In its investor presentation, Kajaria Ceramics laid out two capacity expansions announced in the same breath. One adds 10 million square metres at Srikalahasti in Andhra Pradesh, in the south, for around ₹210 crore, operational by March 2027. The other adds 11 million square metres at Gailpur in Rajasthan, in the north, for around ₹165 crore, operational by April 2027. More capacity going south, and more capacity going north, decided together.
Around the same window, Simpolo — a Morbi-founded manufacturer backed by Motilal Oswal Alternates — was midway through a ₹1,000 crore expansion announced in April 2024. Of that sum, roughly ₹350 crore was going into a new plant at Naidupeta in Andhra Pradesh, and roughly ₹650 crore into a new plant at Malia, in the Morbi belt of Gujarat. Nearly two rupees into the cluster for every one rupee into the south.
If India’s ceramic manufacturing map were simply moving south, away from Morbi, none of this would make sense. Companies do not pour capital in two directions at once if one direction is being abandoned. What the evidence actually shows is subtler and more important than a relocation story: India is adding manufacturing locations without creating new manufacturing ecosystems. The country is building factories closer to its markets, but the evidence so far does not show another Morbi-like ecosystem emerging — and the distinction between those two things is the whole story.
Morbi’s advantage was never just the factories
To understand why adding a plant in Andhra Pradesh does not reduce dependence on Morbi, you have to understand what Morbi actually is. It is easy to picture the cluster as a very large number of kilns in one place, and to assume that building kilns elsewhere reproduces the capability. It does not, because the kilns were never the point.
What makes Morbi work is everything around the kilns. Over decades, the cluster has built a dense concentration of the businesses ceramic manufacturing depends on: raw-material suppliers and traders in body clays, feldspar and the rest; energy infrastructure built around ceramic production at scale; machinery and technical-service providers; the glaze and ink specialists who supply a tile’s surface chemistry; a large, experienced labour pool with the engineers and maintenance crews that come with it; packaging converters and transporters geared to fragile heavy freight; and an export logistics apparatus routed through Gujarat’s ports. It is also, simply, where the buyers go, because so much of the industry sits in one place.
None of that is a factory. All of it is the ecosystem the factory sits inside. A single plant built a thousand kilometres away has the kiln but not the network — it has to import the machinery service, truck in the specialist chemistry, train the labour from a thinner base, and arrange its raw material supply without the density of options the cluster offers. It can be a perfectly good plant. It cannot, on its own, be a cluster.
The machinery point deserves a moment, because it reveals how the global industry actually participates in India’s expansion. When Simpolo equipped its two new plants, the supplier list — reported by Ceramic World Review — read as a roll-call of Italian engineering: three SACMI PCR 2180 presses, the first of their kind in India, powder preparation from LB Technology, digital printing from System Ceramics, Airpower glazing, Tecnoferrari material handling, two SACMI kilns, BMR polishing lines with Surfaces Group abrasives, and LAEK robots for handling large slabs. European ceramic-equipment suppliers are deeply involved in India’s capacity expansion — but through machinery, not ownership. It sells the kit into Morbi and into the new southern plants alike. That is another reason a new plant is not a new ecosystem: the technology can be bought and installed anywhere, but the supplier who services it within hours, the glaze chemist down the road, and the labour pool that has run these exact presses for years cannot be shipped in a crate.
Morbi is still underneath the organised industry
The clearest proof that Morbi remains foundational to the organised industry comes not from Morbi itself but from the disclosures of the companies expanding away from it. And the single strongest piece of evidence sits in Somany Ceramics’ own investor presentation for Q3 FY26.
Somany breaks its sales down by where the product is made. In its Q4 FY26 investor presentation, only 26% of its sales mix came from its own manufacturing; 34% came from joint ventures and 40% from a category the company labels “Others.” Read that again: one of India’s largest and most established branded tile companies makes only about a quarter of what it sells in its own plants. The remaining roughly three-quarters comes from JVs and the “Others” category. This is disclosed by the company, in a filing, this financial year. A substantial share of the tile that carries an organised brand’s name to the dealer counter is therefore produced outside its own manufacturing plants.
Then came a natural experiment in the form of the 2026 gas crisis, and it separated the organised players by exactly the variable this article is about. In Somany’s own words, the US-Iran conflict “resulted in constraints in gas availability and a sharp increase in fuel costs from early March,” hitting the propane-dependent units of the Morbi cluster hardest. The effect on the two largest branded players was strikingly different.
Kajaria, which owns three plants inside Morbi — 17.90 million square metres of combined capacity there, out of a nine-plant total of 87.80 million — told its Q4 FY26 call that production fell about 7% on the Morbi shutdowns, and that it struggled to outsource because so many Morbi plants had themselves closed. Its own Morbi exposure and its reliance on outsourced Morbi capacity worked against it at the same moment.
Somany, whose production is spread across the north, west and south, reported a markedly different outcome. In its Q4 FY26 investor presentation, the company stated plainly that the crisis, “particularly impacting propane-dependent units in the Morbi cluster,” had been weathered because “we maintained stable production levels, supported by diversified manufacturing footprint, adequate inventory position, and uninterrupted operations across North and South manufacturing facilities.” Here is a major manufacturer explicitly crediting a diversified manufacturing footprint for insulating it during the crisis.
| Same crisis, two outcomes | Kajaria | Somany |
|---|---|---|
| Morbi structure | Three owned plants inside the cluster (17.90 of 87.80 MSM) plus outsourced Morbi capacity | No owned plants in Morbi; production spread across owned plants in the north and west and a JV in the south |
| Crisis outcome | Production fell about 7%; struggled to outsource as Morbi plants closed | Reported “stable production levels” and “uninterrupted operations” |
| Underlying exposure | Direct, through owned Morbi plants and outsourcing | Indirect but deep — roughly three-quarters of sales still from JV and outsourced capacity, much of it Morbi |
That looks like a clean lesson — diversify your plants and you are protected. The honest reading is more uncomfortable, and it is where the argument turns. Somany’s protection did not come only from plants it owns. Its northern capacity at Bahadurgarh in Haryana is an owned plant; its southern capacity at Tirupati in Andhra Pradesh is a joint venture. What insulated the company was the location of its production, not the ownership of it. And the same JV structure that gave Somany its southern insulation is what ties it to Morbi: 12.04 million square metres of tile capacity there through a joint venture, its single largest JV block, against a total tile capacity of around 75 million square metres including outsource tie-ups. One mechanism, delivering both the protection and the exposure. Somany’s owned plants generate only about 26% of its sales; the rest comes from JV and outsourced capacity, much of it in and around Morbi. Geographic spread is not independence. Both Kajaria and Somany remain deeply exposed to the cluster — they are exposed differently, but neither has escaped it.
The pattern repeats across the industry in different mechanisms. Orient Bell, on its own manufacturing capabilities page, lists its plants as Sikandrabad in Uttar Pradesh, Dora in Gujarat, Hoskote in Karnataka, and associated entities in Morbi — and the company has historically described its model as combining its own plants with outsourced production from Morbi players. RAK Ceramics, the foreign-headquartered manufacturer, operates its largest Indian plant at Samalkot in Andhra Pradesh, per its India website, and also holds a manufacturing joint venture in Morbi. Four different mechanisms of touching the cluster — outsourcing, ownership, associate relationships and joint ventures — point to the same broader reality: Morbi remains embedded in the supply structures of the major organised players.
A pointed confirmation of what that dependency costs came from Somany’s managing director, Abhishek Somany, on the company’s Q1 FY27 earnings call on 12 August 2026. Explaining why the market leader had outperformed in the quarter, he pointed to its higher in-house production of polished vitrified tiles — a category, he noted, in which Somany is itself exposed to Morbi. In effect, the head of one of India’s largest tile companies was highlighting the competitive consequence of that exposure against a better-integrated rival, in a filed disclosure. It is difficult to state the thesis of this article more plainly than its own protagonists do.
On that same 12 August 2026 call, Somany also gave one of the freshest available readings of the cluster’s condition. Morbi, he told analysts, had been operating at 100% capacity since the end of May, with roughly 15 to 17% of units permanently shut down. The cluster recovered from the crisis — but by the managing director’s own account, a meaningful share of it did not come back. That is what a supply shock does to an ecosystem the organised industry still leans on: it does not move the dependency elsewhere, it thins the base that everyone continues to depend on.
What the southern expansion actually is
If the southern plants are not an attempt to replace Morbi, what are they? The companies themselves answer the question, and the answer is consistent: they are about being close to growing markets, not about escaping the cluster. It is worth separating what the companies actually say from what an observer might infer.
Kajaria is the clearest. It has stated that the Srikalahasti expansion in Andhra Pradesh is funded from internal accruals “to cater to the growing southern market in India,” with the existing facility there already running at 100% capacity utilisation. That is a market-access reason, stated by the company: demand in the south is growing, the existing plant is full, so add capacity near the demand. Nothing in that statement is about input costs or reducing Morbi dependence.
Orient Bell’s southern presence has a longer history that is worth stating as chronology rather than as current data. The company gained its Hoskote plant in Karnataka through the acquisition of Bell Ceramics in 2010 — sixteen years ago — explicitly to establish a foothold in South India. More recently the company has framed its southern and western capital spending as consolidating its position “in the bigger and high growth markets of South and West where traditionally Orientbell has had a lesser share of the pie.” Again, the stated reason is market share, not input cost.
Somany’s southern move is its Siravit Ceramics joint venture, for which it has committed ₹58.8 crore for a stake of up to 49% — a minority stake, not the full project. The plant will build roughly 9 million square metres of glazed vitrified tile in the south, with a total project cost of around ₹220 crore, and management guided on its Q1 FY27 earnings call in August 2026 that it is expected to be operational by Q3 or Q4 of FY28. Notably, on that same call the company also described adding 4 to 5 million square metres of balancing capacity across its existing plants — in Bahadurgarh, Gujarat, Morbi and the south alike — by late FY27. The expansion is happening in every location at once, Morbi included; it is not a migration out of the cluster.
Simpolo’s Naidupeta plant in Andhra Pradesh is part of the ₹1,000 crore expansion the company announced in April 2024. That original announcement put the plant’s eventual capacity higher, but by the time chairman and managing director Jitendra Aghara spoke to Ceramic World Review in April 2025, he described it as heading toward a total capacity of 8.5 million square metres, with full production expected around Q2 of FY26 — the more recent figure from the company’s own chairman. In each case the plant is positioned near a market the company wants more of.
One discipline matters here above all others: none of this makes South India a cluster. It is a set of individual plants, built by individual companies, positioned near southern demand. They do not share a raw-material network, a machinery-service base, a specialist chemistry supply, or a common labour pool the way Morbi’s units do. Calling South India a ceramic cluster because several companies have each built a plant there would be exactly the error this article exists to correct. A collection of factories in a region is not a cluster. It is a collection of factories.
What Thangadh and Khurja show about how clusters specialise
India does have other genuine ceramic clusters, and two of them are instructive precisely because they demonstrate what a cluster is and how narrowly one can specialise.
Thangadh, in Gujarat, is a sanitaryware and refractories cluster, built historically on local fire clay. Its trajectory tells you something important: the wall and floor tile units that once operated there largely closed, while its sanitaryware and refractories production continued. A cluster is not infinitely flexible. Thangadh’s ecosystem was suited to certain products, and when tile production migrated to the conditions that favoured it, Thangadh kept what its particular ecosystem supported and let the rest go.
Khurja, in Uttar Pradesh, is a whiteware cluster — crockery, artware, and high- and low-tension electrical insulators rather than tiles. It is long-established enough that the Central Glass and Ceramic Research Institute set up its Khurja Centre back in August 1981 to support the local industry. Khurja makes what Khurja’s ecosystem is built for, and it is not floor tile.
The lesson from both is not about their size, which is not the point here, but about their nature. A cluster forms around a specific set of local advantages and specialises tightly around them. That is exactly why you cannot will a new Morbi into existence simply by building tile plants in a new state — the ecosystem that made Morbi the tile cluster grew over decades around a particular combination of conditions, and it does not transplant.
What separates a cluster from a factory location
Pull the argument together and it comes down to a distinction that the industry’s own expansion decisions keep demonstrating. A factory location needs perhaps four things: a building and kilns, access to raw material, energy, and enough labour to run the lines. A market-proximate plant can be built on that basis, and several companies have done exactly that in the south.
A cluster needs eight things, all at density:
- Raw material supply
- Energy infrastructure
- Machinery and technical support
- Skilled labour
- Ancillary suppliers — glaze, ink, packaging
- Logistics geared to fragile heavy freight
- Market access
- The broader industrial infrastructure that ties it all together
A plant needs some of these. A cluster needs all of them, concentrated, with enough depth that any one can be sourced quickly and competitively. That is the difference between what India is building in the south and what already exists in Morbi.
A factory location is not a manufacturing ecosystem.
The new southern plants are factory locations, well chosen and commercially sensible. They are not, individually or collectively, a second ecosystem.
What this means at the dealer counter
For the dealer and the distributor, all of this has a practical edge, though a smaller one than the “manufacturing is moving south” framing would suggest. A plant nearer a fast-growing southern market can potentially reduce inbound freight in the landed cost of the tile and shorten replenishment lead times, and it adds a regional sourcing option in the south that the organised brands did not have at this scale a few years ago. During a disruption in one geography, a manufacturer with plants elsewhere can — as Somany showed in 2026 — keep supplying when a single-location manufacturer could not.
But the honest answer for the trade is that a second sourcing geography changes less than it appears while dependency on the cluster runs as deep as the disclosures show. When only about a quarter of a major branded player’s sales mix comes from its own manufacturing plants, a new southern plant improves the margin and the resilience at the edges without necessarily changing the wider manufacturing structure. And that structure still runs through Morbi in concrete ways — Somany alone holds 12.04 million square metres of tile capacity there through a joint venture, its single largest JV block. A dealer who believes his supply has been decoupled from Morbi because his brand now has a plant in Andhra Pradesh has misread the structure. The southern plant helps. It does not free him, or his supplier, from the cluster.
The question underneath the map
All of which leads to the question this expansion wave really poses: can an industry diversify its manufacturing footprint without diversifying away from the ecosystem that made it competitive in the first place?
On the evidence available so far, the answer is that the country is building factories closer to its markets, but the evidence does not show another Morbi-like manufacturing ecosystem emerging. What is taking shape is a different model rather than a replacement one — capacity deliberately positioned closer to the major consuming markets of the south and west, while Morbi continues to supply the specialist inputs and the flexible outsourced and JV production that the organised players draw on for a large share of what they sell. The map is gaining new locations. The ecosystem beneath it has not, on the current evidence, been reproduced anywhere else.
Morbi is not being replaced. Its role is changing — from being simply the industry’s dominant manufacturing location to also serving as a critical source of outsourced and JV capacity, specialist suppliers and manufacturing flexibility for the organised players building capacity elsewhere. The newest kilns may stand in Andhra Pradesh or Rajasthan, but the ecosystem they still lean on has not moved.
