Market Chatter: Somany Ceramics CEO Sees 20% of Tile Manufacturing Units in India Shutting Down Over Inefficiency
Somany Ceramics' (NSE:SOMANYCERA, BOM:531548) managing director and chief executive officer Abhishek Somany said rising gas prices due to the war in the Middle East could lead to the shutdown of around 20% of the country's tile plants due to inefficiency in the coming years, according to a report by news platform Livemint on Sunday.The company's shares were up nearly 1% in recent trade.The growing cost pressures are likely to accelerate consolidation in India's tile manufacturing sector, Somany said in an interview with Livemint.While estimating that 20% of about 850 plants in the tile manufacturing hub of Morbi in India will shut down, Somany said the only way for inefficient plants to survive is to set up new plants. However, the equipment for a new unit will come from Europe, and with the rise in freight costs due to the strengthening of the Euro, setting up a plant is getting very expensive.The company currently operates seven tile factories in India.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
