By Jayashree Mendes
You have a vast footprint around the world. Could you tell us about that?
We have two kinds of operations: manufacturing and commercial. With nearly 33 offices across the world, we have a presence in Europe, Middle East, Saudi Arabia, and other GCC countries as well as, India, Australia and New Zealand, Singapore, among others. Most of the commercial operations are regional offices. When it comes to manufacturing we do have manufacturing set up in Ras-al-Khaimah, (UAE) which is our group headquarters, India (Samalkot), Bangladesh and Iran.
As a strategy, we have acquired capacity in India and commissioned a plant last year for ceramics. We’ve invested in greenfield joint venture in Morbi and that is expected to be commissioned by the year-end. In India, we manufacture in Morbi as well as Kakinada (Samalkot)
We have invested in a design lab and have an R&D facility and all manufacturing units avail benefits from that.
How has RAK Ceramics grown in the last year or so?
The Indian operation has seen a top line growth of 17% in 2017. We did see a slight setback in 2015 and 2016, due to management changes, but all that is behind us now.
Together, both the plants will help us double capacity from 8 million m2 to 16 million m2 by end of 2018.
How do you look at designs in this competitive market?
Be it across tiles or floors or bathware, we draw inspirations from customers based out of 166 countries. We have a diverse offering that helps us move in the right direction while meeting demand in India, which is even more diverse.
For a city like Mumbai, we draw inspiration from Italian or European culture. We have invested largely in a design lab and have an R&D facility in our headquarters and all manufacturing units avail benefits from that. In the last 27 years, RAK Ceramics has consistently delivered unique designs and it’s not hard for us to handle them. We have a global presence and that enables us to serve a diverse pool of customers and geographies, such as India.
In terms of materials, are you experimenting with new kinds across segments?
We do use some of our in-house patented formulas to control cost, but at the same time build what customers want. So there is an ongoing process of R&D besides involvement of our raw material vendors to partner in our efforts in our centralised laboratory at the HQ jointly. We make use of our mother facilities located in Ras-al-Khaimah, and draw benefits from there. We do fulfil local requirements through sourcing alternative materials, engaging institutions, etc.
For instance, we have initiated project for energy efficient (Green Building) Surfaces with CEPT Ahmedabad recently.
Recently we launched a waterless urinal with “Diaphragm Technology” that does not require any liquid or gel and instead notifies the attendant when to change the diaphragm.
How important is retail to you?
We shifted our focus to Tier II and Tier III markets after building 14 Company Display Centres in India. When you have a large population, one cannot stay exclusive. So we are moving to newer cities. There are three store formats we work with our Channel Partners (RAK Select, RAK Privilege, and RAK Exclusive) and would like to see them in most geographies. We have close to 200-odd outlets across formats made in the last eighteen months.
The middle and lower middle-class products’ segment has grown close to 100% over one-and-a-half years and that has given us an impetus to invest in capacity.
Besides low replacement cycles, what are some of the challenges you face in India and what are the measures taken by you to reach your target audiences?
India has a low replacement cycle, but as an economy we are still emerging. With a customer pool of 1.3 billion, there are plenty of opportunities in the Indian market. The large government expenditure on “Infrastructure and Mission of Housing for All” will overall drive the economy and businesses. The fact that we have three display centres in Mumbai alone, should spell how serious we are about gaining ground.
We work closely with the real estate sector, infrastructure and Government.
In another move, we want to be closer to the customer and that is one of the reasons for setting up the plant at Morbi. The Kakinada (Samalkot) plant compels us to spend on logistics and it is not easy to be closer to all customers across all states. The new plant is highly advanced and is a modern plant. We also export our products to other markets and the added capacity will offer us an advantage.