Strategic & Financial Analysis of Royal Ceremics Lanka PLC

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Strategic & Financial Analysis of Royal Ceremics Lanka PLC Powered By Docstoc
					Royal Ceramics Lanka PLC
Vision
“To Continue to be the leader in the surfacing industry
locally and to enter and impact the global market.”

Mission
“To offer state of the art surfacing solutions to both the
home and commercial builders with products and services
that transcend the highest quality, ensuring customer
satisfaction by matching all expectations, growing the
market by way of product innovation, thereby enhancing
shareholder wealth, developing our human resources to
excelling latitudes such that Royal Ceramics exudes a
stance of excellence.”
   Rocell’s Brand Promise


Rocell is in the business of enhancing the quality of
life by adding color, style, and elegance to life. It
creates a sense of aspiration, expectation, fashion and
style always stirring aspirations around good living.
Creating sensorial pleasures of an aesthetically
appealing living ambiance.
                      History
Since Rocell inception in 1990 (then known as Royal
Ceramics Lanka Ltd) focused its efforts on being a brand
leader in its industry. In less than a decade the
organization realized its goal through innovativeness and
excellence in design. Glazed ceramic tiles and ceramic
porcelain tiles are manufactured at the Company's two
production facilities in Sri Lanka. Over the years the
Company has graduated to producing polished tiles, non-
slip rock and studded tiles.
Rocell made the transition from a private company
to a public one in 1994. Rocell has been listed on the
Colombo Stock Exchange since 1994. Today it has
captured 55% of the Sri Lankan market and exports
to numerous countries across the globe.

The Company's marketing operations are supported
by a strong distribution network comprising 40
showrooms and 3 warehouses located in strategic
areas in Sri Lanka.
Corporate Governance

       Shareholders


 External          Board of
 Auditors          Directors


 Managing        Remuneration     Audit
 Director         Committee     Committee


 Corporate
Management

     Group
   Operational
   Committee
                    Environment
Rocell’s “Environment Management System” which enables us
to monitor and control pollution levels to a negligible
minimum. This program is in accordance with ISO 14000
specifications for International Environment Management
Standards. Some measures we have undertaken include:

Manufacturing our porcelain and ceramic tiles from naturally
occurring clays and minerals found in the diverse regions of Sri
Lanka.

Using recyclable paper cartons and boxes for packaging.
Maximizing the use of natural gases and minimizing the
use of waste matter throughout the production process.

Ensuring that our tiles can be maintained without the use
of cleaning products that use harsh chemicals.

Manufacturing tiles that last, thereby eliminating waste
created through replacement.
                       Products
Ceramic tiles are produced from natural raw materials such as
feldspar, clay, silica sand and dolomite, which have to endure
a process called ‘vitrification’ at temperatures of almost 1200
degrees Centigrade. This mixture of raw materials determines
the ceramic nature of the tiles. Ceramic materials are very
ancient products, but they are still used today in the most
advanced and modern applications. The tiles possess several
inherent advantages when compared with natural stone or clay
tiles. Low water absorption, non-existence of radioactive
metals, high resistance to stains, easy cleaning, and strength
and durability are some of the benefits of using ceramic tiles.
Porcelain tiles are extremely compact and resistant flooring
materials. Natural raw materials are fused at very high
temperatures 1200 degrees Centigrade to form a single and
extremely solid body, creating a perfectly homogenous slab.
The product is almost completely vitrified, and because of its
excellent mechanical properties, porcelain tiles are ideal for
use in public spaces and for industrial purposes.
                 Production Process
The production process commences with raw materials feldspar and
dolomite being ground with silica sand and ball clay to create a liquid
known as body slip. This liquid is spray dried and converted to form
the base body powder. To develop colored body powder, dolomite and
feldspar are ground with different colored stains. This powder is
stored separately in silos.

The powder is then retrieved in required quantities and in
required compositions and pressed at a pressure of 400 kg/cm2,
to create green tiles or pre-fired tiles. The green tiles are then
dried in driers for half an hour before being processed further.
The tiles are then sent to the glazing line where the printing
process is undertaken. The tiles undergo up to fifteen
applications including 4-colour printing on each line.
The tiles are then sent to the kiln for firing and are passed through
a roller kiln at a temperature of approximately 1210 degrees
Centigrade. In the kilns the tiles are transformed into finished
products conforming to the CEN 177 BIIa International Standard for
Ceramic products and CEN 176 B I International Standards for
Porcelain products. Each tile is then inspected for surface quality,
flatness and rectangularity using advanced optical sensors and
devices. The tiles are next packed and palletized using automated
packing and robotic palletizing machines and are dispatched to
showrooms or are exported to international clients.
          Research & Development
Rocell’s business strategy is not to be just a volume based producer
of tiles but to be an organization that focuses on value addition and
design. As such the company has concentrated its efforts on research
and development, investing in the latest machinery and infrastructure
at its manufacturing facilities.

As a result of its continuous commitment to research on tiles,
Rocell developed the homogenous porcelain tile. The specialty of this
tile is its hardiness. The tile is characterized by its robustness and
resistance features and is guaranteed to be four times stronger than
normal stone.

In addition Rocell is constantly seeking ways to upgrade the
textures of its tiles, and its state-of-the-art laboratories are equipped
to determine ways in which to replicate naturally occurring surfaces
such as stones and tree barks.
Financial Statements
Income Statement
Balance Sheet
Statement of Changes in Equity
Shareholder Information
 Graphical Review
   Of Five Year
Financial Summary
       Return On Capital Employed (ROCE) (%)
35


30


25


20
                                                 Return On
15                                               Capital Employed
                                                 (ROCE) (%)
10


5


0
     2010     2009     2008     2007      2006
       Current Assets & Current Liabilities (Rs.000,000)
2000

1800

1600

1400

1200
                                                           Current Assets
1000
                                                           Current Liabilities
800

600

400

200

  0
         2010      2009      2008       2007      2006
            Earnings Per Share (Rs.)
14


12


10


8

                                               Earnings Per
6                                              Share (Rs.)

4


2


0
     2010    2009      2008      2007   2006
            Net Sales Growth Rate (%)
40

35

30

25

20
                                                Net Sales
                                                Growth Rate (%)
15

10

5

0
     2010     2009      2008      2007   2006
            Net Assets Per Share (Rs.)
50

45

40

35

30

25                                              Net Assets Per
                                                Share (Rs.)
20

15

10

5

0
     2010   2009      2008       2007    2006
20
             Profit Earnings Ratio (Times)

18

16

14

12

10
                                               Profit Earnings
8                                              Ratio (Times)

6

4

2

0
     2010   2009    2008      2007      2006
              Profit After Taxation (Rs.000,000)
1200


1000


800


600
                                                          Profit After
                                                          Taxation
400                                                       (Rs.000,000)


200


  0
       2010       2009      2008       2007        2006
              Fixed Assets (Rs.000,000)
1200


1000


800


600                                              Fixed Assets
                                                 (Rs.000,000)

400


200


  0
       2010   2009      2008     2007     2006
              Capital Expenditure (Rs.000,000)
1400


1200


1000


800
                                                    Capital
600                                                 Expenditure
                                                    (Rs.000,000)
400


200


  0
       2010      2009     2008      2007     2006
                    Achievements
Rocell’s tiles conform to all product specifications outlined in
the CEN 176 B1 international standard, they have also
introduced methods at their production facilities to surpass these
specifications.

Their quality management system is identified and
standardized according to the specifications stipulated in ISO
9001 standards, certified by BVQ1 (London) in 1996.

Rocell has also put into effect “Total Quality Management
Criteria” which includes resources, procedures, processes and
responsibilities.
In recognition of such continuing improvements they were
presented with a National Quality Award (Merit) in 1997 by
the Sri Lanka Standards Institution.

They have also devised an “Environment Management
System” which enables them to monitor and control pollution
levels and maintain them at a negligible minimum. This
program is in accordance with ISO 14000 International
Environment Management Standards by BVQ1 (London) in
2000.

In addition they have implemented a formal “Safety
Management System” in line with requisite international
standards in order to ensure the safety and enhance the
working conditions of their employees.
       Subsidiary Companies

Rocell Bathware Limited
      Products : Vitreous china sanitaryware
                 Fire clay sanitaryware


Royal Porcelain Pvt. Ltd
      Products : Glazed Ceramic Tiles
                 Vitrified Glazed floor Tiles


Royal Ceramics Distributers (Pvt) Ltd
  Showroom Network




                     Anuradhapura



     Kurunegala

          Kagalle       Kandy

 Gampaha                         Badulla

Colombo                         Bandarawela
                    Ratnapura
 Kaluthara

       Galle
                       Mathara

				
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