The Tamil Nadu Industrial Laundry and Dry Cleaners’ Association (TNILDA) is only in its second year of existence, but has already become a forum for stakeholders from the state to exchange views about the current scenario and suggest ways to make one another’s businesses viable and sustainable. In a free-wheeling group conversation, members of its executive committee voiced their thoughts about the challenges they face, how they are overcoming them and how much more needs to be done
Energy
Venkat Raj, Head of Continuous Services (Asia), Lindstrom, Chennai explains that energy bills constitute a major part of a laundry’s operating costs. The rising power tariffs for commercial entities add to the heavy expenditure incurred by laundry owners.
The laundries of Washdoor Solutions are entirely electrically operated and the machines have in-built water heaters. Its Director Jeeva Gunasekaran says that washing, drying and steam-ironing one kilo consumes 1.4 units, an acceptable figure for such a laundry.
Some laundry owners rely on other sources of energy. Managing Director of Thee Washers Ramkumar informs us that his company has started using wood boilers, which are more cost effective than electricity or diesel. Venkat suggests introducing gasoperated dryers, which he claims will reduce costs by 40% at the very least, if tumble drying is being used.
He adds: “There are more ‘green’ wash programmes available, however, they need to be validated for their efficacy, in terms of hygiene and cleanliness. For instance, if a steam dryer is being used, then the steam traps need to be maintained in good condition, and they should have a design to recover the maximum possible condensate for reuse in the process.” Not collecting and reusing condensate is one of the biggest lost arenas of cost-cutting in the laundry industry.
Wastewater
As India becomes increasingly environment-conscious, it is passing laws which mandate reductions in the green footprint of business. Effluents from laundries are potentially toxic and can leave a lasting impact on groundwater, among other effects. Laws that forbid these effluents from being discharged without treatment are not yet strongly enforced, which is why laundries are enjoying a golden period of not having to invest in waste-water treatment. However, the day is not far when everyone will have to toe the line.
Venkat says, “As per the Central Pollution Control Board, mechanised laundries come under the ‘orange’ category, and many industrial areas come under the Zero Discharge zone. Some states provide Central Effluent Treatment Plants and accept waste-water after some treatment. But these activities come at a high cost. However, sustainable businesses have to comply with the land of law, so this growing need to invest in treatment plants is a potential threat to the future of the laundry industry.”
[box type=”shadow” ]
Energy bills constitute a major part of a laundry’s operating costs. The rising power tariffs for commercial entities add to the heavy expenditure incurred by laundry owners.
-Venkat Raj
[/box]
Water consumption
India’s rapidly depleting water resources are going to make water one of the most scarce, and consequently one of the most expensive inputs required by the laundry industry. Most laundry owners claimed that they use 9-11 litres of water per kilogram for the entire laundry cycle; however, in reality, this figure may go up tp 17-20 litres/kilogram. Anand, Managing Director of Evergreen Drycleaners, Namakkal says that his laundry uses 95 litres for a 7-cycle process for white shirts. “If I use hot water, the water consumption may be halved, but I will have to invest much more than I already have”, he laments. Water as a commodity is presently taken for granted. However, this luxury may not be available for long. Last summer, Chennai faced terrible water scarcity. Ramkumar warns that everyone needs to take this seriously and needs to find a way to consume less water in the process. This will directly reduce wastewater generation and further decrease treatment costs.
Venkat advises laundries to start using a one-wash tworinse program with good-quality chemicals, which will reduce the water burden by three litres per kilogram. He also suggests reusing last-rinse water in the first-wash by putting a recirculation system in place. Srinivasan of Wash World Coimbatore agrees this can be tried, particularly for whites, and if the wash-water isn’t too stained. Manpower woes Kamal Sargunaraj, Managing Director, Kodai Cleaners, Kodaikanal shares, “Another significant problem for commercial laundry owners is the shortage of skilled labour. Even though we have installed high tech washerextractors and dryers, a certain degree of human effort is required to complete the cleaning process”.
Antony Wilfred, Managing Director, Pioneer Laundry, Hosur explains that non-recognition of the laundry sector as an industry is one of the reasons no skillset is developed in this sector. Expecting unskilled labour to use highly advanced processing methods is a challenge for everyone.treatment costs.
“If those who do all the hard work are not paid more than owners claimed that they use 9-11 litres of water per kilogram for the entire laundry cycle; however, in reality, this figure may go up tp 17-20 litres/kilogram.
Anand, Managing Director of Evergreen Drycleaners, Namakkal says that his laundry uses 95 litres for a 7-cycle process for white shirts. “If I use hot water, the water consumption may be halved, but I will have to invest much more than I already have”, he laments.
[box type=”shadow” ]
My company has started using wood boilers, which are more cost effective than electricity or diesel.
-Ramkumar
[/box]
Water as a commodity is presently taken for granted. However, this luxury may not be available for long. Last summer, Chennai faced terrible water scarcity. Ramkumar warns that everyone needs to take this seriously and needs to find a way to consume less water in the process. This will directly reduce wastewater generation and further decrease treatment costs. Venkat advises laundries to start using a one-wash tworinse program with good-quality chemicals, which will reduce the water burden by three litres per kilogram. He also suggests reusing last-rinse water in the first-wash by putting a recirculation system in place. Srinivasan of Wash World Coimbatore agrees this can be tried, particularly for whites, and if the wash-water isn’t too stained.
[box type=”shadow” ]
Washing, drying and steamironing one kilo consumes 1.4 units of power.
-Jeeva Gunasekaran
[/box]
Manpower woes
Kamal Sargunaraj, Managing Director, Kodai Cleaners, Kodaikanal shares, “Another significant problem for commercial laundry owners is the shortage of skilled labour. Even though we have installed high tech washerextractors and dryers, a certain degree of human effort is required to complete the cleaning process”. Antony Wilfred, Managing Director, Pioneer Laundry, Hosur explains that non-recognition of the laundry sector as an industry is one of the reasons no skillset is developed in this sector. Expecting unskilled labour to use highly advanced processing methods is a challenge for everyone. “If those who do all the hard work are not paid more than what they can earn on their own, there will be a shortage of skilled labour,” said Hari Krishnan, CEO, Butlers Laundry, Chennai, hitting the nail on the head.
[box type=”shadow” ]
If I use hot water, the water consumption may be halved, but I will have to invest much more than I already have.
-Anand
[/box]
Saying that in India, productivity is still a lesser known word, Venkat has many suggestions to offer: “A standard working method needs to be implemented. Pressing is a labour- intensive activity, which need to be addressed in a scientific manner. Time and motion studies and proper layouts will help in increasing productivity. Unwanted actions must be avoided.”
Stressing the need for ergonomic equipment, he continues: “Today, I see a disconnect between the management and workers, in which both sides misuse each other. This leads to high worker attrition. For example, a towelfolding person has to bend down at least 20 times to floor level in every trolley to get his last towel, which gives stress to the hip. An ergonomic trolley can solve this. This will indirectly increase worker satisfaction and increase productivity.”
[box type=”shadow” ]
Srinivasan calls out the elephant in the room when he holds price-wars between laundry-owners responsible for cut-throat competition and shrinking returns
-Srinivasan
[/box]
Wash World currently processes around 4500 pieces a day, from tagging, washing and drying to ironing, checking and packing. From next year, it plans to introduce permanent tagging, which will reduce the manpower requirement by about 10 people.
Anand says that the average productivity rate in his facility is eight per person per hour, which can go up to 12. But once trained, many employees quit and he has to start again with freshers, bringing productivity back down. One of the reasons why the industry is unable to attract talent is the distaste of the common man towards handling soiled linen; an institution that streamlines training and makes the profession respectable is the need of the hour. The TNILDA is planning to set up a training platform to bring transgenders and women as a supportive workforce to the laundry industry.
[box type=”shadow” ]
Even though we have installed high tech washer-extractors and dryers, a certain degree of human effort is required to complete the cleaning process.
-Kamal Sargunaraj
[/box]
Technology
Many laundry owners are other. This leads to high worker attrition. For example, a towelfolding person has to bend down at least 20 times to floor level in every trolley to get his last towel, which gives stress to the hip. An ergonomic trolley can solve this. This will indirectly increase worker satisfaction and increase eight per person per hour, which can go up to 12. But once trained, many employees quit and he has to start again with freshers, bringing productivity back down. One of the reasons why the industry is unable to attract talent is the distaste of the common man towards handling soiled linen; introducing technology to reduce their dependence on manpower. However, this is an expensive proposition, and the costs cannot be passed on to customers, who do not want to pay more.
B2B laundries in particular need highly mechanised and automated large volume processing to be profitable. Unfortunately, this needs very high investments too. Wilfred advises that it is better to optimise operations with the current technology instead.
[box type=”shadow” ]
Non-recognition of the laundry sector as an industry is one of the reasons no skillset is developed in this sector.
-Antony Wilfred
[/box]
Some feel that having laundries certified according to pre-decided standards will get them to be taken more seriously by clients, who will then be more willing to open their purse-strings for what they will realise is a scientific, complex service.
GST burden
Laundry owners speak in one voice when they say that the high rate of GST is crippling the financial viability of their businesses. While GST was supposed to reduce the tax burden on the assessed, Venkat claims that he is now paying more than he did earlier. He says, “We need to understand how to do business in a different way, maybe not in the conventional way.”
[box type=”shadow” ]
If those who do all the hard work are not paid more than shortage of skilled labour
-Hari Krishnan
[/box]
Wilfred agrees: “This 18% GST for the laundry sector is huge, as this service is a necessary one for almost every user on a daily basis. Having such high taxes for an essential Wilfred agrees: “This 18% GST for the laundry sector is huge, as this service is a necessary one for almost every user on a daily basis. Having such high taxes for an essential
Business models
The current laundry business model is a contract laundry business. It has few advantages, compared to its many disadvantages. In this model, the laundry industry comes under a lot of pressure when it comes to capacity utilisation, quality assurance, customer satisfaction and employee satisfaction.
Damages claimed for accidentally damaged garments can break a business. Thirumoorthi, Managing Partner, Butlers Laundry, Chennai laid out a detailed example: “Suppose a laundry processes 100 sarees a day and charges INR100 for each. The total revenue generated is thus INR10,000, and the margin is 30%, so the profit is INR3,000. Given that the operation is manual, there is (at least) a 1% chance of something going wrong. That is, at least one in 100 sarees will get damaged. If the damaged saree costs INR3,000 and has to be paid to the unhappy customer, the entire profit on 100 sarees gets wiped out. In other words, 100 sarees have to be processed, just to earn Rs3,000 – but with even 1% error, the cost of settling a claim is equal to the profit!”
[box type=”shadow” ]
If a damaged saree costs INR 3,000 and has to be paid to the unhappy customer, the entire profit on 100 sarees gets wiped out.
-Thirumoorthi
[/box]
Srinivasan calls out the elephant in the room when he holds price-wars between laundry-owners responsible for cut-throat competition and shrinking returns. Giving an example, he says, “Another laundry quoted 50% less to a college where I was doing business, which opted to shift away from me. My main concern is unethical competition”. The challenge is to find a sustainable customer who is ready to pay an incremental price for this convenience.
Venkat has the last word when he says that laundry owners are working in silos. They need to break out of this attitude and come together with a common agenda for the betterment of the industry. The Laundrex India Expo 2020 — of which the TNILDA is a supporting partner — will provide such a platform, at which stakeholders from not just Tamil Nadu but from across India and the world will meet for three days of sharing ideas and technical knowhow, so that in this nascent but fast-growing business, everyone emerges a winner.