Black Friday for Regency Ceramics

It was a black Friday for South India's largest tile maker Regency Ceramics Ltd.

The company lost its President, a union leader and ended with several employees injured and property damaged, at its Yanam manufacturing plant in the Union Territory of Puducherry.

Union leader dead

The peaceful and serene ambience of the former French colony, Yanam, turned chaotic as enraged workers went on the rampage stoning buses, lorries and damaging company property.

Police resorted to cane charge and firing injuring several employees.

While the union leader, Mr Murli Mohan, suffered a heart attack at the police station and was brought dead to the hospital, the Regency Ceramics President, Mr K.C. Chandrasekhar, succumbed to grievous injuries that he suffered as workers stormed his house and beat him up.

Regency has two manufacturing plants at Yanam and Karaikal, both in Puducherry with over 50,000 sq.m/day capacity.

Overseas venture

With over 700 dealers in all metros and cities, it is also in the process of establishing manufacturing lines in China and Italy to cater to Indian customers with high-end products.

It has also emerged as a leading exporter with focus on West Asia and Africa.

First Gen entrepreneur

The 28-year-old tile maker was started by first generation entrepreneur Mr G.N. Naidu in 1983.

He is also a well-known architect and active in politics with the Telugu Desam Party.

With his architect background, Mr Naidu foresaw the evolution of Indian aesthetic sense and demand for high quality inspiring and advanced tiles for floor, walls and exteriors.

The company President, Mr Chandrasekhar, is Mr Naidu's sister's son-in-law. A technically, well qualified professional, a linguist, he had been running the plant for sometime now.

Diversification

In the last few years, the Regency Group has diversified its interests in Yanam, which is close to Kakinada in East Godavari district of Andhra Pradesh.

It has established the Regency Institute of Technology (Engineering College), Regency Packaging and Regency Research Academy of Film & Television with a three-star hotel in the last few years.

BL Research Bureau adds:

However, in recent years, Regency Ceramics has been struggling.

Increasing power and raw material costs, threat from cheaper Chinese imports and substitution by newer flooring materials have pressurised the smaller Indian ceramic tile players.

Consistent losses

That could explain why, despite a 12 per cent annual growth in its sales, Regency Ceramics has reported consistent losses at the net level in the past three years.

In the first half of this financial year, the company reported just a Rs.2.5-crore operating profit on Rs 98 crore of sales.

Scrip down

The Regency Ceramics stock was trading at Rs 4.22, down by Rs 0.18 or 4.09 per cent on Friday. It hit a high of Rs 4.25 and low of Rs 4.19 during the day.

The stock, which dipped below Rs 10 in the market crash of 2008 has not recovered materially since and now trades at about Rs 4.30.

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