For a product to be 100% Made-in-India, each and every one of its components needs to have been produced in India itself. Much as we would all like to believe this is possible, the fact of the matter is that at least some, if not most of the critical components of a cleaning machine, are NOT manufactured anywhere in India.
Not only are these imported parts – which are matchless in quality – used by the few companies which Make-in-India, they also serve as replacements and consumables for cleaning machines. However, there is a nascent homegrown industry that is manufacturing parts in India itself. Mrigank Warrier, Assistant Editor, Clean India Journal profiles three suppliers of spare parts with very different business models.
After-market parts supplier
TVH is one of the biggest stocking companies in the world, with millions of parts relevant to numerous industries kept in stock. Unlike OEM companies, it sources from multiple sources; there is always stock at hand and stocks also get replenished faster.
This leads to 24×7 availability of every conceivable part, which is also delivered super-quick. Asha Aradhye, General Sales Manager, SAARC, TVH said: “For example, If a client orders ten parts from TVH, 90% of the time, all ten parts will be in stock; at least eight parts definitely will be. With same-day shipment, we can deliver to the client’s doorstep within 36 hours or less.”
Nearly all parts are made abroad, and after going through quality checks, sold under the TotalSource brand. These parts include filters, motors and brushes, which work exclusively with cleaning machines manufactured abroad.
So why would a customer – which, in this case, will be an FM service provider – procure parts from TVH rather than from an OEM vendor? Because without compromising on the quality of the part and machine performance, they can procure parts at a more economical rate.
How is this possible? Consider a motor manufacturer in another country, who is supplying ‘x’ number of motors to each manufacturer of cleaning machines; it is common knowledge that while the brand and external appearance may differ, machines across brands can have similar critical components. Enter TVH, which sells after-sales parts to customers who’ve procured machines from different foreign brands; it buys 5x or 10x motors from the same manufacturer, gets a better deal because of the quantum of the order, and offers the price benefit to its customers.
Some large corporations may still choose to source spare parts only from the OEM vendor. Many others will choose to take advantage of TVH’s lower price, since they are convinced that the part will work as well as something supplied by the OEM.
However, under this model, if calibration software for a part is not available, installation becomes a challenge; a limitation that customers are well aware of.
Customers do not ask about where the part was produced; however, in the final invoice, the country of origin will be mentioned.
While this model has immense potential, the fact remains that the Indian market is flooded with China-made machines that are often sold under international brand names; European companies like TVH cater to spare parts for European machines, which form a small chunk of cleaning machines bought in India.
Market leader
Makarand Date, Amer NSM India Pvt Ltd explains: “We are a 100% subsidiary of an Italian company; we sell machine components manufactured by our group companies in Italy to manufacturers of cleaning equipment, and FM service providers who need spare parts in India.”
Apart from supplying spares, this model also supports companies which assemble cleaning machines in India. Amer has a 60-65% market share in this sector globally; in India, it is 35-40%. It offers up to 70% of the components that go into producing a cleaning machine; the Indian manufacturer has to fabricate the body of the machine, assemble the parts procured and sell to customers.
These parts include traction systems, linear actuators and motors for brushes for DC/battery-operated machines; these are currently not manufactured anywhere in India and must be sourced from abroad.
Stocking of parts follows two paths. For parts that are sold to manufacturers of machines, parts are always in reserve. Parts that are sold to end customers like FM service providers have vastly varying specifications; these must be ordered with a certain lead time in mind. In both cases, the parts sold are used in European machines made in India or abroad.
The main competition comes from cheaper, Chinese counterparts. Why then do customers pay more to buy from Amer? Because its products are proven, and more reliable in terms of both durability and performance.
Make-in-India player
“Floor pads are made from fibre, resins and aluminium oxide grains, and we have been making them in India for decades,” shared Vishal Sharma, North India Head – Consumer Business, Grindwell Norton Ltd. As one of only two major players in the market, for a long time it supplied floor pads only to FMCG companies that made and sold soap/detergent. A few years ago, it entered the janitorial B2B segment and is aggressively expanding sales to FM service providers, cleaning machine manufacturers and the hospitality industry, besides exporting its products.
Previously, Chinese or Thai-made products were the main competition; after import duties increased, Indian floor pads became more affordable to customers. Their clients are FM service providers in major cities; Tier II and Tier III cities may not yet have many large facilities or be able to spend on floor pads, and may continue relying on mops.
While some companies producing cleaning chemicals have also started making floor pads, competition also comes from local, non-branded players. “Not everyone can make a good floor pad,” said Sharma. “It requires intensive engineering and experience; we also use good quality grains and follow EHS policies. The performance of our products will always be better. If a non-branded manufacturer’s pads can cover x area, ours will last for 2-3x area. Housekeeping service providers may try out a cheaper option initially, but once they see the life of the pad, they will come to us.”
1 comment