RAK Ceramics to acquire Germany’s Kludi Group to expand operations

Kludi Group has a manufacturing footprint across Germany, Austria, Hungary and the UAE

RAK Ceramics will boost spending this year to add more production capacity at different manufacturing units. Courtesy: RAK Ceramics

RAK Ceramics, one of the world’s biggest producers of ceramic products, plans to acquire 100 per cent of Germany’s Kludi Group as it seeks to expand its operations internationally.

The company will acquire Kludi Group at a valuation of €39 million ($42.9m), RAK Ceramics said on Tuesday.

The deal, subject to regulatory approvals, is expected to be completed by May 31.

"This acquisition of Kludi Group aligns to our growth strategy and commitment to strengthen our presence in core markets and focus on core products,” Abdallah Massaad, group chief executive of RAK Ceramics, said.

“It provides RAK Ceramics with the opportunity to spearhead our expansion into European markets and enhances our positioning in projects across the sanitary ware and faucets business.”

Founded in 1926, Kludi Group produces kitchen and bathroom faucets and shower systems. It has manufacturing facilities across Germany, Austria, Hungary and the UAE, with sales across Europe, Asia and the Middle East.

Abu Dhabi-listed RAK Ceramics already has a joint venture with Kludi Group for the production and sale of fittings in the Middle East under the brand name Kludi RAK.

The partnership between the two companies since 2007 has “grown and proved to be successful and profitable, recording impressive growth and sustainable margins”, it said.

Founded in 1989, RAK Ceramics has a presence in more than 150 countries through its network of operational hubs in Europe, the Middle East and North Africa, Asia, North and South America and Australia.

It specialises in the manufacture of ceramic wall and floor tiles, tableware, sanitary ware and faucets.

The company plans to boost spending this year to increase production capacity at different manufacturing units on the back of higher demand, as global economies continue to recover from the coronavirus pandemic, Mr Massaad told The National in an interview earlier this year.

“In the last two years, we did not spend in capex [capital expenditure] because of the virus and supply chain disruptions," he said. "This year we will spend more because we are going to grow.”

RAK Ceramics swung to a profit of Dh246.45m ($67.16m) in 2021, compared to a loss of Dh129.7m a year earlier, as revenue surged 21.8 per cent annually to Dh2.86 billion and impairment losses declined 36 per cent to Dh32.8m.

The company also plans to set up a new manufacturing unit in Saudi Arabia this year to cater to the rise in demand for its products in the Arab world's largest economy. RAK Ceramics' revenue in the kingdom jumped 26.7 per cent last year.