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A RAK Ceramics showroom in the UAE

A RAK Ceramics showroom in the UAE



RAK Ceramics to boost Saudi ops

One of the largest ceramics brands in the world, RAK Ceramics, also plans to focus on raising its production at its units in India and Europe

March 2019

RAK Ceramics, one of the largest ceramics brands in the world, plans to expand its investments in Saudi Arabia on the back of the kingdom’s lower energy prices compared to other countries in the region, said Abdallah Massaad, Group CEO, RAK Ceramics.

Headquartered in Ras Al Khaimah (UAE), RAK Ceramics is to announce further details on the Saudi investment and its value after completing its establishment, Massaad said.

He added that the firm will step up efforts to boost its footprint in the kingdom in view of its growing construction projects and the attractive cost advantages for manufacturing due to competitive energy costs.

RAK Ceramics also looks to invest in a state-of-the-art production facility that utilises the cutting-edge technology in ceramics manufacturing, the maker of floor tiles said in a statement.

Massaad: poised for growth

Massaad: poised for growth

In the first phase, the company will initially add approximately 10 million sq m per annum to RAK Ceramics’ total tile production capacity.

Massaad noted that RAK Ceramics will also focus on raising its production in its businesses in India and Europe.

The company’s profits fell 28.7 per cent year-on-year in the full-year 2018, registering Dh225.09 million ($61.28 million). However net profit in 2017 included a net extraordinary gain of Dh38.6 million from the sale of non-core entities RAK Warehouse and Electro RAK, the company said in a statement.

Total gross profit margin reached an all-time high of 33.2 per cent, an increase of +160bps YoY as a result of operational efficiencies, the consolidation of Saudi Arabian entities and higher gross profits in the UAE and tableware businesses. ‘All time high’ total gross profit margins were achieved despite significant increases in energy costs relative to its peers.

The company reported total revenues of Dh2.78 billion ($760 million), a slight decline of -2.8 per cent due to lower non-core revenue contribution, in line with the company’s strategy to divest non-core entities.

The tableware business continued to show strong growth with revenues reaching Dh264 million, +11.0 per cent YoY, supported by growth in US, European and Asian markets.

The company is optimistic for growth in Saudi Arabia due to increasing construction and real estate activity and the attractive cost advantages for manufacturing due to competitive energy costs.

 

INDIA TURNAROUND

RAK Ceramics began  production in its recently expanded Indian facility. The Greenfield project for producing slabs began trials production in January 2019 with commercial production expected to commence in Q1 2019.

Production line at an RAK Ceramics production facility

Production line at an RAK Ceramics production facility

Massaad commented: “2018 was an important year for RAK Ceramics; our record gross profit margins and reported net profit of Dh225.1 million are a significant achievement in light of challenging market conditions and continued increases in energy, raw material and freight costs.

“Looking ahead for 2019, there are a number of external macro factors which will continue to affect our business. However, we are focused on enhancing our brand and optimising operations across the group, while continuing to protect our strong market share in the United Arab Emirates, India, Bangladesh and Saudi Arabia,” he said.

“We are pleased to announce our intention to invest in a state-of-the-art production facility in Saudi Arabia, which has historically been one of our most important markets in the region.

“We are also focused on improving the profitability of our Indian and European operations and the growth of our tableware business in the US, European and Asian markets,” he added.

Specialising in ceramic and gres porcelain wall and floor tiles, tableware, sanitaryware and faucets, the company has the capacity to produce 116 million sq m of tiles, 5 million pieces of sanitaryware, 24 million pieces of porcelain tableware and 1 million pieces of faucets per year at its 22 state-of-the-art plants across the UAE, India, Bangladesh and China.

Founded in 1989, RAK Ceramics serves clients in more than 150 countries through its network of operational hubs in Europe, Middle East and North Africa, Asia, North and South America and Australia.

RAK Ceramics is a publically listed company on the Abu Dhabi Securities Exchange in the UAE.




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