Sanitaryware major Roca India has planned to pump in ₹50 crore as capital expenditure in its greenfield plant in Rajasthan and is aiming at doubling revenue to cross the ₹4,000-crore mark over the next four years, a top company official said on Thursday.
The wholly owned subsidiary of Spanish Roca Group is setting up its maiden pipe manufacturing facility at Alwar under its flagship brand Parryware and expects that the plant would be operational by mid of 2023, he said.
“Despite economic headwinds and cost pressure, we remain optimistic about India’s growth story and will continue to invest here. Our capital expenditure will be around ₹50 crore in our maiden pipe manufacturing facility in Rajasthan,” Roca India managing director K.E. Ranganathan told PTI.
He was here to unveil the company’s pipes and fitting products in the city and the northeast market.
The company has already covered Odisha and Bihar in the east, while it has strengthened footprint in South India.
Over the next few months, it would cover the north and western regions of the country, he said.
The company currently has seven manufacturing facilities across the country. Roca took over Chennai-based Parryware from the Murugappa Group in 2006.
“We currently have annual revenue of around ₹2,000 crore. With our growth strategy and focus on pipes, we will be able to grow at 25% CAGR (Compound Annual Growth Rate) and will cross the ₹4,000-crore mark in the next four years,” Mr. Ranganathan said.
The size of the organised market for pipes meant for plumbing [excluding agriculture] is worth ₹15,000 crore, almost three times that of the sanitaryware market, which is ₹5,500 crore per annum, he said.
“We believe, in the long run, pipes business has potential to overtake the revenue from sanitaryware which currently contributes 75%. But in the next three years, its share will come down to 55%, while pipes will contribute at least 25% by then,” Mr. Ranganathan said.
The contribution of the pipe business to its overall revenue is just 5% now, he said.
Roca India forayed into the pipes segment in a bid to increase its revenue share to 15% in the next five years from the current 9% contribution to its global sales.
“Roca India contributes 9% of the group’s global turnover. India is the third largest market after Spain and Mexico. We have set a target to expand this share to 15% in the next five years,” Mr. Ranganathan said.
Speaking about margins, he said it had been impacted by 20% due to cost pressure arising out of increasing commodity prices and rupee devaluation.
“We hope margin pressure will remain till 2022 but we will continue to grow,” Mr. Ranganathan said.
