This is the problem statement: India has cleaning problems. India has cleaning solutions. Too few of them are of Indian origin.
What has stymied the growth of the domestic cleaning equipment manufacturing segment? Why are there too few manufacturers for a country the size of India? What needs to be done to create conditions that are conducive to investment in equipment manufacturing?
Beyond this, where do Indian products stand vis-a-vis foreign products, both in domestic markets and abroad? How have perceptions changed? Has there been a shift in procurement choices?
Mrigank Warrier, Assistant Editor, Clean India Journal spoke to three leading Indian manufacturers of cleaning machines and tools to delve into all this and more.
First off, let the three men describe their individual, differing circumstances and perspectives in their own words:
Arun Thapar, CEO, Inventa Cleantec Pvt. Ltd: “The ratio of Indian-made to foreign-made parts used in cleaning machines varies from machine to machine and depends on the purpose for which it is intended. Currently, I would say this ratio is 50:50, with some variations. Even if an Indian manufacturer were to enter the market now, it would be able to find and source at least 50% Indian parts. If all components are produced in India, there is no reason why any manufacturer should have reservations about using them; they meet the highest quality standards.”
Samir Sabu, Director. Soma Specialities Pvt. Ltd: “We do not have Indian manufacturers who produce vacuum motors, which are at the heart of machines like vacuum cleaners and scrubber dryers. Apart from these, we are not able to get vendors to design specific electronic components for cleaning machines, as the number of cleaning machine manufacturers in India is not high enough for it to be a valuable proposition. There used to be a very good manufacturer of vacuum motors in India in the past, but they had to close down due to labour issues. Now, we are totally dependent on imported vacuum motors.
Localisation of manufactured parts and components will ease production woes of local manufacturers. Today, we are dependent upon either China or Europe for raw material and parts.”
Debtosh Chatterjee, Director, Mrinmoyee Supply Pvt. Ltd: “I do not have to import anything and am using 100% Indian components. We used to import some rubber and steel components but have now found local vendors and developed a strong vendor base.”
Three Indian manufacturers, three varying opinions. Let us explore the reasons for the same.
Tool room gloom
The Number 1 obstacle in the growth of indigenous production is the lack of accessible tool rooms, where components can be fabricated. While manufacturers in other countries go from ideation and product development to sales and profitability at an accelerated pace to reap the benefits of the first mover advantage, the lack of infrastructural support in India forces Indian manufacturers to spend years working on the tooling aspect, making the product cycle less viable.
Manufacturers like Soma, which have been in the business for 30 years, have resorted to in-house manufacturing of parts to keep costs low and maintain quality, along with developing a network of local vendors over time.
“More than 98% of the parts and components in our machines are locally manufactured; the rest is also mostly sourced locally through other importers”, said Sabu. “This was possible mainly because we could invest in our own moulds and tools and other state-of-the-art machinery for manufacturing and testing, so that we can be self-reliant, rather than import these parts.” While his 30 year old investment is paying off, replicating his plan may not be feasible for all in the present day.
In earlier conversations with industry players, Clean India Journal had learnt about how getting a mould made in India was a forbiddingly expensive proposition. Chatterjee begs to differ: “We get one mould made every month: that is the level of demand there is. All our moulds are made in India. We work with two mould makers; one for smaller moulds is next to our factory in Kolkata, another for critical moulds is in Mumbai. To modify, polish or maintain a mould, the mould-maker needs to be close at hand.”
“The manufacturer-mould maker partnership needs to be long term, and mould making should be seen as an investment, not an expense. Some industry platers believe in producing a limited number of units from a single mould; we do not follow this. If the product made from a particular mould has wide acceptance in the market, the mould can be useful for generations.”
Mrinmoyee exports its products to seven countries; it has received overwhelmingly positive feedback, which is a testament to the quality of its moulds. The products manufactured from these Indian moulds are lighter but as strong as their foreign counterparts, which makes them more affordable and desirable to the export market.
Lack of expertise
According to Sabu, one of the biggest challenges that Indian manufacturers face is the lack of technical expertise from experts who are willing to act as consultants to manufacturers. This is because the Indian cleaning machines market itself is not too sizable compared to other industries. There aren’t enough Indian manufacturers for technical experts to make a detailed study of cleaning equipment and give their inputs on design, R & D and manufacturing.
“It is not possible to even find a technical consultant, as they prefer to work in more lucrative industries where there are more customers for them,” he said.
More is less
More than a hundred parts go into manufacturing a cleaning machine – some small and some big – and every part has its own importance. Each part needs to be sourced from a different supplier; when the part is small, a discrepancy arises.
For a machine manufacturer, 100 machines may be a huge order, considering the size of a machine and how complicated it is to assemble each unit. But for a small parts supplier, 100 units is too small an order; their minimum order quantity may be 1,000-10,000 units.
To meet this threshold, the equipment manufacturer may have to invest in higher levels of inventory, which poses financial strain on Indian manufacturers.
While certain parts of a machine may be common across brands, many others need to be customised as per the manufacturer’s stipulations. Such parts may not always be large and visible; even smaller components like electronic chips need customisation.
Customisation is an expensive venture, which becomes more economical when more units are produced. Foreign manufacturers sell to multiple global markets; Indian machine manufacturers find the going tough when they seek to customise parts for smaller production batches.
Indian manufacturers of cleaning equipment must aim to produce machines and tools that meet global standards, which allow them to export to other markets, for more than the obvious reasons:
Countries like China, which hold the upper hand when it comes to pricing, were able to offer attractive prices because they looked beyond their domestic market. By producing more units, Indian manufacturers will be able to get better deals from their parts suppliers.
Indian products are not necessarily cheaper than foreign products. The Indian market is flooded with Chinese goods, which come at rock-bottom prices. For Indian manufacturers to offer competitive pricing, they need to expand their markets to avail of the financial benefits of mass production.
For a very long time, foreign cleaning equipment set the benchmark for what is considered ‘quality’ equipment. If India-made equipment begins to gain acceptance in other countries, it will also begin to find more acceptance from India’s own FM community.
Coming specifically from the tools perspective, Chatterjee has a contrasting viewpoint: “Most foreign manufacturers are dependent on exports to remain viable; if the market abroad loses interest, it bodes ill for them. On the other hand, there is such a massive market for tools in India that Indian tool manufacturers don’t need to export to remain competitive. Exports are a welcome addition, not a mandatory requirement.”
Fluctuating input costs
The cost of raw materials like plastic and steel have risen and fallen dramatically and unpredictably within the span of months. Manufacturers who are tracking this see-saw cannot judge whether they should buy in bulk or only the bare minimum, since they have no idea which way costs will trend next. Regulation of input costs within a 5-10% margin is essential for making in India.
Sabu explained: “In addition to technical competence of the promoters, it also requires patience and persistence in handling failure to develop new products. At times, it can take years from concept to production; a lot of investment goes into R&D.”
It is a long road from conception to profitability; only those who are strong enough to stomach the wait can enter the manufacturing business in India.
Sector development group
Sabu reminisced: “I have visited manufacturing plants of machine manufacturers in China and Europe and found that they have clusters of manufacturers in a specific region; they can just get the parts from a specialised manufacturer of machines’ components and start manufacturing cleaning machines. In India, we had to do everything on our own. Once upon a time, our vendors were not even aware of what we were going to use the parts for; the cleaning industry was in such a nascent stage back then.”
A collective, industry-focussed approach is required. Thapar laid out what’s needed: “The government should facilitate the creation of a development group where specialists can help manufacturers develop homegrown products. If the government were to provide seed money, it will become profitable over time and the industry also will pay for it. It need not be a continuous drain on government coffers; the seed money can also be repaid after a fixed period of time.”
Pause for a moment. Why should all Indian stakeholders go through so much effort to promote Indian-made parts? Because 100% Made-in-India cleaning machines and tools will be 25-30% cheaper than those that have foreign components. In the case of large cleaning machines imported from abroad, the freight cost is prohibitive; this is eliminated in the case of indigenous machines.
As cleaning equipment becomes more affordable, more facilities will opt for professional cleaning, and more FM service providers will enter the organised sector.
Chatterjee’s tools are already cheaper than their Chinese counterparts. With relative cheap plastic and metal production and low manpower costs, India has everything it needs to become a global leader in cleaning equipment manufacturing.
According to Sabu, Indian buyers are already inclined towards buying Indian machines: “Except for industrial consumers, it is not easy to breach the price barrier as Indian machines are not necessarily cheaper than Chinese machines. But they are willing to buy Indian machines as they themselves also believe in the Make-in-India philosophy, and are also aware about the faster availability of spares and consumables at lower prices from Indian manufacturers.”
Chatterjee narrated an anecdote: “When a buyer from Bahrain visited my factory, he asked why the product cartons did not indicate that they were made in India. I told him that most buyers want their logo on the carton; he demurred and said that in markets like Bahrain, products from South-East Asia are no longer well regarded. The sentiment is now in favour of Indian products, and the Made-in-India tag is sought after.”
Going by his experience, global consumer choices are set to trend further in this direction. As long as Indian products are able to match the performance of products currently being used in global markets, buyers are happy to procure and test samples before ordering Indian products to replace whatever they are currently using.
Indian for Indians
If any Indian service provider needs more reasons to use Indian cleaning equipment, here they are: Indigenous manufacturers better understand Indian customers’ requirements and the applications for which they need cleaning machines.
Indian users demand more robust machines as their usage is more rugged compared to other countries. Overseas facility conditions are very different from Indian conditions; build quality and simplicity are more important than sophistication of machines. Operators are not formally trained in using cleaning machines; Indian machines need to be more user-friendly.
When machines are produced indigenously, the designs and tests carried out are also in line with local conditions, whether it is power fluctuations, transport handling, operators’ mishandling, etc. Indigenous products offer longer life compared to imported machines.
The last word
By now, the reader may have assumed that the writer has a pro-Indian, anti-foreign product bias. This is not the case. Foreign manufacturers have long led the way, and India’s cleaning equipment manufacturing segment has been slow to catch up.
At the end of the day, facility managers will buy what they think is best, regardless of the country of origin. But as I have explained earlier, due to the nature and peculiarities of FM in India today, Indian products are more likely to be suitable, accessible and affordable.
This much is certain. What is not is how and when all the above obstacles will be removed and business catalysts will be removed.
We shall overcome, one day.