New Floors

Lanka Tiles is trying to break a lquote lowering-revenue-increasing-cost cycle this year by shifting its raw material supply base from West to East and increasing production capacity.
Lanka Tiles Ltd (LTL) is Sri Lankas pioneer floor tile producer, manufacturing ceramic glazed floor tiles as its core business and holds 30 percent of the local market.rn

rnLast year, the company found itself caught between lowering revenue because of cheaper Chinese and Indian tile imports and rising production costs, says analyst, Chamikara Gunawardane of HNB Stockbrokers.rn

rnCheaper Indian and Chinese tiles have progressively chipped away its margins, forcing the firm to cut its own retail rates to Rs. 600 per tile square meter from Rs. 670.rn

rnMeanwhile, overheads continue to climb, starting from its key raw material import, Glaze. The firm imports a sizeable chunk of glaze from Italy, which accounts for 20 percent of its production cost. rn

rnThe other significant cost comes from electricity, which accounts