Opens fourth manufacturing unit in Perundurai, TN

R.Y. Narayanan

Perundurai (Erode district), Aug. 29

Increasing urbanisation, growth in construction activity and the low penetration levels in the sanitaryware market in the country indicate a sustained demand for sanitaryware, which is witnessing a 15 per cent growth annually, according to Mr A. Vellayan, Chairman, E.I.D. Parry India Ltd, Chennai.

The Murugappa group, which has tied up with Roca of Spain for the manufacture of sanitaryware in India, is confident of facing competition from foreign brands on the strength of its quality, price and customer service, he said.

Perundurai facility

Speaking to presspersons at Perundurai on Monday, where Parryware Roca Private Ltd commissioned its fourth sanitaryware manufacturing facility, he said the Central Government had indicated that the SIPCOT Industrial Complex would get natural gas supply by 2008-09. The company would like to expand the capacity from 1 million pieces to 2 million pieces annually at its Perundurai unit and availability of natural gas "is critical to that expansion".

He said use of natural gas would cut down the manufacturing cost by about 15 per cent, enabling the company to compete in the export market and the Perundurai unit could be used to meet export demand for which lower production cost would be an asset. The Indian demand for sanitaryware was growing and the average spending on bathrooms has gone up by a factor of 2.5 to 3 times in the past five years.

Explaining as to how he expected the company to ward off competition from foreign sanitaryware brands in India, the EID Parry Chairman said the main difference in the partnership between his company and Roca is that it is not a distribution partnership. It is a technology and shareholding partnership. "It is a commitment from Roca to take the Parryware quality up to international level," he said.

Customer service

He said the company was offering unmatched service level and "foreign manufacturers who are coming in with container loads and selling through a few dealers' would not be able to service the market. He said Roca was also into manufacture of top-end tiles and the company was also into production of taps. The company was providing a full range of service at Indian cost, while the quality remained international.

Asked whether Roca has a buyback arrangement with its Indian partner, Mr Vellayan said at the moment there was no such arrangement. But if the company was able to manufacture more than what the domestic market required and if they are price competitive, then Roca would be happy to look at "servicing certain markets from here".

Market share

Mr K.E. Ranganathan, Managing Director, Parryware Glamourooms Private Ltd, Chennai, said, the size of the Indian sanitaryware market was estimated to be about Rs 750 crore and the share of the organised sector was around Rs 350 crore. He put the share of Parryware in this segment at close to 43-44 per cent.

Exports

He said exports to markets like Sri Lanka, South Africa and West Asia accounted for about 3-4 per cent of its turnover. With the commissioning of the Perundurai facility he was confident of stepping up exports. Last year, the company recorded a turnover of about Rs 240 crore and in the first four months of the current fiscal, it had shown a 30 per cent growth that it expects to maintain during the full year.Explaining the reasons for locating the unit at Perundurai, he said Kerala, Tamil Nadu and Karnataka were the fastest growing markets for the company in the South and the location would provide easy access to these markets. The natural gas supply would bring down the manufacturing cost by about 15 per cent. The State Government also played a proactive role by ensuring one-stop clearance from various government agencies for starting industries at the Perundurai industrial complex.

(This article was published in the Business Line print edition dated August 30, 2006)
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