What is sanitaryware industry?
Sanitaryware Industry in India and the world is witnessing unprecedent growth due to the high demand of fixtures and components used for sanitation purposes which includes a wide array of products like washbasins, water closets, bath tubs, toilet bowls, faucets among others. The industry for ceramic sanitaryware industry has been growing mainly due to ceramicware products being easy to clean & maintain, making them cost-efficient. Investxp attempts to bring out the industry overview of sanitaryware industry in India in contrast to the world.
Factors driving demand for this industry is the increase in population, improving standards of living of people, innovations in production of ceramic products and increasing change in preference of end consumers.
This industry faces challenges in managing its variable costs in the production of ceramic products which can lead to significant costs impacting profits. Another challenge faced is that these products cannot be easily replaced unless there is a major renovation or modernization of a building resulting in revenue growth being slower. Other challenges such as environmental damage due to emission to air, wastewater, and solid waste pose as restraints in the growth of this industry.
Major sectors where the demand is expected is from consumer sectors such as hospitals, hotels, educational institutes, industries, housing and other public places.
What is the future prospect in the sanitaryware industry?
The global Ceramic Sanitaryware Market is expected to grow at a CAGR of 10.4% approximately reaching $83.41 billion by 2025. In 2016, the market was valued at $33 billion. Efficient Sanitaryware systems have led to growth in this market. These systems use minimal amount of water making it environment-friendly for consumers. This is coupled with continuing growth in the residential and commercial real estate sectors, globally.
Moreover, over the last few years, there has been an increased awareness towards proper sanitation in developing countries resulting in increasing number of initiatives by the governments for the same. As per statistics, around 2.5 billion people suffer due to lack of access to proper sanitary facilities resulting in deaths of at least 2,000 children every day. As a result, there have been a number of initiatives to tackle poor sanitation issues such as disease transmissions due to lack of proper sanitary toilets in developing countries like India, Bangladesh etc., leading to growth in this industry. In 2015, washbasins accounted for 32% of the market share. It is expected to keep growing at a steady pace reaching close to 195 million units by 2020. The USA was estimated to be the fastest growing market in 2015.
Is Sanitaryware Industry ready to grow in India as well?
The revenues in the Indian Sanitaryware market is almost 20% of the overall market revenues and is expected to keep growing by over 12%. The growth has been owing to increasing disposable income, rapid urbanization, rapid increase for housing and changing end user preferences. Industries such as hospitality and tourism sector have boosted the demand for ceramic sanitaryware products. The growth is further enhanced by initiatives taken by the government of India such as Clean India Campaign to improve and promote sanitation in the country especially the rural and underdeveloped regions.
In terms of geography, the south region in India dominates the market in terms of consumption. Reasons for these are higher literacy rates and increased awareness for need of sanitation in this region. In the metropolitan cities of India, Delhi NCR’s continuing growth in hospitality, Special Economic Zone, Residential and Healthcare sectors have led to increasing demands with the highest share in the market.
In India, there are two types of players who manufacture sanitaryware. One is the unorganized manufacturers who mainly cater to the masses or consumers with low‐income. The other is the organized players who use the most advanced technologies for production and cater to the premium and super‐premium market segments. The market is further bifurcated into prices like low end, mass market, premium and luxury. 60% of the market is dominated by the organized players whereas the unorganized industry contributes to less than 40% of the market. India is also emerging as one of the popular manufacturing hubs for this industry due to lower labor costs and availability of raw material. This has led to many MNCs such as Roca, Kolher, etc setting up their manufacturing facilities in India.
In terms of products, water closets, cisterns and wash basins contribute the highest revenue share in this market. It is expected that with more awareness about adequate sanitation facilities, demand for products such as sinks, bidets, pedestals etc., will increase in the coming years.
The Indian market is dominated by the households in the rural areas where approximately 69% of households in these areas still do not have access to proper sanitation facilities. The statistics are reported to be at 19% for households in urban areas. This presents vast opportunities for potential growth in this sector in India.
It is thereby evident that most of this industry is going to witness a lot of investment in future.
Listed companies available for investment in this sector are:
Hindware (HSIL Ltd)
Watchout for more such companies on this link: Sanitaryware Companies