Facebook Twitter Linkedin Youtube Instagram
Home > Professional > Indian Cleaning Industry From Consolidation to Consistent Growth

Indian Cleaning Industry From Consolidation to Consistent Growth

From a challenging period of consolidation experienced a few years back, Indian Cleaning industry is now in a steady path of growth. Though, the global melt down has had its effect on India, the Indian Cleaning industry was quick to respond to the recovery process. Even a flattened growth curve projected during the third quarter of 2011 was corrected in the last quarter.

In spite of instances of cleaning materials being slashed to inoperable levels and in extreme cases, cleaning contracts being withdrawn or payments being withheld, the practice of using lesser disposables and reduction in service frequency & headcount have had positive impact too. The reduction reduced frequency has induced the need for mechanised cleaning to achieve cost-effective results. In place of multiple single discs, a single scrubber-dryer is doing the rounds, especially in the industrial segment. Hiring companies are now discouraging headcount based contracts, thereby boosting man-machine-material based cleaning contracts.

Making cleaning equipment available to service providers on a rental basis has been a new development. A few leading equipment suppliers and service providers have taken to leasing cleaning machines on a contractual basis. Many machine suppliers are experimenting on this new line of business in the last two years. MP Group in the West and Eureka Forbes in the North are two such companies that lease machines to service providers. This provision of renting machines comes to the direct rescue of service providers who have been finding it difficult to pay off for the machines they purchase from suppliers. Very often reason for the fallout is payment for the purchase is delayed/non-payment by the client company.

Suppliers are also experimenting with selling different brands of cleaning products under one roof. The success of this model is yet to be ascertained.

A development in the service sector is the transition of the service provider from being a cleaning contractor to facility service provider. Cleaning companies are now adding services like security, waste management, pest management, landscaping, etc., thus redefining the soft service segment of facility services.

The growth potential offered by India for professional cleaning has encouraged global players to enter the country. Joint ventures with Indian companies apart, some of the principal companies are also establishing direct sales in India. Nilfisk, Karcher, Dulevo, IPC, Freudenberg Gala Household products (Vileda), TSM – are a few of the international companies that have either taken 100% stake in the distributing company or have floated a new company with the distributor, like in the case of Gala.

The Indian service sector has also been witnessing major mergers. Radha Krishna Hospitality joined hands with Sodexo; Dusters with Total Solutions; and OCS, UK has acquired stake in Absotherm FM. Financing companies have acquired major stake in FM companies to help growth. Granite Hill India Opportunities Fund, a fund founded by Shailesh Mehta, former CEO of Providian Corp, invested in All Services Global (earlier Under 1 Roof). TVS Shriram Growth Fund invested `35 crore in Bangalore-based facilities management company Dusters Total Solutions Services Pvt Ltd. There have also been several secondary deals in the space. New Vernon invested $10 million in Updater Services, a leader in facilities management, in 2006. This investment was bought out by ICICI Venture in a private equity secondary (a PE fund selling to another PE fund) deal in 2008. IKYA Human Capital Solutions Pvt Ltd has invested in Avon FM Services Pvt Ltd. Latest in this is the UK-based private equity major 3i Group acquiring a minority stake in BVG India Limited last year. Previously, Kotak PE had invested `30-40 crore in BVG in 2008.

The industry is likely to witness many more such mergers, partnerships and sell offs paving the way for an organised growth.

Share this article

Leave a Reply

Enter Captcha Here :

Related Articles
Sustainable Waste Management: The Way Ahead for Indian Cities
Addressing Persistent Challenges A Call for Innovation and Collaboration
Vasai-Virar Municipal Corporation Setting New Standards in Urban Cleanliness
Pune Municipal Corporation Pioneering Sustainable Waste Management

Newsletter Image

Get all latest news and articles straight to your inbox