Morbi Ceramic Cluster Takes Production Holiday

Gujarat’s Morbi ceramic cluster, India’s largest tile manufacturing hub, took a month-long production holiday from August 10. The Morbi tile makers last did this five years ago. The ceramic industry in India is about 100 years old and forms a sizeable industrial base at present. India is the 8th largest producer of ceramic products in the world.

Low Demand and Rising Working Capital

Over the last six months, demand for tiles has been low in domestic as well as export markets. A rise in input costs, especially natural gas, and low working capital for a prolonged period are among the primary reasons for the production holiday. 

Prices for tiles and ceramic products are expected to soften or remain static in the near term, as weakness in exports is leading to volumes shifting to the domestic market. Meanwhile, the domestic market industry is seeing softness in retail volumes, and in Morbi, there is an increase in working capital due to rising inventory to 90-120 days from 75 days.

Bumper Exports of Ceramics in 2021-22

India’s exports of ceramics & glassware products for 2021-22 hit a record at US$ 3.464 billion. During the financial year 2013-14, India’s ceramic & glassware products exports were valued at US$ 1.292 billion. This is a growth of 168% over the eight-year period.

The export growth of ceramic tiles was achieved because of a surge in shipments of ceramic tiles and sanitary wares products. The Indian tile industry has become a global player and earns foreign exchange for the nation with the “Make in India” approach and today India is the world’s second-largest manufacturer of tiles.

This export growth was achieved despite unprecedented logistical challenges like high freight rates, container shortages, etc. An increase in ceramic and glassware products exports has benefitted small and medium exporters from Gujarat, Uttar Pradesh, Maharashtra, Karnataka, and Andhra Pradesh.

Over the years, the industry has been modernizing through innovations and product profile, quality, and design to emerge as a modern world-class industry ready to take on global competition. Innovations in terms of new designs digitally printed tiles, and larger-sized tiles with varied colors have also found acceptance in overseas markets.

India exports to more than 125 countries and its top destinations are Saudi Arabia, United States, Mexico, Kuwait, United Arab Emirates, Iraq, Oman, Indonesia, United Kingdom, and Poland.