Industrial Cleaning 2009

The Industrial Cleaning in India Profile 2009
Market Research on Industrial Cleaning Sector in India
Prepared for
By
ACE GLOBAL PRIVATE LIMITED NEW DELHI, INDIA
Copyright Ownership
The report/market research submitted by Ace Global Private Limited is the exclusive proprietary right of Italian Trade Commission (ICE) and will be for exclusive utilization by ICE office. This report shall not be shared with any other clients in the form of part/sections of the report without ICEs prior approval.
Table of Contents 1. Introduction ............................................................................. 1

1.1 Objectives .................................................................................................................. 1 1.2 Coverage of the study................................................................................................ 1 1.3 Methodology ............................................................................................................. 1 1.3.1 Secondary research ........................................................................................... 1 1.3.2 Primary survey................................................................................................... 2 1.4 Draft Report............................................................................................................... 3
2.
India A Brief Profile and Economic Overview ......................... 4

2.1 Geography ................................................................................................................. 4 2.2 Demographics............................................................................................................ 5 2.3 Economic Demographics: .......................................................................................... 5 2.4 Macro-Economic Scenario......................................................................................... 5 2.4.1 Recent Economic performance and future outlook.........................................6 2.5 Business Environment and Policy Framework........................................................... 7 2.6 Currency .................................................................................................................... 7
3.
3.1 3.2 3.3 3.4
Overview of Industrial Cleaning Sector in India ........................ 9

Equipment ............................................................................................................... 10 Consumables ........................................................................................................... 18 Tools & Accessories ................................................................................................. 20 Industry Growth Trends .......................................................................................... 22
4. 5.
5.1 5.2 5.3
Product Range........................................................................ 26 Production Overview ............................................................. 31

Equipment ............................................................................................................... 31 Consumables ........................................................................................................... 32 Tools and Accessories.............................................................................................. 33
6.
6.1 6.1.1 6.2 6.3 6.4
External Trade........................................................................ 35
Imports .................................................................................................................... 35 Italys Share in Indian Imports ............................................................................. 37 Imports information compiled from primary survey .............................................. 38 Import Tariff ............................................................................................................ 42 Exports..................................................................................................................... 43
7.
7.1 7.2 7.3
Channels for Marketing.......................................................... 44

Structure.................................................................................................................. 44 Distribution Network............................................................................................... 45 Market Segments .................................................................................................... 54
8. 9. 10.
10.1 10.2 10.3 10.3.1 10.3.2 10.3.3 10.3.4 10.3.5 10.3.6 10.3.7 10.4
Employment in the Sector ...................................................... 57 Growth Trends ....................................................................... 59 Growth Drivers....................................................................... 61

Real Estate boom in India........................................................................................ 61 Facility Management Services ................................................................................. 62 Growth in end-use segments .................................................................................. 63 Health care segment............................................................................................ 63 Organised Retail .................................................................................................. 65 HORECA segment ................................................................................................ 66 IT and ITES sector................................................................................................. 67 Railways ............................................................................................................... 67 Urban Transportation .......................................................................................... 67 Municipal Authorities .......................................................................................... 68 Efforts by industry ................................................................................................... 68
11.
11.1 11.2 11.3 11.4
Experiences/Perceptions about Italian equipment/ companies 70

Product range .......................................................................................................... 70 Quality ..................................................................................................................... 70 Price ......................................................................................................................... 70 Relationship with customers ................................................................................... 71
12. 13.
Interest in Tie-ups with Italian companies.............................. 72 Conclusions & Recommendations .......................................... 73
13.1 Conclusions.............................................................................................................. 73 13.1.1 Products with Potential ....................................................................................... 74 13.2 Recommendations - Strategy for Italian companies ............................................... 74 13.2.1 Business Structure Options ................................................................................. 74 13.2.2 Practical aspects of doing Business in India ........................................................ 76 13.2.3 Pathways for Market Entry.................................................................................. 76 Business Development and Promotion ....................................................................... 76 Business Models .......................................................................................................... 77 Aggressive marketing for brand building .................................................................... 78 Two pronged approach to sales and distribution: ...................................................... 78 Value added services ................................................................................................... 78
Market Research on Cleaning Industry in India
1. Introduction
This report pertains to the market research on Industrial Cleaning Industry in India. The survey has been sponsored by Italian Trade Commission, New Delhi, on behalf of AFIDAMP - the Italian Association.
1.1
Objectives
The main objective of this study is to prepare an updated version of the Report on Market Survey on Industrial Cleaning Machines / Equipment and Products in India, which was originally prepared in 2006. Accordingly, this updated report covers the following: The current state of the Industrial Cleaning Industry in India Principal factors driving the growth of the market, including trends in technology and products being currently used in India Availability of equipment and products (Indian and Imported) External trade trends 1.2 Coverage of the study
This study covers cleaning equipment and related products used for professional applications only. The following categories are covered in this study:
equipment consumables
1.3
1.3.1
tools & accessories Methodology

Secondary research
The main sources of secondary information have been - Economic Survey of India 2009 - Websites of companies - Journals and publications of various industry bodies (current and past issues)
Ace Global Private Limited, New Delhi, India
1.3.2
Clean & Hygiene Review (a bi-monthly publication of Hammer Publisher Pvt. Ltd., Delhi) Clean India Journal (a monthly publication of Virtual Info Systems Pvt. Ltd., Mumbai) Facility Management (quarterly publication of International Facility Management Institute India chapter) Imports and exports statistics from DGCIS, Govt. of India Catalogues of Indian manufacturing and marketing companies
Primary survey
A primary survey was carried out to assess the market size, growth trends in the industrial cleaning sector in India. The primary survey also obtained feedback on experience, awareness levels and perceptions with regard to foreign (especially Italian) equipment and products for industrial cleaning. The primary survey was carried out through personal interviews in all the important locations for the Industrial cleaning sector, as summarized below: Table 1.: Primary survey contacts Indian companies manufacturing and/or marketing industrial cleaning equipment / consumables / tools & accessories End users of industrial cleaning equipment/products, including Service providers (Facilities Management companies) Industry bodies (including publishers of journals) Total Number 25 12
2 39
A full list of names, addresses and contact numbers of companies/organizations met during the primary survey, is enclosed as Annex 1. It is pertinent to highlight here that although most of the respondents were cooperative, some companies did not agree to meet the consultants while some shared only part of the information. In such cases, effort has been made to compile as much information as possible from secondary sources.
A larger database of industry players and other related organizations in the Industrial cleaning sector in India is enclosed as Annex 2. 1.4 Draft Report
This Draft Report has been prepared based on the compilation and analysis of all information/data collected through secondary and primary research.
2. India A Brief Profile and Economic Overview

2.1
-
Geography
Total area: 3.28 million sq km (of which land area is approx. 2.97 million sq.km.) Land boundaries: 14,103 km o Border countries: West: Pakistan 2,912 km North: China 3,380 km, Nepal 1,690 km, Bhutan 605 km East: Bangladesh 4,053 km, Myanmar (Burma) 1,463 km Coastline: 7,000 km, bordering the Indian Ocean (South), Arabian Sea (South West) and Bay of Bengal (South East) 29 states and 6 union territories. Many of the states are larger than some of the European countries, both in terms of area as well as population
2.2
-
Demographics
Total Population: 1.17 billion, with overall growth rate of 1.548% per annum 31.5% of Indias people are under the age of 15 63.3% are between the ages of 15 and 64 Major religions: Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9% Literacy: overall 59.5%; male: 70.2%; female: 48.3% National language Hindi (spoken by about one-third of the population) 14 officially recognized regional languages - Bengali, Telugu, Marathi, Tamil, Urdu, Gujarati, Malayalam, Kannada, Oriya, Punjabi, Assamese, Kashmiri, Sindhi, and Sanskrit. English has associate level status in India and is widely used in business, as well as everyday life
2.3
-
Economic Demographics:
According to Indias premier economics research agency NCAER, the top of Indias income pyramid has around 1.8 million homes with an annual income of Rs 1 million and above. The second layer is 2.9 million homes, with an annual income of ranging from Rs 0.5 million to 1 million. Most of these high income households are in urban areas. The total urban population in India is close to 28%. The size of Indian middle class having sizeable household income is estimated to be around 30 million. Top 6 most populated cities in India are Mumbai, New Delhi, Bangalore, Kolkata, Chennai, and Hyderabad. Besides Delhi, the political capital of India, Mumbai is the commercial capital of India; Chennai is one of most industrialized city of South India. Bangalore is Information Technology hub of India.
2.4
-
Macro-Economic Scenario
Indian Institute of Finance has projected the Indias Gross Domestic Product for 2009-10 to be US$ 1217.6 billion (at current prices).
Share of Industry and Services in GDP is 25.8% and 57.3% respectively, as per 200809 figures. Gross fiscal deficit has been on a declining trend since 2003 and reached a low of 2.7 % of GDP in 2007-08, but it is estimated to be 6% in 2008-09, largely due to liberal government spending during the economic recession. Exports in 2007-08 were US $163.1 billion with growth rate of 29.2% over the previous year. In 2008-09 exports stood at US $ 168.7 billion pegging a growth rate of 3.4% on the back of global economic recession. Imports in 2007-08 were US $ 251.7 billion with growth rate of 29.2% over previous year. In 2008-09 total imports stood at US$ 287.8 billion with a growth rate of 14.3 %. Thus India is a net importer with trade balance of US$ (-)119.1 billion in 2008-09. Principal imports are petroleum and oil goods, capital goods/machinery, gold & silver, precious and semiprecious stones, electronic goods and chemicals
Principal merchandise exports are textiles/clothing, gems & jewellery, engineering goods, chemicals/ pharmaceuticals, agriculture products, and leather goods.
India had forex reserve of about US$ 309.7 billion in March 2008 and US$ 252.0 billion in April 2009. The total foreign investment inflows were US$ 63.8 billion in 2007-08, out of which FDI was US$ 34.4 billion. Inspite of the global economic meltdown during the current fiscal, the total estimated FDI inflow in the country is US$ 33.6 billion.
Recent Economic performance and future outlook
2.4.1
The average growth rate of GDP of Indian economy has been 8.8% in the past five years from 2003-04 to 2007-08. Under unprecedented global economic conditions in 2008-09 where many countries have registered negative growth rate Indian economy is among the fastest growing, with growth rate for 2008-09 estimated around 6.7%. Despite the slowdown, the investments have been buoyant growing at an impressive rate. The ratio of fixed investment to GDP increased to 32.2% of GDP in 2008-09 from 31.6% in 2007-08. The per capita income in 2008-09 measured at constant prices of 1999-2000 was Rs 31,278. In 2007-08 this was Rs 29,901. The per capita consumption in 2008-09 was Rs. 17,334 as against a level of Rs. 17,097 in 2007-08. There has been a decline in the growth rate of per capita consumption from 6.9% in 2007-08 to 1.4% in 2008-09 largely due to the impact of economic recession. The importance of trade and external capital inflows are increasing in India. The share of merchandise trade to GDP increased to over 35% in 2007-08 from 23.7% in 2003-04. If the trade in services is included, the trade ratio is 47% of GDP in 2007-08.
The 11th plan targets 8-10% growth for Indian economy.
2.5
-
Business Environment and Policy Framework

Since the economic liberalization in 1991, Indian economy has been fairly open and has attracted business from all over the world. According to latest World Bank report Doing Business with India 2009, it is easier to do business in India now, than it was three years ago. Ludhiana, a textile and export hub, is ranked as number one city according to ease of doing business. Tax structure in India is increasingly becoming fair and liberal. The general rate of basic excise duty, central states tax and VAT are being progressively reduced and rationalized. All quantitative restrictions on the imports have been removed since 2001, barring few highly sensitive items. Through various multilateral and bilateral agreements India is reducing its import tariffs to facilitate trade. The number of clearances before starting a business in India sometimes proves deterrent to new players. Apart from the process is time taking and the bureaucratic corruption is main hassle. The Global Enabling Trade Report 2008 by WEF ranked India at a position of 71. China, Indias main competitor was at 48. Competition Commission of India and Investment Commission of India along with various industrial associations like Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industry (CII) have been instrumental in educating and encouraging foreign players to start investing in Indian market.
2.6
Currency
The monetary unit of India is Indian Rupee (1 Indian Rupee = 100 paise). The fluctuation in the exchange rate of Indian Rupee vis-a-vis US Dollar and Euro has been summarized in the table below. Table 2.: Exchange Rate trends Year Exchange Rate* 2005 1US$ = Rs. 43.27 1 Euro = Rs. 58.44 2006 1US$ = Rs. 44.95 1 Euro = Rs. 54.50 2007 1US$ = Rs. 44.11 1 Euro = Rs. 59.10 2008 1US$ = Rs. 39.41 1 Euro = Rs. 57.85 2009 1US$ = Rs. 48.58 1 Euro = Rs. 67.12
Source: Assorted; * Exchange rates are based on the values in the first week of the year
3. Overview of Industrial Cleaning Sector in India

Mechanised cleaning was introduced in India in late 1990s, but is still in early stages of development, considering the size and potential of the Indian market. Traditionally cleaning was not considered a dignified profession and, till recently it was considered a menial job to be done by persons of lower social echelons using their bare hands or rudimentary brooms. Majority of users still rely on the traditional manual cleaning methods. Of late, however, the customers have begun to realize that cleaning requires professional skills and mechanized equipment, besides more efficient, hygienic and environment friendly products. On the whole, the cleaning industry seems to be transforming from a labour-led industry to a technology-led industry. Entry of multi-national companies into India, as well as globalisation of Indian companies has been a major factor in this transformation. The standards are therefore bound to get better. The facility owners have also realized the importance of good cleaning processes employed in their premises. It is being increasingly recognised that a clean healthy work place does increase the employee productivity and customer satisfaction, and any additional investment in housekeeping will lead to higher dividends, in the long run. The significant developments in the sector during the last three years are summarised below:
The market in the last 3 years has seen high paced growth, with mechanised cleaning being inducted in a variety of new applications. A large part of this growth has come from government / semi-government entities like municipal corporations, railways, hospitals etc. A lot of new infrastructure like Metros Rail Stations, shopping malls / multiplexes, upgraded and new airports, new IT / ITES / Residential Complexes have come in the market in the last 3 years leading to increased use of mechanized cleaning equipment and tools. The industrial sector, which includes companies in infrastructure, steel, cement, ports etc., have also contributed significantly towards the growth of the market. Many new international players have entered the market which includes companies like Comac, Nilfisk (direct presence), Tennant, and Dulevo. Many manufacturers from China have appointed distributors in India. Along with the equipment suppliers, the number and reach of service providers has also grown significantly. Many housekeeping / facility management companies have achieved more than 100% growth over the last 3 4 years.
The overall industrial cleaning sector has been subdivided into the following three categories: Equipment
o o o o o o o
-
Sweepers (with/without aspirator). Vacuum cleaners (dry and wet & dry). Carpet cleaners (upright machines and injection extractors) High pressure washers (hot & cold) Steam cleaners Single disc machines Scrubber driers
Consumables
Cleaning chemicals (for wash rooms, Kitchen hygiene, Floor cleaning, Carpet cleaning, Odour control, window cleaning, etc.) o Tissues
Tools and Accessories o Mops and mops holders, including Multi-purpose Trolleys (including wringer buckets) o Window cleaning tools & accessories o Other Floor cleaning tools (brushes, pads, discs, wipers etc.) Equipment
3.1
3.1.1 Overall Market Size

The size of the market for industrial cleaning equipment in India is estimated to be about Rs. 2.55 billion to 2.70 billion in 2008-09, as per details below. This does not include the market for high value vehicle mounted equipment (vacuum cleaners and sweepers), which is estimated at Rs. 1 billion in 2008-09. Table 3.: Market for Industrial Cleaning Equipment (company wise value of sales)
Sales Turnover in 2005 (Rs. million) Tier I companies Roots Multiclean Eureka Forbes Johnson Diversey 240 240 150-160
Sales Turnover in 2008-09 (Rs. million) 700 280 250-300
10
Man Machine Karcher Dulevo Sub-total Tier II companies IPC Western Floors Technoclean Equipments Inventa Cleantec (earlier known as Industrial Spares) Charnock Nilfisk
Sales Turnover in 2005 (Rs. million) 90-100 Commenced Indian operations in 2008 780 800 60-70 ** 30-40 10 Commenced Indian operations in 200708 25 20 15 12 10 10 ** ** ** 140-150 30 50
Sales Turnover in 2008-09 (Rs. million) 550 205 1,985 - 2,035 73 60-70 60-70 40-50 30
Soma Specialities Innovative Delstar R V Industries Dynavac Hafi Elektra Aman Cleaning Equipments Jags Impex Bosch Sub-total Others 20-25 companies Santoni, Godrej & Boyce (Tennant), Rodak Swiss Trademark, Magna Cleaning, Continental Hygiene Concepts etc. + imports from China
15 30 30 25 20 17 20 15 30 450-500 125-150
Total ** in 2005, these companies were included in Tier III
950 1,000
2,550 - 2,700
11
In the absence of any authentic industry data, the above estimate of market size has been arrived at based on domestic sales figures reported by the leading players during the discussions. However, there is a large variance in industry size estimates provided by each company, ranging from Rs. 2 billion to Rs. 3 billion. Further, there were also major differences in the sales figures claimed by individual companies and those reported by other industry players, e.g. while Roots Multiclean claimed sales of Rs. 700 million, their competitors place their sales at Rs. 400-500 million. The industry is dominated by five Tier I companies with each having an estimated turnover of above Rs. 200 million and which together account for about 75% of the market. The second tier companies, about 15 in number, each having an estimated turnover of above Rs. 10 million, account for 18% of the market, while the rest is shared between 20-25 small companies tier III. Many of these tier III companies are marketing low cost Chinese equipment as well as locally made machines. In the last few years, companies like Aman Cleaning, Jags Impex and Bosch have reported higher sales and are now listed under Tier II. The above market size estimate for industrial cleaning equipment includes spares and consumable parts, which are an integral part of the equipment, such as motors, brushes, discs/abrasives, squeegees, filters, gaskets, hoses etc. These spares and consumable parts are generally marketed by the same companies that market the equipment, and account for about 10-12% of the annual sales. During the last few years, there have been a few significant new entrants in the industrial cleaning equipment market like Nilfisk Advance and Dulevo.
Nilfisk-Advance has recently set up their base in Mumbai, India. While, earlier the entire Nilfisk range of equipment was marketed in India by Eureka Forbes, now Nilfisk Advance India has directly entered the market, with Eureka Forbes continuing to market a part of the range. Dulevo India started operations in India in 2008 as a subsidiary of Dulevo International SpA, Italy, a renowned name since 1976 in the field of industrial and road sweeping & cleaning equipments. Dulevo International already has a presence in over 60 countries. RGS Impianti, Italy has started marketing their products in India through RGS Vacuum Systems based in Bangalore. The company has launched their range of 3 phase industrial vacuum cleaners and single phase industrial vacuum cleaners. The company is also studying the Indian market and may start manufacture in India.
High Value Vehicle-mounted Sweepers and Vacuum Cleaners In addition to the conventional cleaning equipment, there is also a significant and growing market in India for high value vehicle-mounted Sweepers and Vacuum Cleaners for various applications such as road cleaning, airports, etc. Ace Global Private Limited, New Delhi, India 12
The market size for high value mounted Sweepers and Vacuum Cleaners is estimated to be about Rs. 1 billion. Delhi based TPS Infrastructure Ltd. is the leading supplier of these types of equipment, claiming 80% share of the market with a turnover of about Rs. 800 million.
A small company Guru Nanak Engineering Works in Ludhiana has also started manufacture of mounted sweepers, mostly for Government departments and expects to sell 35-40 machines per year. 3.1.2 Market for different types of industrial cleaning equipment
By value
The overall market composition for industrial cleaning equipment is summarised below. Vacuum Cleaners (dry and wet & dry types) are the most widely used industrial cleaning equipment in India, followed by Sweepers and Scrubber Driers, together constituting almost two-thirds of the market by value. As can be seen in the table, there is no major change in the composition of the market since 2005.
Table 4.: Composition of market for Industrial Cleaning equipment - by value
Sweepers Vacuum cleaners (dry and wet & dry) High pressure washers Single disc machines Scrubber Driers Carpet cleaners Steam cleaners Others Source: Primary survey by Ace Global
Share in 2005 15-20% 35% 10-12% 10% 15-20% 5% 1-2% 3-5%
Share in 2008-09 17% 35% 10% 7% 22% Included in Vacuum cleaners 2% 7%
The sales composition of the leading companies is provided in the table below. Vacuum cleaners form an important category for all companies, though to a varying degree. However, scrubber driers are most important for Roots Multiclean, while vacuum cleaners and sweepers are important for Eureka Forbes. Some companies which are marketing only one type of equipment are not included in the Table (e.g. Nilfisk Advance - road sweepers, Hafi Industrial vacuum cleaners and Bosch Cold washer high pressure cleaners)
13
Table5.: Company-wise Sales break-up (% by value) A) Tier I companies Equipment Roots Eureka Johnson Man Dulevo TPS Multiclean Forbes Diversey Machine Karcher Vacuum Commercial 11% 19% 28% 21% 6% cleaners Industrial 3% 12% 0% 2% 2% Industrial 0 0 0 0 0 47% Fixed / Vehicle Mounted Sub Total 14% 31% 28% 23% 8% 47% Single disc machines 0% 4% 13% 0% 3% 0 Sweepers Manual 13% 0 0 0 0 Ride On 10% 16% 22% 0 18% 5% Road 32% 0 0 23% 59% 48% sweepers Sub Total 65% 16% 22% 23% 77% 53% Scrubber Walk 20% 22% 22% 14% 6% 0 Driers behind Ride on 6% 11% 13% 10% 4% 0 Sub Total 26% 33% 35% 34% 10% 0 Hot water 0 0 0 0 0 0 High Pressure Cold water 3% 9% 4% 8% 1% 0 Cleaners Sub Total 3% 9% 4% 8% 1% 0 100% 100% 100% 100% 100% 100% B) Tier II & III companies (selected) Equipment IPC Inventa Western Cleantec Floors Vacuum Commercia 39% 14% cleaners l Industrial 12% 0 Sub Total 51% 14% Single disc machines 5% 4%
Charnoc k 50% 0 50% 4%
Aman
Jags Impex 84% 0 84% 16%
14% 0 14% 4%
Godrej & Boyce (Tennant) 0 0 0 0
14
Equipment
Sweepers
Manual Ride On Sub Total Scrubber Mechanise Driers d Walk Behind Ride on Sub Total HOT WATER High Pressure Cold water Cleaners Sub Total Total By volume
IPC Western Floors 0 0 0 0 24% 10% 34% 0 10% 10% 100%
Inventa Cleantec 38% 13% 51% 0 10% 6% 16% 0 16% 16% 100%
Charnoc k 0 0 0 0 24% 6% 30% 0 8% 8% 100%
Aman
Jags Impex 0 0 0 0 0 0 0% 0 0 0% 100%
38% 13% 51% 0 10% 6% 16%
Godrej & Boyce (Tennant) 0 69% 69% 0 12% 19% 31% 0 0 0% 100%
0 16% 100%
The market size for different types of industrial cleaning equipment, in terms of volume of sales, is difficult to estimate due to the wide range of models within each type of equipment, suited for different applications. For example, Man Machine offers several models of vacuum cleaners (including shoulder mounted model), with air flow ranging from 44 litres/sec to 112 litres/sec. Similarly the company sells 9-10 different models of Scrubbers and Scrubber Driers, including walk-behind and rideon models.
However, based on feedback of equipment marketing companies as well as end users, the broad market size by volume, is as in the table below, for the leading companies in each equipment category. The wide variation in prices in some cases is due to availability of low-cost Chinese and locally manufactured equipment. Vacuum cleaners are by far the most commonly used equipment, in volume terms.
Table 6.: Composition of market for Industrial Cleaning equipment - by volume Equipment Type Market size Price range (Nos.) (per unit) Ace Global Private Limited, New Delhi, India 15
Sweepers (with/without aspirator)
Manual sweepers Industrial sweepers walk behind type ride on type
9000
Rs. 6000 10,000 Rs 100,000 Rs. 0.7 1.5 million Rs.7,000 -25,000 Rs. 70,000 125,000 Rs.5,000 40,000 Rs. 100,000 125,000 Rs. 30,000 70,000 Rs. 80,000 150,000 Rs.550,000 700,000 Rs. 4 million (excluding the price of vehicle) Rs. 1 to 5 million (excluding the price of vehicle)
200 190
Vacuum cleaners (dry and wet&dry) High pressure washers
Commercial and Professional 39,500 Industrial Vacuum Cleaners 420 Cold Hot 8,450 1,500 3,000 Walk behind Scrubber Drier Ride on Scrubber Drier 2,665 200
Single disc machines Scrubber Driers
High Value Large industrial vacuum 75 100 Vehicle-mounted cleaners 7.5 KW to 200 KW Sweepers and Vacuum Cleaners Sweepers 200 litres to 6500 ~ 200 litres
Recent new product introductions: In the recent years, several foreign companies (including Italian) have entered the Indian market, either by setting up Indian subsidiaries or through marketing tie-ups with importers and distributors. Some of these as well as Indian companies have launched new products. An indicative list of companies and their products launched in India, is given below:
Roots Multiclean EZE Clean and dry mops, RM series floor stripper, sealer and floor finish, Dry Foam carpet cleaning system, Minuteman MPV31 wide area vacuum cleaner Cimel s.r.l Italy - automatic scrubber drier Turbolava 35 Facile Im.Ex.Serve Italy IMEX Air Water high pressure Washer, IMEX-CxW microfiber cloth wipe , IM.EX.SV13 Nebraska, a diesel steam car wash.
16
Soma Specialty Cyclotron Mini compact scrubbing machine, Desiderio Plus steam cleaner from Capitani of Italy, Cyclon Max-75 special purpose machine for restoration of stone floors, cyclone FP 240 flame proof floor cleaning machine Dulevo India 1300 Star sweeping machine, model S20/E Industrial Vacuum Cleaner from Dulevo Italy, Inventa - Italian RCM S.p.A road sweeper for cement industry, Compact scrubber/drier, smokeless Hot Water High Pressure Jet cleaning machine, Cilmas s.r.l Italy Mirage Spinning 490 floor washer drier-Rainbow Cleaning System manufactured by Rexair LLC, USA which can purify, deodorizer, medicate and aromatize air in a room Lavorwash sps Italy High pressure vacuum cleaners and auto scrubber drier through Aman Lavorwash S.p.A FA-SA , Italy Kappa & Kaiman range s of hot water high pressure systems Hako & Roots Multiclean Hakomatic B45 compact scrubber-drier, Hako Citymaster 1200 street sweepers (about 50 supplied0, Hakomatic B 30 compact scrubber drier, Super Tech Equipment, Thane SEW Series Vacuum Cleaners in 5 models Glutton of Lange Christian, Belgium Self Propelled street sweeper Surie Polex high speed floor polishers Taski - Swingo 1650 for floor cleaning, JFfit onboard dilution control system that automatically feeds right amount of chemicals and Swingo 150 new ultra compact scrubber, which is like a vacuum cleaner for entry into restricted areas. Man Machine Karcher CV 66/2 brush type vacuum cleaner, Karcher BR 30/4C, BD 60/95 RS Model step on scrubber drier Hefter Cleantech, Germany Convert 82 convertible cleaning system for scrubbing, grinding, burnishing and crystallizing. Nilfisk Advance Alto Scrubtec 233 compact scrubber driers Johnson Diversey India Trooper SD Plus scrubber with attached foam generator, Alpha HP (a green seal certified multi-surface cleaner), New range of industrial vacuum cleaners for industrial waste and soil Kam Avida VT 650 Dual Sweep mounted sweepers from Johnston Sweepers, UK. Tennant, USA Green Machines through Godrej & Boyce
17
3.2
Annovi Roberberi India High pressure cleaners and pumps from Annovi Roberberi Spa Bitimec International, US have launched its simple compact inexpensive and cost effective power-brush Speedy Wash line for buses and trucks. Charnock Ride on scrubber drier Vario from Numatic Consumables
The market size for consumables used for industrial cleaning in 2008-09 is estimated at about Rs. 6.50 7.00 billion, representing an increase of about 140% over the 2005 level. Among the two constituents of the segment, namely Cleaning Chemicals and Tissues, the share of cleaning chemicals has increased from 66% in 2005 to 78% in 2008-09, which is in line with the trend of increasing use of mechanised cleaning equipment for various applications. The industry players have also pointed out that in the last few years, the share of organised players has increased from 25% to about one-third of the market, as more end users now prefer to use high quality consumables which are not only more efficient but also more suitable for use with cleaning equipment, and therefore work out to be more cost effective.
3.2.1 Chemicals
As per discussions with some of the leading players, the market size for industrial cleaning chemicals has grown from Rs. 1.8-1.9 billion in 2005 to about Rs. 5.0-5.5 billion, an increase of about three times. The use of professional grade cleaning chemicals has increased substantially, although according to the industry the use is still limited mainly to high end users in various segments like HORECA, healthcare and commercial segments. Therefore, the demand is expected to increase manifolds in the coming years, due to several factors, such as increasing demand for the industrial cleaning equipment, increasing trend of cleaning services being outsourced to professional facilities management companies, and increasing awareness for using more effective, efficient and environment friendly products for cleaning applications.
3.2.2 Tissues Tissues market (washroom tissue papers, facial tissues, paper towels/napkins etc.) is estimated to be about Rs. 1.50 to 1.60 billion (up from Rs. 0.90-1.00 billion in 2005. Kimberley Clark, the market leader holds about 30% share of the market by value. Another leading company in the organised sector Pudumjees imports bulk rolls and converts the same into retail packs at their works in Pune.
Table 7.: Composition of market for Industrial Cleaning Consumables - by value
2005 Rs. Million
2008-09 Rs. Million
18
Cleaning 1800 1900 5,000 5,500 ~78% chemicals Tissues 900 1000 1,500 1,600 ~22% Total 2,700 2,900 6,500 7,000 The company-wise sales of the organised sector players, are summarised below: Table 8.: Company-wise sales of Chemicals and other cleaning products (organised sector) Total Sales Turnover Total Sales Turnover 2005 (Rs. Million) 2008-09 (Rs. Million) Pudumjee 120 700 Kimberly Clark 50-60 600 Johnson Diversey 100 120 250-300 Schevaran Laboratories 80 160 Eureka Forbes (Ecolab) 40 75 Jade 30-40 N.A. Origami 50 75 Haylide Chemicals 10-20 40-50 Rancher 10-15 N.A. Hygiene Products of India 10 N.A. Altret Performance Chemicals 5 N.A. Gujarat Naveen Polycon > 10 Others 125 150 250-300 Total (organised sector) 650 750 2,200 - 2,300 For Kimberley Clark, about 80% of the turnover comes from Tissue paper, while 20% is contributed by other products like Wipers, Apparels & garments, Gloves, Eye protection, soap/hand sanitizers, dispensers, air neutralizers, Paper napkins (locally procured). Some of the companies met during the research felt that the economic recession has not impacted their sales much as they have maintained the quality and competitive pricing of their products. Recent new product introductions:
19
3.3
Bio-Productions Ltd. / Stapro, UK - environment friendly cleaning products and formulations through Charnock, Bangalore. Haylide Chemicals, Jabalpur Sterix-A, advanced biodegradable cleaning solution Henkel India Pril degreasers, Renuzit brand car & air fresheners, super odour neutralizers Jade Auto Foam soap dispensers Mecserflex UK Sagewash Sanitizer through Orange Care Solution Pvt. Ltd. Bangalore Cole-Palmer India IS formulated cleaning concentrate A R Enterprises, Delhi Valorem Aerosol Dispensers Pudumji, Mumbai Greenlime range of fragrances Hokwang , Taiwan HK-RSD Auto Soap Dispenser DAGA Finmark India, Ahmedabad Electroclean for electronic items like computers, fax machines, photocopiers etc. Vinci Chem, Andhra Pradesh Vinci Biomex, a European technology cleaning solution. Quartz Home Care, New Delhi Wizard floor cleaners Tools & Accessories
The tools and accessories comprise of non-mechanised equipment used for manual cleaning, categorised broadly as follows: o Mops and mops holders o Multi-purpose Trolleys (including wringer buckets) o Window cleaning tools & accessories o Floor cleaning tools o Others (brushes, pads, discs, wipers etc.)
The total market for tools and accessories is estimated to be between Rs. 1.30 to 1.50 billion, of which the share of unorganised sector is estimated to be around 65%, including sundry imports from China, Hong Kong and Korea.
Table 9.: Composition of market for Industrial Cleaning Tools & Accessories - by value
Mops and mops holders
Value 2005 (Rs. million) 200-225
Value 2008-09 (Rs. million) 350-375
20
Trolleys Window cleaning tools and accessories Floor cleaning tools Others (brushes, pads, discs, wipers, etc.) Total
25-30 70-80 250-275 100-150 650-750
50-100 200-225 450-500 250-300 1,300-1,500
Almost all the organised sector players are marketing imported tools and accessories, except Roots Multiclean, which manufactures some mops and wringer buckets/trolleys.
Table 10.: Company-wise sales of Tools & Accessories (organised sector) Value 2005 (Rs. Value 2008-09 (Rs. million) million) Continental Hygiene 80-100 150-200 Concepts Cradle Runways 35-40 100 Roots Multiclean 30-35 30-35 Unger 35 50-75 Johnson Diversey 20-25 40-50 Poona Brush 20 25 Man Machine Karcher 10-15 20-25 Bangalore Brushware 10 15 IPC Western Floor 5 6.5 J&B N.A. Inventa Cleantec 2.5 Others 5-10 20-25 Total 200-250 450-550
Note: Aerial work platforms used for cleaning of windows and building facades, are multi-purpose equipment also used for construction, repair & maintenance, painting etc. The leading company, Cradle Runways Pvt. Ltd. reported sales of about R.s 35-40 million during 2005-06. In 2008-09, the company received orders to the tune of 200-220 million and executed about half of the orders. It expects to reach a target of Rs. 150 million during 2009-10. Recent new product introductions:
Brush Tech India Welcome brand brushes for road and floor sweepers Corazzi Fibre S.r.l, Italy Non woven abrasives through Ethos Corp, Mumbai
21
Superclean Scandinavia AB, Sweden Qleeno Quiet, a combi scrubber for noise sensitive areas. Industry Growth Trends
3.4
The industrial cleaning industry in India has seen accelerated growth in the last few years, registering a CAGR of 34% per year, with the equipment segment growing at the fastest rate of 39% per year.
Market size in 2005 (Rs. million)
Market size in 2008-09 (Rs. million) 2,550 - 2,700 6,500 7,000 1,300-1,500 10,350 11,200
Growth Overal l 170% 141% 100% 141% CAGR 39% 37% 26% 34%
Equipment Consumables Tools and Accessories Total
950 1,000 2,700 2,900 650-750 4,300 4,650
Consumables continue to account for a major share of the industrial cleaning market (63% by value) as their use extends to applications where mechanised cleaning, using equipment and/or tools, has not yet become common.
22
Market Composition, 2005
Market Composition, 2008-09
Tools and Access ories 16%
Equip ment 22%
Tools and Access ories 13%
Equipm ent 24%
Consu mables 62%
Consu mables 63%
Market Size Growth

7000 6000 5000 4000 3000 2000 1000 0 Equipment Consumables 2005 2008-09 Tools and Accessories
The above computed industry growth rates are also corroborated by the key industry players met during the research. Most companies claim to have grown at a healthy rate of 20 to 40% per year during the last three years. The overall industry has grown at an average of around 30% per year. Further, there is near unanimity among industry players that the industrial cleaning sector is poised for an even higher growth of 30%-40% in the coming years, given the healthy growth in most of the end-use sectors.
Rs. million
23
The table below summarises the responses relating to past growth trends and the expected future growth of the industry.
Table 11.: Rate of expansion/ growth of the sector in the last few years Annual Growth rate (%) Past (3-year Projected Growth average) Company Industry Equipment Roots Multiclean 15-20% 30-40% 45% Eureka Forbes 20% 15% 35-40% Johnson Diversey 50-60% 10-11% 15% Man Machine 25% 25% 40-45% IPC Western Floors 25-30% 25040% 30% Inventa Cleantec 25% 40% 50% Soma Specialities 30-40% 30-40% Innovative 30% 100% R V Industries 30% Santoni 10-15% 20% >25% Rodak Swiss 200% 20-30% 30% Technoclean Equipments 40% 40% Aman Cleaning Equipments 0 40-50% 50-60% Magna Cleaning 30-40% 50% Godrej 25% TPS Infrastructure 100% 40% 40% Guru Nanak engineering 15-20% 15 20 25% works 20% Consumables Pudumjee 18-20% 18-20% Schevaran Laboratories 20% 30% Eureka Forbes 20% 15% 35-40% Jade 15-20% 20% Kimberly Clark 10-15% 10-15%% Poona Brush 10% 20% >20% Hygiene Products of India 40-50% 50-60% Haylide Chemicals 200% 10-15% >15-20%
24
Naveen Polycon Tools & Accessories Continental Hygiene Products Unger India J & B Industries
10-15%
10% 25%
20% 50% 40% 30-40%
40% 20%
40% 20%
25
4. Product Range
Most of the companies tend to carry all types of equipment, though the range in terms of number of models varies from company to company. The following table summarises the product range offered by various companies, both imported as well as indigenous. Table 12.: Product range of individual companies a) Equipment
Sweepers
Vacuum Cleaners Dry Wet & Dry
Carpet Cleaners
High Pressure Washers
Steam Single Scrubber Cleaners Disc s / Driers machine s
Remarks
Roots Multiclean
80% of machines will be manufactured inhouse by 20102011
Eureka Forbes Johnson Diversey Man Machine Karcher
26
Sweepers
Carpet Cleaners
Remarks
Dulevo IPC Western Floors Technoclean Equipments Inventa Cleantec Charnock Soma Specialities Innovative Aman Cleaning Equipments Santoni Godrej & Boyce Rodak Swiss Trademark Hafi Elektra
27
Sweepers
Carpet Cleaners
Remarks
Magna Cleaning Systems Poona Brush Company Legend: Imported
Manufactured
b) Consumables Wash room products

Pudumjee Hygiene
Kitchen hygiene products
Floor cleaning products
Carpet cleaning products
Odour control products
Other chemicals Photography & X-rays
Tissue paper
Johnson Diversey Kimberly Clark Imported in rolls and cut
28
Wash room products Schevaran Eureka Forbes (Ecolab) Jade International Origami Altret Performance Chemicals Haylide Chemicals
Kitchen hygiene products
Floor cleaning products
Carpet cleaning products
Odour control products
Other chemicals
Tissue paper
to size
Chemicals for photography & X-rays Rancher Hygiene Products Naveen Polycon Roots Multiclean
c) Tools & Accessories
29
Mops and Mop holders Continental Hygiene Concepts Roots Multiclean Unger India Johnson Diversey
Eureka Forbes Man Machine
Trolleys
Window cleaning tools & accessories
Floor cleaning tools
Others (brushes, pads, discs, scrubbers, wipers, hoses etc.)
IPC Western Floor

Charnock Poona Brush Bangalore Brushware J & B Industries Dulevo
Legend: Imported
Manufactured
30
5. Production Overview
5.1 Equipment
The industrial cleaning equipment market in India continues to be import driven. Only one of the five tier I companies, Roots Multiclean has production facilities in India. On the other hand, many of the tier two companies have production facilities, though with limited capacity and product range to supplement the imported equipment marketed by them. Roots Multiclean has a well-established manufacturing set up, with three factories in Coimbatore in Tamil Nadu (south India). One of the factories is a 100% Export Oriented Unit, manufacturing a single model of Floor Washer which is exported through Hakos marketing network in Europe. Nearly 55-60% of the companys sales (by value) come from domestic production, while imported equipment account for 4045% of the sales. The company manufactures a range of equipment, based on technical know-how from joint venture partner Hako, Germany. In 1999, the company also launched an indigenously designed Floor Washing machine Wizard which is also being exported through marketing tie-ups with worlds leading companies such as Trovox, UK, Minutemen, USA, Nilfisk, and INB Hong Kong. In the recent years, the company has added Single disc machines to their product range. In 2008, Roots Multiclean also signed a collaboration agreement with Minuteman Power Bosch USA. The indigenous production facilities for industrial cleaning equipment are summarised in the table below:
Table 13.: Producers of Industrial Cleaning Equipment Name of Production range Production sites company Roots Multiclean Ltd. Scrubber Driers, Manual Sweepers, Mini Floor Washer, Single disc machines 3 factories: - Coimbatore (Tamil Nadu)
Inventa Cleantec
High pressure washers and steam cleaners,
Noida (Uttar Pradesh)
Foreign collaboration, if any Joint venture with Hako Werke, Germany Minuteman Power Bosch USA (subsidiary of Hako) since 2008 Italy for exclusive marketing
31
Name of company
Production range
Production sites
Foreign collaboration, if any
Soma Specialities Innovative Magna Santoni Hafi Elektra
Manual sweepers Auto Scrubbers, backpack vacuum cleaners, carpet cleaners Vacuum cleaners High pressure washers
Mumbai (Maharashtra)
Mumbai (Maharashtra) Mumbai (Maharashtra) Faridabad (Haryana) Pune (Maharashtra) Noida (Uttar Pradesh) Bhiwadi (Rajasthan) & Ghaziabad (UP)
Assembly of imported SKDs
All Vacuum cleaners for textile industry Technoclean Single disc machines, Equipments Scrubber driers TPS Mounted sweepers, Infrastructure Large mounted vacuum cleaners, Compactors
Wieland Lufftenchnik Germany, Stummer Eurowaren, Austria
Several other small companies, such as Guru Nanak Engineering Works, Ludhiana (mounted sweeping machines), Aman Cleaning, R V Industries, Delstar, Dynavac, etc., also manufacture industrial cleaning equipment with indigenous know-how.
5.2
Consumables
Table 14.: Producers of Chemicals and other cleaning products Name of Production range Production sites company Pudumjee Tissue papers Pune (Maharashtra)
32
Name of company Johnson Diversey
Production range
Production sites
Industrial cleaning chemicals
Two factories
Schevaran
Industrial cleaning chemicals Tissue papers Industrial cleaning chemicals Industrial cleaning chemicals Brushes Brushes Chemicals & detergents
- Daman 85% of production - Nalagarh 15% of production Mysore (Karnataka)
Kimberly Clark Altret Performance Chemicals Haylide Chemicals Poona Brush Bangalore Brushware Naveen Polymers
Pune (Maharashtra) Surat (Gujarat)
Rochester Midland, USA (since 2006) Kimberly-Clark Worldwide
Jabalpur (Madhya Pradesh) Pune (Maharashtra) Bangalore (Karnataka) Okhla (Delhi)
All leading companies claim to be using latest international technology where the emphasis is on low toxicity and use of eco friendly & biodegradable raw materials, besides overall quality, and effectiveness. Also products are multipurpose and user friendly. Some companies also undertake contract manufacturing for equipment suppliers, such as Haylide Chemicals for IPC Western Floors, which markets equipment from IPC Italy.
5.3
Tools and Accessories
33
Roots Multiclean is the only leading player producing trolleys, mops, wringer buckets at their Coimbatore (Tamil Nadu) facility. Poona Brush and Bangalore Brushware manufacture a wide range of brushes used for industrial cleaning applications, as attachments to equipment as well as for manual cleaning. Poona Brush has installed a CNC machine for manufacturing technical brushes. The company imports all critical raw materials (bristle, fibres etc.) from Germany, Italy, USA etc. Cradle Runways produces window cleaning systems, but the major part of their production is the cradle/trolley, which are multi-purpose equipment, used for a variety of applications besides window/faade cleaning. J & B Industries started with a factory in Delhi, and have recently set up a new automated facility near Lucknow in UP for manufacturing Cleaning Brushes, Cleaning Pad, Cleaning Sheet, Dishwasher Scrubber, Galvanized Iron Scrubber, Mops, Pot Scrubber, Scouring Pad, Scrub Sponge & Stainless Steel Scrubbers under the brand name Super Brite.
34
6. External Trade
6.1 Imports
Directorate General of Commercial Intelligence and Statistics (DGCIS), an organisation under the Ministry of Commerce & Industry, Govt. of India, is the only official source of import data in India. However, as reported earlier, in the Export-Import database maintained by DGCIS, industrial cleaning equipment and products are not discernible as distinct items, as most companies are importing cleaning equipment under a general HS code 84798999, which refers to Other machines and mechanical appliances having individual functions not specified or included elsewhere in the Chapter 84 please refer table below. The import statistics under this code do not pertain only to equipment for industrial cleaning applications, as they represent broad product categories covering various applications. Further, all equipment and products used for industrial cleaning are not necessarily included in these statistics as some importers use other custom codes for similar products. However, the import statistics reported in DGCIS data for some of the items of interest is tabulated below. It is seen that China is emerging as a major supplier, mainly due to more competitive prices. As an example in 2007-08, Italy exported 980 industrial vacuum cleaners at US$ 3,980 each, while China supplied 14,640 machines under the same category at an average price of US$ 1,230 each, which is less than one-tenth of the average price of Italian equipment.
Table 15.: Imports of Cleaning Equipment
Custom code and Description 2005 -06 Value (US$ million) 2006 2007- 2008-07 08 09 (AprDec) 7.38 8.70 14.3 12.37 2005 -06 Quantity (Nos.) 2006 2007 -07 -08 2008 -09 (AprDec) 430
84642000 - Grinding / Polishing machines for working stone etc. 84798950 - Car
300
550
420
0.18
0.22
0.26
0.95
120
50
60
35
Custom code and Description
Value (US$ million) 2005 2006 2007- 2008-06 -07 08 09 (AprDec)
2005 -06
Quantity (Nos.) 2006 2007 -07 -08
2008 -09 (AprDec)
Washing and related appliances 84798991 - Industrial Vacuum Cleaners 85081000 - Vacuum Cleaners 85092000 - Floor polishers 84798999 - Other s
5.96 2.34 22.07 307
7.13 3.14 11.78 410
1.57 6.90 0.07 559
0 0 0 424
9,180 157570 1780 70,000
9,730 222200 70 106,000
18,100 287360 320 127,000
0 0 0 90,000
Table 16.: Imports of Consumables

Custom code and Description 2005 -06 Value (US$ million) 2006 20072008-07 08 09 (AprDec) 2.66 3.18 3.78 2.37 0.76 0.91 1.19 1.02 2005 -06 Quantity 2006 2007 -07 -08 2008 -09 (AprDec) 1457 220
48025450 - Tissue Paper (Kg) 33074900 - Other Odoriferous preparations used for de-odorizing room (excluding agarbatti) (Kgs) 34029011 - Washing and cleaning preparations having basis of soap other organic surface active (synthetic detergents) (Kg.) 34029019 - Other (synthetic) detergents (Kg) 38084000 - Disinfectants (Kgs)
1266 286
1981 230
2217 243
3.22
3.73
3.63
3.74
1083
1104
953
1331
4.91
5.49
6.26
4.05
1555
2578
2531
2021
0.65
2.48
1.28
108
493
155
Table 17.: Imports of Tools and Accessories

Custom code and Value (US$ million) Quantity (Nos.)
36
2005 -06
2006 -07
2007 -08
96035000 - Other Brushes constituting parts of machines, vehicles etc. 6805 - All types of Natural/artificial abrasive powder etc. of textile material or paper/ paper board w/n cut to shape
2.25
2.37
2.99
2008 -09 (AprDec) 2.81
2005 -06
2006 -07
2007 -08
282
505
549
2008 -09 (AprDec) 699
11.61
15.94
19.6
16.85
1606260
18434 60
248063 0
252622 0
6.1.1
Italys Share in Indian Imports
Italy is among the leading suppliers of industrial cleaning equipment and tools to India in almost all the categories. However, in consumables, Italys share is much lower. As can be seen from the table below, China and other Asian countries such as Korea, Japan, Singapore and Thailand are also emerging as significant contenders for a share in the Indian market. Table 18.: Italys Share in Imports
Custom code and Description

Equipment 84642000 - Grinding / Polishing machines for working stone etc.
84798950 - Car Washing and related appliances 84798991 - Industrial Vacuum Cleaners 85081000 - Vacuum Cleaners 85092000 - Floor polishers 84798999 - Others Consumable s 48025450 - Tissue Paper
Top exporting countries in 2007-08 (US$ million) Italy 4.63; China 3.31 ; Germany 3.19 USA 0.09 ; Korea 0.03; China 0.02; Italy0.01 Italy 0.39 ; China 0.18 ; Sweden 0.38 ; Denmark 0.27 China 3.15 ; Italy 0..81 ; Germany 1.40 ; Singapore 0.23 China 0.02 ; Switzerland 0.04 ; Italy Nil Germany 77.34 ; Italy 77.33 ; Korea 65.79 ; China 65.59 China 0.92 ; Germany 0.55 ; Japan 0.55 ; Italy 0.01
37
Custom code and Description 33074900 - Other Odoriferous preparations used for de-odorizing room (excluding agarbatti) 34029011 - Washing and cleaning preparations having basis of soap other organic surface active (synthetic detergents) 34029019 - Other (synthetic) detergents 38084000 - Disinfectants Tools & Accessories 96035000 - Other Brushes constituting parts of machines, vehicles etc.
Top exporting countries in 2007-08 (US$ million) China0.44 ; Thailand 0.09 ; Vietnam 0.09 ; Italy 0.02 USA 0.51 ; Germany 0.96 ; Singapore 0.70 ; Netherland 0.31 ; Italy 0.17 Switzerland 1.40 ; Germany 0.62 ; Thailand 2.13 ; UK 0.64 ; Italy 0.15 China 0.51 ; UK 0.33 ; Japan 0.18 ; Italy 0.16 ; Singapore 0 Germany 0.89 ; Italy 0.46 ; Japan 0.12 ; China 0.11
6.2 Imports information compiled from primary survey

As per information compiled from primary survey feedback, Italy and Germany are the main sources of import of industrial cleaning equipment, tools & accessories. However, Italy is not an important supply source for consumables, which are mainly being imported from USA, UK and other European countries.
Table 19.: Company-wise Imports a) Equipment
Roots Multiclean
Share of imported products in total sales 40-45%
Country of origin
Name of foreign supplier Hako Werke GmbH Minuteman Power Bosch
Remarks
Germany
Manufacture in India under license + marketing in India and SAARC countries
USA
38
Share of imported products in total sales
Country of origin
Name of foreign supplier SOTECO Interpump Nilfisk Advance Taski
Remarks
Italy Italy Denmark Switzerland, Italy, USA and China Germany Italy
Wet and dry vacuum cleaners Pumps
Eureka Forbes Johnson Diversey Man Machine Western Floors
100%
100%
100% 100%
Karcher IP Cleaning S.P.A. (Interpump Group) Numatic International Perlis Assembly of CKD and Marketing Fiorentini srl Tennant IPC Ready System, Floor Dulevo s.p.a Nilfisk advance RGS Impianti
Charnock Rodak Innovative Godrej & Boyce Mfg.

Continental Hygiene Concepts Dulevo India NilfiskAdvance India
100% 100% 50% 100% 75%
UK Switzerland Italy USA Italy
100% 100% 100%
Italy World wide Italy
RGS Vacuum Systems
39
Share of imported products in total sales Inventa
Country of origin
Name of foreign supplier RCM S.p.A
Remarks
Italy
Road sweeper for cement industry, Compact scrubber/drier, smokeless Hot Water High Pressure Jet cleaning machine
Aman
Italy
Lavorwash S.p.A FA-SA
b) Consumables Share of imported products in total sales Pudumjee 100% Hygiene
Country of origin
Name of foreign supplier
Product range
Remarks
UK
Johnson Diversey
10-15%
Sweden
Waterburys Wash room Vectair and odour control products SCA Tork brand of Hygiene tissues, hand Products wash and room fresheners
Using dispensers from Italy Distribution in India, Sri Lanka, Maldives, Bangladesh, Nepal and Bhutan
Schevaran Laboratories Eureka Forbes Jade International
Neg. 100% 100%
USA and UK Germany USA, UK
Various Ecolab Technical Concepts
Dosing Pumps and Diluters
40
KimberlyClark
Share of imported products in total sales 100%
Country of origin
Product range
Remarks
USA
KimberlyClark Worldwide BioProductions Ltd. (part of Stapro, UK)
Tissue jumbo rolls
Conversion into retail packs done in India
Charnock
UK
cleaning products and formulations
c) Tools & Accessories Share of imported products in total sales Continental 75% Hygiene Concepts Roots 40-45% Multiclean Man 100% Machine Unger India 100%
Country of origin
Product range
UK The Netherlands Italy Italy China USA, Germany, UK, France UK
TC Bentfield TTS Euro Mop Compact Janitorial Trolleys
Charnock
100%
Western Floor
100%
Italy
Various tools & accessories Trolleys, mops etc. UNGER Brushes, Mops/Wringers, Global Trolleys & Carousels, Washers & Squeegees, Numatic Trolleys, mops/wringers, International carousals, glass cleaning eqpt. IP Cleaning Trolleys, mops/wringers, glass cleaning eqpt.
41
Poona Brush
Share of imported products in total sales 5%
Country of origin
Product range
USA Germany Italy Mexico
Dupont Hahl
Bristles Diamond Abrasive filaments Hollow car washer fibre Natural fibre for tile floor cleaning
6.3
Import Tariff
Import tariffs in India consist of following elements:
Basic Customs Duty - the border tariff as defined under WTO; Countervailing Duty (CVD) - being the equivalent of the excise duty on equivalent goods manufactured in India; Special CVD - being the equivalent of the VAT on equivalent goods manufactured in India; Education Cess (EC) - a surcharge on the duties, imposed for a public cause (education) As per the present import policy, the total effective import tariffs applicable for 200809, for the items of interest to this study, are summarised below. Table 20.: Import tariff applicable for 2007-08 Total import tariff Equipment 31.011% to 34.130% Consumables 29.275% to 34.130% Tools & 31.011% to Accessories 34.130%
42
6.4
Exports
Roots Multiclean is the only major exporter of industrial cleaning equipment, with exports accounting for nearly 50% of their sales. The company exports floor cleaning machine and equipment to the leading markets of the world including USA, Europe, Australia, Japan, Far East, South America and several other advanced countries. RMCLs joint venture partner Hako uses RMCL as a production hub for worldwide sales of selected machines, such as Hakomatic Scrubber Drier E 350. Also RMCLs indigenously designed and manufactured machines (WIZARD floor washer) are marketed in Europe by Hako.
In high value cleaning equipment, TPS Infrastructure currently exports equipment accounting for about 5-7 % of their sales. However, the company is targeting to increase their exports to 30% of sales in the next 2-3 years.
Exports of consumables, tools and accessories from India are negligible. , except for cleaning brushes. Johnson Diversey and Schevaran Laboratories are exporting a part of their production of cleaning chemicals. Poona Brush Company indicated exports of industrial cleaning brushes, mostly to Indonesia, China and Korea and is currently negotiating with a British importer.
J & B Industries indicated that their products are finding acceptance in the overseas markets such as Saudi Arab, South Africa, Australia and Pakistan.
43
7. Channels for Marketing

7.1 Structure
The most common marketing model adopted by companies in the industrial cleaning sector is a 2-tier structure, comprising of direct sales by the companies through their own offices and staff, and through dealers.
The leading companies rely more on direct sales through their own network of offices in important locations, the obvious advantage being that this allows them to not only have a firsthand feel of the market, but also ensures after sales service support to the customers, which is a very important differentiator from the customers point of view. For medium-sized and smaller companies, it is not feasible to set up and maintain own sales and service facilities in all locations, necessitating a greater reliance on dealers to expand their geographical spread. Table 21.: Mode of Sales Company Name Direct Equipment Roots Multiclean Eureka Forbes Johnson Diversey Man Machine IPC Western Floor Inventa Cleantec Soma Specialities Innovative R V Industries Santoni 60% 50% 80% 90% 10% 5070% 60% 100% 100% 75%
Mode of sales Through Dealers/ Distributors 40% 50% 20% 10% 90% 30-50% 40% 25%
44
Company Name Charnock Hafi Elektra Godrej Rodak Magna TPS Infrastructure Consumables Pudumjee Johnson Diversey Schevaran Laboratories Eureka Forbes Jade Kimberly Clark Altret Performance Chemicals Poona Brush Haylide Chemicals Naveen Polycon Tools & Accessories Unger India Johnson Diversey Western Floor J & B Industries Direct 20% 50% 100% 100% 100% 80% 40% 80% 20% 50% 6070%
20%
Mode of sales Through Dealers/ Distributors 80% 50% 20% 60% 20% 80% 50% 30-40% 80% 85-90% 90% (most of the sales offices closed) 70% 100% 20% 80% Nil at present, but likely to increase in future
1015% 100% 10% 30% 80% 20% 100%
7.2
Distribution Network
The marketing network of leading companies is summarised in the tables below. Almost all the top companies have a pan India presence either through their own offices or through dealers. The market leader, Roots Multiclean, is headquartered in south India
45
and also has an extensive network of own sales and service offices all over south India. However in other regions, the company has set up offices in major locations, and relies more on sales through dealers. Some smaller companies, like Santoni, have consciously decided not to spread nationally as they do not have the resources to provide adequate after sales support to dealers and customers. Another company, Haylide Chemicals, which had a network of own marketing offices have now closed down most of their offices. Western Floor and Charnock have adopted the strategy of entering into marketing tie-ups with other companies selling non-competing range of industrial cleaning products. This gives them access to the distribution network of their partners, but logistically they deal with a single entity.
46
Table 22.: Marketing & Distribution Network A) Equipment

Regional presence
North Roots Multiclean Own offices Delhi
Dealers
Eureka Forbes Ltd. (Corporate Care Division)
Own offices Dealers
Johnson Diversey
Own offices
Bangalore (head Mumbai Kolkata office), Chennai Delhi, Chandigarh, Bangalore, Chennai, Mumbai, Indore, Kolkata, Guwahati Srinagar, Jaipur, Hyderabad, Cochin, Vadodara, Goa, Pune, Pondicherry Aurangabad Lucknow Sales and Service network in 100 cities in all regions, through distributors/dealers Gurgaon Bangalore, Chennai & Mumbai (Head Office) Kolkata Hyderabad
Chandigarh, Jaipur, Gorakhpur, Rishikesh, Varanasi, Bhopal & Satna Delhi, Jaipur
South Coimbatore, Madurai, Cochin, Chennai, Mysore, Trivandrum, Bangalore, Hosur, Secunderabad Bangalore, Tirupathi, Vishakhapatnam
West Mumbai, Goa, Vapi
East Kolkata
Vadodara, Ahmedabad, Vapi, Pune, Nagpur, Indore
Assam, Imphal, Bhuvaneshwar, Ranchi, Jamshedpur
47
Regional presence
North Man Machine Karcher IPC Western Floor Inventa Cleantec Soma Specialities Innovative Dealers Own offices Noida (head office), Punjab
South West 60 dealers all over India Bangalore, Chennai Mumbai, Vadodara
East
Kolkata
Dealers 5 resident representatives and 18 dealerships all over India Own offices Delhi (head office) Hyderabad, Chennai, Indore, Mumbai, Pune, Kolkata, Bhubaneshwar Dealers/Outlets Delhi, Ludhiana, Kanpur, Chandigarh Bangalore, Cochin, Nagpur, Durg Own offices Noida (head office), Delhi Dealers 20 dealers Own offices Mumbai (head office) Dealers Own offices Dealers Own offices Dealers > 20 dealers Bangalore & Chennai Mumbai (head office), Pune Nil Delhi (head office), Faridabad Chandigarh, Aligarh
Santoni
Hyderabad, Bangalore, Chennai
48
Regional presence
North Charnock Auto Products Hafi Elektra Rodak Swiss Trademark Own offices Dealers Own offices Dealers Own offices Delhi Delhi, Noida, Ludhiana, Kanpur Delhi Nil
South Bangalore (head office) Bangalore, Hyderabad, Chennai, Cochin Pune, Mumbai Bangalore, Kottayam
West Mumbai Mumbai, Pune, Nasik Kolkata
East
Technoclean Equipments Magna Cleaning Godrej & Boyce Mfg.
Dealers Own offices Dealers Own offices Dealers Own offices
Goa (head office), Pune, Mumbai, Ahmedabad, Nil
Bilaspur
Noida (head office) 2 dealers Hyderabad Mumbai (head office), Surat Kochi Baroda & Sholapur Bangalore. Kochi, Mumbai (head office), Hyderabad, Chennai. Pune, Ahmedabad, Indore Vishakhapatnam All India distribution network
Delhi, Lucknow, Chandigarh
Kolkata, Bhubaneshwar
Dealers
49
Regional presence
North TPS Infrastructure. Own offices Delhi Chennai
South Mumbai
West
East Kolkata, Bhubaneshwar. Jamshedpur
Dealers B) Consumables
12 in smaller cities All India
Regional presence North Pudumjee Own Delhi offices Dealers Own Gurgaon offices Dealers Own offices Dealers Own Delhi, Jaipur offices South Bangalore, Chennai West Pune (head office), Mumbai 32 dealers Bangalore, Chennai & Mumbai (Head Office) Hyderabad 60 dealers /distributors all over India Mysore (head office) 22 dealers Bangalore (head office), Mumbai Chennai East
Johnson Diversey Schevaran Laboratories Eureka Forbes Ltd.
Kolkata
Kolkata
50
Regional presence North South West East Dealers Delhi, Chandigarh, Bangalore, Chennai, Mumbai, Indore, Kolkata, Guwahati Srinagar, Jaipur, Lucknow Hyderabad, Cochin, Vadodara, Goa, Pune, Pondicherry Aurangabad Sales and Service network in 100 cities in all regions, through distributors/dealers Jade Own Delhi Mumbai (head office) International offices Dealers 40 dealers Kimberly Own Pune (head office) Clark offices Dealers 32 dealers Origami Own Bangalore (head office), Kolkata offices Hyderabad, Coimbatore Dealers Not available Haylide Own Jabalpur Chemicals offices Dealers 16 dealers Naveen 6-7 distributors Polycon C) Tools & Accessories
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Regional presence Continental Hygiene Roots Multiclean Own offices Dealers Own Offices North Delhi (head office) Delhi South West Bangalore, Chennai Mumbai > 25 dealers Coimbatore, Madurai, Mumbai, Goa, Vapi Cochin, Chennai, Mysore, Trivandrum, Bangalore, Hosur, Secunderabad Bangalore, Tirupathi, Vadodara, Vishakhapatnam Ahmedabad, Vapi, Pune, Nagpur, Indore Bangalore, Chennai Mumbai, Vadodra 35 dealers all over India Bangalore, Chennai & Mumbai (Head Office) Hyderabad 60 dealers /distributors all over India Bangalore, Chennai Mumbai, Vadodara East
Kolkata
Dealers
Unger India Johnson Diversey Man Machine India
Own offices Dealers Own offices Dealers Own offices Dealers Own offices
Chandigarh, Jaipur, Gorakhpur, Rishikesh, Varanasi, Bhopal & Satna Gurgaon (head office) Gurgaon
Assam, Imphal, Bhuvaneshwar, Ranchi, Jamshedpur Kolkata Kolkata
Noida (head office), Punjab Delhi (head office)
Kolkata
5 resident representatives and 18 dealerships all over India
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Regional presence IPC Western Floor IPC Western Floor Own offices North Delhi (head office) South West East
Dealers/Outlets Delhi, Ludhiana, Own offices Kanpur, Chandigarh Dealers
Hyderabad, Chennai, Bangalore, Cochin,
Pune (head office) Indore, Mumbai, Pune, Kolkata, Bhubaneshwar NilNagpur, Durg
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7.3
Market Segments
The major end users industrial cleaning equipment and services are - HORECA (hotels, restaurants and catering) - Health & Hygiene (hospitals, nursing homes) - Industry (shop-floor/machine cleaning, maintaining dust free environment, collection of useful/valuable waste etc.) - Commercial establishments (shopping complexes, cinema halls - Government offices and infrastructure (roads, railways, airports etc.) Traditionally, the end users have been direct buyers of cleaning equipment/products. However, lately the cleaning tasks are being increasingly outsourced by the end users to housekeeping contractors or facility management companies. As a result, the housekeeping contractors / facility management companies have become important customers for the suppliers of industrial cleaning equipment, chemicals and other products. For some of the leading companies like Johnson Diversey, and Soma Specialities, the service providers account for more than 50% of sales. Even in the case of other companies, the share is increasing rapidly. Although most of the companies cater to all the end use segments, there are cases where some companies have a stronger presence is a particular area. The market leader Roots Multiclean, which earlier focused mainly on the government segment, has widened its customer base to cover almost all end use segments. Eureka Forbes forte is the commercial establishments segment, while Johnson Diversey is focused on Service Providers. The company wise sales break-up is summarised below. Table 23.: Market structure/composition by end use segments Company Service End Users Provider HORECA Health Industr Comml. s & y Hygiene Equipment
Govt.
Others
Company
Service Provider s 15% 10% 50% 30% 45% 20% 90% 10% 30% 30% 70% 80% 5-8% 10% 5%
HORECA
Health & Hygiene
End Users Industr Comml. y 20% 20-25% 4-5% 8% 20% 150% 25-30% 30% 100% 30% 30% 15% 25-30% 80-90% Nil 25% 40% 20% 20% 10% 5% 5% 50% 30% 5-10%
Govt.
Others
Roots Multiclean Eureka Forbes Johnson Diversey Man Machine IPC Western Floor Inventa Cleantec Soma Specialities Aman Cleaning Technoclean R V Industries Innovative Charnock Rodak Aman Cleaning Equipments Hafi Elektra TPS Infrastructure Consumables Pudumjee Johnson Diversey Schevaran Laboratories Eureka Forbes Kimberly Clark Haylide Chemicals Naveen Polycon Tools & Accessories Johnson Diversey Poona Brush
15% 20-25% 5% 17-20% 2-3% 30% 10% 10% 10% 5% 5% 5-10% 5% Nil 10%
20% 2% 2% 15% 20%
5%
5-10% 10% 20%
5-10%
50-60%
Nil
Nil
Nil
95%
20% 50% 40% 10% 20-30% 40-50% 10%
30% 17-20% 10% 20-25% 20% 50%
2-3% 40% 5% 10-15% 5% 20%
4-5% 10% 20-25% 10-15%
50% 20%
2%
40% 30-40% 20%
4050%
15-20% 20%
10%
50%
17-20%
2-3%
4-5% 90%
20%
2% 10%
55
Company
Service Provider s 40 50% 70%
HORECA
Unger India Bangalore Brushware Charnock
5-6 10%
Health & Hygiene 15-20 30%
End Users Industr Comml. y
Govt.
Others
2 5% 30%
5%
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8. Employment in the Sector

Most of the companies have total manpower strength in the range of 10 to 100 persons. Only very few companies reported more than 100 employees. The company-wise employment is summarised in the table below. Several companies did not wish to disclose the exact manpower strength. Even those which did, (please refer figures in brackets in the table below), may not have indicated the correct number, as this is a highly sensitive issue, due to implications with respect to statutory obligations and labour laws.
Table 24.: Employment in the Industrial Cleaning sector No. of Machinery Consumables employees manufacturers/Importers Manufacturers /Importers Up to 10 Nil Naveen Polycon 10-100 Eureka Forbes (90), Man Schevaran Machine Karcher, IPC Laboratories (75) Western Floor, Inventa Jade International Cleantec (70-75), Soma Kimberly Clark (250) Specialities (25), Aman Haylide Chemicals (90 Cleaning (25), Santoni, ) Charnock (35), R V Origami (25-30) Industries (16), Magna Cleaning, Rodak Swiss Trademark, Innovative (60), Technoclean Equipments, Guru Nanak Engineering Works (15) 100-500 Roots Multiclean (300), Pudumjee Hygiene Johnson Diversey (150), (130) + contract labour Godrej (120), TPS Infrastructure (40 Graduate engineers, 4550 diploma holders, 100 workers, 80 indirect)
Tools & Accessories Manufacturers /Importers Nil Continental Hygiene (55) Poona Brush (20) Unger India (35) J&B Industries (3040 in Delhi, 20-25 in new facility in UP with more automation)
Nil
Further, it is common for companies to engage manpower on contractual basis, for functions such as security staff, chauffeurs, maintenance and housekeeping and even sales staff. The number of contractual staff is normally not included in the employee strength of the company.
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This is also substantiated through the employment figures of housekeeping contractors and facility management companies. The top 50-60 such companies have more than 1000 employees each, with first 10 companies having between 5000 8000 employees each, with some companies having 15,000 to 25,000 employees.
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9. Growth Trends
As illustrated by the growth in market size during the last three-four years, the industrial cleaning Sector in India has been growing steadily at a healthy rate every year. However, industry players feel that still the size of the industry is nowhere near its potential in a country of Indias size and diversity. As per estimates, the market for industrial cleaning equipment alone is expected to grow to Rs. 10 billion in the not too distant future. Some of the factors that have inhibited the growth of the sector are:
o Abundant availability of cheap labour. Majority of the potential users still have a mindset that it is cheaper to employ labour for manual cleaning than to invest in sophisticated machines. This has been accentuated by the lack of widespread awareness about the cost effectiveness as well as superior functional performance achieved by using machines vis-vis manual labour. o Lack of training facilities for creating a pool of trained manpower for the development of mechanised and professional cleaning industry: While companies seldom face any problems in finding staff for their mainstream activity, they find it very difficult to source trained staff for housekeeping work. As a result, they increasingly resort to outsourcing of housekeeping staff. However, even the outsourced staff needs to be trained properly, particularly for proper use of advanced equipment. o Price is the single most important consideration in purchase decision of majority of buyers. There have been several cases where marketing companies try to sell a model that fits into the buyers budget rather than going by the technical requirements of the application for which it is to be used. As a result, buyers end up with unsuitable machines, which do not perform to their satisfaction. This lack of ethics puts a question mark in the minds of the users, about the utility of cleaning equipment as a whole. o Although the level of professional competence of the housekeeping/facility management companies has improved considerably in the past few years, many of the companies/ contractors still lack proper knowledge of scientific cleaning. Their focus is mainly on minimising the overall cost by employing cheap labour and using general purpose cleaning chemicals/products rather than specialised ones. o Imported cleaning machines do not work efficiently in Indian conditions. Suppliers should take into account the following aspects while offering industrial cleaning machines for the Indian market: - The equipment are not always handled by trained manpower - The machines need to be designed to work efficiently in high ambient temperatures - The machines should be easy to maintain in-house, rather than requiring professional support for routine maintenance
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Another likely aspect of the growth of the industry, specifically for industrial cleaning chemicals, is the increase in customer awareness of the long term benefits of professional cleaning products. This is already reflected in the increasing share of organised sector from 25% in 2005 to 33-35% in 2008-09.
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10.
Growth Drivers
The consistent economic growth over the years has fuelled the economic boom in India. Inspite of the global meltdown, India achieved a 6% GDP growth in 2008-09. De-regulation and opening up of the economy, coupled with sound all round growth, India is seeing a flurry of activities in world-class infrastructure developments. Talent availability in India is driving large multinational corporations to building world-class campuses of their own. The manufacturing sector which has been growing at over 9% per year saw only a marginal dip in the growth rate in 2008-09, when all developed economies of the world registered near-zero or even negative growth. Also the infusion of foreign capital, new tie-ups and international players setting up businesses in India are helping the service sector to grow even faster. This coupled with double digit growth in hospitality and IT industry, is opening up new horizons for Industrial Cleaning sector in India.
10.1
Real Estate boom in India
The real estate sector saw a growth in demand by 15% in the second quarter of financial year 2009-10, after slowing down to 10% during the first quarter. Although, this is still way off the 35% to 40% growth witnessed in January to March 2008 in metros, the real estate sector is expected to bounce back to the pre-recession growth levels soon. The Indian commercial office space market saw 10 million sq ft of office space commitment pan-India in top major IT cities, including Mumbai and Delhi. Of this, the bulk of the demand (almost 70%) came in the second quarter. The supply of commercial properties is all set to touch 55 million sq ft by December 2009, with an expected demand for 25 million sq ft during the period. The industry is confident that a number of commercial projects that were put on hold during the past two years will be completed by the end of financial year 2009-10, to take advantage of the rising demand. As for the residential market, a majority of developers were in a wait-andwatch mode in Q1 2009-10 and are now beginning to resume construction work. The growth of the real estate sector in India is also facilitated by increased/easy availability of finance. In all of Indias major cities, the real estate industry is experiencing a strong upswing. Mumbai and Delhi (National Capital Region) represent the top tier of the market, being the administrative and commercial capitals of India respectively. In Mumbai, the proposed release
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of 5,500 acres1 salt-pan land for development' is expected to provide a major boost to the real estate sector. Bangalore, Chennai, Kolkata and Hyderabad make up the second tier. Bangalore and Chennai have taken huge strides in the recent years. While Bangalore has emerged as the hub of IT and ITES industry, Chennai is still the main commercial city of South India, and is also the birthplace of organized retail in India. Cities like Pune, Ahmedabad, Goa, Chandigarh, Jaipur, Ludhiana and Surat are also not far behind. Just below these top cities are a number of cities such as Amritsar, Indore, Lucknow, Kanpur, Coimbatore, Mysore, Mangalore and Vishakapatnam, which have growing populations, growing economic prosperity and increasing levels of income. The relaxed FDI rules for the real estate sector have attracted more foreign investors and real estate in India. The investor friendly policies allow foreigners to own property, and dropped the minimum size for housing estates built with foreign capital to 25 acres (10 hectares) from 100 acres (40 hectares). With this change in investment policies, the overseas firms can now put up commercial buildings as long as the projects surpass 50,000 square meters (538,200 square feet) of floor space. 10.2 Facility Management Services
Outsourcing of cleaning services to facilities management companies is on the rise, as owners of buildings prefer to engage specialists for the job, so that they continue to focus on their core operations.
As per present estimates, there are about 1,000 cleaning service providers in the country (up from 400450 in 2005), of which only about 10-15% are large players, having all India presence. Recession has had little effect on the commercial cleaning sector, which is considered stable. The industry size was estimated at Rs. 500 million (Euro 75 million) in 2008 and is growing steadily. New companies are entering into this sector due to the increasing number of commercial buildings, office complexes, retail shopping centres, industrial facilities, hotels, hospitals, and infrastructure projects. These demand quality minded professionals regardless of economic conditions. These new entrants are corporates offering the desired professional services in an organised way. Several leading international players, such as ISS, Knight Frank, Groupe 4 etc., have already established a sizeable presence in India, besides the home-grown companies like Vipul Facility Management, Clean India Group and Nimbus Harbor.
1 acre = 4000 sq.mtrs.
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Knight Frank India Pvt Ltd, part of the Knight Frank Global Network, provides a comprehensive range of real estate related services covering residential, commercial, land, investments, hotels & leisure, valuation, advisory services and facilities management. The above services are provided in India through its offices in Mumbai, Gurgaon (Delhi), Bangalore, Pune, Hyderabad, Chennai & Chandigarh. Some of their key clients in India includes: Deutsche Bank, HSBC, Maersk, Sony, SKF, Barclays Bank, British Petroleum/Castrol, Tata Group, Novartis, Ingersoll-Rand, Fulford, and many high net worth private individuals. A case study of services provided by the company to one of its clients Ansal Plaza, a large mall cum shopping arcade in New Delhi is provided below: Facility Management Services at Ansal Plaza, Delhi, by Knight Frank India Types of cleaning services: Sweeping, Mopping, Dusting, Stain removing, Glass Panels cleaning, Marble cleaning, Washroom cleaning. Equipment deployed: Vacuum cleaning machine dry/wet ; Pressure Washing machine Cold water, Scrubbers, Driers, Drain Cleaning machine Manpower: 2 executives, 3 supervisors and 42 workers - out sourced on contract basis but selected by Knight Frank. Nimbus Harbor, with its headquarters at Gurgaon and offices in Hyderabad, Bangalore, Chennai and Mumbai provides integrated one stop facility management solution to a large number of organizations in hospitality sector, malls/commercial buildings and residential complexes. In the NCR, Nimbus Harbor provides these services to West Gate Malls in Delhi, Gurgaon and Noida and housing complexes in Gurgaon.
Technoclean (India) Pvt. Ltd. of Clean India Group is the sister concern of Cradle Runways (India) that undertakes facade cleaning and maintenance contracts for buildings having glass facades & structural glazing walls. The company offers faade cleaning and maintenance contracts in over fifteen cities including Mumbai, Bangalore, New Delhi, Kolkata, Chennai, Gurgaon, Ahmedabad, Pune, Hyderabad, Coimbatore, Kochi, Vizag, and Noida. Their services include faade cleaning, mastic filling, signage changing, glass removal and fixing, beehive removal, high rise horticulture, pressure washing and all other faade maintenance activities. In 2008-09, the company received orders to the tune of Rs. 80 million and executed about Rs. 60 million worth of jobs. It expects to reach a target of Rs. 100 million during 2009-10.
10.3
Growth in end-use segments
10.3.1 Health care segment Healthcare is amongst the largest sectors in the Indian economy, in terms of revenue and employment. In the last decade, Indian healthcare grew at a compounded annual rate of 16%. In 2008 the estimated total value of the healthcare sector was about US$40 billion (Euros 27.78 billion). This translates to close to US$40 (Euros 27.78) per capita, or roughly 4% of GDP. By
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2012, Indias healthcare sector is projected to grow to nearly US$ 75 billion (Euros 52.1 billion) at a CAGR of 15%.
Source: India Healthcare Trends, 2008 The private sector accounts for more than 80% of total healthcare spending in India. State governments and central government fund the public owned hospitals but their number is far outgrown by the private, independent hospitals and health centres. The main responsibility for public health spending lies with the state governments, which provide 80% of public funding. The central government contributes another 15% mostly through national health programs. The total number of hospitals in India is around 16,000. It is estimated that about 70% of all hospitals and 40% of all hospital beds in the country are in private sector. In cities, there has been a trend of corporatization of hospitals. Some of the leading private hospitals include Apollo Hospital Enterprise Ltd (41 hospitals in various cities), Wockhardt Hospitals (12), Fortis Healthcare (11), Max Healthcare, Manipal Group (20), and Care Hospitals. In the last few years, most of the existing players have implemented/announced huge expansion plans and many large companies with no prior presence in the sector, have committed large investments in healthcare delivery. To meet the growing needs of healthcare in India, the country needs additional investments to the tune of US$ 50 billion (Euros 34.7 billion) annually for the next 20 years, according to Confederation of Indian Industry (CII). More than 1 million hospital beds need to be added to reach a ratio of 1.85 per thousand population at an investment of US$ 77.9 billion (Euros 54 billion) by 2012. According to India Healthcare Trends, 2008, country is going to need additional 3.1 million beds by 2018 in addition to existing 1.1 million beds. This would raise the bed to 1000 population ratio to 4.
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10.3.2 Organised Retail Domestic consumption market in India is estimated to grow approximately 7 to 8% every year, with retail accounting for 60% of the overall segment. Of this organized retail is just 5-6% at present, which is comparatively lower than other countries with emerging economies. In developed countries organized retailing is the established way of selling consumer products. Despite the low percentage, organized retailing in India has grown noticeably in the recent years. Organized retail has indeed arrived in India and is projected to grow at 25-30 per cent annually and triple in size from Euro 54.7 billion in 2004-05 to Euro 170.3 billion by 2010. India is on the radar of the global retailers seeking entry into the Indian retail market. The market is growing at a steady rate and accounts for around 10 percent of the countrys GDP. The inherent attractiveness of this segment lures retail giants and investments are likely to sky rocket with an estimate of Euro 0.31 0.39 billion in the next 2-3 years, and over Euro 3.13 billion by end of 2010. Indian retail market is considered to be the second largest in the world in terms of growth potential. The growth of the organized retail sector in India is primarily driven by India's young population. With the influence of electronic media, urban consumer trends have spread across the rural areas also. Other factors, like favorable income demographics, increasing population of young people joining the workforce with considerably higher disposable income, have unleashed new possibilities for retail growth even in the rural areas. Thus, 85% of the retail boom which was focused only in the metros has started to infiltrate towards smaller cities and towns. Tier-II cities are already receiving focused attention of retailers and the other smaller towns and even villages are likely to join in the coming years. This is a positive trend, and the contribution of these tier-II cities to total organized retailing sales is expected to grow to 2025%. Professional cleaning is becoming a critical aspect of maintaining and enhancing the value of malls / large stores and multiplexes. Outsourcing is the most preferred route to professional cleaning, as the management can then concentrate on their core business without getting involved in routine cleaning/maintenance issues. Cleaning requirements in such retail formats range from floor maintenance, windows cleaning, faade cleaning & maintenance, washroom & kitchen cleaning, carpet cleaning, cleaning of roads and parking areas, etc.
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10.3.3 HORECA segment Hotel industry is one of the key segments expected to fuel the demand for cleaning services and equipment in India. The hotel industry can be categorized as star rated hotels (5-star hotels, 4-star and 3-star hotels), heritage hotels, and budget hotels. The demand for outsourced cleaning services is largely driven by the star rated hotels. The star hotel industry is a phenomenon of mainly urban India, with most of them concentrated in metros; tier-1 and tier2 cities; and tourists and heritage cities. These include metros like Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, Pune, and tourist cities like Jaipur, Agra, Goa, Shimla etc. According to various research sources the total inventory of hotel rooms in India is presently around 110,000 rooms across various segments. The premium segment of 5star-deluxe, 5-star and 4-star hotels accounts for around 40% of total inventory. The outlook for next 4-5 years has been very positive. At the all-India level, as many as 96,000 rooms are in the pipeline till 2012. About 40 new hotel brands are in various stages of planning / starting new hotels. According to a research by Knight & Frank, there are currently close to 40,000 rooms across the 5-star deluxe, 5-star, 4-star and heritage categories in planning or under-construction in the 10 cities New Delhi (NCR2), Jaipur, Kolkata, Mumbai, Pune, Goa, Bengaluru, Hyderabad, Chennai and Kochi. In NCR, the governments tax holiday till 2013 for 4star, 3-star, and 2-star hotels will drive the additions. The Commonwealth Games of 2010 is the major driver for the growth of hotel industry in NCR. The hotel capacity scenario in Indias big cities till 2012 is given in the table below: Table 25.Current and future status of the Hotel Inventory in India (premium category only) City Present Room Inventory Additions till 2012 NCR (Comprising Delhi, Gurgaon, 10500 60003 NOIDA, Faridabad etc.) Kolkata 1850 3700 Mumbai 9250 6000 Pune 1500 2600 Goa 3000 2500 Bengaluru (Bangalore) 3500 3300 Hyderabad 3700 8000
2
NCR National Capital Region includes Delhi and selected contiguous areas in the adjoining states, such as
Gurgaon and Faridabad in Haryana, NOIDA in Uttar Pradesh etc.
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City Present Room Inventory Chennai 3100 Jaipur 3000 Kochi 1000 Total 40,400 Source: India Hotel Review 2008, Knight Frank 10.3.4 IT and ITES sector
Additions till 2012 3700 2500 1200 39,500
In the financial year 2008-09, India maintained its status as the top global IT BPO outsourcing destination, as exports of Indian software and services touched US $ 40.8 billion. Last years growth was significant in the light of various challenges, and the growth was a demonstration of the industrys ability to absorb nasty shocks including the US financial crisis, the rupee-dollar ratio, increase in input costs and the resultant pressure on margins. Despite the unprecedented economic downturn the industry is expected to witness sustainable growth. Services and software segments are estimated to cross USD 1.2 trillion by 2012. This is more than the 5.2 per cent growth expected in the total IT spending. 10.3.5 Railways India has the worlds rail largest transportation systems under one management, Indian Railways have 100,000 km track, 30,000 wagons, 75,000 passenger coaches, 9,000 locomotives and thousands of stations. Railways Ministry has announced a massive expansion plan for cleanliness and sanitation for trains and stations. Southern Railways estimate that the passengers generate 14 cu.m. (21.6 tonnes) of garbage daily. Planning garbage collection, track cleaning, platform sweeping, coach/ locomotive washers etc and need scrubbers/flippers, vacuum operated sweeping machines, drain cleaners and trolleys etc, along with tools, accessories and consumables Kolkata Metropolitan Development Authority Cleanliness drive for one of the worlds largest stations at Howrah. 10.3.6 Urban Transportation
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India has a road length of 3.3 million km, out of which 25 have been designated as National Highways under National Highways Authority of India (NHAI). Guidelines have been laid down By NHAI for maintenance and cleaning of roads. As these highways pass through congested cities, semi urban and rural areas, it is impractical to do manual cleaning. This will need a large number of industrial cleaning machines. Many cities have inducted or are planning to induct high-cost imported high capacity buses in their fleet, which will entail commensurate mechanised cleaning at the workshops for proper upkeep. Delhi NCR and Mumbai are already in the process of constructing extensive metro rail networks which incorporate mechanised cleaning equipment for coaches, platforms, tracks etc. 10.3.7 Municipal Authorities In addition to the metro cities, the municipal authorities in other cities and towns are also showing increasing awareness for maintaining cleanliness and hygiene which requires upgradation of the present systems. Some examples are illustrated below: Clean Kochi drive launched Pune Cantonment Board acquired two Karcher ride-on-sweepers. Lucknow city has launched a drive for sweeping roads at night and acquired Kam Avida truck mounted suction sweeping machines. The Delhi state government outsourcing the roads cleaning and maintenance work to a private agency on a three-year contract. Municipal Corporation of Chennai has engaged the French multi-national Onyx on a sevenyear contract for street sweeping, and handling of municipal waste. Onyx has inducted state-of-the-art equipment and 2,300 workers for undertaking the job.
10.4
Efforts by industry
The leading players in Indian industrial cleaning industry (including facility management companies) have formed an Association of Indian Cleaning Industry (AICI), with the objective of promoting the interests of the industry. The association head quarter is in Mumbai with regional chapters in the north, south and east. There has been a 20% increase in membership in the last year. The association has taken several initiatives for development of the sector, like the workshops conducted in Mumbai & Delhi on Right Machinery Right Usage and the CEO Summit 2008. The association has also launched its website (http://www.aici.org.in/) to serve
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as an interactive platform for sharing updates news, and views from both international and Indian industry leaders. International Facility Management Association (IFMA) India Chapter (http://www.ifmaindia.org/) was formed in 1990. The membership of the India Chapter has grown from a handful to over 100+ members from across India. One of the significant initiatives taken by IGMA has been to set up an International Facility Management Institute (IFMI), to overcome the lack of trained and certified professionals in facility management to sustain the large projects and campuses. The IFMA India Chapter also brings out a quarterly e-journal FM Update. IFMA has also developed a certification methodology to meet the recognized need of the facility management profession for a designation that would not only help FMs gain additional credibility but also establish increased global recognition for the profession.
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11.
Experiences/Perceptions about Italian equipment/ companies
As mentioned in a previous section of this report, Italy has been one of the important sources of imported industrial cleaning equipment being used in India. Even the companies not directly involved in marketing or using Italian equipment have in one way or another been exposed to the same. Summarised below are the experiences/perceptions about Italian equipment and industry: 11.1 Product range
Italian companies offer a complete range of industrial cleaning equipment, though Italy is better known as a source of small portable type machines. There are a large number of Italian companies exporting industrial cleaning equipment, although there are only a few manufacturers. Essentially, Italian companies specialise in technology for specific components/sub-systems for cleaning equipment. For example, some companies specialise in manufacturing vacuum motors, while some manufacture only body parts. Most of exporters assemble the equipment by procuring components/sub-systems from the same sources. As a result there is not much difference between equipment offered by different Italian companies. 11.2 Quality
The quality of Italian equipment is generally perceived as good value for money. Most of the companies dealing in or using Italian equipment are satisfied with their performance. However the equipment from Germany is considered of much better quality than Italian counterparts, which in turn is considered of better and more consistent as compared to Chinese products. However, some respondents feel that although Italian equipment are good in terms of design and aesthetics, they are not very sturdy, which is an important requirement for performance in India. 11.3 Price
Lower price, as compared to equipment from other European companies (Germany, UK, Denmark etc.) is one of the main factors that makes Italian equipment readily acceptable in the price sensitive Indian market.
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Some companies, though, feel that lower prices of Italian equipment is on account of compromise in quality, and therefore do not have a good image and perceived as cheap alternatives to other European equipment. Further, lower prices offer only a temporary advantage to Italian equipment suppliers. As and when new cheaper equipment becomes available, for example from China, Italian share in Indian market will be threatened. 11.4 Relationship with customers
The more prevalent opinion about Italian equipment suppliers is that they do not provide adequate technical back-up and after sales service support. There is a tendency to blame the users rather rectifying the problem. However, the Indian companies representing Italian companies generally feel they are good to do business with, reliable and fulfil their business obligations. They also feel that Italian companies are competitive, and ready to provide service support as required. One of the companies also mentioned that it is difficult to get business visa for travelling to Italy, which makes it difficult to do regular business with Italian companies. Italian companies have better industrial policies and strong legal position as compared to Chinese which is a closed society and cannot be sued in case of disputes.
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12.
Interest in Tie-ups with Italian companies
Many of the organisations met during the research expressed interest in tie ups with Italian companies. However, these expressions of interest may be the personal opinions of the executives met during the primary survey, and cannot be construed as official positions of the companies they represent. Interested Italian companies will need to discuss specific business propositions with individual companies. Specific areas of interest are listed below: Naveen Polycon interested in collaboration/Joint venture for manufacture of chemicals and detergents J & B Industries are expanding their operations and are keen to collaborate with a foreign company. Cradle Runways are marketing products of a Brazilian company (Power Climber) but may be interested in collaboration with Italian companies in the field. Man Machine may go in for manufacture of cleaning agents with Italian collaboration. There is also a scope for manufacture/marketing of water treatment plants, automatic car/ bus/coach washing equipment.IPC Western interested only in case IPC is not having the desired range of products to be distributed. Already discussing with IPC to transfer technology to produce scrubber driers in India to get the competitive advantage of manufacturing. Greatly interested in talking to Italian companies who can give tech know for Road sweepers. Haylide Chemical is importing most of their raw material from Europe, particularly Germany. They would like to contact Italian companies to help in reducing the input cost. Also they would like help in marketing their products abroad. The products are made from latest international technology where the emphasis is on quality, performance, low toxicity & using eco friendly & biodegradable raw materials. Inventa Cleantec - Very much interested
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13.
13.1
Conclusions & Recommendations

Conclusions
The industrial cleaning sector in the last three years has seen high paced growth, with a CAGR of 34% per year. Mechanised cleaning is being inducted in a variety of new applications. A substantial part of this growth has come from government / semi-government entities like municipal corporations, railways, hospitals etc. Major projects in infrastructure development like Metros Rail networks, upgraded and new airports, new IT / ITES / Residential Complexes, shopping malls / multiplexes, etc. have contributed to the increasing use of mechanised cleaning equipment. As the industry matures, and consumer awareness and expectations increase, the quantitative growth the industry has been accompanied with a qualitative change in terms of higher demand for equipment with higher performance levels. This has also resulted in increasing professionalization of equipment suppliers as well as service providers (facility management companies). Accordingly, the share of organised sector players has increased at the expense of smaller unorganised / informal enterprises. On the other hand the market has grown more in volume terms than in value terms, indicating a drop in realization per machine, a fallout of increasing competition in the sector. The sector continues to be import led, as indigenous production base of equipment, consumables and tools & accessories remains extremely limited, more due to lack of market volumes rather than technical capability. Therefore, imports are and likely to remain the main source of supply, till the Indian market reaches the threshold of viability for widespread domestic production. China has strengthened its presence in the Indian market as a supplier of industrial cleaning equipment and tools/accessories as their prices are atleast 40% lower than those of European / Italian prices. The industry players feel that if the Chinese manufacturers are able to improve the quality, there will be substantial loss of the market share of the European companies in India. The strong Euro is also impacting the competitiveness of European / Italian companies. In the last 3 years the exchange rate of Euro has moved from 1 euro = Rs. 55 to 1 euro = Rs.70.
Service providers (facility management / Housekeeping contracting companies) have emerged as the major buyers of cleaning equipment and other related products as most of the large end users, particularly hotels, hospitals, office complexes, malls etc, prefer to outsource their service requirements.
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Italian equipment is generally perceived to be of lower quality vis--vis other European equipment, but this is not necessarily a disadvantage in a price sensitive market like India. This is corroborated by the fact that most of the companies expressed interest in collaborations/joint ventures with Italian companies. 13.1.1 Products with Potential
Since a large share of the demand for cleaning equipment, consumables and tools/accessories is expected to emanate from Government/Public sector infrastructure projects like highways, railways. metro rail, aviation, power etc., high capacity equipment like vehicle mounted vacuum cleaners and road sweepers will be required in ever increasing numbers and being high value products will be an attractive potential for Italian companies In addition to the conventional products, there is also a growing demand for customised products for unique Indiaspecific equipment and cleaning solutions for applications such as: Sports stadia being constructed for Commonwealth Games in 2010 and Indias bid for Olympics in the next decade. Religious shrines like Akshar Dham temple, Golden temple, Tirupathi, Mosques, Churches etc. Cleaning of rivers and water channels (Ganga/Yamuna cleaning projects) and drainage/sewerage cleaning.
In addition, the equipment flagged in the earlier study (in 2005) as having good potential in India, continue to be relevant even now, and are therefore reproduced below:
Steam cleaners for sterilization application in HORECA and health & hygiene sectors. At present these machines find very limited use in India, that too mainly in industries for cleaning of greasy surfaces. However, given the projected growth in the number of high-end hotels and hospitals in India, the use of steam cleaners is expected to rise significantly, as these facilities strive to achieve international standards in hygiene and cleanliness. Portable carpet cleaner with an inbuilt foam generator and scrubber. Such machines, if available in a price band of Rs. 75,000-80,000 could be attractive for the HORECA sector. Single disc machines, already very popular due to their versatility, will have an increasing demand, as the presence of facilities management companies/contractors increases. The demand for window and facade cleaning tools and accessories is likely to grow exponentially, given the growing trend of high rise buildings for offices, hotels, commercial complexes etc.
13.2
Recommendations - Strategy for Italian companies
13.2.1 Business Structure Options
A foreign company can set up operations in India by incorporating a company under the Companies Act, 1956, through setting up a private or a public company with limited liability,
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which can be either Joint Ventures; or Wholly Owned Subsidiaries. A private limited structure gives the most flexibility and involves fewer statutory requirements. For registration and incorporation, an application has to be filed with Registrar of Companies (ROC). Once a company has been duly registered and incorporated as an Indian company, it is subject to Indian laws and regulations as applicable to other domestic Indian companies. Foreign Companies can also set up their offices through unincorporated entities, which can undertake only the permitted business activities, namely
Liaison Office/Representative Office acts as a channel of communication between the foreign company and the entities in India and collection of information about possible market opportunities. Liaison office can not undertake any commercial activity directly or indirectly and cannot, therefore, earn any income in India. Project Office is a temporary office in India for executing specific projects. Such offices can not undertake or carry on any activity other than the activity relating to execution of the project.
Branch Office is allowed for trading, professional or consultancy services, research, promoting collaborations with Indian companies, representation as buying/selling agents in India etc. A branch office is not allowed to carry out manufacturing but is permitted to subcontract these to an Indian manufacturer.
Incorporation Costs Office rentals
Interiors Work spaces Residential Apartment rentals Industrial land
Illustrative Business Costs Euros Basis 5000 - 6000 One time 250 to 300 per sq m 6 months advance (Interest free per month deposit) 3 year lease 250 300 per sq m 300 - 400 per seat 50 per sq m per 6 months advance (Interest free month unfurnished, deposit) bare walls 3 year lease 30 - 60 per sq m Buy / 33 yr lease
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Staff, junior management salary Middle management Top management Vehicle lease (Toyota Corolla)
Euros 150 - 500 per month 1000 2500 per month 3000 +/ month 450 per month
Basis add 25% benefits Performance based Performance based 15% advance 5 year lease
13.2.2 Practical aspects of doing Business in India
Italian companies planning to enter Indian market need to consider carefully the need for a local partner. In most activities, the government regulations allow a 100% foreign ownership. Therefore a Country Manager may serve the purpose instead of having an Indian investor partner. However, if a local partner is preferred, a due diligence review must be carried out, before finalizing the tie-up. Foreign entities can build-in sufficient safeguards to protect their legitimate business interests in joint ventures. Some important issues arising in management control of joint ventures are explained below:

All verbal understandings must be formalized in writing, even for confidential agreements. Ensure a provision for right to exit from a contract and clear procedures and triggers for termination and dispute resolution All intellectual property must remain the exclusive domain of the originator and only licensed to the joint venture / local agent.
13.2.3 Pathways for Market Entry Business Development and Promotion
Given the increasing degree of competition in the Indian market, both from Indian and foreign companies, particularly from low-cost countries, any new entrant in the sector needs to focus on aggressive awareness building in India about company and product capabilities. Some of the possible avenues for initial introduction in India, both for attaining visibility as well as networking with end users in various segments are:
a. Clean India Pulire 12-14 November 2009, Mumbai
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An international event dedicated to cleaning sector. The targeted visitors at Clean India Pulire are professionals from Hospitality Industry such as Hotel, Resorts, Restaurants, Clubs, Hospitals, Government & Civic Authorities, Banks & financial Institutions, Amusement Parks, IT & BPO Industries, Supermarkets / Malls/ Multiplexes, Educational Institutes, Large/Medium/Small Manufacturing Companies, Automobile Industries etc. The exhibitors at Clean India Pulire include companies/firms dealing in Cleaning Equipments & Products. b. Hospitality International India
Hospitality International India showcases the recent developments in the hospitality industry. Visitors at the Hospitality International India exhibition are food and beverage suppliers and distributors, architects, interior designers, engineering consultants, contractors; professionals from catering service establishments, catering and hospitality colleges, restaurants, hotels, supermarkets, hospitals, airlines, sports & leisure clubs, and cleaning service companies. Exhibitors at the Hospitality International India are companies/firms dealing in restaurant equipments, signage, food manufacturing or foodstuffs, spa & leisure equipment, tableware, hotel furniture, kitchen appliances, food preparation equipment, room service, front-of-house & back-of-house systems and IT services.
c. Events organized by apex bodies of relevant end use segments, such as Association of Indian Cleaning Industry (AICI) and International Facility Management Association (IFMA) India.
d. Contribution of technical articles and case studies in publications/journals in India dedicated to the cleaning and hygiene industry, such as Clean & Hygiene Review, Clean India Journal and Facility Management highlighting the new developments achieved by the Italian industry. Also Italian companies could individually or collectively insert paid advertisements in these publications.
Business Models
The alternative business models are described briefly below for consideration of Italian companies.
a. Indian Agent/Representative: Marketing of industrial cleaning equipment and other products in India through an Indian agent/distributor, on commission basis. Ideal for small and medium sized companies offering standard machinery models that can be used in a range of applications. b. Technical Licensee: Licensing agreement with an Indian entity, for use of proprietary technology within well defined parameters. Ideal for niche companies having proprietary technologies, who can use this model for leveraging the manufacturing and marketing reach of established Indian manufacturers. Technology fee up to US$ 2 million (Euros 1.39 million) and royalties up to 10% require no prior approval from Government of India.
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c. Manufacture: Setting up manufacturing facilities in India, either as a wholly owned subsidiary or as a joint venture with appropriate management control. More suitable for larger Italian companies, who can also use Indian operations as a supply hub for the Asian region. Aggressive marketing for brand building a. Launching of products should be accompanied with aggressive marketing and promotion. Indian representatives often do not have the financial resources to undertake a sustained campaign, and therefore need to be supported by their principals. b. Active involvement with Indian representatives in lobbying for prestigious and high value orders, including presentations, live demonstrations, technical and commercial negotiations etc. Typically large orders have a long gestation period, and many Indian companies simply do not have the wherewithal to handle such requirements. Two pronged approach to sales and distribution: a. Vertical integration, through tie-ups with large service providers (contracting / facility management companies) would provide a captive market as well as national presence. Given the trend of increasing share of service providers, a revenue-sharing or equipment leasing arrangement between equipment supplier and service provider offers a clear synergy for both. b. Direct selling to high end users like hotels, hospitals, embassies, public utilities etc., where outsourcing of housekeeping is not very prevalent.
Some examples of strategic initiatives taken by Indian companies, which have brought or are likely to bring rich dividends in the medium to long term, are: Demonstration units: One of the companies (Jade International) installed complete wash room equipment and cleaning system at the public conveniences at Mumbai Central Railway station free of cost. Through this investment about Rs. 400,000, the company hopes to gain through future orders, and high visibility, as Mumbai Central station is one of the busiest in the country. Several companies offer value added services like cleanliness audits, training of cleaning staff, sharing of global best practices etc. Some of the equipment producing/marketing companies also offer facility management services (Eureka Forbes, Clean India Group) One of the companies (Santoni Electric) offers a 10 year guarantee on its machines
Value added services
a. One of the main constraints faced by the industry in India is the customers inability to make large investments in auxiliary functional like cleaning. Options to reduce up-front investment costs, such as hire-purchase scheme or tie-ups with banks/financial institutions to offer the facility of payment in instalments, would be highly appreciated. Suppliers credit particularly for high value equipment Ace Global Private Limited, New Delhi, India 78
b. Provision of testing/measuring instruments for on-site demonstration of effectiveness of the cleaning equipment and products, as per operational requirements, could be another USP for Italian suppliers. This would not only provide comfort to the discerning users, but also convert the users of non-scientific, and therefore ineffective, cleaning methods. c. Training of staff for proper use of equipment and products, for achieving maximum efficiency as well as ensuring trouble free operation.
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Industrial Cleaning 2009

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Industrial Cleaning 2009

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The Industrial Cleaning in India Profile 2009

Market Research on Industrial Cleaning Sector in India

ACE GLOBAL PRIVATE LIMITED NEW DELHI, INDIA

Table of Contents 1. Introduction ............................................................................. 1

India A Brief Profile and Economic Overview ......................... 4

Overview of Industrial Cleaning Sector in India ........................ 9

Product Range........................................................................ 26 Production Overview ............................................................. 31

Channels for Marketing.......................................................... 44

Employment in the Sector ...................................................... 57 Growth Trends ....................................................................... 59 Growth Drivers....................................................................... 61

Experiences/Perceptions about Italian equipment/ companies 70

Interest in Tie-ups with Italian companies.............................. 72 Conclusions & Recommendations .......................................... 73

Market Research on Cleaning Industry in India

tools & accessories Methodology

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

2. India A Brief Profile and Economic Overview

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

The 11th plan targets 8-10% growth for Indian economy.

Business Environment and Policy Framework

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

3. Overview of Industrial Cleaning Sector in India

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

3.1.1 Overall Market Size

Sales Turnover in 2008-09 (Rs. million) 700 280 250-300

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

Total ** in 2005, these companies were included in Tier III

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

Market Research on Cleaning Industry in India

Share in 2005 15-20% 35% 10-12% 10% 15-20% 5% 1-2% 3-5%

Share in 2008-09 17% 35% 10% 7% 22% Included in Vacuum cleaners 2% 7%

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

Charnoc k 50% 0 50% 4%

Jags Impex 84% 0 84% 16%

Godrej & Boyce (Tennant) 0 0 0 0

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India

IPC Western Floors 0 0 0 0 24% 10% 34% 0 10% 10% 100%

Charnoc k 0 0 0 0 24% 6% 30% 0 8% 8% 100%

Jags Impex 0 0 0 0 0 0 0% 0 0 0% 100%

38% 13% 51% 0 10% 6% 16%

Market Research on Cleaning Industry in India

Sweepers (with/without aspirator)

Manual sweepers Industrial sweepers walk behind type ride on type

Vacuum cleaners (dry and wet&dry) High pressure washers

Single disc machines Scrubber Driers

Ace Global Private Limited, New Delhi, India

Market Research on Cleaning Industry in India