PROJECT REPORT

OF

Cera sanitaryware
ltd
ON

Impact of foreign sanitaryware

brands over Indian market

Submitted by-
Abhishek Gera
(+91-9711972217)
Amity Business School

1
 Self Certification by the Intern

I hereby certify that I, Abhishek Gera have successfully completed my

internship with “Cera Sanitaryware ltd” in the month of may june‘10
from (3rd may 2010 to 30th june 2010). This is also to certify that this
report is an original product and no unfair means like copying etc… have
been used for its completion.

Name: Abhishek Gera

Signature:
Date

2
 PREFACE

As an extra advantage in my Graduation Course, I have done training at

cera sanitary ware LTD. at Delhi from 03rd may 2010 to 30th june 2010
(Eight Weeks)

During my training, I have been given practical exposure to the field of

marketing and Sales. I was to deal directly with various workshops in
Delhi

It was quite an enriching experience for me as we had to deal with

different having different personalities.

3
 Acknowledgement

No task is a single person effort, same is with this project. Thus I would
like to extend my sincere thanks to all those people who helped me in
accomplishing my project.

I owe my project success to all members for providing us with this

wonderful opportunity and guidance. I would like to again extend my
special gratitude to fellow trainees and management staff for providing
excellent Guidence for the successful completion of this project. This
project provided me a platform to increase my knowledge and
empowered me with a better understanding of concepts in the real world
scenario. And last but not the least special thanks to “cera sanitary ware
ltd.” who accepted me in spite of my inexperience in the field and gave
me the opportunity to work and learn with them.

4
 Table of Contents

S. No. Topic Page Number

1 Acknowledgement 4

2 Summer Internship Objective 6

3 Introduction to sanitaryware industry

7
4 Outlook for sanitaryware industry in 11
india
5 Introduction to cera sanitary ware ltd
12

5 History of cera sanitary ware ltd 14

6 Mission and vision 16

7 Analysis 17

8 Study of customer response 25

9 Production capacities of organized 30

players

5
 OBJECTIVE

 To gain knowledge of impact of foreign sanitary ware brands over

Indian market
 To know how Cera works and method adopted.
 To know the overall development of Cera Sanitaryware Ltd

6
 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 in India (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 shift from rural to urban areas and 27% of the population
now lives in urban areas as compared to 20% in 1971. There is a large
difference in amenities between the urban population and the rural. In
1994, 70% of the urban population had access to adequate sanitation,
whereas in the rural community only 14% had access.

In 1991, approximately 64% of urban households had some kind of toilet

facility compared with 9% of the rural areas. There is a widening
difference in income between different regions, the rich and the poor.

Sanitation is a must for every individual of our society. According to the

Government estimates, more than 50% of the urban population does not

7
access to sanitation facilities. Condition of the rural areas abysmal that
only 6% of the population are covered by sanitation.

Sanitaryware Demand: Sanitaryware Industries in India for the last 6-7

years have

shown very dramatic growth with major players doubling their

production capacity. The Companies have also upgraded their
manufacturing system by introducing Battery Casting, Beam Casting and
have gone in for latest imported Fast Firing Cycle Kiln Technology.
These Companies have also upgraded their quality and have introduced
high value range in the market, which has been accepted and appreciated.
The demand for high value Sanitaryware in India is growing very fast.
The Companies are trying to meet the demand as the realization per
Metric Ton for high value product is very good which ultimately results
in good profitability. In order to educate the customers in India to go for
quality products and also for higher value sanitaryware, companies have
adopted a very aggressive advertisement campaign. Companies have also
strengthened 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 for Sanitaryware in India is growing @ 15%
-17% every year.

The sanitaryware industry in India is divided in two sectors. The

organized sector consisting of 5 companies (M/s. Hindustan Sanitary
Industries Limited, M/s. E.I.D. Parry, M/s. Swastik Sanitaryware
Limited, M/s. Madhusudan Ceramics, M/s. Neycer India Limited),
manufacturing sanitaryware for the last 15-20 years and have established
their Brand image. The organized sectors produce fully vitrified
sanitarywares, using latest technology and best of Ceramic Raw
Materials available in India. The unorganized sectors have adopted local

8
Indian technology to manufacture the basic sanitaryware products. Since
the availability of raw material is in abundance and also very cheap in the
state of Gujarat & Rajasthan, various companies 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 their sales in the local domestic market are higher than that of
the organized sectors' sales. Unorganized sanitaryware manufacturer
comes under small sectors and hence enjoy the benefit of Nil Excise Duty
and Sales Tax and hence they sell their products in the domestic market
approximately 70% cheaper than the organized sector products.

Opportunities: Government of India Policy on Housing Sector is very

encouraging.

The Government has announced Income Tax rebate on housing loan to

boost the housing sector. All financial institutions 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 per DGTD Survey Report there is a shortage of about 20
million houses in the country by the end of 8th Five Year Plan. The
housing has become a basic necessity, as people in India are looking
forward for improved sanitary condition. The concept of making toilet is
fast growing even in village areas, where toilet till last two years did not
exist.

The cost of producing sanitaryware in India is substantially low as

compared to the advance countries, because the labour cost and the basic
raw materials for manufacturing quality sanitaryware is available at very
cheap rate and in abundance. Because of our low cost of production,

9
Indian sanitaryware are very competitive in the neighboring countries and
hence export from India is also growing everyday.

10
 Outlook for Sanitaryware Industry in
India:
In the next decade, India is expected to be one of the world's fastest
growing countries for sanitaryware consumption. The sanitation
penetration has more than trebled from 8% in 1982 to 18% in 1994 and to
29% in 1999.

The comparative penetration levels in neighboring countries are as

follows: Pakistan:
50%, Sri Lanka: 65%, Malaysia: 94% and Thailand: 96%.

The government impetus to improve hygiene and sanitation is likely to

increase the demand for sanitaryware in India. Moreover the increasing
urbanization of India and the consequent requirement for residential and
commercial buildings will be a major driver for growth of sanitaryware.
Along with this the focus of the central and state governments to provide
housing facilities to the poor, is also expected to generate demand.

The National Housing Policy formulation that envisages "Housing for

all" by the end of Ninth Plan period is a big step towards this. Indira
Awaas Yojana, Samgra Awaas Yojana is programs for providing housing
to the rural poor is a key step taken by the government in this area. The
housing development organizations like HUDCO, State Housing
Development Boards and Rajiv Gandhi Rural Housing Corporation Ltd.
are also playing a large role in this initiative.

It is estimated that there is currently a demand for 20 million housing

units in India. Further, a significant number of the 115 million housing
units across the country will need reconstruction for improvement.
Therefore a replacement market will emerge, though currently original
equipment sanitaryware market accounts for nearly 90% of the market.

11
Company Profile
Introduction to CERA Sanitaryware
Limited:

Cera Sanitaryware Limited (CSL) is one of the pioneers in the

Sanitaryware segment in India. CSL was founded in the year 1980 as a
division of Madhusudan Industries Limited. It is based in Kadi, Gujarat.
Realizing the future growth prospects of this division, in the year 2001,
management thought it worthwhile to have independent identity by de-
merging and transferring the entire business to a new company. The new
company was named Cera Sanitaryware Limited It is now the third
largest company in the organized sector with over 20% market share. It is
also the largest and only listed company in pure Sanitaryware space. CSL
is the first sanitary ware company to use natural gas and the first Indian
sanitary ware company to haveISO

9002and ISO 14001 certifications for its products.

. The first sanitary ware company to use natural gas, Cera has been on the
forefront of launching a versatile color range and introducing the bath
suite concept. It also launched innovative designs and water-saving
products. The twin-flush model launched in India by Cera for the first
time, it reduces the water needs of households considerably. WCs
designed to flush in just 4 liters of water is another notable innovation by
Cera. Based in Kadi, Gujarat, Cera Sanitaryware Ltd. uses German
technology, which has ensured Cera’s superiority over others in quality.
Established with an initial capacity of 3,600 MTPA, the plant has
undergone several periodical up gradations and modernizations to expand
to 15,000 MTPA.

12
To achieve growth in the rapidly changing retail market in the country,
Cera, has launched its one of a kind Cera Bath Studios in Ahmadabad,
Bangalore, Chandigarh, Kolkata, Cochin and Hyderabad. With the
opening of the Cera Bath Studios, the discerning consumers, architects
and interior designers can have full view of the Cera’s premium ranges of
WC’s, Wash Basins, Shower Panels, Shower Cubicles, Bath Tubs,
Shower Temples, Whirlpools, CP fittings etc. Cera Bath Studios will
complement its existing network of 400 distributors and 4000 retailers.
Several Bathrooms are displayed live, so that the customers can get a feel
of Cera’s vast range of products. Soon, Cera will also launch premium
Spanish Tiles in Indian market….

The company is poised to become a total bathroom solutions provider.

Having shown a growth rate of more than 20% since last 3 years, Cera
Sanitaryware Ltd. today is the fastest growing sanitary ware company in
India.

13
History of Cera Sanitary ware Limited
Vikram Somany, Chairman & Managing Director of Cera Sanitaryware
Limited. Mr. Somany possessed entrepreneurial spirit even while he was
managing Madhusudan Industries Limited in Gujarat. This company was
into production of vegetable oils and vanaspati. The turning point came
into the company when Mr. Somany met a government delegation in
1978.When he signed the MoU to commence the sanitary ware
manufacturing unit in Kadi in North Gujarat using natural gas, the first of
its kind in India. It was a kind of milestone. And it was just the
beginning.

Of course, one might argue that Mr. Somany had entrepreneurship in

his blood and had also inherited the understanding of this industry. His
father had rich experience in sanitary ware. He along with his brothers
had pioneered sanitary ware in India in the early sixties by setting up a
manufacturing unit, Hindustan Sanitaryware, in collaboration with
Twyfords of UK. Yes, this did give Vikram Somany some kind of
background. Also, there was a market opportunity. But Cera's success
does not rest on these two factors. It rests on his ability in transforming
the opportunity into a business success. The opportunity was open for
others as well but Cera made the most of it. Though those were the days
of sellers’ market for sanitary ware, most companies, which went into
production around the same time as Cera, did not succeed later. So what
was it that Cera did different? The quality of Cera matched international
norms. Cera focused on creative designs and paid equal attention to after-
sales service with the differentiating factor. Moreover, Mr. Somany did
not neglect the other relevant business aspects as well. Cera went on to
create history with its advertising campaign in the early 1980s: Your

14
Bathroom is a Room Too…" An entrepreneur is successful because he
understands and respects the three Cs: customer, change and competition.
Apart from Cera, the other two major players are Parry ware and Hind
ware. Both have larger production capacities than Cera currently Cera,
however, is now expanding its capacities

To maintain that edge in the market, Cera keeps upgrading and increasing
its product portfolio regularly. Cera also recognizes its responsibility
towards environment. Like the other two major players in the organized
sector,. In fact, it’s gone a step ahead.

Well, looking at Cera's track record, Mr. Somany's vision is soon likely
to be transformed into reality. He is himself quite confident about it
because he has built a strong team. Success tips from Mr. Somany of
Cera Identify market opportunities Create a dedicated team and give it
full operational freedom Concentrate on brand- building right from the
beginning Recognize social and environmental responsibilities Follow
international norms of quality Keep innovating the product offerings
Provide good after-sales service.

15
MISSION OF THE COMPANY:
 To setup and carry out research and development for the
manufacture and
development of Sanitaryware products.
 Provide high quality to sanitaryware products.
 The Company is aiming to achieve 50-60% of market share for
every product.

VISION OF THE COMPANY:

 To be a total home solutions provider in the long run, providing
products for every room in the home.

16
International presence and exports:
CERA has exported, in the past, to developed countries like the US, huge
quantities. However, as the domestic market was giving better
realization, CERA has to curtail its exports. Currently, CERA has
presence in several markets like Gulf, New Zealand, Greece, South
Africa, etc. With the production going up in the coming months, CERA
is now looking at export market more seriously and talks are on with
certain parties for OE supplies.

World Technology:

To keep ahead of competition, Cera has always kept its technology ahead
of rest of the players in India. It took help from ceramic technology
suppliers from several countries in Europe time and again so that its
process and products are of international norms. It also helped Cera bag
large export orders from the US, unmatched by any other Indian
sanitaryware company. Cera could easily make products conforming to
ANSI, apart from European, Australian, Canadian and Indian norms.
CERA has been constantly using internationally renowned consultants in
the ceramic field to upgrade its

production
processes,
yield
and
finished
goods
quality.

Product innovation has been Cera’s forte. One after the other, Cera
launched not only new designs, but even new innovations in India. The
first was bathsuites—a unique design concept consisting of WCs, wash

17
basins, bidets and accessories, giving the bathroom a distinct personality.
A series of bathsuites—Crowne, Conca, Capri, Cornet, Comet, Clair,
Cognac, Celebrity, Celeste, etc.—were launched in quick succession.
Cera is also credited with launch India’s first monoblock EWC, Cologne
and now has an array of one piece ewcs & wash basins to its kitty.

Innovation:

Water scarcity has always been a concern in most parts of India. When
there is shortage of water, can we not think of conserving it, by sending
less water per flush down the drain? This concern was brainstormed by
our technical and research personnel, designers and quality assurance and
marketing personnel and thus the concept of twin action flushing was
born. CERA found that in most households, a WC is used more as a
urinal and still it was using 8 to 12 liters of water for each flush. Cera
then came up with the idea of half flush along with full flush. A
household can

save substantial quantity of water by installing twin flush. Even where

water is available in abundance, we advise twin flush because the cost of
electricity for pumping extra water to overhead tank can be saved. In
India, ever since cera pioneered the twin action coupled closets two years
back, it has caught the fancy of all architects, plumbing consultants,
trade, customers and even competitors. One after the other, all
manufacturers commenced twin action.

For the economy range, Cera have also launched twin flush model of

Plastic Cisterns

18
Credit analysis
CERA SANITARYWARE LTD.
Long-term bank loans/facilities CARE AShort-
term bank loans/facilities PR1
Ratings

CARE has retained the ‘CARE A-’ [Single A Minus] rating assigned to
the long-term
bank loans/facilities of Cera Sanitaryware Ltd. (CSL). This rating is
applicable for
facilities having tenure of more than one year. Facilities with ‘Single A’
rating are
considered to offer adequate safety for timely servicing of debt
obligations. Such
facilities carry low credit risk. CARE assigns '+' or '-' signs to be shown
after the
assigned rating (wherever necessary) to indicate the relative position
within the band
covered by the rating symbol.
Further, CARE retained the ‘PR1’ [PR One] rating assigned to the short-
term bank
loans/facilities of CSL. This rating is applicable to facilities having tenure
up to one year.
Facilities with ‘PR One’ rating would have strong capacity for timely
payment of shortterm
debt obligations and carry lowest credit risk. Within this category,
facilities with
relatively better credit characteristics are assigned PR1+ rating.
Total facilities rated by CARE aggregate to Rs.50.40 crore including
outstanding/sanctioned term loans of Rs.19.65 crore, sanctioned fund
based working
capital limit of Rs.18 crore and sanctioned non-fund based limit of
Rs.12.75 crore.
The ratings continue to factor in CSL’s experienced promoters, its long
track record of
operations, strong position with established brand name in the retail
segment of the
Indian sanitaryware market, good manufacturing capabilities, healthy
profitability,

19
comfortable gearing level and liquidity position. The ratings are,
however, constrained
by working capital intensive nature of operations and CSL’s linkage with
the real estate
sector which, being cyclical in nature, directly affects the demand for
CSL’s products.
Revival in demand for sanitaryware due to change in outlook for the real
estate sector in
India and maintenance/improvement in the overall financial profile are
the key rating
sensitivities.

Company Background
Incorporated in 1998, as Madhusudan Oils & Fats Ltd., the company
acquired 20 years
old ceramic business of Madhusudan Industries Ltd. under the scheme of
arrangement in
2001, followed by the change in name to Cera Sanitaryware Ltd. The
company is
promoted by Shri Vikram Somany of the Madhusudan group. Its
manufacturing facilities
are located in village Kadi in Mehsana district of Gujarat. CSL has also
setup up its
display centres at various locations across India for its retail customers.
CSL is one of
CREDIT ANALYSIS & RESEARCH LIMITED 2
the leading players in the organized sector in the Indian sanitaryware
industry which
also consists of a large unorganized sector.

Operations
CSL is into manufacturing of ceramic sanitaryware (60% of gross sales in
FY09) and
trading of bath fittings (38%) in various design and sizes. Positioned as
the third largest
player in the Indian sanitaryware market, CSL has pan-India marketing
network for
retail market in addition to direct institutional sales to reputed
construction companies.

20
CSL has an installed capacity of 2 million pieces of sanitaryware per
annum.
Manufacturing of bath fittings, which are sold along with sanitaryware
products under its
own brand CERA, is outsourced by CSL.
Raw material and power cost are the two major costs in manufacturing of
sanitaryware,
accounting for about 55% of the total cost for FY09. CSL has installed
2.4 MW gasbased
captive power plant and 4.98 MW windmills to meet its power
requirements. The
company uses natural gas as its primary fuel, which is sourced from
GAIL. CSL’s
operations are working capital intensive in nature as it requires
maintaining significant
finished good inventories in order to respond to demand from the retail
segment for
various designs and sizes of its products.

Ongoing Projects
CSL has planned to setup a plant for manufacturing of bath fittings,
which the company
presently outsources from various units/parties in India and also imports
some of its
requirements. The total cost of the project is estimated at Rs.5 crore
which will be
financed entirely by way of internal accruals. The project is expected to
start from
October 2009 and the commercial production is expected to start at the
end of FY10.

Financial Performance
CSL’s total income has grown at CAGR of 27% over the past four years
due to increase
in demand from the real estate market coupled with increase in sales
realizations of
bathware. CSL’s total operating income grew by 25% during FY09
compared to FY08
while PBILDT margin improved to 18.68% during FY09 compared to
16.62% during FY08

21
due to improvement in sales realization. PAT margin, however, increased
marginally
during FY09 compared to FY08 due to extraordinary loss suffered during
the year in a
foreign currency swap transaction.
Both, long-term debt equity ratio and overall gearing improved and stood
at 0.22 times
and 0.41 times as at Mar.31, 2009 compared to 0.29 times and 0.55 times
as at Mar.31,
2009 due to accretion of profits to networth and repayment of term loans.
With the
improvement in profitability, interest coverage ratio improved to 6.03
times during FY09
over FY08 level of 5.15 times.
Liquidity position of the company was comfortable as indicated by
current ratio of 1.51
times as at Mar.31, 2009 which improved from 1.26 times as at Mar.31,
2008 due to
CREDIT ANALYSIS & RESEARCH LIMITED 3
increase in cash & cash balances and sundry debtors. CSL had a cash and
bank balance
of Rs.21.64 crore as on Mar.31, 2009. Overall operating cycle marginally
improved
during FY09 to 134 days compared to 139 days during FY08.
Latest quarterly performance: For the first quarter of FY10 ended Jun.30,
2009
(Q1FY10), CSL reported a PAT (profit after tax) of Rs.3.35 crore on a
total income of
Rs.40.24 crore as against the PAT of Rs.2.54 crore registered on total
income of
Rs.33.90 crore during the corresponding quarter last year.

Industry Scenario
The sanitaryware industry is characterized by its cyclical nature and
working capital
intensive operations with close linkages to the real estate market. The
domestic sanitary
ware market is largely unorganised, with just 5-6 key players like
Parryware – Roca,
Hindware, Cera, Neycer, Classica, Raasi, Johnson Pedder and Liberty in
branded

22
segment. Shifting customer preferences towards branded products is
leading to declining
share of unorganized sector despite their selling of products at lower
prices. Growth
drivers for the industry include growth in the real estate sector in India
including
residential and commercial property, shopping malls, multiplexes, hotels,
hospitals,
airports, business/IT parks etc. which is currently facing a slowdown.
Initiatives taken
by the government to boost the sales of residential properties through
interest rate
benefits is likely to impact the demand for sanitarywares. This is further
augmented by
increasing spending power of the Indian consumer. Increase in demand
from
replacement market is likely to increase from around 10% as compared to
80% in
developed countries due to increasing preference for branded products
and availability of
new and better designs.

Prospects
CSL’s prospects would be driven by its ability to maintain sales volume
growth and
profitability in light of weak scenario for the real estate sector. Control
over working
capital cycle and continuous introduction of new designs and products
would be critical
for the growth prospects of the company.
CREDIT ANALYSIS & RESEARCH LIMITED 4

Financial Results
(Rs. crore)
For the period ended / as at 2007 2008 2009
Mar.31, (12m, A) (12m, A) (12m, A)
Working Results
Net Sales 106.67 128.05 159.52
Total operating income 106.67 128.05 159.85
PBILDT 18.89 21.28 29.85

23
Depreciation 3.54 4.94 5.93
Interest 2.28 3.17 3.97
PBT 13.98 15.54 19.90
PAT (after deferred tax) 9.07 10.05 13.11
Gross cash accruals 14.58 18.16 20.43

Financial Position
Equity capital 3.59 3.09 3.11
Networth 47.58 58.71 70.53
Total capital employed 86.22 110.07 118.43

Key Ratios

Growth
Growth in total income (%) 33.42 20.05 24.83
Growth in PAT [after deferred tax] (%) 53.70 10.84 30.45

Profitability (%)
PBILDT / Total operating income (%) 17.71 16.62 18.68
PAT / Total income (%) 8.50 7.85 8.20
ROCE (%) 21.50 16.65 20.94
Average cost of borrowing (%) 9.17 9.24 10.82

Solvency
Long-term debt equity ratio (x) 0.29 0.29 0.22
Overall gearing ratio (x) 0.52 0.55 0.41
Interest coverage (x) 6.74 5.15 6.03
Term debt / GCA (years) 1.13 1.21 1.11

Liquidity
Current ratio (x) 1.28 1.26 1.51
Quick ratio (x) 0.86 0.79 1.06

24
Turnover
Capital turnover ratio (x) 1.49 1.30 1.40
Working capital turnover ratio (x) 5.03 4.24 4.00
Avg. collection period (days) 56 63 60
Avg. inventory period (days) 82 84 80
Avg. creditors period (days) 8 8 7
Total operating cycle (days) 130 139 134

Cera Sanitaryware Ltd: 30 years and

counting

What started as a small plant with a capacity to manufacture about 1,000

pieces of sanitaryware per day is now the third-largest sanitaryware
company in India. Cera Sanitaryware Limited (CSL) now commands a
20% share in the Rs 1,000-crore organised market.

A split in the family business, Hindustan Sanitaryware Industries Limited

(HSIL), led Vikram Somany to start out on his own. He chose
sanitaryware as it was one business he felt comfortable with. A young
Vikram Somany started doing the rounds of the state government offices
in Ahmedabad. He was promised land at Kadi and natural gas from an
isolated field. That was all he needed to make a beginning. And as they
say, the rest was history.

Today Vikram Somany, chairman and managing director of CSL, has

500 distributors and retails through 5,000 outlets in India.

25
What set the plant apart from the rest in 1979 was the use of natural gas
in its kiln. It was a conscious choice. Those days most furnaces used coal
or other fuel that left specks on the ceramic. Somany decided to use
natural gas and that made a huge difference in quality. In fact, right from
day one, Cera was focused on just one aspect – quality.

Seated inside his office in Dalhousie Square, the heart of Kolkata’s

central business district, Vikram Somany, said: "We wanted to make a
name in quality. I knew everything else would follow." It took his
competitors nearly 12-13 years to switch over to natural gas as a fuel. "So
we had a head start," Somany added. The other thing that set Cera apart
was contemporary style and the range of 30 colours it offered. "We
offered sanitaryware in dark colours. Those days, coloured sanitaryware
was much in demand," he said.

In a market dominated mainly by British designs, Cera’s designs too

were a break from the past and refreshingly different. As a result, these
products were lapped up by a younger and more youthful set of buyers.
Within a year-and-half, capacity doubled. There was no looking back.
While Cera had started off with a capacity of 1,000 pieces per day or 3
lakh pieces per year, post-expansion, it will soon have a capacity of 28
lakh pieces per year.

Of late, Cera has given a new thrust to its marketing and product range. It
has earmarked a Rs 15-20 crore budget for an ad campaign across print,
TV and outdoor. It has launched the Italian wellness brand, Novellini, to
gain a foothold in the bathroomware segment, including shower
enclosures and hydro massage bath cubicles. And it has yielded rich
dividends for the company. Cera is now ready to launch the next phase of
its growth. The company is betting big on the mid-to-premium segment
of the market.

The emerging tastes and preferences of our customers is towards the

more expensive items with contemporary styling and designs. The market
is also graduated towards mainly two colours –ivory and white," Somany
pointed out. The products offer double-glazed surfaces which is easier to
maintain. In step, Cera has launched the ‘Whitest White’ range of
products. The products are retailed through the company’s exclusive

26
outlets, Cera Bath Studios and also through premium retail showrooms.
To further consolidate its position in the premium segment, Cera is in
talks to acquire a leading Italian sanitaryware brand. "We are negotiating
with a few of the Italian players and we hope to close a deal within the
next six months," Mr Somany who is back from a recent trip to Italy,
said.

Today, Cera has a stronghold in western India states and in Kerala, Goa
and Punjab. Apart from marketing strategy, the company is investing
some Rs 100 crore in expanding capacity at its Kadi facility. While it will
spend Rs 50 crore on new faucet unit, another Rs 50 crore will be spent
on expanding its sanitaryware line. In revenue terms too, it has started
giving results. Last year, it notched up Rs 190 crore in revenues, while
this year it plans to earn around Rs 300 crore. In next 2-3 years, Cera has
set a sales target of Rs 500 crore.

27
Cera Sanitaryware eyes acquisition in
Europe

With a view to tap high end sanitaryware market, Cera Sanitaryware Ltd,
India's third largest sanitaryware manufacturing company, plans to
acquire a company or a brand in Europe. Apart from this, the company
intends to infuse Rs 60 crore for capacity expansion.

"Cera is pursuing overseas acquisition to expand its footprint and capture

a larger global
customer base. The BSE
company is in N
dialogue with leading | S Price
European faucets and E
sanitaryware brand
with intension of
acquiring two super
premium brands.
There is major growth
on cards with Cera
becoming a complete
bathroom solutions
company,"

However, the company officials declined to divulge further details

regarding acquisition saying that the board of the company has recently
decided to make acquisition and the company is currently exploring
various opportunities. "The company wants to tap high end sanitaryware
market," added Vikram Somany, chairman, Cera.

The company, which enjoys 20 per cent share of Rs 1000 crore organised
sanitaryware market in India, has already taken up substantial expansion
in last four year involving an investment of Rs 53 crore. It is now in the
process of setting up a green field plant to make faucets, popularly known
as CP fittings, with a production capacity of 2500 pieces per day at Kadi,

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where it already has its existing facility for sanitarywares. The new unit
for faucets is scheduled to start operations from September this year.

"We have further decided to double the production of new facility for
faucets. In addition to this, the existing unit for sanitaryware will also see
capacity addition of 35 per cent to 2.7 million pieces from current 2
million pieces. We have earmarked capital outlay of Rs 60 crore for the
capacity expansion," Vidush Somany informed.

Cera today announced a bonus issue of shares in the ratio of one share for
every share held. Also, the company declared dividend of 50 per cent on
the back of encouraging financial results. The net sales of the company
have risen by 20 per cent to Rs 191.36 crore for the fiscal 2009-10 as
compared to Rs 159.52 crore in 2008-09.

Indian Sanitary Ware Industry bullish:

Indian Sanitary Ware Industry bullish India, today, is all set to
become the biggest manufacturing hub for international sanitary wares
brand. Even foreign brands like H&R Johnson, Roca and Kohler have
established their operations in India. India’s current sanitary ware
market size is almost 500 crores and in fact is growing at an annual
growth rate of 3-4 percent in the industry. Going forward, India will
have a huge market for sanitary ware products and of course the
export market will also grow simultaneously. Further, government’s
support to improve sanitation and hygiene and increasing urbanization
has given a big push to the Indian sanitary ware industry. The
companies are applying accurate standards and using top machinery
and stringent quality measures with latest designs to manufacture
finest quality machines India, today, is all set to become the biggest
manufacturing hub for international sanitary wares brand. Even
foreign brands like H&R Johnson, Roca and Kohler have established

29
their operations in India. For the starters, Indian sanitary wares are
comparatively cheaper as opposed to our western counterparts,
courtesy availability of ample raw materials and low cost labor in
comparison to other countries. This in fact has given Indian sanitary
ware products an edge over the competitors from the nearby countries
and naturally the exports of sanitary wares from India is scaling up.
On other hand, India’s population is growing at a growing at a
significant rate. Of which 27 percent of the population hails from
urban areas. However, there is large difference in distribution of
amenities between the urban and rural population of the country. As
per 1994 study, almost 70 percent of the urban population has access
to sufficient sanitation, when it comes to the rural population only 14
percent has access. According to current government’s estimation,
almost 50 percent of the urban population lacks proper sanitation
facilities, while the condition of rural market is terrible. In the last
five, six years, the Indian sanitary ware market has witnessed
exponential growth, with major companies increasing their production
capacities. Certainly, Industry’s growth is directly related to the
development in real estate. Today, housing’s demands are on rise.
And interestingly people have started taking interest in top sanitary
wares, thanks to the rise in purchasing power parity. Actually the
increased demand for sanitary ware is not just emanating from the
new projects but there is a huge market for replacement products also.
The remarkable growth by the industry has inspired industry majors to
enhance their manufacturing system and even apply latest technology
to give customers value for their money. Moreover, Indian companies
are taking a step further to enlighten people about the advantages of
premium sanitary wares. With 15 to 17 percent growth per year,
Indian manufacturers have strengthened their dealer network all
across the country. Demand for Made-in-india Sanitary Wares in the
International Markets

China (Mainland), Nigeria, Hong Kong, Malawi, Nepal, Thailand,

United States Prominent Destinations to Source Sanitary Wares from
India Majority of the sanitary companies have set up their plants in
Rajasthan and Gujarat given the availability of large quantity of raw
material and low-priced labor there. Chennai, Mumbai, Morbi,
Ahmedabad, Thangadh , Delhi, Pune , New Delhi, Bangalore, Rajkot,
Jaipur, Jamnagar, Hyderabad, Vadodara, Kolkata, Gurgaon, Indore,
Jalandhar, Nagpur, Surat, Ludhiana, Chandigarh, Jodhpur, Bharuch,
Bikaner, Coimbatore, Thane, Patna, Secunderabad, Bahadurgarh,
Faridabad, Guwahati, Surendranagar, Gandhidham, Ghaziabad, Navi

30
 Mumbai, Noida, Bhopal, Dhuva, Ernakulam, Kochi. Made-from-
india.com, a leading B2B portal from India has listed on its portal top
manufacturers, suppliers and exporters dealing in sanitary products.
Keywords B2b portal,market, sanitary

The Indian sanitaryware market is the second largest market in South

Asia and is growing at the rate of 22 per cent per annum, says a report by
Netscribes (India) Pvt Ltd consulting solution. Many international brands
like Kohler, H & R Johnson and Roca have entered the Indian market in
the past decade. The latest addition to the list is a German brand Grohe,
which seeing the huge potential of the Indian market could not resist but
enter. The sanitaryware retailing has come a long way and now involves
technology centres and trained fitters, who are also the source of
information, regarding the local market, to the retailers.

Also, considering the construction of residential societies, and hotels etc

to cater to the common wealth games, the time is right to tap the
sanitaryware market in India. Let’s explore the basics.

Why tap India for sanitaryware?

India had a GDP of 6-7 per cent per annum even when other countries
were dying of recession. The sanitaryware market has grown almost
double to 2000 crore in 2009. All big international brands regardless of
their category are entering India, the fastest growing country which has a
young population of more than 50 per cent. The newer generation wants
better homes, better services, better quality and better facilities; which is
the reason enough for the sanitaryware market to grow in India.

“India is no longer a testing ground, but a lucrative market for premium

brands. It’s increasingly willing to spend on premium quality and are

31
becoming extremely value conscious. People are also aware of leading
global brands in the space with high growth potential. India is being
looked upon by the entire world as an emerging market and potential
global hub for many products”, says Mathew Job, CEO, Grohe India.

Target Audience
Everyone needs a toilet! But sanitaryware isn’t only about toilets; the
range goes from bath tubs, bath tiles, basins to shower accessories.
Everyone requires them, be it your home, small shops, salons, corporate
offices or restaurants, so the consumer is everyone. “Broadly speaking
our target consumers are divided into B2B (business to business) and
B2C (business to consumer). B2B primarily comprises developers,
engineers, contractors and specifiers like architects, interior designers,
purchase managers, sourcing managers, project heads etc. B2C is
focused on the end consumer” adds Job.

Product Innovation:
The Indian consumer which is the direct consumer is not very easy to
tackle. It’s well educated, well placed, well travelled and ambitious;
tracking it isn’t an easy job so how do you cater to their needs? “Known
for its products and technology, Grohe has carved out a niche for itself in
the premium segment with a strong backing of superior product quality
and customer service. Most of the Grohe products that are available
globally are already on offering in the Indian market. In fact, we are now
launching a product line that will specifically cater to the Asian market.
The new Grohe Baulines IS available in the market from April 2010”

Retail Channels
For a foreign sanitaryware brand, there are various channels through
which it can enter India. Job states that a retailer can come in with help of

32
various channels. You can have a joint venture (JV) with an Indian
company who can sell your products in India. You can take help from
wholesales, small retailer and also with your own outlets across the
horizon. Having a JV with an Indian company surely helps as the Indian
company is already known in India and also helps you to have a better
image in front of the customers.

Hurdles in India:
Other than the obvious hurdles of FDI and other licensing issues, what
other threats does the sanitary ware market see? “The lack of sufficiently
trained plumbers was a huge concern for us when we came to the Indian
market. Globally, plumbers (installers) are a major focus group for us.
We work with them; we don’t just train them, we get feedback from them
about what is it that the consumers like and don’t like. Plumbers are our
greatest marketing research tool. But, we are concerned that plumbers in
India are not organised to a great extent to allow us to benefit from this
resource. This is something we hope to change gradually in the coming
years” contemplates Job.

Sanitary fittings industry in India witnesses a new entrant frequently and

is growing at a significant rate every year. Also, with the construction
spree going on to cater to the common wealth games like residential
societies, hotels and malls it will create a boom in the near future. In
addition, consumers are now willing to spend a lot more on making their

33
bathrooms look and feel good. These factors when taken together will
ensure a robust growth for the industry in the future.

Continuously improve the development of sanitary ware, more and more

consumers to buy bathroom product is not only concerned about price,
quality, service, brand awareness is more concerned about the reputation
and business. If the business or remain in the seller's business philosophy
in the past, certainly in the market competition at a disadvantage, even
ruthlessly eliminated by the market, sanitary industry into the era of
brand marketing.
Enhance the concept of competitive high-end brand market
Secretary-General of the Chinese Kitchen Works Committee, said Gao
Yan: China has become the world's largest bathroom products consumer
market, many domestic sanitary ware brand performance and quality to
meet or exceed the foreign brands, however, TOTO, American Standard
and other foreign funds sanitary ware brand strength using strong and
high brand awareness, almost monopolized the high-end sanitary ware
market in China. Except for historical reasons, China is not strong
corporate brand awareness is an important reason leading to this
situation.
Many companies have said in an interview, "low prices, high quality" is
their current business philosophy. Some bathroom companies make full
use of promotions to attract consumers to purchase desire. Thus, from the
second quarter of this year, a large bathroom industry price war, the trend
was intensified, and even a rare low-cost 199 yuan toilet. This price is
clearly lower than production costs, but the brand must not only equal to
sales.
There currently the largest sanitary industry errors are: the business
equivalent to the brand. In fact, the brand is independent of the spirit of
the factory class of property, it belongs to you, you can also belong to
other people. There are many companies mistakenly think that there is a
good product, there will be a great brand big factories, the majority of
resources into concrete things up, but unwilling to invest in brand
marketing to do.
Identify the precise positioning marketing
The brands are an effective tool to compete, but also the tools to achieve

34
business value and the carrier, not a luxury but necessary choice. Brand
positioning is the most important issue the operation, but also the future
development of corporate strategic issues. Facts have proved that the
enterprise has never been outside their range, and no all-encompassing
brand. Flooding and flooding in the information age products, accurate
positioning of the brand can only be consumer awareness and choice.
Through the study of international brands, and with reference to current
market structure point of view, the future development of sanitary
industry in China will be a number of trends: First, a few will appear in
the "comprehensive sanitary ware brand," the second will be a
"professional brand "Third, there are" personalized bathroom brand. "

A Study On Customer Response towards

Technical Assistance:

Objective of the study:

 To know the Customer satisfaction towards technical assistance

 To know customers expectations about after sales service provided

by the
company

Scope of the Study:

35
This study gives detailed view about customer satisfaction towards after
sales assistance by Cera Sanitaryware Ltd. The study focuses on to make
a solution for the customer dissatisfaction towards technical assistance
those facing by Cera Sanitaryware Ltd. The analysis would be helpful to
the management for taking decision regarding marketing strategies and
formulating suitable policies to make their business more effective and to
make customer satisfied.

Data collection:

Primary Data:
Through Questionnaire

Limitation of the study:

 Many constraints were involved in doing this study. Some of them

are as follows.
 Time is critical factor limiting this study.
 To reach every client.
 The data provided by the company may not be 100% correct as the
Company has.
 Finding and suggestion have been given from personal point of
view.
 Due to work pressure, detailed interaction with the executives was
not possible.
 Unable to find fair responses from various clients. Because there
were different response from different customers…

36
Findings:

 Cera’s have more innovative idea to offer product with new

innovation

 Cera is currently stood on third rank in its production capacity.

 Having shown a growth rate of more than 20% since last 3 years,
Cera Sanitary
 ware Ltd. today is the fastest growing sanitary ware company in
India.

 Cera has a production capacity of 1.3 million pieces. Cera is

upgrading it to reach
 2.2 million pieces by this year end

 Cera Sanitaryware Limited (CSL), announced all time high

revenue of Rs.107.58
 crore for the year ended March 31, 2007 up by 33.4% from Rs
80.64 crore.
 Sanitary ware manufacturing is highly labor intensive, non-
availability of standardized raw-materials (every manufacturer has
to source raw materials from mines and have its own quality
assurance systems of taxes).
 Many customers are satisfied with the use of cera’s product. Those
are not satisfied have not much knowledge about the product use,
and have less knowledge about the installation of product.
 About 50 % customers have a view that Cera’s product and
services are similar like other product in market. According to
company report those customer have bought only simple or
medium level products.

37
  More then 50 % of customers has got technical information from
the user manual. Because user manual is available with every
products. Other customers have got it from website or helpline no.
because they were unable to find information in User Manual.
 About 84% customers are not satisfied with the technical
assistance provided by company.
 Mostly customers are not satisfied with the information available
in User Manual. . According to them; It’s not about, how to use,
how to fit it, at any problem what should do etc.
 According to all data analysis customer have dissatisfaction
towards technical assistance. Company is unable to give full
satisfaction to its customer.

Suggestions:

 Need to give full knowledge about product use to customers

through advertisement in magazines, newspaper or TV. channel.
 Need to make some improvement in products to satisfy its
customer.
 Company has needed to expand its services and handling
customer’s queries in a sound manner.
 There should be all information regarding product use, installation,
product features, and emergency repair of product in User Manual.

 Company should add sufficient technical information in other

mediums of information like website. So customer can use
alternate way for information.

38
  Company should provide technical expert employee for every
specific area. Those can personally solve the problem of customer.
 If company is not providing service to its customer timely. Then
there should be provision of compensation to its customer.
 Introduction of designs to suit handicapped people, closets which
are the height of an average chair and therefore more comfortable,
lavatories with interesting shapes and designs.
 The technology of water saving should be in every product. So
customer will definitely attractive towards products.
 The company should launch low unit packs in all categories to
drive market penetration and to push volume.
 The product should be diversified in its maximum categories.
 More interest should be taken to increase the employee
participation in the management of the company.
 Mechanization should be done at each stage of the production
process, which will reduce the number of workers and then reduce
the cost of the production.
 100% production capacity should be utilized to increase the
volume of production.
 It is advisable to conduct market surveys before the introduction of
new products.

Conclusion:

Cera Sanitaryware Limited (CSL) is one of the pioneers in the

Sanitaryware segment in India. It was the first sanitary ware company to
have ISO 9002 and ISO 14001 certifications for its products. Cera is the
first company that launches such equipment those are helpful in reduces
the water needs of households considerably. It has more innovative idea
to offer product with new innovation. Cera plans to be a total home
solutions provider in the long run, providing products for every room in
the home.

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