First Appeared on 23rd December 2023 on StarBizWeek
By Lydia Nathan
IT is not very often we hear of a Swiss multinational company being bought over completely by Malaysians, and run successfully at that, but Niro Ceramic Group (Niro) is an exception.
Managing director Ian Kok (pic) tells StarBizWeek the first factory belonging to the group was built in Switzerland back in the 1970s, and was actually producing machinery for the food and ceramics industry.
It then decided to foray into the tile sector and look at different countries to grow its footprint.
“In the late 1980s, Niro came to South-East Asia and found Malaysia to be a strategic base to expand operations. By 1988, Niro Ceramic Malaysia was a bustling company and its factory in Pasir Gudang, Johor, is still running today,” he says.
Over the next few years, it became 100% Malaysian-owned, and in addition to its home market, Niro now exports to more than 60 countries around the globe.
Kok says India, Vietnam, Indonesia, China, and the Philippines all either have a Niro factory, office or warehouse from which operations are run.
“We have a big factory in Indonesia near Jakarta, while the rest of the countries utilise contract manufacturing. This means we always have stock of whichever products customers are after,” he says.
Speaking on the group’s product offerings, Kok says while there have always been two broad groups of tiles – porcelain and ceramic – Niro mainly deals with porcelain for its superior qualities.
“Using porcelain, we can produce heavy-duty tiles that can be used internally or externally including for high traffic areas. Porcelain also offers a variety of colours, textures and sizes, so the possibilities are limitless,” he says.
Like art, creativity is what draws buyers, and Kok says this rings true for tiles as well. “It boils down to the imagination, how you want a tile on your floor or wall to look like,” he says.
What has changed drastically over the years, is the way technology has evolved and impacted the tile sector.
“We are heavily reliant on technology, from forming the actual shape to manufacturing to colours and designs. It’s in every part of the process. Prior to this, all this was done manually, but that resulted in inconsistencies,” Kok explains.
When asked what makes Niro different from the many other tile brands out there, Kok says Niro’s tiles are built to serve a specific purposes, so every part of the process is centred on that.
“For living rooms and dining halls, people prefer bigger tile pieces with polished surfaces. Areas like kitchens and bathrooms have a more functional requirement so tiles need to be non-slip and easy to clean, whereas if the tiles are going onto the driveway, they’ll need to be made strong and hardy,” he says.
Another factor that makes Niro unique is the group’s diversified distribution channels.
Niro sells to building projects and aims to serve property developers and contractors directly.
Venturing into two new markets in asean and one in the west in 2024
Kok says this is a big segment for the group while the other way Niro’s tiles are sold are through resellers who are also dealers.
“These resellers have shops where they stock Niro’s tiles and serve end-users. Our third way of selling is through our own retail stores called Creative Labs,” he says.
There are currently Creative Labs across Malaysia, Indonesia and Vietnam, with plans to establish one in the Philippines as well.
“Our Creative Labs has unique offerings with expert personnel who can provide other services like using 3D software for layouts and such,” Kok says.
So how has Niro maintained its premium status in the tile industry for all these years, particularly after taking over an established Swiss brand?
Kok says the group plans ahead, usually on a three-year cycle.
“We have a product pipeline of between 18 and 24 months, which means we already know what we are going to launch or introduce much earlier on. And we work towards this goal,” he says.
Kok explains that tiles have a shelf life of up to 70 years, so being in this industry simply means looking ahead and putting time, effort and investments into the correct avenues for strategic product development as well as business plans.
“Niro spends a considerable amount of funds on research and development (R&D). The team goes to exhibitions, they speak to other people in R&D to discuss trends. For tiles that have gone out of fashion or are no longer in demand, we make them obsolete,” he says.
Expansion into other markets is also a priority for the group, Kok says.
“Niro is excited for next year, there are new markets we are looking at venturing into. We will be going into two markets within Asean and one in the West – the groundwork has been laid already,” he says.
But beyond just looking outward, Kok says he envisions Niro’s presence gaining strength within Malaysia itself.
“Post-Covid, more resorts and hotels are opening up and we can leverage on that. There is still plenty of scope for us to grow in the country, it just depends on how fast we can assemble a team and make inroads to build the business,” he says.
Moving forward, Indonesia is set to become the company’s largest market, even though right now Malaysia is a top contributor to the group’s top and bottom line.
“Our target market will be smaller contractors and homeowners. Indonesia has their own version of Home Depot and we foresee this trend of individuals or small businesses buying from places like this as a growing phenomenon.”