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Anti-dumping duty to protect 40% of co sales: Cera Sanitaryware

The government has imposed anti-dumping duty on vitrified tiles for six months. The duty is USD 1.37 per square meter on all vitrified tiles from China.

The duty is far less than industry expectations of USD 3/sqm.

Vikram  Somany, CMD,  Cera Sanitaryware , says the duty is positive for the company and expects Chinese tiles to become less competitive now.

However, the company is not looking to raise prices as of now but will align its hikes with the industry.

Forty percent of the company’s sales are protected by anti-dumping duty, says Somany.

The gains from this anti-dumping would be higher for smaller companies like Nitco and Asian Granito than bigger players like Kajaria Ceramics etc.

Below is the verbatim transcript of Vikram Somany’s interview with Nigel D’Souza on CNBC-TV18.

Q: Could you tell us how big a positive is this, is this a positive in the first place because we had heard that the industry was looking for USD 3 per sq meter. That was a demand, it is coming at around USD 1.37 per sq meter?

A: It is definitely a positive point for us and our main market is in Kerala in South India so we will benefit because Chinese tiles will be around 20 percent costlier. So, it will be a huge advantage for us so far as our market is concerned.

Q: How much of your entire products get covered by these vitrified tiles, is this the entire basket?

A: No, not the entire, around 40-50 percent.

Q: You are saying that after this anti-dumping duty is imposed then your tiles will be 20 percent cheaper in comparison to imports then this USD 1.37 per sq meter is adequate?

A: Yes, so our tiles will be around that much cheaper because our new plant is in Vellore. So freight cost is lower there.

Q: So that USD 1.37 per sq meter is adequate?

A: I think for the time being we should be happy. Let us see.

Q: If it is 20 percent cheaper then will you be tempted to go ahead and increase prices by at least 10-15 percent?

A: No, right now we are not increasing because our new plant will be operational in April. Once we start selling all our production then we will consider. Immediately we are not doing, right now we are just watching the situation. However, if all the others increase then we may have to follow suit but right now we are watching what everyone is doing.

Q: Could you tell us that most of the imports coming from China itself because this anti-dumping duty has only been imposed from China. So that is adequate?

A: Yes, because most of it is from China therefore Europe is for a very high end product and they are very costly so they don’t compete with the Indian products anywhere.

Q: Could you give us some details in the last one year or so, have imports ballooned up, could you give us some numbers, have they gone up?

A: I cannot give you the exact number but they have ballooned up. With this imposition of import duty, the import will go down now.