Financial Times - Rocell Bathware to be operational by 2007

Rocell Bathware to be operational by 2007

A Rs. 900 million new venture by Royal Ceramics Lanka Limited (RCL) called Rocell Bathware Ltd to manufacture and market sanitaryware at Panagoda will be operational by April 2007.

“The new venture has received BOI approval and will benefit from a three year tax holiday after it commences earning profits,” Nimal Perera, Finance Director, RCL told The Sunday Times FT, adding that the next two years’ profits will be taxed at 10 percent and subsequent profits at 20 percent.“This project is funded through a combination of bank facilities and internally generated cash,” he said.

Perera said that Rocell Bathware will offer a value for money proposition, positioning its Italian and Spanish designs at a high end. Pricing is expected to range between Rs.15-20,000 at the lower end of the spectrum while the highest end products will be priced between Rs.60-70,000,” he said. He said that the company is planning to launch a range of faucets and fittings designed and manufactured in Italy and is negotiating with an Italian supplier to co-brand the range.

Market analysts said that the company expects a 35 percent year on year growth in sales during the current financial year. Vajira Premawardhana, Executive Director, Lanka Orix Securities Company (Pvt) Ltd said that RCL estimates a 25 percent to 30 percent per annum growth in the house-building sector, and plans to tap this growth in the future.

While RCL maintains its market mix of 90 per cent local sales, 10 per cent of revenue is generated from exports.

“The company has made inroads into the Indian market with its value added product range.

The group also exports to 26 countries and its main markets include India, Australia, Taiwan and Japan. However, exports are not a priority at the moment as margins on domestic sales are more attractive,” Premawardhana added.

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