Demonetisation and GST seem to have made a dent on the prospects of unorganised sanitary-ware manufacturers, forcing some of them to down shutters.
According to KE Ranganathan, Managing Director, Roca Bathroom Products, many factories engaged in the production of sanitary wares, floor tiles etc in Gujarat in the unorganised segment have started closing down due to cash crunch. The emerging situation is expected to benefit the organised players in a big way.
SlowdownAsked whether the organised sector has faced a similar scenario, he told BusinessLine that the cash crunch had impacted dealers for a short period. “There was a lull between June 15 and July 15 due to uncertainties over GST, but now sales have started picking up.”
At present, the GST rate on sanitary ware is 28 per cent, an increase of two per cent from the earlier VAT + excise duty of 26 per cent. Since bathrooms are a basic necessity, the Indian Council of Sanitaryware Manufacturers Association (INCOSAMA) is batting for a reduced duty structure, he said.
It has also appealed to the government to enact rules on building in terms of toilets and making mandatory the quality certification of toilets. Toilet penetration in India has gone up to 62 per cent from 40 per cent in the last 10 years, he added.
Ranganathan was in Kochi to inaugurate the first Roca and Parryware display studio offering innovative bathroom concepts and world class products. It is the second company-owned showroom and plans are afoot to set up 10 such studios in the next 3-4 years, he said.
Market sizeOut the total ₹3,500-crore sanitary ware market, the share of organised segment is ₹1,700 crore. In India, 70 per cent of houses have toilets. Given the projected shortage of 40 million houses in the next 20 years, the bathroom market in the organised segment continues to grow double digit, he said adding that the high growth will happen in premium segment and the budget segment will upgrade.
With a 35 per cent market share, the company is looking at a 10 per cent growth, he said.
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