Saudi Ceramic’s market share growing, profit margins boosted by higher prices in 2021: CEO

Saudi Ceramic Co. CEO Majed Al-Eissa

Saudi Ceramic Co.'s profit margins improved in 2021 amid increasing product prices across all its business segments, according to CEO Majed Al-Eissa.

He added that the increase was marginal in some products and reached about 10%.

On the other hand, showroom sales grew by more than 40% year-on-year (YoY), which drove the growth of the company’s profit margins, the CEO told Argaam in a statement.

Saudi Ceramic’s 2021 performance was the best in the past six years, as all segments posted strong sales and profit margins results amid stronger contracting and construction activity, coupled with the company’s adoption of initiatives to raise operational efficiency to reduce costs, Al-Eissa said.

The CEO also said that the ceramics segment achieved better performance in the fourth quarter of 2021 YoY at the profit margin level. The sanitaryware segment recorded strong improvement, earning profits after four years of consecutive losses. Moreover, the heaters segment’s profit margins improved, powered by the increased operational efficiency, as the company achieved the highest productivity in its history.

Saudi Ceramic’s market share is constantly growing, backed by consumer confidence in its products due to quality, diversity, and fair prices. The approval of anti-dumping duties on imports of tiles from India and China helped curb some harmful practices that affected local factories. However, it had no direct and significant impact on increasing the market share of their products, the CEO revealed.

Al-Eissa stressed that the company began construction works on its porcelain tiles factory, which is expected to be operational by the end of the first quarter of 2023.

“The factory will focus on large tile sizes and unique designs. This is a qualitative expansion for our company as the largest local manufacturer of tiles.”

The remarkable improvement seen in 2021 came despite supply chain issues and the increase in prices of some production inputs. The CEO said that the company’s subsidiary, Ceramic Pipes Co., witnessed robust sales and operational efficiency, directly contributing to reducing losses in 2021.

When asked about his expectations for the price and volume of contracts in the construction and housing projects segment, Al-Eissa said that the company has four main sales channels, including the projects channel.

“We are keen to be present in this segment, whether for housing projects or other projects. Currently, we have contracts with several major developers and contractors. Given the size of our company and the diversity of its products, the level of aspirations to boost participation in these projects is greater. This is what we are working on during the coming period.”

The company’s profit jumped to SAR 233.9 million in 2021, compared to SAR 77.7 million in 2020, according to Argaam’s data.