Spanish Roca to buy plastic unit for exporting toilet seats

Chennai, Jan 31 (IANS) With an eye on sourcing plastic products like toilet seats out of India, Spanish sanitaryware major Roca is planning to acquire a unit here and also planning to increase its market share in the mass premium segment, said a top official of the Indian subsidiary.

He said the company will also increase its distribution network across the market segments.

He said demonetisation has affected unbranded sanitaryware makers which in turn offers an opportunity for organised players.

"Roca has 79 factories in the world and except in India it does not have plastics product factory in other countries. The Indian plant is sufficient to meet the domestic demand. Now there is a new thinking of sourcing plastic items out of India," K.E.Ranganathan, Managing Director, Roca Bathroom Products Private Ltd, told select media here on Tuesday.

"We will soon be signing an agreement to buy a unit making plastic components for automobile industries at Sriperumbudur near here. We need to make certain modifications before we can start making toilet seats and other products by this October," Ranganathan said.

Declining to reveal the financial details of the deal, he said the acquisition is part of the company's overall annual capex plan of around Rs 100 crore.

The Spain based Roca is around a Rs 13,000 crore group and the share of the Indian company is around Rs 1,000 crore.

According to Ranganathan, Roca in India is present in all the segments in the Rs 2,000 crore Indian sanitaryware market -- luxury (Armani Roca), premium (Roca, Johnsson Suisse), mass premium (Parryware) and budget (Johnson Pedder).

He said the company will be increasing its Roca brand sales outlets by 100 to 300 in two years; Johnson Peddar outlets by ten times to 5,000 outlets while there are around 6,000 Parryware outlets.

According to Ranganathan, there are around 25,000 sanitaryware outlets selling unbranded products out of which around 10,000 outlets are potential points for selling Parryware branded products.

He said the company sees good opportunity for its budget brand Johnson Pedder as there are still lots of Indian homes that do not have a toilet.

"We plan to redefine the sanitaryware buying experience for the customers in our outlets. Currently the sales are based on the product price at the outlets," Ranganathan added.

Queried about the demand mix he said 60 per cent of the demand is from the new building segment and 40 per cent is from the replacement market.

Ranganathan said the company is targeting a growth of 15 per cent for the next couple of years.

With a total capacity of four million pieces, Roca in India would look at capacity expansion by 2018 as it is targeting a turnover of Rs 2,000 crore by 2020.