Kolkata, June 16 (PTI) Sanitaryware major Roca India has planned to pump in Rs 50 crore as capital expenditure in its greenfield plant in Rajasthan and is aiming at doubling revenue to cross the Rs 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 Rs 50 crore in our maiden pipe manufacturing facility in Rajasthan, Roca India managing director KE Ranganathan told PTI.
He was here to launch 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 its footprint in South India.
Over the next few months, it will 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 Rs 2,000 crore. With our growth strategy and focus on pipes, we will be able to grow at 25 per cent CAGR (Compound Annual Growth Rate) and will cross the Rs 4,000-crore mark in the next four years, Ranganathan said.
The size of the organised market for pipes meant for plumbing (excluding agriculture) is worth Rs 15,000 crore, almost three times that of the sanitaryware market, which is Rs 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 per cent. But in the next three years, its share will come down to 55 per cent, while pipes will contribute at least 25 per cent by then, Ranganathan said.
The contribution of the pipe business to its overall revenue is just five per cent now, he said.
Roca India forayed into the pipes segment in a bid to increase its revenue share to 15 per cent in the next five years from the current nine per cent contribution to its global sales.
Roca India contributes nine per cent 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 per cent in the next five years, Ranganathan said.
Speaking about margins, he said it has been impacted by 20 per cent 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, Ranganathan said.
