Ceramics companies in the UAE have continued to perform better this year despite a slowdown in sales of most other building materials.
However, the companies said although the sector has been marginally affected in the UAE, increased exports combined with new markets have resulted in better business and exceeded sales figures for the first quarter.
Fujairah-based Emirates Ceramics Factory told
Emirates Business that it has recorded more sales this year compared to 2008. It is a subsidiary of Fujairah Building Industries, listed on Abu Dhabi Securities Exchange, and was established in 1980. Emirates Ceramics Factory has an annual production capacity of 3.6 million square metres of floor and wall tiles in various sizes.
KC Cheriyan, Senior Manager, Sales and Marketing, Emirates Ceramics Factory, said: "As of end-June 2009, our sales were 10 per cent more than what we sold during the same period last year. The ceramics industry has definitely been affected due to the slowdown in the construction sector. Many projects are held up because of the slowdown, but those companies that are completing their projects are processing finishing work. As ceramic tiles are mostly required during the final stages, we are seeing greater sales because builders are speeding up work for handing over many of the projects."
Ras Al Khaimah-based RAK Ceramics said its net profits have exceeded Dh65 million during the first quarter, representing a remarkable 21.2 per cent increase compared to the same period last year.
In a recent statement, the company said it has "managed to sustain the impressive overall performance in 2008" during which profit margins rose by 24.4 per cent to more than Dh205m.
RAK Ceramics, a $700 million (Dh2.57 billion) global conglomerate, has achieved a compound annual growth rate (CAGR) of 22.7 per cent in sales revenues for the period 2004-2008, with net profits growing annually by 24.1 per cent. In 2008 alone, revenues exceeded Dh2.5bn or a growth of 15.6 per cent compared to 2007, with the UAE manufacturing plants accounting for Dh1.924bn of all revenues.
Abdallah Massaad, Assistant Chief Executive Officer, RAK Ceramics, said: "We have performed exceedingly well in 2008, a highly delicate period that saw other companies sustain diminished sales and profits. Importantly, profits have reached more than Dh65m in the first quarter of 2009 alone. This is a clear indications that the company is moving in the right direction towards achieving another banner year."
RAK Ceramics has an installed capacity of 325,000 square metres per day for tiles and 12,000 pieces per day for sanitary ware through 10 state-of-the-art tile plants and two sanitary ware plants at its two million square metres manufacturing facility located in Ras Al Khaimah.
The company also owns manufacturing subsidiaries in Bangladesh, Sudan, China, India and Iran, along with subsidiaries in Italy, Germany, Georgia, France, the United Kingdom, Australia and Saudi Arabia.
Cheriyan said the company is selling its products to more than 100 countries.
"We are ranked among the top 10 quality producers in the world," he said.
RAK Ceramics said it exports its products and designs in ceramic tiles and sanitary ware to more than 135 countries, targeting architects, project developers and retail customers.
It has also opened its high-end Elegance Ceramics boutiques in Dubai, Abu Dhabi and Ras Al Khaimah to complement the existing RAK Ceramics showrooms.
According to Massaad, "The launch of the boutiques is part of a strategy to continuously expand our market base, create new revenue streams and ultimately increase profits. Moreover, it demonstrates RAK Ceramics resiliency and its unique ability to remain focused on its goals despite the global economic challenges."
Cheriyan pointed out that innovative products and marketing are key elements to negotiate the crisis.
"We recently launched rectified [joint free] tiles that have high demand in the GCC and Europe. We are selling more in Saudi Arabia and Qatar. Our prices have not dropped and our sales have not been affected by the global recession," he said.
The company sources most of its raw materials from Europe, "to keep our quality at high levels", Cheriyan added.
A recent report published by Global Research on RAK Ceramics points out that the company has ongoing programmes for raw material usage, freight rates renegotiations for imported materials and energy consumption.
"The company has already substituted energy feedstock from expensive LPG to cost-effective natural gas and is presently in the process of improving its energy usage for its manufacturing lines," said the report.
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