RAK Ceramics, a Bangladesh-UAE joint venture company, plans to increase its annual production capacity in Bangladesh this year, said its chief executive.
The UAE-based Ras Al Khaimah (RAK) Ceramics, one of the world’s biggest makers of floor tiles, plans to invest $80m this year on plant expansions in India and Bangladesh as well as technology upgradation at other plants, Abdallah Massaad told Reuters.
The news was recently carried by Arabian Business.com.
“In Bangladesh, RAK Ceramics plans to increase annual capacity by 3.5m square metres of tiles from the current 7m, and by 350,000 pieces of sanitary ware from 1m, Massaad said.
“This year we have an expansion coming,” he said, adding that the new Indian production would start coming on stream in June.
The company, which makes ceramic wall tiles and sanitary ware as well as floor tiles and is part owned by the ruling family of the emirate of Ras Al Khaimah, posted revenues of AED3.5bn ($953m) last year.
RAK Ceramics is the first company that was listed with the Bangladesh bourses in 2010 under book building method. According to Dhaka Stock Exchange, sponsor or director has a stake of 79.07%, institute 9.95% and public 10.98%.
In Bangladesh operation, the company’s net profit after tax in 2013 stood at more than Tk68 crore against nearly Tk61 crore a year earlier. It started commercial production in Bangladesh on November 12, 2000.
The company is boosting annual production in India to almost 800,000 pieces of sanitary ware from 300,000 to meet rising demand.
Besides India, it runs plants in the United Arab Emirates – which accounts for around 70% of its overall production capacity – Bangladesh, China, Iran and Sudan. Its capital expenditure totalled $60m in 2013.
The company is also upgrading technology at factories in the UAE and elsewhere. “Within the next two months, we will have technologies to produce the largest slabs available worldwide,” said Massaad.
RAK Ceramics, in which Ras Al Khaimah’s ruler Sheikh Saud bin Saqr al-Qassimi owns nearly 48% and the emirate’s government holds a further 5%, will finance its expansion through bank loans. Bond issues have not been considered, Massaad said.
Overall, the group has an annual capacity of 117m square metres of tiles and 4.5m pieces of sanitary ware – its core businesses. It can also produce 24m pieces of tableware annually.
The company’s Abu Dhabi-listed shares are up 24% so far this year, outperforming a 15% rise in the stock market index.
Massaad said a decision was likely to be made this year on possible further expansion plans, given a strong outlook for the construction industry as the UAE and other markets emerged from the global financial crisis.