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Gas kiln cost & Morbi cluster
What it is
Ceramic tile firing is gas-intensive, so natural gas price determines cost competitiveness. Production concentrates in the Morbi cluster in Gujarat, where a large unorganised base supplies branded players under outsourcing arrangements
Branded companies increasingly outsource manufacture and focus on design and distribution
Impact on industries
- Gas cost is the dominant variable and is set by policy and global LNG prices, so a producer's competitiveness moves with something it cannot control
- The outsourced model lets branded players scale volume without kiln capex, converting a fixed-cost business into a variable one
- Morbi's unorganised capacity competes aggressively on price and has periodically flooded the market, capping realisation at the value end
- GST formalisation shifts share to branded producers, and premiumisation into large-format slabs earns margins commodity tile cannot