Regency Ceramics plans to double its dealer network

Initially, we have collaborated with 10 contract manufacturing companies in Morbi, Gujarat and initiated distribution through 50 dealers across five States. Trial production at Yanam plant has started recently with a capacity of 7,000 sq meters per day - Satyendra Prasad Narala, MD, Regency Ceramics

After a lull of almost 12 years, Hyderabad-head quartered tile manufacturer Regency Ceramics has kickstarted its sales during the last quarter (October-December) Q3 of financial year (FY) 2023-24. It is gearing up to more than double its dealer network to rapidly expand its business presence in various geographies.

Post relaunch, the company has adopted a new distribution strategy. The brand will have an expansive network of associates. Already it has established a network of 50 dealers to cover various regions in five States and plans to expand to 100 - 120 dealers, followed by sub-dealers and influencers like architects and interior designers.

The company’s manufacturing unit at Yanam in Puducherry had been shut down since January 2012 owing to an internal riot between its factory workers and the then President (Operations). Sorting out all the legal issues, the facility was reopened during last year-end under the leadership of new Managing Director Satyendra Prasad Narala.

He said, “The arbitration bench comprising three retired Supreme Court judges Justice Arijit Pasayat, Justice Jasti Chelameswar and Justice Kurien Joseph, unanimously ruled in favour of Regency Ceramics and ordered National Insurance Company Ltd to pay Rs 157 crore plus interest. Once received, we are planning to use these funds for the company’s expansion.”

“After a period of strategic planning, Regency has emerged stronger and more determined than ever to bring its unparalleled craftsmanship back to the market. The company's recall value in its key markets has motivated it to relaunch. It is a testament to its commitment to innovation, quality, and excellence in the field of ceramics,” Satyendra Prasad told Bizz Buzz.

Talking about Regency’s production capacity, he said: “Initially, we have collaborated with 10 contract manufacturing companies in Morbi, Gujarat and initiated distribution through 50 dealers across five States. Trial production at Yanam plant’s first manufacturing line has started recently with a capacity of 7,000 sq meters per day.”

Prasad further said, “We are planning to expand the production capacity at Yanam Plant to four lines in phases with 25,000 sq meters per day by the end of FY25. The second and third lines will come up with a production capacity of 7,000 sq meters per day each, and the fourth line will have a capacity to manufacture 4,000 sq meters per day.”

More than 1,500 employees had lost their jobs at the Yanam plant when it was shut down in 2012. He informed that the company will slowly improve its workforce by generating employment opportunities to about 600-800 local people directly and another 500 people indirectly by the end of FY25.

The MD said, “The company has reshuffled all the departments. Maria Castello and Design Team, a creative designer from Spain will position Regency as a design-led brand. The manufacturing team is responsible for monitoring production processes in Morbi and test products as per market standards. Also, we have appointed new Sales Heads for each State.”

Regency has recently reported sales of Rs 49 lakh during Q3FY24. However, there were no sales reported during the previous quarter. The company’s net loss has widened to Rs 2.59 crore in Q3 FY24 from a net loss of Rs 1.10 crore during the same quarter last fiscal. This is due to the rise in expenses in terms of purchases and employee benefits amounting to Rs 1.40 crore in Q3FY24.

The company has set a target to open at least 10 FOFOs (Franchise owned Franchise operated stores) in key markets over the next few months. It is also going to launch a 4,000-sq-ft experience center in one of the metro cities. With a current offering of over 500 SKUs (stock-keeping units), it plans to add 100 SKUs more once production commences in the Yanam factory. Regency aims at a pan-India presence, not only as a trading firm but with a distinctive manufacturing presence in multiple locations. Its marketing strategy is to expand business through contract manufacturing agreements and work with manufacturers in Tamil Nadu and Morbi. It has a well-placed go to market strategy in all South Indian States.

Speaking about the investments, Prasad said: “We have cumulatively invested around Rs 70 crore in phases. Out of this, Rs 20-25 crore was raised from the promoters, while the rest through borrowings and term loans. Over Rs 8-10 crore was invested to revamp the first manufacturing line and machinery at Yanam plant. We aim to touch Rs 100-crore revenue by FY26.”

“Regency is poised to introduce a captivating array of new designs that blend timeless elegance with contemporary aesthetics. These creations will resonate with both traditional aficionados and modern sensibilities. The brand’s key differentiation factor is its design led approach. It has an increased focus on dynamic trends and emphasis on functionality and style,” he added.

The company’s wide range of products and pricing will drive its growth in tier-2 cities which have been suggested by the CRISIL to be key growth markets for the ceramics industry. It is all set to create its own market share and aspires to have a share of the growing ceramics market. It has plans to reactivate all the channels of government, quasi-government and private projects.