

According to company books and stock exchange figures, Orient Ceramics, Murudeshwar Ceramics and SPL Ltd witnessed sales growth of 2-5 per cent. Kajaria Ceramics Ltd, Bell Ceramics Ltd and Regency Ceramics witnessed negative growth of 7-17 per cent. However, H&R Johnson recorded 21 per cent jump in sales.

Industry players say that for an industry that is struggling with over capacity installation, the import of tiles from China has come as a major impediment to profitability.

According to industry estimates, the total import of tiles in 2004 was worth Rs 100 crore. But, in the first nine months of the current year, the imports have gone up to Rs 300 crore.

Industry players say that with the traders taking advantage of the inverted duty structure and other loopholes in the current anti-dumping provisions, the situation may get even worse. The dumping has resulted in downward revision in prices by the domestic manufacturers.

They say that following the reduction in import duty of tiles from China, the prices of vitrified tiles crashed from Rs 60 per sq. ft. to Rs 40 per sq. ft. The overall price reduction over the last two years in this segment has been 65 per cent from Rs 120 per sq. ft. to Rs 40 per sq. ft.

Also, the doubling of raw material costs last year has added to their woes. Moreover, the price war between the manufacturers would negate the benefit of the investments made by them towards capacity building and technology upgradation.

According to an industry estimate, industry players have made a total investment of Rs 2,500 crore in the last three years for the purpose. The market is expected to take more than three years to absorb this capacity.

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