Bangkok--Feb 22--Siam PR. Consultant
Royal Ceramic targets sales to soar 34% to 1.975 billion baht and market share to increase to 9%
Greater performance expected following buyout of RABT worth over 100 million baht, aimed at expanding company’s ceramic tile dominance
Royal Ceramic Industry Public Company Limited, leading manufacturer and distributor of floor and wall tiles with over 36 years of experience under the trademark of RCI, is planning to bolster sales in 2006 by 34% after investing over 100 million baht in a buyout of RABT, manufacturer and distributor of clay tiles to ensure greater product variety with hopes to see higher market share to 9%.
Sanya Nongsuwan, Managing Director, Marketing Division of Royal Ceramic Industry Public Company Limited, manufacturer, importer and distributor of ceramic products including clay tiles, wall tiles and floor tiles under the trademark of RCI, Modena and other international brands from Italy, Spain, China and Indonesia, disclosed details regarding the trend of the construction business, property sector and ceramic tile industry, saying in 2005, the country’s construction industry was projected to value around 641 billion baht, up 12.7% from that of the previous year. “The growth was attributed to higher construction on the part of the government sector, which went up by 15.3% to 339.73 billion baht. Construction on the part of the private sector increased 9.9% to 301.207 billion baht, improving at a slow-down growth rate compared with the 20.2% in the previous year due to the continuous slowdown in private consumption since 2004. In 2006, the construction industry is expected to expand following investments in large government projects. Construction on the part of the private sector continues to weaken further. Prices of fuel and construction materials remaining stable but at a very high level with interest rates showing sign of increasing may be the factors affecting the cost of construction resulting in longer construction period for some projects,” he said.
“Supportive factors come from government initiated mega projects in 2006, which are estimated to be 255.35 billion baht in value. Constructions within domestic private sector and the Indochina are predicted to continue growing but at slower pace. The property market in 2005 continued to expand with home construction business and condominium showing continuous growth. The housing projects are declining following the decline in demand for expensive homes, which prompted the popularity of medium-priced homes to improve. Operators were putting emphasis on building townhouses in the city to cater to the needs from those demanding convenience and places to stay near offices especially when fuel prices have strengthened. Therefore, in 2006, the industry is predicted to grow following the strategic adjustment on the part of the operators to tackle higher demand for smaller and cheaper homes. The rising interest rates may only slightly affect the demand since the overall interest rates remain low for homebuyers. Expansion on the part of the transportation network within metropolitan Bangkok such as the Sky Train has allowed greater access to the living community,” he said.
As for the ceramic tile industry in 2005, the total market is expected at 22.636 billion baht in terms of value or up 8% from that of 2004 with domestic market reaching 18.924 billion baht. Total sales of ceramic tiles in Thailand in 2005 were 186 million square meters, of which 165 million square meters (150 million square meters in 2004) and 21 million square meters went to domestic sales and export respectively. Export valued at 3.7255 billion baht up 16%. Important export destinations include the United States, the ASEAN and the EU with ratio of 32.7%, 19.0% and 7.2% respectively.
In 2006, the ceramic tile industry is believed to be performing better than in the previous year with 10% growth to reach 25 billion baht as a result large government projects and specific projects on the part of the private sector following the government implementation to expand on the transport network within Bangkok and its vicinity. “These have helped creating greater potential for living community. Other negative factors also began to improve such as more stable oil prices, slightly higher interest rates and better tourism situation,” he said.
“As for RCI, in 2005 the annual sales totaled 1.481 billion baht or 7% of the 22.636 billion baht total market, of which 1.434 billion baht cam from domestic sales or 8% market share and 47 million baht from export or 1% of the market. Sales target in 2006 has been set at 1.975 billion baht or 34% growth over that of 2005 with improving market share of 9% as a result of increased product variety namely clay tile following the 100% take over of Royal Asia Brick and Tile Co., Ltd. (RABT), manufacturer, importer and distributor of wall and floor clay tiles. The acquisition of RABT business immediately helps RCI raise market share by over 250 million baht in this category,” he explained.
Patamol Bhirombhakdi, Assistant Managing Director, Marketing Division of RCI, added that in order to achieve the 9% target market share and 34% projected growth, the company had laid out a strategy focusing on increasing product variety such as the addition of clay tile which help increase the coverage of products to wider target groups. “Brand building is also part of the strategy to enhance awareness and stimulate sales through integrated marketing communications via different channels including advertising, public relations, event marketing, trade fair participation and sales promotion. These activities have been part of the company’s implementation especially advertising and product display, which will be the focus for this year,” she said.
“In term of distribution, RCI continues to operate through agents with 470 representatives all over the country. The company provides importance to attracting new customers by creating good relationship with the agents using effective customer relationship management (CRM), while expanding into projects. RCI solutions is also developed to provide additional sales channels with substantial success in the provinces. The practice will be developed further in Bangkok to provide integrated trouble shooting using demonstration, tile pattern design and information service. RCI Solutions can truly help customers get rid of their problem given comprehensive product range with wall tiles, floor tiles and porcelain tiles for internal and external decorations, as well as swimming pools. We are planning to expand the RCI Solutions all over the country including Bangkok to 50 outlets. In terms of export, RCI sell products to buyers in Taiwan, Japan, Australia, Myanmar and India,” she concluded.
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