The Twin Engines behind CERA’s Surge

Kochi: It is not very often one would get to see two Malayalis holding key positions simultaneously in a leading publicly listed private sector company having pan-India presence. P K Shashidharan and Abbey Rodrigues, Senior Vice President, Marketing and Senior Vice President, Sales respectively of CERA, have, over the years, established themselves as indispensible in the national sanitaryware giant’s scheme of things through their valuable contributions to the growth of the company. Here, in this issue of Destination Kerala we portray these two corporate leaders which, in every sense, unravels the story of the company as well, for our readers.

A CERA share was priced at Rs. 5 when it was listed on the BSE and NSE almost a decade ago. Today, it is available for Rs. 3300 a pop. Tagged as a Complete Home Solutions Provider, the annual turnover of the country’s fastest growing sanitaryware company touched Rs. 1015 crore during the last fiscal. India’s organised market for sanitary fittings is estimated to be worth about Rs. 4000 crore. In a recent interview to a national media house, Atul Sanghvi, Executive Director of the company, said CERA’s plan is to gun for 20 per cent growth in the coming years. The market leader in the building materials space (sanitaryware, tiles and faucets), CERA has even clocked 50 per cent annual growth rate in some years. CERA was also one of the biggest exporters of sanitaryware to US retail giant Home Depot till the invasion by cheap Chinese products.

Hidden behind the envious growth trajectory of this Gujarat-based company lies the story of two successful professionals from Kerala. Meet P K Shashidharan, Senior Vice President, Marketing and Abbey Rodrigues, Senior Vice President, Sales, who have done every Malayali proud by being the two pillars of CERA for more than two decades now. In an exclusive chat with Destination Kerala, the duo speak about their professional journey as well as the growth story of CERA.

Excerpts from the interview:

Tell us about your association with CERA.

Shashidharan: I started my career in the advertising industry. I was with Shilpi Advertising earlier and then moved to Mudra Communications in Ahmedabad. Back then, CERA was Mudra’s client and that was how my association with CERA began. In 1991, I joined CERA and started sitting on the other side of the table. I was entrusted with the responsibility of managing the media and communications. In between, I was also asked to handle sales for some regions. Now, I look after marketing, communications and product management at CERA.

Abbey: Before joining CERA, I worked for three companies: SESA Information Systems, Godrej and then a building materials company, Nova Industries. I joined CERA in 1994 as a sales executive covering the area between Thiruvananthapuram and Kottayam. Later, I got promoted and was managing Tamil Nadu, Andhra Pradesh and Karnataka, besides Kerala. In 2010, I got elevated to the post of VP – Sales (South India) and in 2012, I was assigned to lead sales at the national level and later, the international business, too. When I took over as National Head in 2012 CERA’s turnover was Rs. 317 crore. In the last fiscal, the annual turnover crossed the Rs. 1000 crore mark.

In your view, what makes CERA so successful as a brand?

Abbey: CERA ventured into sanitaryware in 1980. Today, we are the biggest when we compare players in the ceramic sanitaryware space. And, our competitors include MNCs as well who came in at a premium level but are now involved at all levels, including non-premium categories.

From the very beginning, CERA came in with a very different modus operandi. Firstly, it was technology. Our chairman always says that when the Government of Gujarat invited him to set up the plant there, the first thing that attracted him was the availability of natural gas. It is always the best fuel source for ceramic products. Kerosene or LPG, which are the other sources of fuel used for the process, are not pure forms of fuel as they contain lot of impurities. CERA also brought in a fully-computerised kiln for vitrification which operates at 1200 degree centigrade. The heating process involves multiple stages and if the temperature is not maintained uniformly, the product will develop cracks or blots. Natural gas and computerised kiln gave CERA’s products a whole new sheen unseen in the market till then.

Shashidharan: Till 1980, the sanitaryware segment was a sellers’ market with not many players. In the early 1980s, suddenly many players came into the picture and the market soon turned into a buyers’ one. Half-a-dozen new brands emerged but only CERA survived since we remained focussed on quality, after-sales service and distribution network. Moreover, our product range was the most innovative in terms of design. CERA started with 30 colours when the rest of the players were offering only a few pastel shades. We also came with the ‘bath suite’ concept. Till then, sanitaryware was a commodity product. No glamour or lifestyle quotient was associated with the category. We were the first one to come up with ideas like wash basin with pedestal design, designer Western closet and Bidet as a set. In fact, we became a brand to reckon with in the early 1980s itself. CERA was the first to advertise on TV, too. Our campaign ‘Your bathroom is a room too’ was an instant hit. In those days, bathrooms used to be constructed in a nondescript corner of the house and nobody really cared about sanitaryware. Today, washrooms have become a space where you spend a good part of your private time.

Aishawarya Rai was our brand ambassador even before she won the Miss World title, which was followed by Dia Mirza and now, Sonam Kapoor is our brand ambassador. We select brand ambassadors after a thorough market research and survey. We see ourselves as a young brand and retain the youthfulness. So the brand ambassador should also be a youth icon. ‘Reflects My Style’ is the new brand mantra. So brand ambassador should also be a style icon. And market research told us Sonam fits the brand positioning and messaging the best. We do periodic market researches to identify what exactly the customers are looking for. Right now, another market research is underway. We are examining the responses to all our running campaigns and also trying to gauge the expectations of our customers so that we can fine-tune our existing strategy and launch newer campaigns.

You have come out with several innovative design elements. How did they help improve business?

Shashidharan: We have a strong in-house design team comprising passouts from institutions such as National Institute of Design (NID), in-house technical team and market feedback team. The design team works with the R&D team so that whatever innovations have been introduced in terms of glaze, shape etc. they will collaborate and make it happen. We have a strong design team for the tiles section, too. Recently, we have launched some 500 new designs in tiles and it has really helped us in terms of increasing the sales exponentially.

Abbey: We do all design innovations in Ahmedabad. Some models are designed and imported as OEM. We have a very advanced 3D printing technology; maybe, the only one in the whole world in this space – an 8-ft. high and 9-ft. wide printer. If we have a design, we can scan and print it right away. We can decide what changes are required and then go for the final print. Today, we develop all sanitaryware and faucet designs in 3D, and it is something we pioneered globally.

How are your designs helping drive sustainability and environmental friendliness?

Shashidharan: Design innovation is also about improving water efficiency. We started with 10 litre cisterns. It gradually became 8 litres, then 6 litres and now it is as less as 4 litres. The condition of water in India and the way we use sanitaryware are all very different compared to that in foreign countries. So companies like CERA which understand Indian water conditions and how we use sanitaryware or faucets, are better placed to create more durable and efficient products. We are one of the pioneers of water-efficient products in this space. It was way back in 2000 that we launched dual flush for the first time in India. In most of the houses, a Western closet is also used as a urinal where we need only very minimal amount of water. In those days, a conventional Western closet used to flush almost 10-12 litres of water, wasting so many litres of water down the drain for no reason. That is how we came up with the concept of dual flush. Now it has become a standard and every brand has dual flush products.

How do you manage customer relations and after-sales service so effectively?

Abbey: We have a large team to offer after-sales service. CERA is sold in every nook and corner of India and has a 24×7 toll-free number for products guidance and service. What we say is ‘Don’t call a plumber. Just call CERA.’ Come to our exclusive showroom, select the models and we will deliver them at your home. And then you can enjoy our after-sales service. Our service technicians, 29 of them even in a small state like Kerala, are CERA-trained and on our payrolls. We have not outsourced it like most other players do and hence, the commitment of technicians is very high. Product education is also very important in our business. In most of the cases, we have found that there may not be a problem with the product per se, but it may be caused by their improper usage. Today, just like the looks and price of products, after-sales service is also equally important. We know builders who have gone and picked up MNC brands lured by brand persona and low price. But they have moved away from those brands after one project because the after-sales service was unsatisfactory.

You seem to have established a robust distribution network also nationally?

Shashidharan: Exactly. We have a large dedicated distribution network of 1500-plus distributors/dealers and 15,000-plus retailers, very loyal to brand CERA. Any product from CERA, which we bring to the table, is considered as their own by our distributors/dealers and retailers.

What was the thought process behind launching CERA Style Studio?

Abbey: Style Studio is a touch and feel experience facility which has been operational for more than 15 years now. We have Style Studios in Chennai, Bengaluru, Kochi, Thiruvananthapuram, Hyderabad, Ahmedabad, Mumbai, Kolkata and Chandigarh. Each studio has a minimum area of 6000 sq.ft. The idea is to showcase all our products in the best possible manner. Since our product range is very large, dealers cannot display all of them in their showrooms. However, there is no sales at Style Studios. Products are on display only. Once they decide on their preference, we guide the customers to the nearest retailer.

Shashidharan: We connect with customers through various media. CERA Style Studios are one among those touch points. We have a dedicated team of customer relations executives who explain the features of every product on display.

What are your expansion plans? Which segment gives you more revenue now?

Abbey: We ventured into the tiles business just four years ago. The segment contributes around 20 per cent of our revenue. The revenue share of faucets business, which we began around nine years ago, again comes to around 20 per cent. Sanitaryware contributes the major chunk of revenue, 60 per cent. Faucets and tiles are high turnover products. We are growing very aggressively in this space and can easily attain a high turnover in the near future.
As far as revenue potential is concerned, tiles segment holds six times more potential than sanitaryware. For faucets, it is 2.5 times more than sanitaryware. This is the opportunity we see. Sanitaryware, which we produce three million pieces a year, is the toughest to manufacture and sell because for a house, we can sell a maximum of six to seven pieces only and yet we are doing extremely well in that. The thinking is that if we could crack the tough sanitaryware market, we should be able to do well in the relatively easier tiles and faucets markets, too. We are also into Home Upgrade solutions. If a customer wants to renovate his/her bathrooms, we do that on a turnkey basis. We also take care of the plumbing with the help of CERA-trained technicians. However, we are not interested in venturing into the paint category for now. There are many more interesting opportunities in the spaces we are operating currently. Many European companies are approaching us. In sales, retail segment contributes 65 per cent while the rest 35 per cent goes to the builder community. This is the strength. For many players it is the other way round. For us, real estate projects form the icing on the cake. But retail is always the cake. To be part of housing for all, the affordable housing initiative of the government, we have launched a new brand called JEET.

How employee-friendly is CERA?

Abbey: There are quite a few Malayalis in CERA. Our logo used to be CERA written inside an ‘M’-shaped design. It was jokingly termed as representing ‘Malayali’ CERA! I think our Chairman has some affinity towards Malayalis. We are a 3500-employee strong debt-free company. It is very rare that one gets to see more than one Malayali holding such high positions in a non-Malayali company at the same time. I did not know Sashidharan before I joining CERA. He is my senior in the company as he has already completed silver jubilee. I am only a few years away from that milestone.

Shashidharan: We both have come a long way in CERA. We share ideas and arrive at a consensus before we start working towards achieving the goal.

What are your plans to grow outside India?

Abbey: We are committed to expanding abroad. CERA Style Gallery in Dubai has been operational for the last two years. CERA was the first Indian sanitaryware company to go overseas. We have also appointed a distributor for Oman. Other GCC countries will happen next. GCC has the capacity to host one factory. Tapping African market is also under consideration. We already export to European countries. CERA is hoping to generate about 15 per cent of revenue in the next two years from overseas expansion.

How amenable is your industry to e-commerce?

Abbey: e-commerce in sanitaryware is very difficult as products are prone to breakage. To be frank, we did try this route but it did not click. Maybe, in the faucets space it is possible.

How have the three tsunamis impacted you?

Shashidharan: Demonetisation, RERA and GST have had disruptive impacts on our business. 2017 has been hopeless. It will take at least one-and-a-half to two years for the real estate sector to bounce back. Retail business also has been hit. It is only the fittest who will survive the current tsunamis.

How is CERA placed in Kerala? And nationally?

Abbey: Kerala is a key market for CERA where we do about Rs.250-crore business annually. We can grow to Rs. 600 crore by 2020 here. We have the best brand presence in Kerala. When I started my career, CERA was in the fourth place in Kerala. We created the network first and then we built the brand presence. We have many dealers in Kerala selling only CERA products. However, CERA is a national brand. We are very strong in AP, Telangana, Karnataka, Punjab, UP, Gujarat and Orissa. In other markets, we have more ground to cover.