World's largest maker of ceramic tiles expects to boost its European market share by 10 per cent over the next four years.
RAK Ceramics aims to grow in Europe
RAK Ceramics, the world's largest maker of ceramic tiles, expects to boost its European market share by 10 per cent over the next four years, says the company's chief executive.
Dr Khater Massaad, who also heads the Ras Al Khamaih Investment Authority, said RAK Ceramics would take advantage of a shortfall in European ceramics production caused by the financial crisis.
Ceramics production in Europe has come down by about 30 per cent in the past three years. The company plans to increase sales in Europe without setting up subsidiaries in the region, Dr Massaad said. The company already exports 25 per cent of its production to Europe and is the biggest ceramics exporter to Germany, where it has about 6 per cent of the market. "What we want to do is consolidate our position in the [European] market and increase market share overall by 10 per cent," said Dr Massaad.
"Our biggest markets are in the UK, Germany and France and that's where we're targeting," he said. RAK Ceramics also exports to many Middle East and emerging-market countries but those markets were less reliable and are "sensitive" locations for the company, he said.
The company sold 4 million square metres of tiles to Iraq last year and 2 million sq metres to Pakistan. But its Bangladesh subsidiary, which has a market capitalisation of US$600 million (Dh2.2 billion), is the jewel in RAK Ceramics' crown.
Since the division's initial public offering (IPO) last May, which raised $250m and was 15 times over-subscribed, it has become one of the biggest producers for the company.
The Bangladesh subsidiary was RAK Ceramics' first overseas tile project and produces 6 million sq metres of ceramic tiles annually and 250,000 pieces of sanitary ware. The division is worth more on paper than the current market value of the entire company, which stands at about $500m.
An IPO of RAK Ceramic's India subsidiary is expected later this year, although Dr Massaad did not reveal the size or timing of the flotation.
The company has cut its debt by more than Dh550m, or 25 per cent, in the past two years, freeing up cash to expand existing operations around the world.
Dr Massaad said there was a possibility it would give out a cash dividend next year but said that was a decision for the board.
This month, Manish Joshi, RAK Ceramics' chief financial officer, said the company expected to boost its revenues by up to 15 per cent over the next two years.