This term paper is made byPRANAB CHOWDHURY MBA 12TH BATCH BANGLADESH UNIVERSITY OF PROFESSINALS MIRPUR CANTONMENT, DHAKA.

CONTAVT NO: 01814-417649

1. Historical Background:
RAK Ceramics (Bangladesh) Limited, a UAE-Bangladesh joint venture company, was incorporated in Bangladesh on 26 November, 1998 as a private companylimited by shares under the Companies Act 1994. The name of the Companywas thereafter changed to its name from RAK Ceramics(Bangladesh) PrivateLimited to RAK Ceramics (Bangladesh) Limited on 10 June 2008, certificateissued by the Registrar of Joint Stock Companies dated 11 February, 2009. It is engaged in manufacturing and marketing of ceramics tiles, bathroom sets and all types of sanitary ware. It has started its commercial production on 12 November 2000. The commercial production of new sanitary ware plant was started on 10 January 2004. Further expansion of the existing facilities ofceramics tiles plant took place in year 2004, and for tiles and sanitary plantswere in year 2007. RAK Ceramics (Bangladesh) Limited, 90% held by RAK Ceramics PSC, a company incorporated under the laws of UAE and remaining 10% owned by local investor Mr. S.A.K. Ekramuzzaman. RAK Ceramics PSC, UAE is presented by Dr. Khater Massaad as Chairman. With an annual turnover of over BDT 3248 million, within the short span of eight years RAK has firmly established itself as one of the leading manufacturer of high quality ceramic wall, floor tiles, gres porcellanato and sanitarywares products in Bangladesh. 2. Company Profile: 2.1 Products Offered: RAK Ceramics (Bangladesh) produces a very wide range of products in the Ceramic Range with products such as Ceramic Wall and Floor Tiles, Dcors and Listellos, Pencils and Capping and Borders & Corners. The widest range in the industry in terms of sizes and designs is on offer. RAK Ceramics ( Bangladesh) produces an extremely wide range of products in Gres Porcellanato in several finishes suited for any ambience. Thousands of tile models in Glazed and Polished Porcelain are backed by advanced technologies such as MDR, Double Charge, Double Charge with Soluble Salt, Granited, Dry Glaze, Twin Press etc. Finishes such as Rustic, Antique, Modern, Cotto, Stone, 3

Brick,

and

Marbo

are

some

of

the

wide

range

of

effects

on

offer.

R.A.K. Ceramics' (Bangladesh) sanitary ware encompasses an elegant range in Wash Basins (Mounted & Pedestal types), Counter, Bathroom sets - comprising of wash basins, water closets & bidets ( both Floor Standing & Wall Hung types) and Accessories. Wall Tiles: Ceramics Border tiles

Dcor tiles
Floor tiles: Ceramics Gres Porcellanato: Salt & peper (Glaze) Salt & peper (Homogeneous) Soluble salt (Mirror polish) Double Charge (Mirror Polish) Wooden Model Staire & pavement Slate Rustic

2.2 Production: It produces more than 600 models of sanitary wares sizes from 13cm * 13cm up to 60cm * 60cm and 8 million square meters per annum and over 600 models of tiles. Following table illustrates the production capacity of Tiles and sanitary wares division: Production Unit Installed capacity Annual For the period Tiles Sanitary wares 4 Sft Pcs 86,402,80 0 900,000 43,201,40 0 450,000 Utilization during the period 38,783,71 6 440,382 90% 98% % of the utilization Over (under) Utilization (4,417,684) (9.618) /

2.3 Customers of RAK: The major customers of RAK are builders, contractors and house holders etc.

2.4 Employee Strength: As on June 30, 2009 total number of the employee was 1,223. The divisions of employees are as follows: Work Division Part Time Administration & Sales Tiles Sanitary Wares Total 260 65 325 Number of Employees Full Time 114 439 345 898

2.5 Capital Structure: Particular As on June 30, 2009 (Tk.) Share capital Share money deposit Bank 1,296,800,000 558,835,000 486,625,056 3,562,713,265 As on Dec 31, 2008 (Tk.) 648,400,000 508,122,547 995,310,065 3,500,082,807 As on Dec 31 2007 (Tk.) 648,400,000 502,546,929 654,668,293 3,047,423,909 As on Dec 31 2000 (Tk.) 648,400,000 5,170,347 676,293,648 1,995,702,200

Overdraft Total

3. Competitive Status:
3.1 Other Competitors: Jasma Ceramic Industry Peoples Ceramic Industry Standard Ceramic Industry 5

 Bangle Ceramic Industry Monno Ceramic Industry. 3.2 Competitive Condition of this company RAK Ceramics (Bangladesh) Limited enjoys the reputation of being a market leader in the local tiles and sanitary ware market, as one of the establishments producing high quality tiles and sanitary ware products. The quality along with the competitive pricing of the products has enabled RAK Ceramics (Bangladesh) Limited to gain a substantial market share in the ceramic sector. The Companys currently enjoying more than one fourth share of the tiles market and greater than two third share of the sanitary ware market. The strengths of RAK Ceramics (Bangladesh) Limited is its professional expertise, unrelenting pursuit of excellence, and a deep and profound knowledge of the business environment that has enabled the company to tap the market share in the tiles and sanitary ware field.RAK has always painstakingly positioned the company to respond to emerging market opportunities and have made major investments. RAK intends to leverage the leadership by pursuing strategic opportunities through the investments that have been made. It will continue to invest in innovative breakthrough technologies in the ceramic field because we know that in this era of global competitiveness and borderless economies, only productive organizations delivering quality goods and services can prevail, prosper and grow.

4. Performance dynamics of RAK Ceramic Ltd

4.1 Trends of performance

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4.2 In overall performance RAK Ceramic was the first ceramic company in Bangladesh to receive ISO 9001:2000 certification due to its consistency in delivering high-quality service. In just 5 years turnover reached four fold. Turnover in 8 years achieved a compounded annual growth of 33.26%. Now it is globally recognized as a super brand. RAK contributed nearly Tk - 1 billion to the national exchequer in taxes, levies, duties and VAT. A major chunk of Bangladeshs construction was done by RAK products. Over the last 12 months, sales of RAK increased by 20-30%. Further, they also improved their production capacity and technique.

5. Factor Influencing Performance:

5.1 Focus On Quality: RAKCBL has devised its own quality norms for its operations which are better than generally accepted best quality norms followed by reputed players in the ceramics sector. The quality control system implemented from input sourcing stage to final packing & dispatch trail. The quality management systems that RAK Ceramics operates is comply with the highest standards of leading 7

institutions throughout the world. The Company has several leading certifications that not only stand testimony to meet and comply with stringent standards, but also represent a universal endorsement of the quality of the products manufactured. To name few-ISO 9001: 2000 issued by the BVQI,WaterMark license, -Standards mark License for sanitary wares,-SETSCO certificate of recognition,-Insitute Szkla I Ceramic-CSTB. 5.2 Economic climate: After introduction of democratic Government, Bangladeshs financial condition enhanced day by day. After the recession of 2008, RAK picked up in 2009 and 2010. Due to sudden crash of prices all over the world in 2008, the company did lose a lot of money on their inventory. However, they were able to recover well and focus on productivity and efficiency enabling them to come out of the crisis successfully. 5.3 Technological Advancement: RAK Ceramics (Bangladesh) Limited is the technology oriented company. The production facilities of the company are based on currently available technology. It uses latest technology for its Tiles &sanitary ware production. Its research and development (R&D) and Quality control (QC) department are equipped with the best technologies in the country. Due to technology advantage the company will assist the future business growth of the company. Some advance technology by is RAK Ceramic is shown below: 1. Modern European machinery: Robotic controlled TGV machines. Computer controlled vehicles transferred semi finished goods from station to station, robots picked and placed semi finished tiles in many production steps as well as in sorting and packing the finished tiles, skilled technicians in sophisticated control rooms monitored raw materials in blending mills, wet and dry grinding vessels, presses, kilns, drying and cooling cycles, and many other operations 2. Water jet cutting technology machines: Facilitate unique water jet designs, and diamonds cutting machine tools help make beautiful vanity tops from gres procellanato slabs. 3. Latest Italian Technology: For production including computerized kilns.

6. SWOT Analysis:
6.1 Strength: 8

 Market leader: RAK Ceramic is the market leader in the Ceramic Market of Bangladesh. They occupy 12 % of the total ceramic market. Innovativeness: The strength of RAK lies in the speed with which it has innovated itself to meet market expectations. It invests regularly to produce products that would stand out in the market. Strong Marketing lineup: RAK has developed sound and effective marketing policy to share knowledge about their products with design engineers, thus creating more awareness in the minds of the customers. Reliability: Be the preferred business partner of the customer and suppliers by offering quality products; providing best and timely service before and after the business transaction. Great competitive skills: It has been working consistently in steel production sector. So it has achieved great competitive skills. It has the ability to face strong competition. . Strong employee bonding and belongingness: RAK employees are one of the major assets of the company. The employees of RAK have a strong sense of commitment towards organization and also feel proud and a sense of belonging towards RAK. The strong culture of RAK is the main reason behind this strength. Modern equipment technology: The Company is working continuously with their modern

technological expertise with research and development to improve the product quality in accordance with customer choice, fashion and design. Strong products distribution lineup: RAK has appointed more than 98 dealers including tiles and sanitary ware products all over the country to sell the products of the Company to the ultimate customers. Cost minimizing capacity: RAK ability to deliver variety of products at one stop location with affordable prices will have an edge over competitors. 6.2 Weakness: Low per capita consumption (0.15 sq mt. p. a.) as compared to developed nations. Low advertising. 6.2 Opportunities: 9

 The construction and housing boom to provide bolstering demand for ceramic tiles. The untapped rural market supported by a strong growth witnessed by agriculture provides tremendous potential for the domestic ceramic manufacturers. As RAK is internationally renowned company so its have a strong possibility to export steels product in near future. 6.4Threats: All ceramic company of Bangladesh wish to increase their production capacity. If they increase the production capacity then their production cost will decline. So competition will also increase in the steel market. Labor unions are one of the emerging threats of Bangladesh now-a-days. Supply of power and gas remains key-cost related issues impacting issues.

7. Possible measures to improve performance:

The following measures can be recommended for the industry to improve performance: The production of the industry should be raised because the production is lower than the demand of the product. That means, their product has high demand. The industry should expand its plant. The industry should increase its channels of distribution of product. The organization should give more emphasis on advertisement of its product. Need to take steps for individual customers. There should be alternative source of power to maintain rate of production. Company should arranges the dealers meeting at reasonable periodicals to understand the market updates and future plans of market demand & related developments.

8. Conclusion:

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RAK ceramic creates a strong position in the market for ceramic for their high quality product and high technology as it successfully competes with its competitors. The overall performance of this company was good. The production, sales and marketing activities of the company are expanding day by day in countrywide. Organization is a completely profit making organization . But for any organization branding is most important. So management should focus on that.

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