Orient Ceramics hopes to turnaround Bell by next fiscal

Orient Ceramics and Industries Ltd (OCIL) expects to turnaround the ailing tile maker Bell Ceramics that it acquired in December 2010 by the end of next fiscal through infusion of new technology and improving efficiencies.

OCIL, which became India's largest tile maker after the acquisition with a 10 per cent market share at present, had bought 68 per cent in Bell at a cost of Rs 19 crore. With this buyout, Orient, which is strong in the northern and eastern markets, could get an immediate presence in the southern and western markets that Bell had been servicing.

“We have already begun to get improved results from Bell operations. We expect to notch up a combined turnover of Rs 500 crore this fiscal (Bell results are being merged with OCIL's from the current quarter of this fiscal),” Mr Madhur Daga, OCIL Executive Director, told presspersons here on Tuesday.

Bell, which has two manufacturing facilities near Bangalore and in Gujarat, had a limited product range and lower operational efficiency, he pointed out. “Since we took over the company, Bell's operational efficiency improved from 60-65 per cent to 80-85 per cent with little or no investments from our side. Its turnaround will be reflected in our consolidated revenues next fiscal,” he said.

Imports

Orient, which has a current capacity of 30 crore sq feet per annum, is planning to sharpen focus on trading of imported tiles for the upper premium domestic market. “We are in talks with a clutch of European and Asian tile markers for import of their products for the domestic market. We expect to finalise a deal in the next quarter. We will create a new umbrella brand for such imported products,” Mr Vijay Shankar Sharma, the company's CFO, said.

The company's trading revenue at present is about 15 per cent of its overall sales and this is expected to double in the next two years.

To expand reach

OCIL is also increasing its marketing spends on its brand and expansion of its retail outreach.

The company, which opened its first shop-in-shop in Andhra Pradesh in Hyderabad, plans to open 25 franchisee stores in the next one year, with four company-owned showrooms, and 75 shop-in-shop outlets across India.

On its plans to set up a manufacturing unit in Kakinada in Andhra Pradesh, Mr Daga said it would go slow on the project for now although it has acquired the land, in the light of the Bell acquisition.