Lanka Tiles to outsource much-in-demand tiles
View(s):Lanka Tiles PLC (Tiles) is gearing to outsource products that aren’t produced in Sri Lanka, but has a strong demand for customers here, officials said. ”Things like ‘polished glazed porcelain tiles’ aren’t manufactured here. So, we want to outsource these tiles as they have a strong demand”, an official told the Business Times. He said that the company is trying to outsource this from India. “We are negotiating with a Gujarati firm to lease a manufacturing line of a factory there and outsource it,” he said. He said that the fibre cement plant in the 100 acre land at Divulapitiya that Tiles has planned will start soon will produce ceiling boards, wall paneling and asbestos free roofing sheets.
“This will open a huge market for us,” he said. “We will channel all production to the local market,” he said. Given the demand and shift to larger format tiles, the company has been making necessary amendments to its existing production mix, while a capacity enhancement is expected at the end of FY 2017E. The investment on expansion is expected to be substantial during the year, he said adding that larger tiles attract higher margins.
Analysts say that the overall tile market continues to grow, albeit the industry as a whole being affected by the floods during the month of May. Tiles caters mainly to the local household market, which contributes 90 per cent to top line sales. (DE)