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Asian Granito: We are the Masters of Bharat

Asian Granito is seeing a surge in revenues on the back of robust global demand for Indian products, as well as good offtake in tier-II and III domestic markets. Executive director Prafulla Gattani explains how the company has built a dominant position in Bharat and why it is emerging unscathed despite the Covid attack.

State of Industry
The brunt of the pandemic has been felt largely in the 6-7 metro cities and the rest of the country has not been as severely impacted. While the labour force had migrated from the large cities, it was abundantly available in the villages, rural and semi-urban areas. Therefore the pace of construction had not been affected in these markets, particularly in the popular budget housing segment. And this trend has helped the ceramic industry. Today, 60% of market demand is coming from renovation and 40% from new construction. In terms of the price range, demand is more from the budget segment rather than the luxury segment. We are the masters of Bharat. The real Bharat lies in the non-metros, and right from the beginning, our focus has been on the non-metro markets.

Some of the top players of the ceramic industry, especially those from North India, have been badly impacted by Covid-19. After the first lockdown, they started late because of the scarcity of labour. But we had an advantage, since all our nine factories had hosted their labour force within the premises. During the lockdown, we ensured that they had food and medical supplies, and were safe. This boosted their confidence and they did not leave for their towns and villages. In fact, we were the first in India to resume operations at all our plants at around 90% capacity.

On the digitalisation front, earlier our channel partners, architects and contractors expected us to meet them physically and supply them with samples. But post-Covid they are showing a preference for digital communication. Accordingly, our sales and marketing teams have swiftly shifted to the new mode. All the popular meeting platforms are being utilised. We have streamlined our communication processes, right down to the management of catalogue and sample distribution and their logistics. This mode is more effective in terms of client satisfaction and outcomes.

Technologically the ceramic industry is similar to the textile industry. Every 3-4 years we see a huge jump in technology. I have been in this industry since 1994 and have seen technology change time and time again. In 1994 we used to manufacture 6×8, 6×12 and 12×12 inch tiles, but by 1997 we took a huge leap and started making 400×400 tiles. Today, we manufacture 6×12 feet tiles. So, upgradation of technology is a major factor here. In the 90s I had been a strong votary of acquisition of state-of-the-art technology when India was known as the dumping ground for old equipment. At AGL, we pioneered the use of new machinery that had better electronic and mechanical parts, and that contributed significantly to the transformation of the Indian ceramic industry.

Recently we have launched a campaign to increase our touchpoints across the regions. Under this campaign, we are motivating the youth to get involved with our distribution channel. We are selecting them through interviews and connecting them with our marketing team. Wherever we have a presence, they are also linked to our dealers. We provide them with digital support with e-catalogues and other sales material, and enable them to market and sell our products in their areas. Through this programme, we aim to bring livelihood to large numbers of the population.

The loyalty of dealers has always been a big challenge for the ceramic industry. Service and trade margins are most important for them. Also important is the kind of product basket that you provide them with. Asian Granito has one of the largest product baskets in the country; we provide everything from tiles to bath products, to quartz to sanitaryware. One of the reasons why our dealers are very satisfied with us is that they get all these products from one brand. No wonder most of our dealers have remained associated with us for as long as 10-15 years.

Almost 60% of our sales come from projects and 40% from retail, which is the exact opposite of the industry trend where the majority of sales come from retail. Starting 2019, we too have started shifting focus from institutional to retail sales. And during the current crisis, this shift has helped us maintain our momentum in upcountry markets. In fact, last year turned out to be good for us, and even in the current year, we are anticipating growth of around 9-10%, which I believe would be 4% above the industry average.

We have the widest product portfolio in the industry right now. Seventy percent of our sales come from our core tiles business, while the remaining 30% come from marble, quartz and bath fittings. This fiscal we are expecting bath ware to bring in about Rs 20 crore, and quartz products Rs 100 crore. Overall we expect to clock combined revenues of Rs 1,300 crore.

Global Opportunities
Indian tile exports now account for nearly 10% of global supplies, and they are set to grow by 20% this year. As a company, we too have emerged as one of the major exporters. Last year, we were servicing 78 countries, and this year we are already selling in over 100 countries.

Indian ceramic exports have risen significantly and as a country, our share in the global tile market has grown to 10%. Our products remain in the $4-7 per sqm price point, but that is our specialisation. Chinese manufacturers, which controlled 60% of global supplies till 2000-10, had occupied this price point. But over time they have moved up the value chain with slabs and other special products.

While Spain and Italy continue to dominate the global market, India, Turkey and Brazil are comparatively new entrants. I am sure that in the coming years our market share in the upper and niche markets will increase because in terms of design and quality we are on par with Spain and Italy. Branding and marketing are where we are lagging right now, so we need to be more organised and brand conscious, and aggressive in our approach.

At AGL we are strengthening our international marketing team. We are one of the largest listed export companies in our sector. From 2019 onwards we have focused a lot on increasing our teams for international markets. In the previous financial year we exported tiles worth Rs 150 crore, but this year our target is more than Rs 300 crore. We are aggressive in our approach and confident that after this quarter we will achieve our export target. Quartz products make up a major portion of our exports. With the US placing a ban on Chinese goods, the benefits are coming to Spain, Turkey, Italy and India. Indian products are very well accepted in the US market, we expect to build up a much better market share in the near future. The launch of our 15,000 sft showroom at Morbi, where we have showcased more than 600 products, is another step for building up our export infrastructure.

Also Read:

How Asian Granito Will Become a Complete Bathroom Solutions Brand

Asian Granito Launches AGL Export House in Gujarat


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