United Arab Emirates-based RAK Ceramics, one of the world's biggest makers of floor and wall tiles, said on Thursday it would sell its Sudan business and use the cash raised to expand its sanitary ware production capacity in the UAE.

The company has entered an initial agreement to sell all its shares in RAK Ceramics Sudanese Investment Company, and aims to completed the sale by March 31, it said without naming the buyer or revealing the sale price. It added that it had received an initial, non-refundable cash deposit from the buyers.

At the same time, RAK Ceramics has concluded agreements to raise its annual sanitaryware capacity in the UAE by 500,000 pieces, it said without giving further details.

Confirming the exit plan, CEO Abdallah Massaad said:"We had already announced our intentions at the third quarter results presentation and detailed at the time that we were reviewing the strategic options available to us in the country."

"The sale is the result of this review.  At present, we are in a preliminary agreement status and the completion of the sale is subject to final agreement and regulatory approval," he stated.

"The increase in our sanitaryware production is inline with our strategy to focus on our core business; tiles, sanitaryware, taps and faucets and tableware," he added.

RAK Ceramics had reported an 18.3 per cent fall in third-quarter net profit to Dh57.4 million ($15.6 million) as it continued to book an accounting provision for hyper-inflation in Iran and Sudan and reduced its non-core business earnings.

The company's current production of sanitary ware at plants around the world exceeds 12,000 pieces per day, according to its website.-Reuters and TradeArabia News Service