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Asian Granito to Set Up New Manufacturing Units in Luxury Surfaces & Bathware Segments

Indian Ceramic Tiles and Sanitaryware industry witnessing strong tailwinds in both domestic and exports markets with India ranking at 2nd Position in all three i.e. Production, Consumption and Exports, beating dominant markets;

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Asian Granito India Limited (AGL), one of the largest Luxury Surfaces and Bathware Solutions brands in the country, has filed draft papers (Draft Letter of Offer) for Rights Issue of equity shares to raise up to INR 500 Crores (USD 70 Mn). The Company has lined up Mega Expansion Plan in Value Added Luxury Surfaces & Bathware Segments such as GVT Tiles, Sanitaryware and SPC Flooring segments through setting up new state-of-the-art manufacturing facilities at Morbi, Gujarat, under newly incorporated wholly owned subsidiaries. The Company is also setting up one of the World’s largest Display Centres covering an area of approx. 1.5 lakh sq. feet at Morbi, Gujarat to showcase Group’s entire product range under single roof. The new manufacturing facilities are expected to commence commercial operations in April 2023.

Commenting on the development, Mr. Kamlesh Patel, Chairman and Managing Director, Asian Granito India Ltd, said, “Indian Industry has been witnessing significant shift in the recent years from Double Charge Tiles to Value Added Large Format GVT Tiles and Slabs. Although, Double Charge Tiles still holds major share in the overall demand and is well penetrated across the market, however, with new technologies emerging, to manufacture innovative designs through glazing & digital printing, GVT and PGVT are expected to grow at higher rates in medium to long term. In Sanitaryware, India is 2nd largest manufacturer after China and one of the fastest growing markets globally with immense opportunities led by various micro and macro factors and policy initiatives. Similarly, SPC Flooring is also emerging as the fastest hard flooring product across the globe due to its varied advantages over other hard flooring products including ease of installation, heat & water resistant characteristics, etc.. Currently, AGL has presence in GVT Tiles and Sanitaryware through own manufacturing as well as third party manufacturing. To fuel the Mega Expansion Plan in these segments and various strategic initiatives, the Board has approved issuance of equity shares for up to INR 500 crores via Rights Issue. With commercialization of the proposed plans as above, AGL is expected to further strengthen its position as an Integrated Luxury Surfaces and Bathware Solutions Brand and up the Group’s margin profile in near to medium term.”

New entities incorporated for Expansion:-

  • Future Ceramic Pvt Ltd – FCPL (wholly owned subsidiary of AGL) to manufacture Value Added Large Format Glazed Vitrified Tiles (GVT) in 800×1600 mm and 800×2400 mm formats. To capture the vast opportunities in the GVT space, FCPL is setting up a new manufacturing facility at Morbi, Gujarat with an installed capacity of 6.6 million sq. mtrs. per annum. Total estimated cost for setting up the new manufacturing unit in FCPL is around INR 175 crores.
  • AGL Sanitaryware Pvt Ltd – ASWPL (wholly owned subsidiary of AGL) plans to establish in-house manufacturing unit of Sanitaryware products. Currently, AGL deals in a range of Sanitaryware products, manufactured through third party manufacturers and imported from outside India, and are marketed under AGL Brand. To strengthen and               scale up the Sanitaryware segment, the Group is setting up manufacturing facility at Morbi, with an installed capacity of 0.66 million pieces per annum. Estimated cost for setting up the proposed new unit is around INR 50 crores.
  • AGL Surfaces Pvt Ltd – ASFPL (a wholly owned subsidiary of AGL) to manufacture innovative new age Stone Plastic Composite (SPC) flooring. ASFPL is incorporated as part of the Company’s strategy to expand product portfolio and presence in high growth oriented export markets through value added offerings. The manufacturing facility is proposed to be set up at Morbi with an installed capacity of 2.97 million sq. mtrs. of flooring per annum. Total estimated cost for setting up the new manufacturing unit in ASFPL is around INR 35 crores.

The Company is also setting up one of the World’s largest display centre at India’s Ceramic Tiles hub – Morbi, Gujarat to showcase AGL Group’s entire product range under single roof i.e. Tiles, Sanitaryware,  Bathware, Quartz & Engineered Marble, SPC, etc. The five storey display centre is conceptualised in 1.5 lakh square feet of area and aims to showcase AGL Group’s production, technological excellence and best in class sourcing caliber at single place and is also expected to enhance Company’s brand and reach. Total estimated cost for setting up the Display Centre is around INR 40 crores.

The commercial operations in all the three wholly owned subsidiaries are expected to commence in the beginning of financial year 2023-24. In the first year of operation, the Company expects capacity utilisation ranging from 45-60% to be scaled up gradually. The Company has estimated that total working capital requirement for all the three companies in the first year of commercial operations in 2023-24 will be around INR 80 crores.

The Company has filed draft papers (Draft Letter of Offer) for Rights Issue of equity shares to raise up to INR 500 Crores (USD 70 Mn). The Net Proceeds of the Rights Issue shall be used for the Proposed Projects. Additionally, the Company also proposes to deploy the proceeds of the Rights Issue to meet general corporate purposes including other strategic initiatives, brand building and strengthening, marketing activities, and ongoing general corporate exigencies. The Company has roped in mid-market merchant banker, Pantomath Capital Advisors Pvt Ltd, who has a specialized division for Construction Materials Industry, having successfully handled multiple recent transactions in this industry.

Mr. Patel continued, “Due to various strategic locational advantages including close proximity to the raw material sources, easy & quick availability of manpower, close proximity to some of the country’s largest ports, etc., Morbi is India’s hub for Ceramic Tiles & Sanitaryware and accounts for more than 80% of the country’s total production, housing over 1,100 manufacturing units. AGL has lined up major expansion plans in Morbi region keeping in mind these strategic advantages. Trusted for reliability, adaptability and innovation, AGL has created a strong brand identity for ‘Make in India’ products and is able to achieve global recognition with exports to 100 plus countries.”

SMEStreet Edit Desk

SMEStreet Edit Desk is a small group of excited and motivated journalists and editors who are committed to building MSME ecosystem through valuable information and knowledge spread.

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