Unearthing Opportunities: How Tier II & III Cities are Crucial for the Indian Ceramic Industry
Unearthing Opportunities: How Tier II & III Cities are Crucial for the Indian Ceramic Industry

In the vibrant economic landscape of India, the ceramic industry has assumed a prominent role, casting a luminous glow across both urban sprawls and rural enclaves. While the metropolises have long basked in the limelight, it is imperative to recognize the pivotal contribution of Tier II and III cities to the growth and sustainability of the ceramic industry. The ongoing technological advancements and infrastructural development in these cities are not just propelling the nation's economic prosperity but also positioning the ceramic industry as a paramount driver of socio-economic transformation on a global scale.

Industry Growth in Tier II and III Cities

The Indian ceramic industry has witnessed remarkable growth, particularly in Tier II and III cities. In fiscal 2022, the industry experienced a resurgence, post-pandemic, with the Indian floor and wall tiles sector reaching a staggering valuation of Rs 261 billion. The volume of production stood at a substantial 707 million square meters (MSM). Perhaps the most notable aspect of this growth was the 15 percent increase in demand for ceramic tiles during the same fiscal year, a significant surge primarily attributable to the development in Tier II and III cities. These cities have experienced a remarkable upswing in disposable incomes, urbanization, and the aspirations of their residents, fueling the demand for ceramic products.

Infrastructure Development and Real Estate Boom

The ceramic industry's close relationship with the real estate and infrastructure sectors is a key driver of its growth. According to the Ceramic Tiles Market Study Report by CRISIL, both Tier I and II cities are poised for increased real estate demand and substantial infrastructural activities. This forecast aligns with the Indian government's unwavering commitment to infrastructure development and housing initiatives, such as the Pradhan Mantri Awas Yojana (PMAY). Under PMAY-U, the government-sanctioned 1.19 crore units of housing under the affordable segment, with a cumulative budgetary allocation of INR 4,011 billion by the central government from FY 2016 to FY 2024BE.

Tier II and III cities are experiencing rapid urbanization, marked by the emergence of new housing projects, malls, and commercial complexes. The aesthetic and functional role of ceramic products in shaping these spaces has solidified them as indispensable components of this growth trajectory.

Operational Costs and Market Potential

Tier II and III cities offer a unique advantage in terms of operational costs. This cost efficiency empowers ceramic companies to maintain competitiveness and provide cost-effective solutions to consumers. Furthermore, these cities present untapped market potential, providing fertile ground for companies to expand their customer base and augment their market share.

Ceramic products are well-suited to the design aesthetics of these cities, combining traditional and contemporary elements. Five of the top 10 cities in the Ease of Living (EOL) index are Tier II cities. Lower pollution levels and better air quality compared to most Tier I cities make Tier II cities increasingly attractive and transform them into a first choice for the ones who look to shift.

Employment and Sustainable Development

The ceramic industry's presence in Tier II and III cities generates significant employment opportunities. The establishment of manufacturing units and distribution networks stimulates local economies, enhancing the overall quality of life for residents. With the ongoing urbanization trend, the country is expected to urbanize at a rate of 50 percent by 2050 and the focus will shift to Tier II towns that have the potential to be the next hub for the real estate sector. Cities like Nagpur, Coimbatore, and Bhubaneswar have witnessed the highest residential demand growth year-on-year, a trait that brings in huge potential for the growth of the ceramic industry.

Additionally, the ceramic industry plays a pivotal role in promoting green building materials and sustainable practices in these cities. This dual role, providing employment and contributing to environmental conservation, underscores its importance in local and national development.

In conclusion, Tier II and III cities are the unsung heroes propelling the Indian ceramic industry to new heights. As per estimates, to accommodate the urban population, urban cities in India would require 230 million housing units by 2047. As these cities continue to evolve and prosper, the ceramic industry is poised to further enrich their landscape and solidify its position as a beacon of economic prosperity and sustainable development.

 

About the Author

Satyendra Prasad Narala, MD, Regency Ceramics

Satyendra Prasad Narala, MD Regency Ceramics

 

 
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The Impact of Red Sea Crisis on Retail Sector: Measures Logistics Players are Taking to Sustain Demand and Supply
The Impact of Red Sea Crisis on Retail Sector: Measures Logistics Players are Taking to Sustain Demand and Supply
 

The Red Sea crisis, sparked by escalating tensions in the region, has cast a shadow of uncertainty over various industries, with the retail sector being significantly affected. As the crisis disrupts vital shipping lanes and raises concerns about maritime security, ships are avoiding the Red Sea and choosing a longer route through the Indo-African region, it takes more time and effort to deliver goods. This crisis affects everything from electronics to clothing, impacting a wide range of products. 

The retail sector, reliant on global supply chains, faces formidable challenges as the crisis unfolds. The disruption of maritime routes poses to the timely delivery of goods, leading to potential shortages and increased costs. Moreover, heightened geopolitical tensions exacerbate market volatility, further complicating the situation for retailers already grappling with the aftershocks of the pandemic. Data from the Centre for Monitoring Indian Economy (CMIE) reveals that shipping rates for Very Large Crude Carriers (VLCC) soared to their highest point since November 2023, experiencing a notable 3.5 percent month-on-month escalation to $48,171 per day in February but to tackle this situation logistics companies are deploying a range of measures to navigate the stormy waters and uphold the resilience of the retail sector.

One significant measures comes in the form of leveraging air freight as a mode of transport. With traditional maritime routes facing increased scrutiny and potential blockades, air transport offers a viable alternative for expedited delivery of goods. While typically more expensive than sea freight, air cargo enables logistics players to ensure timely delivery, albeit at a premium. By incorporating air freight with adequate in-land transportation into their supply chain strategies, logistics companies can reduce the risk of delays and shortages, thereby bolstering the stability of supply chains.

Furthermore, logistics players are prioritizing insurance coverage on goods as a proactive risk management measure. Recognizing the heightened security risks associated with maritime transport in crisis-affected areas, insurers are offering tailored policies to protect cargo against potential losses or other unforeseen events. By securing comprehensive insurance coverage, logistics companies provide added assurance to retail stakeholders and mitigate the financial impact of supply chain disruptions. This proactive approach not only safeguards the interests of all parties involved but also fosters confidence in the reliability and resilience of supply chains amidst geopolitical uncertainties.

In addition to these operational measures, logistics players are also collaborating closely with retail partners to develop contingency plans and ensure effective communication and coordination in times of crisis.

In conclusion, the Red Sea crisis has caused significant disruptions in global supply chains, particularly impacting the retail sector. With vital shipping lanes disrupted and concerns about maritime security escalating, logistics companies are facing formidable challenges. However, through innovative measures such as leveraging air freight and enhancing insurance coverage, they are striving to mitigate risks and uphold the resilience of supply chains. Collaborating closely with retail partners, they are developing contingency plans to navigate through these uncertain times. Despite the challenges posed by geopolitical tensions, their proactive approach underscores their commitment to ensuring the continuity and reliability of supply chains amidst adversity.

Jitendra Srivastava, CEO, Triton Logistics & Maritime

Jitendra Srivastava, CEO, Triton Logistics & Maritime

Visionary, strategist and go-getter, Jitendra Srivastava, the dynamic CEO of Triton Logistics & Maritime is the man behind Triton Logistics & Maritime’s nimble, agile and best-in-class operations. A stalwart of the logistics and maritime industry with over 25+ years of experience in International Freight Forwarding, Global Sales, Supply Chain and Logistics, Mr. Srivastava has ensured smooth sailing for TRITON LOGISTICS & MARITIME’s clients through the company’s innovative, efficient and time-bound deliveries. A veteran with years of experience creating, training and developing result-driven teams, Mr Srivastava is a respected figure in the global logistic landscape and has guided Triton Logistics & Maritime through the choppy waters of international trade, environmental challenges and shifting market dynamics.

 

 

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