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I N T R O D U C T I O N

Introduction to
Sanitary ware industry

India is a large, highly populated Country of around one billion


people, with an economy,which is steadily growing. As per the study,
there were an estimated 125 million dwellings inIndia (1995), but 200
million households. This reveals an acute housing shortage. The
U.N.predicts an increase in the population of 1.6% per annum. There
is a gradual migrant shiftfrom rural to urban areas and 27% of the
population now lives in urban areas as compared to20% in 1971.
There is a large difference in amenities between the urban population
and therural. In 1994, 70% of the urban population had access to
adequate sanitation, whereas in therural community only 14% had
access.In 1991, approximately 64% of urban households had some
kind of toilet facility comparedwith 9% of the rural areas. There is a
widening difference in income between differentregions, the rich and
the poor.Sanitation is a must for every individual of our society.
According to the Governmentestimates, more than 50% of the urban
population does not access to sanitation facilities.Condition of the
rural areas is that only 6% of the population is covered by sanitation.

Sanitary ware Demand

Sanitary ware Industries in India for the last 6-7 years has
shown very dramatic growth withmajor players doubling their
production capacity. The Companies have also upgraded
theirmanufacturing system by introducing Battery Casting, Beam
Casting and have gone in forlatest imported Fast Firing Cycle Kiln
Technology. These Companies have also upgradedtheir quality and
have introduced high value range in the market, which has been
acceptedand appreciated. The demand for high value sanitary ware in
India is growing very fast. TheCompanies are trying to meet the
demand as the realization per Metric Ton for high valueproduct is
very good which ultimately results in good profitability. In order to
educate thecustomers in India to go for quality products and also for
higher value sanitary ware,companies have adopted a very aggressive
advertisement campaign. Companies have alsostrengthened their dealer
network by offering showroom incentives and some of the

companies have also gone for their own retail outlets in major
towns. The demand forsanitary ware in India is growing @ 15% -
17% every yearThe sanitary ware industry in India is divided in two
sectors. The organized sector consistingof 5 companies (M/s.
Hindustan Sanitary Industries Limited, M/s. E.I.D. Parry, M/s.
Swastik Sanitary ware Limited, M/s. Madhusudan Ceramics, M/s.
Neycer India Limited),manufacturing sanitary ware for the last 15-20
years and have established their Brand image.The organized sectors
produce fully vitrified sanitary wares, using latest technology and
bestof Ceramic Raw Materials available in India. The unorganized
sectors have adopted localIndian technology to manufacture the basic
sanitary ware products. Since the availability of raw material is in
abundance and also very cheap in the state of Gujarat & Rajasthan,
variouscompanies have established their factory in these areas. They
are producing the basic sanitaryware in various brands. Unorganized
sector's percentage of production capacity and also theirsales in the
local domestic market are higher than that of the organized sectors'
sales.Unorganized sanitary ware manufacturer comes under small
sectors and hence enjoy thebenefit of Nil Excise Duty and Sales Tax
and hence they sell their products in the domesticmarket
approximately 70% cheaper than the organized sector products.

Opportunities

Government of India Policy on Housing Sector is very


encouraging. The Government hasannounced Income Tax rebate on
housing loan to boost the housing sector. All financialinstitutions are
lending money for construction of house at a very low rate of
interest.Government figure shows that Housing Sector is growing by
approximately 25% every year.The need of Housing in India with 100
crores population looks to be very potential. As perDGTD Survey
Report there is a shortage of about 20 million houses in the country by
the endof 8th Five Year Plan. The housing has become a basic
necessity, as people in India arelooking forward for improved sanitary
condition. The concept of making toilet is fastgrowing even in village
areas, where toilet till last two years did not exist.The cost of
producing sanitary ware in India is substantially low as compared to
the advancecountries, because the labour cost and the basic raw
materials for manufacturing qualitysanitary ware is available at very
cheap rate and in abundance. Because of our low cost of production,
Indian sanitary ware is very competitive in the neighboring countries
and henceexport from India is also growing every day.