Ceramic tiles makers may be forced to go slow on up to Rs 3,000 crore investments that have been planned for next 3-4 years due to lack of government support for their infrastructure requirements,industry body ICCTAS said on Friday.
Seeking priority sector status so that tiles makers can avail of benefits to reduce input costs,which is about 40 per cent of sales,Indian Council of Ceramic Tiles and Sanitaryware (ICCTAS) said margins of the companies are being affected due to high productions costs.
In the next 3-4 years,Rs 2,000-3,000 crore investment will come in in the ceramic tiles sector for upgradation of technology,expanding existing and setting up new plants. However,if the industry goes through a bad patch,everyone takes a backseat, ICCTAS Chairman Shreekant Somany said.
The sector is going through a rough phase as high input costs are affecting the margins of the producers,he added.
Energy accounts for nearly 40 per cent of input costs for the ceramic tiles industry and it has made manufacturing in India very expensive compared to neighbouring nations. Moreover,depletion of critical raw materials like feldspar and quartz due to high exports is a matter of serious concern, Somany said.
ICCTAS asked government to include ceramic tiles industry in priority sector list under Natural Gas Utilisation Policy and Allocation of Natural Gas,he added.
We are also asking for effective implementation of swapping arrangement by all concern entities for natural gas supply, ICCTAS Vice Chairman Vijay Aggarwal said.
The industry is requesting the government to allocate LNG from the KG basin to manufacturers in Andhra Pradesh at a rate equivalent to imported natural gas,he added.
Elaborating the potential of the industry,Somany said: The sector is estimated to be Rs 18,000 crore big,of which 40 per cent are contributed by national players. It is expected that the revenue will grow at a consistent 12 per cent rate for the next 15 years.
The total production capacity stands at around 550 million sq mt annually and it is being expanded by 10 per cent every year,he added.
There are over 500 manufacturers across the country that employs 50,000 people directly and gives indirect employment to another five lakh people.
In the last 4-5 years,the ceramic tiles industry has seen about Rs 5,000 crore investment on various fronts,Somany said.