RAK Ceramics' India IPO by year-end

RAK Ceramics plans to IPO its subsidiary in India by the end of this year or beginning of next year, its top official said.

The world's largest ceramics manufacturer is also looking at increasing its revenues and profits by 10 per cent this year.

“We are looking to IPO RAK Ceramics in India,” Dr. Khater Massaad,CEO of RAK Ceramics, said. “Hopefully we will IPO by the end of this year or early next year. We are preparing for that.
 
RAK Ceramics in India, like in Bangladesh, is also doing well.”

“The size of the issue depends on the laws of India. It may be up to 30-40 per cent and we are probably talking about $40mn to $50mn,” he added.

This move follows the $250mn Bangladesh IPO it did in May.

The IPO was 15-times oversubscribed and was launched to make the company debt-free and fund future projects in Bangladesh.

RAK Ceramics supplies up to 75 per cent of the domestic demand for sanitary ware and 25 per cent of demand for ceramic tile in Bangladesh.

While in India, about three out of every four tiles is from RAK Ceramics.

“The valuation in Bangladesh was extremely good.

In fact we have gone trading more than what was expected. We think the markets in Bangladesh and India are good markets,” he said.

Already named the largest ceramic tile manufacturer by the Ceramic World Review thanks to its total production of 115 million square metres in 2009,

Massaad is aiming at further increasing the company’s market share while consolidating its markets.

“You grow always when you have a market share to penetrate and when you have a pressure on the demand.

RAK Ceramics has been growing because we always have more demand than supply,” he said.

“We want to consolidate our marketing,” he said. “We want to improve our efficiency.
 
We have been growing very fast for the past five years.

Being such a big organization, we have to make sure that everything is more efficient and is doing well. 

We will improve the R&D for the products and technology and we want to improve our profitability.”

Massaad says total revenue is expected to rise 10 per cent to reach $1.1bn this year from $1bn last year. He said he is hoping the same percentage increase in terms of profits.

For the fiscal year of 2009, RAK Ceramics posted a 20.2 per cent jump in net profits to Dh261.9mn compared to Dh217.9mn in the previous year. 

Revenues during the same period rose 17 per cent to Dh3.77bn from Dh3.23bn.

The company recorded global sales of 100mn square meters of ceramic tiles, up from 92.3mn square meters in 2008.

“This year, revenues will be hopefully $1.1bn, a 10 per cent increase from $1bn last year,”

Massaad said. “Already we have increased 5 to10 per cent in the first half.
 
Reason for growth is there is a demand and we have increased our capacity for the last one-year in Bangladesh and Ras Al Kaimah.
 
We have put more production on line and we have been able to sell in other markets.”

“I am happy to say that profits in 2009 went up by 20 per cent from 2008,” Massaad added.

“This year we also have increased by 5 to10 per cent in terms of profit and sales so we have not been squeezed.

RAK Ceramics is exporting to more than 130 countries. If you have recession in one country it can be compensated in other countries.”